HomeMy WebLinkAbout1986-12-16 ResolutionRESOLUTION NO. 86-349
RESOLUTION TO REFUND CIGARETTE PERMIT
W1¢REAS, Comer's Pipe & Tobacco at Old Capitol Center
in Iowa City, Imia, has surrendered cigarette permit No. 85=50 , expiring
June 30 ,19 87 , and requests a refund on the unused portion therof,
now therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF IOWA CITY, IOWA, that cigarette
permit No. 85-50 , issued to Comer's Pipe $ Tobacco be cancelled and,
BE IT FURTHER RESOLVED that the Mayor and City Clerk be and they are
hereby authorized and directed to draw a warrant on the General Find in
the amount of $ 75.00 , payable to David Bert -ling as a refund on
cigarette permit No. 85-50
It was moved by Strait and seconded by Dickson that
'the Resolution as read be adopted, and upon roll call there were:
AYES: NAYS: ABSENT:
Ambrisco X
Baker X
Courtney X _
Dickson X
McDonald X
Strait X
Zuber X _
Passed and approved this 1.6th day of December _'1986
OR
1W
RESOLUTION NO. 86-350
RESOLUTION TO ISSUE DANCING PERMIT
BE IT RESOLVED BY THE CITY COUNCIL OF IOWA CITY, IOWA,
that a Dancing Permit as provided by law is hereby granted
to the following named person and at the following described
locations upon his filing an application, having endorsed
thereon the certificates of the proper city officials as to
having complied with all regulations and ordinances, and
having a valid. Class "B" Beer Permit or liquor control license,
to wit:
Cabe's Inc. dba Gabe's/Oasis, 330 Washington St. (Renewal)
Lower Level: 30'x100'
Upper Level: 301x100'
It was moved by Strait and seconded by Dickson
that the Resolution as rea�a opted, and upon rol ca are
were:
AYES: NAYS: ABSENT:
Ambrisco X
Baker X
Courtney X
Dickson X
McDonald x
Strait X
Zuber X
Passed and approved this 16th day of December ,
19 86 .
Attest:
i
/flugP
'r
j RESOLUTION NO. 86-351
RESOLUTION ADOPTING SUPPLEMENT NUMBER 30 TO THE CODE OF
ORDINANCES OF THE CITY OF IOWA CITY, IOWA
WHEREAS, the Municipal Code Corporation has prepared the 30th supple-
ment to the Code of Ordinances of the City of Iowa City, Iowa, and,
WHEREAS, it is deemed appropriate to adopt supplement number 30 by j
resolution as a part of the said Code of Ordinances,
i
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA
CITY, IOWA:
i
I. That supplement number 30 to the Code of Ordinances of the City
Of Iowa City, Iowa, attacFed to this Resolution as Exhibit A, and by 3
this reference made a part hereof, is hereby officially adopted as a
part of the said Code of Ordinances.
2. That the Mayor is authorized to'sign, and the City Clerk to attest,
this Resolution.
It was moved by Strait and seconded by Dickson the
Resolution be adopts an upon ro call there were:
AYES: NAYS: ABSENT:
X Ambrisco
_ X Baker
X Courtney
X Dickson
X McDonald
Strait
_. Zuber
Passed and approved this 16th day of Decembc ; 1986 ,
ATTEST:
611 r-LUNK
Rocelvod a Approver:
By Jim kyal Dci+a bz
670/
a-,
SUPPLEMENT NO. 30
CODE OF ORDINANCES
City of
IOWA CITY, IOWA
luoseleaf Supplement
This Supplement contains all ordinances from the calendar
quarter, July through September, 1986 which are suitable for
inclusion in the Code; the latest ordinance in this Supplement
is:
Ordinance No. 863295, adopted August 12,1986.
See Code Comparative Table, page 2967.
Remove old pages Insert new pages
975,976 975-976.1
2127, 2128 2127, 2128
2505, 2506 2505-2506.1
2967 2967
Insert this instruction sheet in front of volume. File removed
pages for reference.
MUNICIPAL CODE CORPORATION
Tallahassee, Florida
November, 1986
FRANCHISES 114.78
(b) Estenaiou of networl: within city boundaries:
(1) Conditions of required extension: The grantee shall at its
expense extend its broadband telecommunications network
so as to provide ful l network service to all potential sub-
scribers in:
a. Newly annexed areas of the city contiguous with an
area served by or required to be served by an existing
network as soon as possible but in no event Inter than
six (6) months after the first request far service.
b. Newly annexed areas of the city noncontiguous with
an area served by or required to be served by an exist•
ing network as soon as possible but in no event later
than six (6) months alter the first rcquext far service
when the annexed area contains at least twenty (20)
potential subscribers per plant mile including inter•
connecting trunk.
c. New housing areas developed within the city limits
and contiguous with an area served by or required to
be served by an existing network as soon as possible
but in no event later than six (6) months after the first
request for service.
d. New housing areas developed within the city limis,
and noncontiguous with an area served by or required
to be served by an existing network as soon as possible
but in no event later than six (6) months after the first
request for service when the annexed )housing) area
contains at least twenty (20) potential subscribers per
plant mile including interconnecting trunk,
e. Any resident dwelling within the city limits and within
two hundred (200) feet of an existing network as soon
as possible but in no event later than thirty (90) days
after the first request for service.
(2) Extension policy: The grantee shall file with the city
clerk two (2) copies of its extension policy for poten-
tial subscribers dwelling beyond two hundred (200)
feet from the nearest point of the existing network
Supp. No. 90
075
Of/
i
514-78 IOWA CITY CODE
but within the city limits. Such policy must be approved
by the city and the grantee shall not make, or refuse
to make, any extension except as permitted by this
approved policy.
(3) Disputes: The commission shall, upon petition, conduct
a public hearing and make a final determination con-
cerning any disputes arising from the extension of the
network as stated herein.
(4) Documentation: Upon receipt of a "first request for ser-
vice" by a potential subscriber within any of the required
extension areas listed above in section 14-78(b)(1), the
grantee shall document such request(s) by 1) promptly
sending written acknowledgement of same to the request-
ing potential subscriber confirming the date of grantee's
receipt of such request, and 2) by supplying monthly to
the commission a list of the names and addresses of those
potential subscribers making such first requests for ser-
vice during the prior month, including in said list the date
of grantee's receipt of such requests from each said poten-
tial subscriber.
(6) Damages: Failure of the grantee to meet the deadlines for
required extension of the network as specified in section
14.78(6X1) unless exempted under the provisions of sec-
tion 14.79(f) shall result in withdrawal from the security
fund as provided in section 14.75(d) up to one hundred
dollars ($100.00) per day for each day beyond said dead-
lines as compensation by way of liquidated damages as a
result of such failure. (Ord. No. 78.2917, 4 2, 822.78; Ord.
No. 83.3163, § 2(6),12.20.83; Ord. No. 86.3294, 6 2,7-15-86)
Sec. 14.79. Construction timetable.
(a) Pcrmit application: It is hereby deemed in the public
interest that the system be extended as rapidly as possible to
all residents within the city. Within ninety (90) days of the
effective date of a franchise granted hereunder, the grantee
shall file with the appropriate authorities and utilities all
initial papers and applications necessary to comply with the
terms of this article including the application for franchise
Supp. Nu. 30 976
;FF:, 4,
-• �r -lr I --- .��rT 7`
FRANCHISES 514.79
I
and any additions or amendments thereto and shall there-
after diligently pursue all such applications. After the grantee
has diligently pursued the acquisition of necessary pole st-
tachment contracts, or other necessary easements, and where
such necessary contracts have not been executed or easements
obtained after a reasonable period of time as determined by
the city, the city may, at its discretion, provide assistance
to ensure the extension of the system to all residents.
(b) Commencement of construction; Within one hundred
eighty (180) days of the effective date of FCC certification,
the grantee shall initiate construction and Installation of the
broadband telecommunications network. Such construction
and installation shall be pursued with reasonable diligence.
(c) Conunencemend of operation: Within twelve (12)
months of the effective date of FCC certification, the grantee
shall "commence operation" within the meaning set forth
In section 14-61 of this article.
(d) Substantial completion of co, 1181 (stun¢ Within twenty-
four (24) months of the effective date of FCC certification,
Sapp. No. 10
976.1
IW
STREETS, SIDEWALKS, PUBLIC PLACES 6 31-24
the one-year period for which the deposit is made. The
balance of the annual deposit shall be released one year
later. If no refund request is received, the deposit shall be
carried over for use as all or part of the annual deposit the
following year.
(f) Use of deposits: Deposits shall be used to pay the cost of
any work the city performs to restore or maintain the
public places in the event the permittee fails to perform
the work as required in this chapter. The amount released
to the permittee shall be reduced by the amount expended.
iWork done by the city shall be at uniform fees based on
labor, material, and overhead expense, Notwithstanding
the foregoing, if the deposit is not sufficient to cover the
cost of work by the city, the permittee shall be personally
liable for the balance of such costs. (Ord. No. 77.2849, § 6,
7-26.77; Ord. No. 85-3237, § 2,5.21.85)
Seo. 31.24• Traffic control
(a) No permittee under Division 2 of this article shall interrupt
access to and from private property, block emergency vehicles,
I
block access to fire hydrants, fire stations, fire escapes, water-
valves, underground vaults, valve housing structures, or any other
vital equipment as designated by the director. If a street closing
is required, the applicant will request the assistance and the ap-
proval of the director. It shall be the responsibility of the per.
mittee to notify and coordinate all excavations with the police, fire,
and transit departments and Johnson County ambulanceaervice,
(b) The permittee shall take appropriate measures to assure
that traffic conditions as near normal as possible are maintained
at all times.
(c) Type I and type 11 barricades, as defined in Port VI of the
Manual of Uniform Traffic•Control Devices, must be used when.
ever it is necessary to close a traffic lane or a sidewalk. Barri•
cades are to be supplied by the permittee. If used at night, they
must be reflectorized and must be illuminated or have barricade,
warning lights.
Supp. Nn. ae
j `/' 2127
101
-1
4 31.24 IOWA CITY CODE
(d) As a general guide for all maintenance and construction
signing, Part VI of the Manual on Uniform naffic•ControI Devi-
ces shall be used. The permittee shall illustrate on the excava.
tion permit the warning and control devices proposed for use. At
the request of the director, such warning and control devices
shall be increased, decreased or modified.
(e) Oil flares or kerosene lanterns are not to be allowed as
means of illumination. (Ord, No. 77.2849, § 7, 7.28.77; Ord. No.
85-3237, § 2,5-21-85)
Croes reference—Motor vehicles and traffic, Ch. 23.
Sec. 31.25. Protection of paved surfaces from equipment
damage.
Backhoe equipment outriggers shall be fitted with rubber pads
whenever outriggers are placed on an
ce. Tracked
vehicles are not permitted on paved surfaces unlessad aspecific pre•
cautions are taken to protect the surface. The permittee under
Division 2 of this article will be responsible for any damage to
existing pavement caused by operation of such equipment and,
upon order of the director, shall repair such surfaces damaged by
excavation equipment. Failure to do so will result in use of the
Performance deposit to repair any damage. (Ord, No, 77.2849, §
8, 7-26.77; Ord. No. 86.3237, 12, 6.21.85)
Sec. 31-26. Protection of adjoining property.
The permittee under Division 2 of this article shall protect
from "Jury an adjoining property by providing adequate support
and taking other necessary measures. The permittee shall, at his
own expense, shore up and protect all buildings, walls, fences or
other property likely to be damaged during the excavation work,
and shall be responsible for all damage to public or private proP.
erty or highways, resulting from failure to properly protect and
carry out excavation work. Failure to follow the provisions of this
section will result in the use of the performance deposit to repair
damage, (Ord. No. 77.2849, § 9, 7.26.77; Ord. No, 85.3237, § 2,
6-21.85)
Supp. No.3o
2128
moi'
ZONING a 36.6
(2) Family care facilities provided they shall not be located
within one-quarter (�/4) mile of each other.
(3) Religious institutions, subject to the requirements of sec-
tion 36-55.
(d) Special exceptions.
(1) Clubs subject to the requirements of section 36.55.
(2) Public utilities.
(e) Dimensional requirements.
(1) Minimum lot area: 40,000 square feet.
(2) Minimum lot width: 80 feet.. -
(3) Minimum lot frontage: 40 feet.
(4) Minimum yards:
Front—According to the table established in the ID zone.
-�
Side -6 feet for Abe first 2 stories plus 2 feet for each
additional story.
Rear -20 feet.
(6) Maximum building bulk:
Height -35 feet.
Building coverage—None.
Floor area ratio—None.
(6) Minimum building width: 20 feet for at least 75 per cent of
the building's length.
(f) General prouisions. All principal and accessory uses permit-
ted within this zone are subject to the requirements of Articles III
and IV, the divisions and sections of which are indicated as
follows:
(1) Accessory uses and requirements: See Article III.
a. Permitted accessory uses and buildings: See section
36.56.
b. Accessory use and building regulations: See section
36.57.
C. Off-street parking requirements: See section 36.68.
Supp. No. 30 2505
r
/9sH
4366 IOWA CITY CODE
d. Off-street loading requirements: Not applicable.
e. Sign regulations: See section 36.60.
C Fence regulations: See section 36-65.
(2) General provisions: See Article IV.
a Dimensional requirements: See Division 1.
b. Tree regulations: See Division 2.
c. Performance standards: See Division 3.
d. Nonconformities: See Division 4.
(g) Special prouisionx None.
(Ord. No. 86.3295, 0 1, 8-12-86)
See. 36.7. Low density single-family residential zone (RS -5).
(a) Intent It is the primary purpose of this zone to provide far
single-family residential development consistent with the pre-
dominant single-family,. residential character of Iowa City. De-
velopment within this zone is expected to have a neighborhood
orientation; therefore, parks, schools, religious institutions and
neighborhood commercial facilities are expected to be located
J
within or in close proximity to developments in this zone. Com-
patibility of development within this zone shall be encouraged
and related nonresidential uses and structures should be planned
and designed to be in character with the scale and pattern of the
residential development.
(b) Perinitted uses.
(1) Detached single-family dwellings.
(c) Provisional uses.
(1) -Detached single-family dwellings with a maximum of one
roomer provided that one additional off-street parking space
shall be furnished. Two-family and multifamily dwellings,
which exist as nonconforming uses, shall be permitted one
roomer per dwelling unit. (See "special provisions.")
(2) Family ave facilities provided they shall not be located
within one-quarter ('/4) mile of each other.
Supp. No.30 2506 I
4I•e.'
vi` ♦ 1t
/9ft/
ZONINU §36-7
(d) Special exception&
(1) Child care facilities subject to the requirements of section
36.55, and provided they shall be located in a private resi-
dence in which fewer than twelve (12) children are cared
for, or in a religious institution,
1 Senn. N., an
2506.1
I
I
CODE COMPARATIVE TABLE
Ord. No.
Adpl. Dale Section Sectithis
thlx Code
36.58(dX2)b
-
36.62(aX2Z1, -
(cX] )02, 5, (6)
36.65(cX2) I.
-
36.7D(aX2) ,
..
36.76(aXD, -
-
l
Wl), (dXj)
85 ,3268
(eX11, (0,
85.3270
..I
12.17.85 1 27.85 h i .
86.3274
12.17.85 2 27.85
1.14.86 2A 23.255(6), (c)
Rpld
3-17.3-18
2B Rpld 6-16_6.18 I..
2C Rpld 19.1-19.5,
86-3277
86.3280
]•2886 1D Rpld 217-21.19
86.3282
2'25.86 1 31.12
i...
3.11.86 1 36.76(h)
36.7(gX2) ;.
36.8(8X2)
86.3283
36-10(gXD, .
86.3284
3'25.86 1 36.11(8X3) I.
4.22.86 2 36-63(bX1) .
86.3286
15.2
5. 6.86 111) 15.62(,)
1(21 36s2rcX5m.6 �
36.61(MX2)
863287
I(3) Rpld 36'62(cX6)b.l
86.3288
6. 6.86 2 36.62(cX5),,2.o l
)
6- 3.88 27.36--
2(D, (2)
7 6
.
213) (4) D.l•z, 9.i .
- .86.3289
, 9.1.7, 9.1.8
2(6)
8 386 9.1.71
9
86.3290
6 61
3
17.86 5.39-544
863294
2 3
4 3345
86.329u'
7.16.80 33.44,
2 163
8.12.86 1 14.78(bXI)-(5)
86.6(cX3)
Supp. No. 39
11 -he next pngo 11 29711 -
2967
�I
RESOLUTION N0. 86-3S2
RESOLUTION AUTHORIZINTHE
STATE
HISTORICAL DEPARTMENT, OFFiCELOFIGHIISTORICOF ANPPLICATION PRESERVATION,THE FORIOWA CERTIFIED
LOCAL GOVERNMENT (CLG) DESIGNATION FOR IOWA CITY, IOWA.
WHEREAS, the City of Iowa City is committed to the protection, enhancement,
and perpetuation of the community's historical, architectural, and cultural
heritage; and
WHEREAS, the City intends to promote the use of districts of historic and
cultural significance as sites for the education, pleasure and welfare of the
people of the City; and
WHEREAS, grant funds are available from the Iowa State Historical Department,
Office of Historic Preservation, through the Certified Local Government (CLG)
Program, to encourage local preservation efforts and to assist City -initiated
historic preservation projects; and
WHEREAS, participation in the CLG Program qualifies the City for financial
assistance for preservation projects that can uplift the community's appear-
ance, instill a sense of history, and encourage economic activity.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF I014A CITY,
IOWA:
1. That the application requesting Certified Local Government status for the
City of Iowa City, Iowa, is hereby approved.
2. That the Mayor is hereby authorized to sign said Application, which shall
then be filed with the Iowa State Historical Department.
It was moved by ftDonald and ,seconded by Zuber
the Resolution be ado pte, and upon ro call there were:
AYES: NAYS: ABSENT:
X Ambrisco
X Baker
- l�— Courtney
Dickson
—- McDonald
X Strait
Zuber
Passed and approved this 16th day of _ Tkcemher 1986.
ATTEST:
7441
LI 1 T- bLtl<K
Received G Npprovea
By The Legal Deportment
I�-
RESOLUTION NO. 86-353
RESOLUTION AUTHORIZING THE MAYOR TO SIGN AND THE CITY CLERK TO ATTEST
AN AGREEMENT WITH MICHAEL E. HODGE AUTHORIZING PLACEMENT OF A SIDE-
WALK RAMP ON PUBLIC RIGHT-OF-WAY AT THE CORNER OF LINN AND MARKET
STREETS.
WHEREAS, Michael E. Hodge ("Hodge") owns property located at 203 North Linn
Street, Iowa City, Johnson County, Iowa, which he is redeveloping; and
WHEREAS, the building presently is located on the property line with both Linn
and Market Streets, and the first floor is elevated from the streets; and
WHEREAS, Hodge wishes to install a sidewalk ramp in front of his building to
provide handicapped access to it; and
WHEREAS, installation of the ramp will require use of public right-of-way; and
WHEREAS, the City is willing to allow such use of the right-of-way if it is
protected from liability which may result from such use, and can order removal
of the ramp if the right-of-way is needed for any purpose; and
WHEREAS, an Agreement for Use of Public Property containing such conditions is
attached to this Resolution.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF IOWA CITY, IOWA, THAT:
1. The Mayor is authorized to sign and the City Clerk to attest the Agreement
for Use of Public Property which is attached hereto.
2. Prior to the issuance of a certificate of occupancy for the main level of
the building at 203 North Linn Street in Iowa City, Hodge shall record the
Agreement in the Johnson County Recorder's Office, and shall return
file -stamped copies of the Agreement to the City Clerk and City Building
Inspector.
It was moved by Zubu and seconded by Strait the Resolution be
adopted, and upon roll call there were:
AYES: NAYS: ABSENT:
X AMBRISCO
X BAKER
X COURTNEY
X DICKSON
X MCDONALD
X STRAIT
X ZUBER
Passed and approved this 16t1i day of December 1986.r
/O OR
ATTEST:
CA CLERK 2eWA
i(eccivad & Approved
By Tyhbe L^pai Onpa nt nt
AGREEMENT FOR USE OF PUBLIC PROPERTY
I
THIS AGREEMENT is made between Michael E. Hodge, an indi-
j vidual, hereinafter referred to as "Hodge,"
Iowa City, Iowa, a municipal corporatiohereinafter referred
and the
of
to as "City."
i
i
WHEREAS, Hodge is the owner of certain real estate located
at 203 North Linn Street, Iowa City, Johnson County, Iowa, and
legally described as follows:
The South 50 feet of Lot 8 in Block 68,
Original Town of Iowa City, Iowa; !.
and
the
storyV�buildingHangthesabove above-described dlrst floop opertyrt fat tenantt
tfor
business purposes; and i,.
ramp in frontWHEREAS, Hodhisbuilding seeks City
to to
to install a sidewalk
it, all as shown on the attached drawproviinghlabeledpExhibits"All '
and incorporated herein; and
WHEREAS, a portion of the ramp will be located in City
Property as shown on Exhibit "A"; and
WHEREAS, the City Will agree to allow use of its
but only subject to the terms and conditions stated herein.
NOW, THEREFORE, in consideration of the mutual
set forth below, IT IS AGREED AS FOLLOWS: Promises
I. Hodge will construct the sidewalk ramp adjacent to '
the property at 203 North Linn Street, as shown on Exhibit "A"
attached to this agreement according to the City specifica-
tions,
2. Hodge will be allowed to install this sidewalk ramp
on City property from the
"A c sidewalk the building as
shown on the attached Exhibit
property right is conferred by this grant of permission,h thano
t
the City is not empowered to grant a permanent use of its
street right-o£-way for private commercial purposes, and that
the City may order the sidewalk ramp removed at any time if,
for any reason, the City Council determines that the property
upon which the sidewalk ramp is
obstructions. located should be cleared of
T
—2-
3. Hodge agrees to maintain the sidewalk ramp in good
i repair according to City standards, and to remove the sidewalk
ramp within thirty (30) days after being so ordered by the
City. If Hodge fails to remove the sidewalk ramp after being
ordered to do so, the City may re
mo
shall be chargedve it and the cost thereof
against the
p2�e�rty in the manner provided in
Iowa Code (1985), Section 364
4. Hodge agrees to indemnify, defend and hold the City
harmless in connection with any liability whatsoever arising in
regard to the installation, maintenance, use and repair of said
sidewalk ramp. Hodge shall be required to carry liability in—
surance, in minimum amounts of $500,000/$1,000,
with contractual liability 000/$250,000
coverage included asof suchi
insurance, and shall furnish a copy of the policyart to the City
before installing the sidewalk ramp. Hodge agrees to thereaf—
ter maintain such insurance in force until the sidewalk ramp is
City prot
removed from the property, and failure to maintain such
insurance in force shall automatically terminate the grant of
permission contained herein. The parties agree that the City
may require reasonable increases in the amount of coverage in
order to
If the required insurance maintained,othin the future
ity shall
have the right to remove the sidewalk ramp
days prior written notice to the following five (5)
owner of the property and the
cost of removal shall be charged against the
proe
manner provided in Iowa Code (1985), Section 364.2(e). in the
5. This agreement shall constitute a covenant running
with the land and shall be binding upon and shall inure to the
benefit of the respective successors in interest and assigns of
both parties. i
EXECUTED at Iowa City, Johnson County, Iowa, upon the
i dates as indicated below. I,
I 1 II
DATED: �J o Bb ✓�'�.lJ_� .
FfICHAEL E. HODGE
CITY OF IOWA CITY, IOWA
i DATED: _ 12/16/86 Bqf
i
LLIAM J AMB ISCOY
ATTEST:
IMARIAN K. KARH
<we>ivr.! .0 Approval
I yyphc !^53.:,1 LiepartmonS
�r_
-3-
STATE OF IOWA
) SS:
JOHNSON COUNTY )
On this Id day of 1986, before me, a
LNotary Public, personally appeared Michael E. Hodge, to me
known to be the identical person named in and who executed the
foregoing instrument, and acknowledged that he executed the
same as his voluntary act and deed.
otary Public 1 and or the
State of Iowa.
STATE OF IOWA )
) SS:
JOHNSON COUNTY )
On this 16th day of December'
1986, before me,
the undersigned -,a Notary Public in and for said County, in
said State, personally appeared William J. Ambrisco and Marian
K. Karr, to me personally known, who being by me duly sworn,
did say that they are the Mayor and City Clerk, respectively,
of said municipal corporation executing the within and forego-
ing instrument; that the seal affixed thereto is the seal of
said corporation; that said instrument was signed and sealed on
behalf of said corporation by authority of its Board of Direc-
tors; and that the said William J. Ambrisco and Marian K. Karr
as such officers acknowledged the execution of said instrument
to be the voluntary act and deed of said corporation by it and
by them voluntarily executed.
02/33-01-135
.n ��ictn,nn_r_o
liotary Public inand of the
State of Iowa.
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DRAWING NUMBER
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RESOLUTION NO, 86-354
RESOLUTION AUTHORIZING AN AGREEMENT BETWEEN THE CITY OF IOWA CITY AND
LUTHERAN SOCIAL SERVICES OF IOWA FOR THE USE OF $13,000 OF 1986 COMMUNITY
DEVELOPMENT BLOCK GRANT (CDBG) FUNDS FOR THE PURPOSE OF MAKING REPAIRS AND
IMPROVEMENTS AT THE RESIDENTIAL TREATMENT CENTER FOR YOUTH (COFFELT PLACE)
LOCATED AT 416 SOUTH DODGE STREET, IOWA CITY, IOWA
WHEREAS, the City of Iowa City is a recipient of Community Development Block Grant
(CDBG) funds granted by the United States Department of Housing and Urban Develop-
ment (HUD) under Title I of the Housing and Community Development Act of 1974, as
amended, Public Law 93-383; and
WHEREAS, the City Council of Iowa City deems it in the public interest to maintain
a decent and safe living environment for all the City's residents; and
WHEREAS, the Lutheran Social Services operates a residential treatment center for
low income, disadvantaged and troubled youth; and
WHEREAS, the City of Iowa City wishes to utilize a portion of such CDBG funds
($13,000) to assist Lutheran Social Services in making necessary repairs and
improvements to the residential treatment center for youth (Coffelt Place) located
at 416 South Dodge Street.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA,
THAT:
1. The attached Agreement between the City and Lutheran Social Services of Iowa
for use of 1986 CDBG funds is hereby approved in form and substance.
2. The Mayor is authorized to sign and the City Clerk to attest the Agreement
with Lutheran Social Services of Iowa for the use of 1986 CDBG funds,
It was moved by Strait and seconded by Dickson the
Resolution be adop e , an upon roll
ca there were:
AYES: NAYS: ABSENT:
X Ambrisco
X Baker
X Courtney
X Dickson
X McDonald
X Strait
Zuber
Passed and approved this 16th day of December , 1986.
OR
ATTEST:
RHeMd 8 Approved
By 71s Lc -;al D3p2 ent
�0 8
AGREEMENT BETWEEN THE CITY OF IOWA CITY AND LUTHERAN SOCIAL SERVICES OF IOWA
FOR THE USE OF 1986 COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) FUNDS
FOR THE PURPOSE OF MAKING REPAIRS AND IMPROVEMENTS
AT THE RESIDENTIAL TREATMENT CENTER FOR YOUTH (COFFELT PLACE)
LOCATED AT 416 SOUTH DODGE STREET
This Agreement, entered into this_ I� day of 4-M gg
1986, by and between the City of Iowa "City, a municipal corporation(herein
referred to as the "City"), and the Lutheran Social Services, an Iowa not-
for-profit corporation (herein referred to as "LSS"), and
E WHEREAS, the City is the recipient of 1986 Community Development Block Grant
(CDBG) funds granted by the United States Department of Housing and Urban
Development (HUD) under Title I of the Housing and Community Development Act of
1974, as amended (Public Law 1.`3-383); and
WHEREAS, the City wishes to utilize such funds to assist LSS in repairing and
making improvements to the residential treatment center for young men known as
Coffelt Pltce and located at 416 South Dodge Street, Iowa City, Iowa.
NOW, THEREFORE, the parties hereto agree to the following in performance of
this Agreement:
PART I
1.1 PURPOSE AND SCOPE OF SERVICES:
LSS shall complete the following projects in compliance with all applica-
ble state and local building codes, in order to repair the residential
treatment center for boys located at Coffelt Place, 416 South Dodge
Street, Iowa City, Iowa:
1. Replace boiler.
2. Remove asbestos from heating pipes.
3. Cover radiators.
4. Repair front porch.
5. Remove or repair garage.
6. Install linoleum in the kitchen.
7. Replace carpeting in residents' bedrooms.
8. Blacktop recreation area.
If CDBG funds allocated for the improvements do not cover the costs for
all the projects, LSS shall complete as many of the projects as possible
in the order listed.
1.2 TIME OF PERFORMANCE:
A. LSS shall perform according to the following schedule:
Activity Deadline
1. Contract for construction January 31, 1987
2. Begin construction February 15, 1987
i3. Complete construction June 15, 1987
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B. This schedule is subject to change only by prior mutual agreement of
the LSS and the City in writing.
1.3 COMPENSATION AND METHOD OF PAYMENT:
f
The City shall pay and LSS agrees to accept in full no more than $13,000
for performance under this Agreement as follows:
A. Five thousand dollars ($5,000) of said amount shall be paid from 1986
CDBG funds. The balance of the $13,000 shall become available if and
when the City receives 1987 CDBG funds from HND. If no such payment
is received, the City's liability hereunder shall be limited to
$5,000. If 1987 CDBG funds are not received by February 15, 1987, the
performance schedule shall be adjusted accordingly,
B. Partial payment shall be made monthly upon presentation of invoices
and mechanics' lien waivers for improvements completed to the City's
satisfaction as listed in 1.1 Purpose and Scope of Services.
C. Monthly reports detailing the project's progress for the previous
month as well as said invoices and lien waivers shall be due by the
fourth day of the month. Reimbursement shall be made to LSS by the
14th of the month for City approved expenditures incurred during the
previous month.
D. Total of the above payments will not exceed $13,000.
1.4 TERMS AND CONDITIONS:
A. The City shall assume no responsibility or liability for work to be
performed hereunder, nor for the maintenance, operation or program
funding of the residence.
B. LSS shall use the $13,000 in CDBG funds only to complete the improve-
ments detailed in Section 1.1, Purpose and Scope of Services, of this
Agreement.
C. LSS shall, at its own expense, procure and maintain during the period
of this Agreement, all risk property damage and liability insurance to
be effective as of the start of the improvement project. Property
damage coverage shall not be less than the current market value of the
property and liability coverage shall not be less than $100,000 for
bodily injury per person, and $300,000 for personal bodily injury or
death per occurrence. Proof of insurance shall be shown to the City
by furnishing a copy of a Certificate of Insurance which lists the
amounts of coverage issued by an insurance company licensed to do
business in the State of Iowa, together with a receipt showing payment
in full of premium.
D. LSS shall consider S3,OOD of the payment as a no interest loan. LSS
shall repay to the City the sum of $3,000 beginning February 1, 1988,
in thirty-six (36) installments according to the attached loan agree-
ment.
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3
E. In the event LSS ceases operation of the residential treatment center,
elects to sell or otherwise transfer legal or equitable interest in
the property located at 416 South Dodge Street, LSS shall pay to the
City ten thousand dollars ($10,000) in full; this amount to be re-
corded as a lien against the property for twenty years. On December
31, 2008, this lien will be forgiven.
Except as provided herein, the term of this Agreement shall be from
date of execution until sale or change in use of the property on
December 31, 2008.
PART II
2.1 PERFORiANCE AND REPORTING:
A. During the term of this Agreement, LSS shall operate a facility pro-
viding counseling, treatment, shelter and board for approximately ten
low and moderate income adolescents.
B. LSS shall direct all correspondence concerning this Agreement to the
Office of the Iowa City Community Development Block Grant Program
Coordinator, Civic Center, 410 E. Washington Street, Iowa City, Iowa
52240.
C. LSS shall submit monthly reports describing the progress of the reno-
vation activities to the COBG Program Coordinator's office by the
fourth day of each month until completion of all renovations and
expenditure of all CDBG funds disbursed under this Agreement.
D. Upon completion of this repair project, LSS shall submit quarterly
operations reports by the fifteenth day of January, April, July and
October of each year until April 15, 1991. Quarterly reports shall
include, at a minimum, statistics pertaining to the number and perma-
nent place of residence of persons using the facility. LSS shall also
submit a copy of its annual audit each year until it ceases operation
of the residential treatment center at 416 South Dodge Street or
December 31, 2008 (when the lien is forgiven.) i
E. Not later than July 15, 1987, LSS shall provide the City with a certi-
fied statement of the expenditure of funds disbursed under this Agree-
ment.
2.2 OTHER REPORTS, AUDITS AND INSPECTIONS:
A. LSS shall furnish the City or HUD with such statements, records, data
and information as the City or HUD may reasonably request pertaining
to this Agreement.
B. During the term of this Agreement, at any time during normal business
hours, LSS shall make available to the City, HUD and/or the Comptrol-
ler General of the United States or their duly authorized representa-
tives, all of LSS's records with respect to this Agreement in order to
permit examination of any audits, invoices, materials, payrolls,
personnel records, conditions of employment and other data relating to
all matters covered by this Agreement.
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I
4
C. LSS shall retain financial records, supporting documents, statistical
records and all other records pertaining to expenditures under this
Agreement for a period of three (3) years from the termination of this
Agreement.
2.3 CONTRACTING AND PROCUREMENT STANDARDS:
i
The requirements of Attachment 0 (Procurement Standards) of OMB Circular
A-110 and OMB Circular A-122 (Cost Principals for Non -Profit Organiza-
tions), shall apply to the use of funds disbursed under this Agreement.
The City shall provide LSS with copies of said OMB Circulars, and LSS
hereby acknowledges receipt of said Circulars.
2.4 NON-DISCRIMINATION:
No person shall be excluded from or denied the services of the LSS facil-
ity on the basis of race, color, creed, religion, national origin, marital
status, sexual orientation, disability or public assistance source of
income. A majority of the prospective beneficiaries must, however, be low
and moderate income adolescents in need of housing and treatment serv-
ices.
2.5 EQUAL EMPLOYMENT OPPORTUNITY:
LSS certifies that it is an "Equal Opportunity Employer" and that it will
comply with Chapter 18 (Human Rights) of the Iowa City Code, Chapter 601A
(State Civil Rights) of the Iowa Code, and all applicable regulations of
the United States Department_077[ouMg and Urban Development pertaining
to equal opportunity and affirmative action in employment. Further, LSS
shall ensure that all contracts for work under this Agreement contain an
appropriate equal employment opportunity statement.
2.6 ENVIRONMENTAL ASSESSMENT AND HISTORICAL PRESERVATION:
The LSS shall assist the City in complying with all applicable environ-
mental assessment and historic preservation requirements of HUD and the
State Historic Preservation Officer of Iowa.
2.7 LEAD-BASED PAINT POISONING PREVENTION:
LSS shall comply with the requirements of the Lead -Based Paint Poisoning
Prevention Act (42 USC 4831 et seq.) and HUD regulations thereunder (24
CFR Part 35), insofar as they apply to the performance of this Agreement.
2.8 TERMINATION OF AGREEMENT FOR CAUSE:
If LSS fails to fulfill its obligation under this Agreement in a timely
and proper manner or if LSS violates any of the terms, agreements or
stipulations of this Agreement, the City shall thereupon have the right to
terminate this Agreement by giving written notice to LSS specifying the
defaults, and stating that this Agreement will be terminated 30 days after
the giving of such notice and if such default or defaults are not remedied
/its
within such grace period. In the event of such termination, LSS shall
reimburse the City for the full amount of all payments it has received
under this Agreement.
2.9 INTEREST OF CERTAIN FEDERAL AND OTHER OFFICIALS:
A. No member or delegate to the Congress of the United States, and no
Resident Commissioner, shall be admitted to any share or part of this
Agreement, or to any benefit to rise herefrom.
B. No member of the governing body of the City, no officer, employee,
official or agent of the City, or other local public official who
exercises any functions or responsibilities in connection with the
review, approval or carrying out of the project to which this Agree-
ment pertains, shall have any private interest, direct or indirect, in
this contract.
2.10 INTEREST OF LSS:
LSS covenants that it has no interest and shall not acquire an interest,
direct or indirect, which would conflict in any manner or degree with the
performance of the services to be performed under this Agreement. LSS
further covenants that in the performance of this Agreement, no person
having such an interest shall be employed by LSS.
2.11 ASSIGNABILITY:
LSS shall not assign or transfer any interest in this Agreement afiether
by assignment or novation, without the prior written approval of the
City.
2.12 HOLD HARMLESS PROVISION:
LSS shall indemnify and hold harmless the City, its officers, employees
and agents from all liability, loss, cost, damage and expenses (including
reasonable attorney's fees and court costs) resulting from or incurred by
reason of any action based upon the performance of this Agreement.
2.13 LIMITATIONS OF CITY LIABILITY - DISCLAIMER OF RELATIONSHIPS:
The City shall not be liable to the Grantee, or to any party, for comple-
tion of or failure to complete any improvements which are part of the
project. Nothing contained in this Agreement, nor any act or omission of
the City, the Grantee or any employer or agent of the parties, shall be
deemed or construed by any of the parties, or by any third persons, to
create any relationship of third -party beneficiary, principal and agent,
limited or general partnership, or joint venture, or of any association or
relationship involving the City.
6
IN WITNESS WHEREOF, the parties hereto have executed this contract on this
day of 1986. —
CITY OF IOWA CITY
ayor
ATTEST/1AiA _i
City Clerk
LUTHERAN SOCIAL SERVIC S
By
presen a rve, oar o rustees
ATTESTu�/
W' ness
Reeefve-0 14 Approves
BY The
Lew p,epartmed
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Exhibit A
STATEMENT OF LIEN
The undersigned hereby agrees that the following described real estate,
located in Iowa City, Johnson County, Iowa, is the Property referred to in
the attached Pronmissory Note. `
To -wit:
Part of the northwest quarter of Section 15, Township 79 North,
Range 6 West of the 5th P.M. as follows: Beginning on the east ;
side of Dodge Street at a point 220 feet south of the southwest j
corner of Out Lot 28, in Iowa City, Iowa, according to the
recorded plat thereof, running thence east 159 feet, thence
south 50 feet, thence west 159 feet to the east line of Dodge
Street, thence north 50 feet to the place of beginning.
I
IN WITNESS WHEREOF, the foregoing instrument is executed on behalf of the j
i uofder�gned thority of
its Board of Directors, on this aZ day
LUTHERAN $ SOCIALCEOF IO}IA
Uj
C.� ,fit,trr✓ �
By: `4srLZ;6e ec
STATE OF IOWA )
SS: -
JOHNSON COUNTY ) J.)mom"
' day of /�,cLE���� 19 g; before me, a Notaryn�or the a e o owa, persona y appeared°�¢.�, to me personally known, and who by me a ng u yid say that the person is the Director of the Lutheran Socialof Iowa, a non-profit corporation, no seal has been procured byoration, and that the instrument was signed on behalf of theion by authority of its Board of Directors, and the person ac -
d the execution of the instrument to be the voluntary act andhe corporation. by it and by the person voluntarily executed,
SEAL _[c4cc��%
o ry u is in and for the state o owa
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8y Th: 1c ;al ds s,i
' 1988
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6
LUTHERAN SOCIAL SERVICES OF [OVA
PROMISSORY NOTE
Name: Coffelt Place Date:
Address: 416 South Dodge Street
Iowa City, IA 52240
Legal Description: Part of the northeast quarter of Section 15, Township
79 North, Range 6 West of the 5th P.M. as fol laws: Beginning on the east
side of Dodge Street At a point 220 feet south of the southwest corner of
Out Lot 28, in Iowa City. Iowa, according to the recorded plat thereof,
running thence east 159 feet, thence south 50 feet, thence west 159 feet
to the east line of Dodge Street, thence north 50 feet to the place of
beginning.
In the Amount of: 33,000
For value received, the undersigned Jointly and severally promise(s) to
pay to the order of the City of Iowa City (hereinafter called the 'City -)the sum of 33,000. There shall be DS Interest rate on the unpaid princi-
pal amount of this Note. The principal and interest charge an this Note
are payable on the first day of each month in 36 monthly installments,
including principal and Interest, commencing with the payment of $83.45 on
February 1, 1988, and of $83.33 the first day of each month for the re -
mining 35 months commencing on March 1, 1988, In lawful money of the
United States at the offices of the Iowa State Bank and Trust Company or
At such other place as may be designated by the City.
The undersigned reserves) the right to prepay at any time all or any part
of the principal Amount of this Note without the payment of penalties or
premiums.
In the event that a payment has not been received by the Iowa State Bank
within ten days after It is due, 53 interest will be charged one time on
each overdue payment.
In the event the undersigned shall fall to pay any installment payment on
this Nate when due, and if such failure be subsisting on the date the next
installment payment under this Mote becomes due and payable, the unpaid
principal Amount of this Note together with Accrued service charges shall
become due and pa able, at the option of the City, without notice to the
undersigned. Failure of the City to exercise such option shall not con-
stitute a waiver of such default. No default shell exist by reason of
non-payment of any required installment of principal as long as the Amount
of any optional prepayments already made pursuant hereto equals or exceeds
the amount of the required Installments. If this Note be reduced to
judgment, such Judgment shall bear the statutory interest rate on judg.
merits.
If suit is Instituted by the City to recover on this Note, the undersigned
agrees) to Pay All costs of such collection including reasonable attor-
ney's fees and court costs. This Note Is secured by a Statement of Lien,
duly filed for record in the Johnson County Courthouse.
Oared, protest and notice of demand and protest are hereby, waived, and
the undersigned hereby waives to the extent 4uthorized by law all home-
stead and other exemption rights which otherwise would apply to the debt
evidenced by this Note.
IN WITNESS WHEREOF, this Note hes been duly executed by the undersigned,
as of Its date.
Rwived 8 APPmve:
C, Thi bnal De moan'
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B. This schedule is subject to change only by prior mutual agreement of
the LSS and the City in writing.
I. COMPENSATION AND METHOD OF PAYMENT:
City shall pay and LSS agrees to accept in full no more than $13,000
fo performance under this Agreement as follows:
A an tial Payment
ym nlien waiversfor thall be ade monthly upon pre entation of invoices
sati action as listed in 1.1 Pur ose and Sco of 1Services the City s
B. Monthly reports detailing the project's rogress for the previous
month as we 11 as said invoices and lie waivers shall be due by the
fourth da of the month. Reimburseme sha11 be made to LSS by the
14th of the month for City approvedltures incurred duri
previoumon ng the
s
C. Total of the ab a payments will of exceed $13,000.
1.4 TERMS AND CONDITIONS:
A- The City shall assum no esponsibility or liability for work to be
performed hereunder, r for the maintenance, operation or program
funding of the resident
B. LSS shall use the $1 1000 n CD8G funds only to complete the improve-
ments detailed in S tion 1. ,Purpose and Scope of Services, of this
Agreement.
C. LSS shall, at i own expense, rocure and maintain during the period
of this Agreem t, all risk prop ty damage and liability insurance to
be effective s of the start of the improvement project. Property
damage cover ge shall not be less t an the current market value of the
property a liability coverage sha 1 not be less than $100,000 for
bodily in ury per person, and $300,0 for personal bodily injury or
death pe occurrence. Proof of in sur ce shall be shown to the City
by fur shing a copy of a Certificate f Insurance which lists the
amoun of coverage issued by an insur nce company licensed to do
busi ss in the State of Iowa, together wi h a receipt showing payment
in 11 of premium.
0. L shall consider $3,000 of the payment as no interest loan. LSS
all repay to the City the sum of $3,000 beg ning February 1, 1988,
in thirty-six (36) installments according to t attached loan agree-
ment.
In the event LSS ceases operation of the residenti 1 treatment center,
elects to sell or otherwise transfer legal or eq table interest in
the property located at 416 South Dodge Street, LSshall pay to the
City ten thousand dollars ($10,000) in full; this mount to be re-
corded as a lien against the property for twenty ye rs. On December
31, 2008, this lien will be forgiven.
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City of Iowa City
MEMORANDUM
DATE: December 12, 1986
T0: City Council
FROM: Patt Cain, Economic Development Coordinator
RE: CEBA Loan Agreements with the Department of Economic Development and
Computer Aided Design Software, Inc, (CADSI)
The proposed loan, agreements necessary to complete award of a Community
Betterment Account Loan for use by CADSI are attached. Attachments 8
(a copy of the CEBA Application as submitted to the State) and E
(Mortgage and Security Agreement with CADSI) are available for Council
review on request and are on file in the City Clerk's office_
If you have any questions on this material, please call me at 356-5235.
/414
Iq
RESOLUTION NO. 86-355
RESOLUTION APPROVING COMMUNITY ECONOMIC BETTERMENT LOAN AGREEMENT
BETWEEN THE CITY AND THE IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT FOR
$100,00(CADSI)OTOHICH ASSISTLINBE LOANED PU CHASE OF LAND COMPUTER A ANDIDED DESIGN CONSTRUCTIONSOFTWRE, INC.
AABUILDING
TO HOUSE CADSI'S OPERATIONS
WHEREAS, CADSI is a local business which needs economic betterment funds in
order to expand into its own facilities; and
WHEREAS, the State of Iowa, Department of Economic Development, has agreed to
loan $100,000 of Community Economic Betterment Account Funds to the City for
the benefit of CADSI; and
WHEREAS, the City will, in turn, loan those funds to CADSI to assist in
purchasing land in Iowa City and constructing a building to house CADSI's
operations; and
WHEREAS, it is expected that the CADSI expansion will create 36 new jobs
during the next few years.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF IOWA CITY, IOWA, THAT:
1. The Community Economic Betterment Loan Agreement and Promissory Note,
copies of which are attached hereto, be and hereby are approved in form
and substance.
2. The Mayor is authorized and directed to sign, and the City Clerk to
attest, the Loan Agreement and Promissory Note.
It was moved by McDonald — and seconded by Courtney
the Resolution be adopted, an upon ro call there were:
AYES: NAYS: ABSENT:
X Ambrisco
X Baker
X Courtney
X Dickson
X McDonald
X Strait
X Zuber
Passed and approved this 16th day of December 1986.
AA�YOR `
ATTEST: Yjln... ) j Tia u1__
CI CLERK
Recefved & Approved
BI, The tegn? LMpa+hnon2
K� F e t
I
COMMUNITY ECONOMIC BETTERMENT ACCOUNT LOAN AGREEMENT
Issuing Agency: Agreement Title:
Department of Economic Development Community Economic Betterment Loan
Loan Recipient: Agreement Number:
City of Iowa City CEBA-86-26
CERA Recipient Business
Fiscal Summa Loan Amount Contribution Contribution Other 'Total
ounce t. 1�� — — T -U— ug -'000
Source Agency/Law: 11 G.A., HF 225, as amended.
Type: Cost Reimbursement
I
Effective Date: August 1, 1986
Submit Requisitions to:
CEBA Program Administrator
Department of Economic Development
600 East Court Ave.
Des Moines, IA 50309
Project Completion Date: July 31, 1988
Final Loan Repayment Date: duly 31, 2001
Issue Payment to:
City of Iowa City
Civic Center
410 E. Washington Street
Iowa City, IA 52240
IN WITNESS THEREOF, the parties hereto have executed this Agreement on the day
and year last specified below, said Agreement consisting of typewritten pages
and Attachments "A", "B", "C" and "D".
Recipient: Issuing Agency:
City Y utrlowa City Department o Econ�oimic�Oelopment
^ ( // V7
By : � 2 �'
Al Collet, nv s on irector
Date: '7
By: ti.
Allan T. inoms, Director
Date: 12/16/86 Date: 4 f"d'7
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City of Iowa City
Contract No. CEBA-86-26
Page k2
ARTICLE 1.0 GENERAL
1.1 Identification of Parties. This Agreement is entered into by and
between the Department of Economic Development (hereafter referred to
as the Department) and the City of Iowa City (hereafter referred to as
Recipient).
1.2 Statement of Purpose.
WHEREAS, the Community Economic Betterment Account (CERA) has been
created to assist in economic development; and
WHEREAS, the Department has been designated to administer the
Community Economic Betterment Account; and
WHEREAS, the recipient has the necessary ability to carry out its res-
ponsibilities as a loan recipient under this Program, and has been
approved for receipt of a loan;
THEREFORE, the parties hereto, in consideration of the premises, do
agree as described herein.
1.3 Designation of Officials.
1.3.1 Department - The Director of the Department of Economic
Development or his designee is the Department official
authorized to execute or negotiate any changes in the terms,
conditions, or amounts specified in this Agreement.
1.3.2 Recipient - The Mayor of the City of Iowa City is the
Recipient official authorized to execute any changes in the
terms, conditions, or amounts specified in this Agreement.
The Mayor of the City of Iowa City is designated to
negotiate, on behalf of the Recipient, any changes to this
Agreement.
1.4 The Loan. The Department agrees, upon the terms and conditions
j ere na ter set forth to make a loan to the Recipient in the amount of
$100,000 in order to assist in the financing of the project described
in Article 2.2 of this Agreement. The obligation of the Recipient to
repay the loan shall be evidenced by the promissory note of the
Recipient to the Department in the amount of $100,000 to be in the
form attached hereto as Attachment A. In the event Recipient fails to
requisition and spend the full face amount of the loan as set out
herein and in said promissory note, then the amount of the loan shall
be reduced accordingly.
1.5 Time of Performance. The services of the Recipient are to commence as
of the Ist day of7ugust, 1986, and shall be undertaken in such
sequence as to assure their expeditious completion. All of the
project activities required hereunder shall be completed on or before
July 31, 1988.
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City of Iowa City
Contract No, CEBA-86-26
Page N3
1.6 Reports and Products. The Recipient shall submit the following
reports:
REPORT DUE DUE DATE
Expenditure Reports Monthly
Quarterly Progress Report 15th of the month following the
end of each quarter
CADSI's Annual Within 4 months of end of CAOSI's
Financial Statement fiscal year
Final Progress Report Within 30 days of project completion
Audit Report Within 30 days of the audit completion
1.7 Performance of Conditions Precedent. The Recipient certifies
t at t as sats ed a cord t ons and requirements precedent
to the award of the Agreement.
1.8 Assurances. The assurances appearing in the Recipient's applica-
tion or the loan are incorporated herein and made a part of this
Agreement.
ARTICLE 2.0 RECIPIENT'S PROJECT
2.1 Statement of Work and Services. The Recipient shall perform in a
sats ac tory an proper manner, as determined by the Department,
the work activities and services as written and described in the
approved Community Economic Betterment Account Application
Package, Attachment B to this Agreement. This Attachment is
hereby made a part of this Agreement by reference. In addition,
Recipient's work activities and services shall conform to the
approved Program Budget form, Attachment C to this Agreement, and
the approved Project Schedule, Attachment D to this Agreement.
2.2 Pro ect ;scri tion. As described in Recipient's approved
app cat on, the roject(s) shall be:
Funds will be loaned to Computer Aided Design Software, Inc. to
purchase land and construct a 6,000 - 6,800 square foot building
to house CADSI s operations.
2.3 ProJgct Budmet,
City of Iowa Cit : CEBA-86-26
CEBA
LOAN RECIPIENT BUSINESS OTHER Total
Loan to CADSI, Inc. $100,000 S - 0 - $ 30,000 S 0 $345,000
Cash
215,000
Loan
TOTAL $100,000 S - 0 - $245,000 S 0 5345,000
City of Iowa City
Contract No. CEBA-86-26
Page .M4
2.4 Cost Su_fficie�n��. The Department does not make any warranty,
ett er' a—fi xpressed or implied, that the proceeds of the loan avail-
able for payment of the costs of the project will be sufficient
to pay all the costs which will be incurred in that connection.
2.5 Prior Costs. Costs of any kind related to Recipient's project that
were incurred before the effective date of this Agreement shall not be
included as local cash resources and loan proceeds shall not be used
to pay for nor reimburse such costs unless approved in writing by the
Department.
ARTICLE 3.0 TERMS OF THE LOAN
3.1 Maximum Amount of Loan. It is expressly understood and agreed that
t e maximum amount to be loaned to the Recipient by the Department
shall be $100,000.
3.2 Loan Rate. The Department and Recipient agree that all funds loaned
to Recipient shall be at an interest rate of variable percent.
Applicable interest rates are shown as part of Attachment A.,
3.3 Loan Term. The Department and Recipient agree that the term of the
oai n sFTi be fifteen (15) years.
3.4 Prepa,Zment of Loan. The outstanding principal of the loan may be
prepaid -by the Recipient at any time without penalty.
ARTICLE 4.0 CONDITIONS OF PAYMENT OF LOAN FUNDS TO RECIPIENT
4.1 Requisition for Payment.
4.1.1 Payments to the Recipient. All payments to the Recipient
SH, be subject to the receipt by the Department of a
requisition for payment. The requisition shaiI be made
according to the format specified by the Department,
4.1.2 Su2Porting Evidence to Accompany Requisition. The Recipient
snail suomit to the Department such supporting evidence as
may be reasonably required by the Department to substantiate
all payments which are requested and to substantiate all
payments then made with respect to the project. In
addition, the Department may require the Recipient to secure
and provide evidence to the Department of lien waivers from
any contractor or subcontractor for all work done and for
all materials furnished by them for the project.
4.2 Timing of Requisitions. Loan recipients shall request loan funds only
R needed an s a never have more than $500.00 in loan funds on hand
for a period longer than 30 days,
4.3 Use of Loan Proceeds, Proceeds of the loan are to be disbursed in
accordance w t rticle 2.2 and with Article 2,3, Recipient
understands and agrees that loan proceeds shall not be spent on any
1911
City of Iowa City
Contract No. CEBA-86-26
Page M5
other purpose(s) or projects) than that described in Articles 2.2 and
2.3.
4.4 Investment of Loan Proceeds. Temporarily idle loan funds held by the
Recipient may ainveste y the Recipient provided that such invest-
ments shall be in accord with state law, shall be controlled by the
Recipient, and that the interest accruing from such investments shall
be credited to and expended on the project prior to the expenditure of
other loan funds. In the event that loan funds remainafter project
completion, and after all charges, including audit costs or estimated
audit costs, to the project have been paid or obligated, such funds
shall be returned to the Department within thirty days. Any loan
funds plus any interest accrued on loan funds, that are not expended
in a timely fashion, shall be returned to the Department upon request.
4.5 Sus ension of Payments. The Department reserves the right to suspend,
w ti o , or a ay oan payments to the Recipient if it is determined
that the Recipient's project has been changed, interrupted, or
significantly delayed or if the Recipient is determined to be not in
compliance with any provision of this Agreement.
4.6 Promissor Note Re uired. The Department shall not provide loan funds
to t e ec p ent or
or to the completion and execution of the
promissory note, Attachment A to this Agreement.
4.7 Repayment Schedule. Repayment of the loan shall be made by Recipient
to t e e� p-6 artment as specified in Attachment A, the Promissory Note.
ARTICLE 5.0 LOAN DEFAULT
5.1 Default. If any of the following events ("Event of Default") shall
occur and be continuing, the Department may declare the Recipient to
be in default:
5.1.1 Any representation or warranty made by the Recipient under
or in connection with this agreement shall prove to have
been incorrect in any material respect when made; or
5.1.2 The Recipient shall fail to perform or observe any other
term or condition contained in this Agreement and any such
failure shall remain unremedied for thirty (30) days after
written notice thereof shall have been given to the
Recipient by the Department; or
5.1.3 Execution shall have been levied against the project or any
lien creditors suit to enforce a judgment against the
project or such other property shall have been brought and
(in either case) shall continue unstayed and in effect for a
period of more than thirty (30) consecutive calendar days;
or
5.1.4 The Recipient shall sell, transfer, lease or convey the
project, or any part thereof, without the prior written
consent of the Department.
GL1
City of Iowa City
Contract No. CEBA-86-26
Page k6
5.2 Actions U on a Declaration of Default. Upon declaration of default by
the epartnw'nt, t e epartment may:
5.2.1 By notice to the Recipient, declare the loan payable under
the promissory note and this Agreement to be forthwith due
and payable, without presentment, demand, protest, or
further notice of any kind, all of which are hereby
expressly waived by the Recipient;
5.2.2 Take whatever action at law or in equity may appear
necessary or desirable to collect the payments and other
amounts then due and thereafter to become due or to enforce
performance and observance of any obligation, agreement or
covenant of the Recipient under this Agreement. No remedy
herein conferred upon or reserved to the Department is
intended to be exclusive of any other remedy or remedies,
and each and every such remedy shall be cumulative, and
shall be in addition to every other remedy given hereunder
or now or hereafter existing at law or in equity or by
statute.
ARTICLE 6,0 ADMINISTRATIVE REQUIREMENTS
6.1 Administration. The Agreement shall be administered in accordance
w t apter 8, Iowa Administrative Code and all applicable state
and federal laws and regulations.
6,2 Administrative Costs. The Recipient agrees that no loan proceeds
s a e use oradministrative expenses.
6.3 Accounts and Records. The Recipient shall maintain books, records,
vidence
xense
incurredsandnrevenueseacquiredpundernthisertaiingtAgreementttoatheeextentsand
in such detail as will properly 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 Agreement.
6.4 ins ection of Records, Any time during normal business hours and as
requent y as s eemed necessary, the Recipient shall make available
to the Department and the State Auditor, for their examination, all of
its records pertaining to all matters covered by this Agreement and
Permit these agencies to audit, examine, make excerpts or transcripts
from such records, contract, invoices, payrolls, personnel records,
conditions of employment, and all other matters covered by this
Agreement.
6.5 Monitorin b De artment. The Department reserves the right to make
sc e u e an unsc e u ed visits to the Recipient in order to monitor
project performance and compliance with this Agreement.
6.6 Reports Required. The Recipient is required to submit to the
epart6 ment reports specified in Article 1,6 and such other reports or
q�9
City of Iowa City
Contract No. CEBA-86-26
Page q1
documents as may be reasonably required by the Department in the
administration of the Community Economic Betterment Account,
6.7 Audit Requirements. Recipient is required to have an audit of the
protect conFu—cte-r to include all income and expenditures of loan
proceeds and local cash. This audit may be part of the next regular
city audit following project completion. If the Recipient is not
regularly audited, Recipient shall have a special audit performed
within sixty (60) days after project completion and said audit costs
may be paid from loan proceeds, local cash, or a combination of said
loan proceeds and local cash to the extent they may be accurately
estimated at the time of submission of and included in the loan
application. The audit report shall be submitted to the Department
within thirty (30) days after audit completion.
ARTICLE 7.0 OTHER CONDITIONS
7.1 This Agreement is, and the Promissory Note, other documents and
agreements required by the Agreement when delivered hereunder or
pursuant thereto will be, legal, valid and binding obligations of the
Recipient enforceable against the Recipient in accordance with their
respective terms.
7.2 Neither the execution, delivery or performance of this Loan Agreement
or the Promissory Note, the consummation of the transactions
contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Loan Agreement conflicts with or results
in a breach of any of the terms, conditions or provisions of any
restriction in any organizational document or any agreement or
instrument to which the Recipient is now a party or by which the
Recipient is bound, or constitutes a default under any of the
foregoing, or results in the creation or imposition of any lien,
charge or encumbrance whatsoever upon any of the property or assets of
the Recipient under the terns of any instrument or agreement, other
than as provided in this Loan Agreement.
7.3 There is no litigation or proceeding pending, or to the knowledge of.
the Recipient threatened, against the Recipient affecting in any
manner whatsoever the right of the Recipient to execute this Agreement
or the other agreements required to be executed by the Recipient under
the Agreement, or the ability of the Recipient to pay the payments
required hereunder or to otherwise comply with the Recipient's
obligations contained herein or therein.
7.4 The Recipient will comply in all material respects with all applicable
laws, rules, ordinances, regulations and orders, such compliance to
include, without limitation, paying before the same become delinquent
all taxes, assessments and governmental charges imposed upon the
Recipient or upon the Recipient's property except to the extent
contested in good faith.
7.5 The Recipient agrees that the Department shall have no responsibility
nor incur any expense for maintenance or preservation of the Project
U
City of Iowa City
Contract No. CEBA-86-26
Page M8
or for the payment of any taxes, assessments or other governmental
charges assessed or levied with respect to the Project.
ARTICLE 8.0 MISCELLANEOUS
8.1 Agreemen_ t Coveraue.
8_1.1 This instrument, and any referenced attachments hereto or
documents referred to herein, contains the entire agreement
between the parties and any statements, inducements or
promises not contained herein shall not be binding upon said
parties. This Agreement shall be binding upon the - —I -
successors in office of the respective parties.
8.1.2 If any of the provisions herein shall be in conflict with
the laws of the State of Iowa, or shall be declared to be
invalid by any court of record of this state, such
invalidity shall be construed to affect only such portions
as are declared invalid or in conflict with the law and such
remaining portion or portions of the agreement shall remain
in effect and shall be construed as if such invalid or
conflicting portion of such agreement were not contained
herein.
8.2 Term of the Agreement. This Agreement shall be in full force and
f� rom t e ate ereof and shall continue in effect so long as
1 the loan is outstanding and unpaid.
8.3 Maintenance of the Pro ect and Insurance. The Recipient covenants
that, so ong as t e loan s outstan ng and unpaid, the Recipient
shall keep, or cause to be kept, the Project in as good repair and
condition, as same may be, or may be hereafter placed upon completion,
ordinary wear and tear only excepted; and shall not suffer or commit
waste or damage upon the Project. In addition, the Recipient may be
withoutdto noticeeorin force demand, againstclossrbyifire, tornado,refore tandeotheraid
'r hazards, casualties, and contingencies as the Department may require
on the Project, in an amount not less than the full insurable value of
the Project, or not less than the unpaid balance of principal on the
loan with such insurance payable to the Recipient and the Department
as their interests may appear. Y Pp r. The Recipient ers with ma b
deposit such policies with proper riders with the Departments to j
8.4 Amendment of this A reement. The Department or the Recipient may,
ur ng t e ural ono t s Agreement, deem it necessary to make
A'reement,lswhichto harerapproved by the'this
Department, shallbe
changes
incorporated
into this Agreement. The provisions of the amendment shall be in
effect as of the date of the amendment unless otherwise specified
within the amendment. A waiver of any condition of this Agreement
must be in writing from the duly authorized official of the
Department.
City of Iowa City
Contract No. CEBA-86-26
Page N9
8.5 Indemnity, Fees and Expenses.
8.5.1 The Recipient will indemnify and save harmless the
Department and its officers and employees from and against
any and all losses, by it or them whileit or they are
acting in good faith to carry out the transactions
contemplated by this Agreement or to safeguard its or their
interests or ascertain, determine or carry out its or their
obligations under this Agreement or any law or contract
applicable to said transaction.
8.5.2 The Recipient will upon demand pay to the Department the
amount of any and all reasonable expenses, including the
reasonable fees and expenses of their counsel and of any
experts and agents, which the Department may incur in
connection with the exercise or enforcement of any of the
rights of the Department hereunder, the failure by the
Recipient to perform or observe any of the provisions
hereof, the collection of payments due under this Agreement,
and any other reasonable expenses of the Department related
to the Project or this financing (including reasonable
attorneys' fees) which are not otherwise expressly required
to be paid by the Recipient under the terms of this
Agreement.
8.5.3 The Recipient agrees to pay all appraisal fees, survey fees,
recording fees, license and permit fees and insurance
premiums related to Recipients Project.
It is the intention of the
hall
not incur pecuniary liability rbyes that e
reason oftheptermsnofsthis
Agreement and the Recipient shall indemnify and hold
harmless the Department (including any person at any time
iserving as an officer or employee of the Department) against
all claims by or on behalf of any person, firm or corpora-
tion, arising out of the same, and all costs and expenses
incurred in connection with any such claim or in connection
with any action or proceeding brought thereon.
The obligation of the parties under this Section shall
survive the termination of this Agreement.
8.6 Bindin Effect; Governin Law. This Agreement shall be binding upon
an mute to t e ene t of the Recipient and the Department and their
respective successors and assigns, except that the Recipient shall not
have the right to assign its rights hereunder or any interest herein
i without the prior written consent of the Department. This Agreement
shall also inure to the benefit of the Department. This Agreement
i shall be governed by, and construed in accordance with, the laws of
the State of Iowa.
8.1, Obli ations of the Reci ient Hereunder Unconditional. The obligations
o t e ec p ent to ma e t e payments require n ttachment A and
other articles hereof and to perform and observe the other agreements
contained herein shall be absolute and unconditional and shall not be
subject to any defense or any right of set-off, counterclaim or
City of Iowa City
Contract No. CEBA-86-26
Page #10
recoupment arising out of any breach by the Department of any
obligation to the Recipient, whether hereunder or otherwise, or out of
any indebtedness or liability at any time owing to the Recipient by
the Department and until such time as the principal shall have been
fully paid or provision for the payment thereof shall have been made
in accordance with the Agreement, the Recipient (i) will not suspend
or discontinue any payments provided for in Attachment A hereof, (ii)
will Agreement rm n
and (iii) eserve lother
)exceptasproviden
edinArticleained 8.10.3nthis
hereof, will
not terminate the tern of this Agreement for any cause, it being the
intention of the parties that the payments required hereunder will be
paid in full when due without any delay or diminution whatsoever,
8.8 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 a
future occasion. No delay on the part of the Department in exercising
any right or remedy hereunder shall operate as a waiver thereof. No
single or partial exercise of any right or remedy by the Department
shall preclude future exercise thereof or the exercise of any other
right or remedy.
8.9 Additional Provisions. The following items or requirements are also
agree to:
- 8.9.1 A reement with Business - CEBA funds shall not be advanced
nor sig un she used to reimburse project expenses
prior to approval of a loan agreement between the Recipient
and the business cited in Article 2.2 above,
8.9.2 Sale or Relocation - The loan shall be due and payable upon
t e sa e o t e company or upon its relocation from the Iowa
City area.
8.9.3 The Grantee represents that it will take all actions
necessary and required to secure the accomplishment of the
following benefits to the community:
The business cited in Article 2.2 above shall create 36
Jobs in the State of Iowa in addition to the current
employee total.
8.10 Suspension and Termination of this Agreement.
8.10.1 Sus ension - If the Recipient fails to comply with the
conditions of this Agreement, the Department may, after
notice to the Recipient, suspend the Agreement and withhold
further payments or prohibit the Recipient from incurring
additional obligations of funds, pending corrective action
by the Recipient or a decision to terminate in accordance
with
artmnt
may determine nt Ballow such .2 and 8necessary and prope.1.3 heof. Therrecostsewhich
the Recipient could not reasonably avoid during the period
of suspension.
-1
City of Iowa City
Contract No. CEBA-86-26
Page Oil
8.10.2 Termination for cause - The Department may terminate this
greement in w o e, or in part, at any time before the date
of completion, whenever it is determined that the Recipient
has failed to comply with the conditions of the Agreement.
The Department shall promptly notify the Recipient in
writing of the determination and the reasons for the
termination, together with the effective date. Payments
made to Recipient or recoveries by the Department under
leAgreements terminated
galrights andliabilitiesuof the 1parties.acPaymentscord withanth
de
i recoveries may include, but are not limited to the
following; Payments may be allowed for costs determined to
be in compliance with this Agreement up to the date of
termination, based on accepted audits. The Recipient shall
return to the Department all unspent funds within one week
of
paid obythe
cfDepartment Further,
costs determined to
be unallowable through audit shall be returned to the
Department within thirty (30) days of such determination.
8,10.3 Termination for convenience - The Department or Recipient
may terminate %ements n whole, or in part, when both
parties agree that the continuation of the project would not
produce beneficial results commnsurate with the future
expenditure of funds, The two parties shall agree upon the
termination conditions, including the effective date and, in
the case of terminated. pThe lRecip ental ashall�e
notincurinewtobligations
for the terminated portion after the effective date, and
shall cancel as many outstanding obligations as possible.
The Department shall allow full credit to the Recipient for
the Department share of the noncancellable obligations,
properly incurred by the Recipient prior to termination,
6.11 Lit_ atfon. The Recipient agrees to pay the cost of any litigation
s ng ro
aregulations r m failure of the Recipient to comply with the rules and
rom the nelience or
incompetence 1oftthe Recipient. his torInecarryingsulting fout the provisions of the
Agreement or in exercising any power or authority granted to the
Rbe no ecipient
it be_nglunderstoodbthatyinpsuchnmatterstthe ise,
indemmnifttrthe State.
yandsave harmmlessthe Departmentandh
ndthethe eStatenfromasuits,
actions or claims of any character brought for or on account of any
injuries or damages received by any person or property resulting from
operations of the Recipient or any persons working under him, carrying
out the terns of this Agreement.
8,12 Resolution of Disagreement, In the event of any disagreement between
t e ec pient an t e Department relating to the technical competence
of the work and services being performed and its conformity to the
requirements of this Agreement, the decisions of the Department shall
prevai 1,
Date: August 1, 1986
PROMISSORY NOTE
Attachment A
Promises to FOR VALUE RECEIVED City of Iowa City, Johnson County, Iowa (the Maker)
Development, pat its to iprincipalhe oreroplace ofabusi essf the Stte of ,laor0atasuchnotherrtmet ofEpconomc
laceias may
be designated from time to time by the holder �- f this
onote, the principal sum of - one hundred thousand dollars to be paid as follows:
I. Repayment of the loan shall begin when the Department determines CADSI
has reached a level of $500,000 in net worth and has operated with a
Positive net income for 3 years running. The first payment will be
due one year from the end of the fiscal year in which the
aforementioned conditions have been met. CADSI shall provide copies
of their audited annual financial statement in confonnance with
Article 1.6 of the Loan Agreement, until such time as these conditions
have been met.
loan
2 toThe
be112,to 13 years)lofbCADSIIsizeover mortgage onetret
remaining term
(expected
property. Repayments shall be quarterly,
3. Interest will accrue commencing with the first day of the fiscal year
in which repayment will be required. The interest rate shall be the
prime rate published in the Nall Street Journal on the day interest
begins to accrue and shall be adjusted annually to reflect the prime
rate on the first day of CADSIIs fiscal year,
In the event the Maker fails to requisition and spend the full face amount
of the loan as set out above and as set out in the Loan Agreement then the
amount of each installment payment shall be reduced accordingly in equal
amounts.
If default is made in the payment of this note, the same may become due and
payable without notice at the option of the holder. In the event of default in
the payment of this note, Maker agrees to pay all reasonable costs of
collection, including reasonable attorney fees. Maker's liability for the
repayment of this note to the State of Iowa, Department of Economic Development,
is limited to those amounts Maker collects through its good faith enforcement of
its security interest which secures its loan to computer Aided Design Software,
Inc. The Maker hereby represents and warrants that it has obtained or will
obtain a mortgage and security interest on the project (as defined in the loan
agreement described below) which is or will be subordinate to a first mortgage
and security interest securing a $215,000 mortgage loan on the project, Upon
exhaustion of its rights in the collateral granted by such security interest,
the Maker will have no liability for any deficiency owing the State of Iowa,
Department of Economic Development under this note. Nothing in this paragraph
shall limit the recovery of principal and interest by the State of Iowa,
Department of Economic Development in the event of fraud, or gross mismanagement
in the application for or use of the sums loaned under this note.
/4n
j Maker represents and warrants that the extension of credit evidenced by
this note is for the purposes described in the Loan Agreement.
This Promissory Note is the note referred to in, and is entitled to the
benefits of, the Loan Agreement dated August 1, 1986 (the "Loan Agreement"),
between the Maker and the State of Iowa, Department of Economic Development.
The Loan Agreement, among other things, contains provisions for acceleration of
the maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof upon the
terms and conditions therein specified.
This Promissory Note has been approved by the City Council which has
designated the Mayor as signatory for the City of Iowa City.
ity of Iowa City, Iowa
ayor
Attest:
(Seal)
The special endorsement of this Note does not constitute an
indebtedness or a charge against the general credit or general fund of the
State of Iowa or the Department of Economic Development.
STATE OF IOWA
DER
BY:
Date
By:
Date: T X
_ lg81
ATTACHMENT 6
CITY OF IOV/A CITY
CEBA
COMMUNITY ECONOMIC
HTTEKI" LENT ACCOUNT
application
package
410 East Washington St.
Iowa City, Iowa 52240
JULY 2119 66
1489
COMMUNITY ECONOMIC BETTERMENT ACCOUNT
I
GENERAL INFORMATION
Date Submitted: July 2, 1986
Applicant Name:_ City of Iowa City
Address: 410 East Washington St., Iowa City, IA Zip Code: 52240
Phone Number:(AC) (319) 356-5000
Economic Develop -
Contact Person: Patt Cain* Title: ment Coordinator
Address: (same) Phone No.: (319) 356-5230
Type of Application (Check one below):
xxGrant for Buydown of principal or interest of Business Loan
—Grant/Other (Specify: )
_Loan to a Business
—Loan/Other (Specify: )
,_Other (Specify: )
Explanation/Justification for Type of Application:
The purpose of this application and the paramount need of CADSI is the
reduction of up -front capital. necessary for construction of new facilities
so that the firm can become established according to its business and
marketing plan without jeopardizing its financial solvency. A grant for
buy -down of the loan principal or interest is the most effective and
assured means of achieving this.
Business Name: Computer Aided Design Software, Inc. (CADSI)
Address: P.O. Box 203, Oakdale, Iowa Zip Code: 52319
Phone Number:(AC) (319) 353-7248
i
Contact Person: Rex Smith/Bill Pearce Title: President/Controller
Address: (same) Phone No.: (same)
Amount of CEBA Funds Requested: S 1002000.00
indicate Application Timing: xx Regular c_rp< itior.
Emergency submittal
*Alternate City Contact (7-7-86 through 7-18-86): Dale Melling,
Acting City Manager
(319) 356=5010
4
a
t..
I
I
DESCRIPTION OF BUSINESS (history, product or service provided, etc.):
See Attachment 1.
PROJECT DESCRIPTION
i
The project for which CEBA funds are requested is the purchase of land
and construction of a 6,000-6,500 square foot building to house CADSIIs
operations as the firm moves out of the University of Iowa's Technology
Innovation Center and continues a period of rapid growth and expansion.
The background and details of this project are explained in Attachment 2.
Has any part of this project been started? _Yes xx No
If yes, explain:
Does the project involve relocation of economic activity from elsewhere in Iowa?
_Yes xx No
If yes, explain:
0
JOB CREATION/RETENTION (Full-time equivalents) *
2 Number of permanent jobs retained as a result of the project.
10 Number of permanent jobs created within 12 months of grant award.
36 Number of permanent jobs created within 24 months of grant award (cumula-
includes 12 month figure).
*See projected staffing schedule attached.
OTHER JOB CREATION IMPACTS (Describe)
See Attachment 3.
DESCRIPTION OF THE PROPOSED FINANCIAL PACKAGE
Description: (should include all sources an uses of funds, type of assis-
tance -grants, loans, or loan guarantees, repayment terms, etc.)
CADSI is working with Iowa State Bank in Iowa City to help fund this
.project. They have indicated strong interest to become the major
source of capital for this project. No formal loan application has
been prepared or any specific terms worked out as the project depends
on the approval of this application. The loan would be guaranteed by
CADSI and collateralized with the new building and real estate. Iowa
State Bank is also willing to apply through the Iowa Finance Authority
for tax-exempt status on their part of the financing.
SOURCES OF REVENUE EXPENDITURES
Source Amount Item Amount
Mortgage Loan
CEB Grant
Private Capital
TOTAL
$215,000
Land
$ 55,000
100,000
Building
Construction
260,000
30,000
Site Preparation
10,000
Exterior
Fixtures
3,000
Interior
Fixtures
17,000
S 345,000
TOTAL S
345,000
Ci
STAFFING SCHEDULE
(FISCAL YEARS ENDING JUNE 30)
1985-6 1986-7 1987-88
trtr tr trr Qtr 1 er tr tr 4
GENERAL AND
ADMINISTRATIVE
President
1
1
1
1
1
1
1
1
1
Corporate
-
Secretary
1
1
1
1
1
1
1
1
1
TOTAL
2
2
2
2
2
2
2
2
2
ENGINEERING
Development
4
4
5
5
5
6
6
7
7
Software
3
3
4
4
4
5
6
6
6
Consulting
1
1
1
2
2
3
3
4
5
Secretary
1
1
1
1
1
1
2
2
2
TOTAL
9
9
11
12
12
15
17
19
20
SALES
Sales
Engineer
1
1
1
2
2
3
4
4
4
Customer
Support
1
1
1
1
2
3
3
4
4
Secretary
0
0
0
0
0
0
0
1
1
TOTAL
2
2
2
3
4
6
7
9
9
FINANCE AND
ACCOUNTING
Controller
1
1
1
1
1
1
1
1
1
Acct. Support
0
0
0
0
0
1
1
2
2
TOTAL
1
1
1
1
1
2
2
3
3
TOTAL CADSI STAFF
14
14
16
18
19
25
28
33
34
KETEK DIVISION
Production Staff
2
3
4
4
5
6
10
10
12
Marketing Staff
1
1
1
2
2
2
4
4
4
Administrative
Staff
0
0
1
1
1
2
2
3
3
TOTAL KETEK STAFF
3
4
6
7
8
10
17
17
19
TOTAL STAFF
17
18
22
25
27
35
45
50
53
NEN POSITIONS ADDED 1 5 8 10 18 28 33 36
(cumulative)
6a 1 �9
DESCRIPTION OF OTHER ASSISTANCE VOLVED IN PROJECT
For examp e, describe use o?
30
INtraining programs, local assistance, etc)
1.
See Attachment 4.
I
I
! 2. Amount of Funds Contributed by Applicant: S
Amount of Funds Contributed by Business: E 30,000 I;
Amount of Funds Contributed by Others: $ 13,000 !
err..
(Others: Funds foregone by landowner. )
*The applicant will contribute all expenses involved in the !
DESCRIPTION OF NEED FOR PROJECT grant or contract. +
Description sou d nc u e discussion of unemployment, per capita income, tax
base, business closings, etc.) �.
r
See next page.
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DESCRIPTION OF NEED FOR PROJECT
The need for this project locally is directly related to the type of firm and
type of jobs that would be created. This area is fortunate to have a highly
educated resident population as well as new University of Iowa graduates
looking for jobs every year. Iowa City needs firms like CAOSI for employment
opportunities for its population and for diversification of its tax base to
support municipal services.
Although the Iowa City/Johnson County area enjoys a relatively low unemploy-
ment rate (3.2% annual average CPS rate in 1984 and 3.1% in 1985) compared to
national and state averages, this statistic masks Meat has been termed an
'elastic labor market' in which the large number of students and seasonably
employed persons work when jobs are available but do not consider themselves
unemployed otherwise. Nor does the unemployment rate indicate the number of
university graduates who move elsewhere because they cannot find professional
employment in this area. Such individuals do not remain in the community to
be counted as "unemployed." Thus, the pool of potential workers is considera-
bly larger than the unemployment rate would indicate.
Also relevant to this application, the unemployment rate does not reflect the
difficult to document but widely perceived problem of "underemployment,"
which occurs when the workforce is over -educated and, by reference, over -
skilled for the work available. Iowa City has many captive workers who
remain here as part of a family unit and are often employed in positions that
do not utilize their full abilities or training.
To add to the ever-present underemployment, within the last 12 months there
have been several lay-offs directly within Iowa City. Mercy Hospital laid
off 50 workers, Oral B laid off 138, and 10 positions were lost when Pharma-
ceutical Development Systems closed. Thus, almost two hundred jobs were
lost within Iowa City while additional ones were lost within the metropolitan
area (e.g., the Oakdale Security Medical Facility lost 14 positions). Note
that these were primarily skilled positions.
Another need for this project stens from the City's over -reliance on the
residential and commercial sectors for providing property taxes. Land be-
longing to the University, the city's largest "industry,' is not taxable, and
the industrial tax base is only about half of that expected for an average
city of this size, with the residential and commercial sectors paying rela-
tively higher percentages of the city's revenues.
The Iowa City area's 1983 personal per capita income ($11,141) is just
slightly above the Iowa average of $10,697. Compared with the eight Iowa
metropolitan statistical areas, the Iowa City MSA's personal per capita
income ranks fifth.
The need for this project from the point of view of the firm was explained
in attachment 2 (Project Descc+_tion).
0
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DESCRIPTION OF IMPACT OF PROJECT ON APPLICANT AND STATE
The impact of this project on the City of Iowa City, the applicant, is two-
fold. First there is the creation of 36 new jobs, which will be offered to
qualified individuals in the community. Many of the jobs will go to highly
educated professionals in the areas of mechanical and computer engineering,
Such jobs are ideally suited to the local labor force, which is highly edu-
cated and professionally trained,
Second, establishment of this firm within the boundaries of Iowa City will
help diversify the local tax base, which is now heavily dependent on commer—
cial and residential sectors. CADSI, as a high-technology firm, could begin
the formation of a nucleus of similar companies and would, therefore, be
expected to have an eventual impact far greater than the tax revenue solely
from its individual property. Studies of high-technology businesses indicate
that the growth and multiplication of local companies creates a self-sustain-
ing process that ultimately produces a healthy cluster.
Other important impacts of this project are those which directly benefit the
State of Iowa and the University of Iowa. One of the economic development
goals of the State has been the formation and expansion of high-technology
firms. CADSI is a prime example of the type of investment in the future that
Iowa has been seeking. The jobs created will give our State's new college
graduates an opportunity to remain in Iowa in challenging and competitive
Positions otherwise found only if they left the State. The secondary job
creation impacts within the entire state were described in a previous sec-
tion --and these have already begun, as was detailed. The need now is to keep
that momentum going and to aid this company during its vulnerable period of
rapid growth and diversification.
The University of Iowa is also a beneficiary of this project. The jobs
created will be complementary to the University, as they will provide some of
the State's brightest minds a chance to use their skills in the private
sector while still remaining close to the academic environment. Possibili-
ties will also exist for consulting contracts and occasional joint venturing.
But ntire stat, CAI actuall
srimportant o eUniversity
and the
serves as a model theprocessoftechnologyeincubationeat the University
to the establishment of 'a new self-sufficient private enterprise within the
state. The emergence of success models has been shown to be an important
condition supporting the start-up and growth of high-tech enterprises.
Success models not only stimulate entrepreneurship but also reduce risks for
investors, suppliers and bankers who are called on to assist new endeavors.
The following letters from the University of Iowa and FCDI further emphasize
and support this point.
CADSI is the result of the University of Iowa, the State of Iowa, and many
individuals committed to bringing high-technology firms and iob expansion to
together�to achieve theiris reaty goalsen For ilts part, CA,pSI wilt remain committed
to helping the State economy and image as the firm OSI will remain
wcomm tted
The University of Iowa
10*8 CA IOWA 52242
Oflin Of the Vin President for
Eduatlanel Development a Releatch,
D11e11 W Ihra Orade\b Collpe
(310) 953-557/
July 2, 1986
F. Forbes Olberg, Chairman
Iowa Development Commission
600 East Court Avenue
Des Moines, IA 50309
Dear Mr. 01berg:
alrTe
The University of Iowa is proud that the technology that has enabled
CADSI to emerge as a competitive new business was developed on its campus.
We are equally proud that the UI Research Foundation was instrumental in
creating the corporation and that so far it has been housed in the UI
Technology Innovation Center.
[ I The application to which this letter is attached will make clear the
commercial prospects of the company. Others can tell you what the presence
of CADSI means to our area's economic picture. I would like to remind you
and your colleagues what the success of CADSI can mean as a valuable
Precedent-
Because it is clear that CADSI offers a textbook case for the creation
of new businesses based on university technology, we are eager to see the
company prosper and grow. It serves as a model for those throughout Iowa
who wish to encourage this sort of technology transfer. CADSI is a techni-
cal pioneer in its field. It also represents a pioneering effort, the
value of which goes beyond the documented economic value of the company.
We encourage favorable action on the request for a Community Economic
Betterment Award.
Sincely,
D: C. priestersbach
Vice •esident and Dean
11
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First Capitol Development, Inc.
P.O. Box 2567
RQ Iowa City, Iowa 52244
(319) 354-3939
July 2, 1986
F. Forbes Olberg
Chairman
Iowa Development Commission
600 East Court Avenue
Des Moines, Iowa 50309
Dear Mr. 01berg:
I am writing to support positive review of the proposal for an
economic development betterment grant from the City of Iowa City
in behalf of Computer Aided Design Software, Inc.
As you know, Computer Aided Design Software is our first and
perhaps most exciting example of university, public and private
partnership in the development of a new technology and
corporation through entrepreneurship. The company began with the
research and development of Professor Haug in the College of
Engineering with substantial support from the University of Iowa
Research Foundation. The Foundation was instrumental in
soliciting financial support from local private investors as well
as the High Technology Council and other agencies through the
product development stage. The company has also received support
from the Iowa Venture Capital Fund.
From the outset, Iowa City officials have worked hand in hand
with First Capitol Development, their economic development
organization, to assist CADSI officers in their continuing
development plans. We are strongly committed to continue that
support in the future in cooperation with the state and other
local government agencies.
The company has been housed as one of the charter occupants of
the University of Iowa Technology Innovation Center during its
organizational period. They are now capitalized and ready to
"graduate" to their own facility. It is especially imperative
that this transition be made without dilution of resources which
have been assembled to support operational costs of completing
the projected gr.wth of the ccrporstior. dur'_ng these firEt
critical years. Consequently, we seek your support of this
application to support physical facilities to house the company.
The commercial implications of this corporate initiative extend
far beyond the immediate projections of fobs and technology
12
a
outlined in the application. The demonstrative example of a high
technology "success model" will have a direct effect on our
ability to encourage and attract similar entrepreneurs to
stimulate businesses in Iowa. Researchers at Harvard University
have specifically identified this factor as critical in breeding
new high tech industries. We are excited about the near term
economic impact of new jobs which will be generated by CADSI. We
are even more excited about the symbolic message this project
I•. will represent... that state, local and private partnerships can
and do succeed in Iowa.
We are grateful for your consideration and support.
S.nc rely,
��
A n
Pr si en
13
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ATTACHMENT 1
DESCRIPTION OF BUSINESS
Computer Aided Design Software, Inc. (CADS!) was formed in late 1983 with the
aid of several departments and individuals at the University of I
company was the University's first experiment with owa. The
o direct i
turning an academic idea Into a viable commercial enternvolvement in
prise.
The purpose of CADSI's formation was to develop and market computer software
to the mechanical engineering
called Dynamic Analysis Design industry. The initial product was software University's College of EngineerSystem (DADS), originally conceived in the
g CADS1 continued development p
ment of DADS to
a commercially viable product that represents the highest technology avail-
able in the market today in the dynamic analysis application area. DADS is
licensed from the University in exchange for a substantial royalty to be paid
on all DADS related revenues.
seen reat success,,
DADS has been available to the market for less than one year, but has already
called ADAMS which is sold mainDlofromitionAnnArbor is a Mich (10) year old package
marketing and product superiority, DADS is already challenging DAMth Sgfressive orsthe
market leadership position. The two have had head-to-head evaluations at
companies such as FMC and Polaroid with DADS coming out on top. Other compa-
nies using CAOSI's products include Boeing, General Dynamics, &V Corpora-
tion, McDonnell -Douglas, General Motors, and Penske Cars Ltd, of Great
i
Britain.
Even with CAOSI's initial successes, there are still hurtles to cross for
the company to survive in the long term. The technology imbedded in DADS has
peoplevandacolmpanies staying on top of select he chof angeseinBtheirecauseit isindustrynhaveohad
the ability to use it. This creates a fairly limited market in which to
DADS. Only large companies with significant research sell
and development budg-
ets (such as General Motors, FMC, General Dynamics and firms performing
research for the government) could afford its product.
Several things are now changing this. First, this new technology is being
taughtr's level in
years thereiwilltbe a very large baset across the f and around
acceptance
of this technology. Over the past ten months DADS software has been
installed at 15 universities, with many more interested in getting it.
Second, computer equipment is becoming more powerful and less expensive. Two
years ago CADSI software required a system costing in excess of $250,000.
Today a computer Gostin
srun e
within
year there will be $15,000computerslthat can useoDADSrProd as. Thisanother
medium and small companies affordable access to this technology.
Finally, the marketplace is iust now beginning to realize the need for such
ec;no'09y, Large manufacturers are ra'
quality, which can only be done usinl"'s Of 'esting and
g technologyyffound io 6DS1's products.
14
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As all of these factors converge, the market for CADSI's products will expand
rapidly. To make sure CADSI is ready for this expansion and becomes a large
part of it, solid, well-placed marketing strategies will have to be employed
and adequate capital must be available to finance the company through this
transition stage. As with all new high technology developments in the past
one of the crucial elements of successfully marketing a new product is to
become an educator to the marketplace. This helps create and develop the
marketplace and position the firm as the market leader at the same time. This
is the mode CADSI is in now and will be in during the next two years. Within
three years, the company expects to see itself as a solid market leader
Within a rapidly growing area. This is discussed in further detail in the
enclosed business plan.
Since the dynamic analysis area is one of the fastest growing segments of the �-
mechanical engineering industry, CADSI expects DADS to remain its mainstay
product for several years to come. However, to continue growth and reach the
company's potential, several new products are being developed. Many of these
are extensions of DADS and will increase the average sales amount per cus-
tomer. Two of these products are near completion with marketing efforts just
beginning. Three more are planned for completion by the end of 1986.
CADSI has also just started work on a new software package that is completely
separate from DADS and has a market potential even. greater in size. It is in
the design optimization area of mechanical engineering and is expected to be
completed by early 1987. CADSI is working closely with the University of
Iowa on this project and is supporting research in this area at the College
of Engineering.
Early this year CADSI 's management decided to expand into the
com-
puter peripheral business. A separate subsidiary was formed in February 1986
for this purpose. In April this subsidiary, KETEK, introduced its first
product: a cabinet for the Commodore computer line. The organization is
expected to grow rapidly over the next two years as additional products are
added. This market area does not have many of the negative points of the
dynamic analysis software market, such as longs
ales cycles and huge overhead
costs, (However, this market is much more competitive.) This diversifica-
tion will allow CADSI to lower its business risk factors. CADSI will con-
tinue to explore additional entrepreneur opportunities that fit its business
j goal S.
15
11M
ATTACHMENT 2
PROJECT DESCRIPTION
CADSI has been located on the Oakdale Campus of the University of Iowa since
It was formed. Over the past two years, the company has expanded into all of
the excess space that the University facilities have available for it. CADSI
has grown from 6 to 11 employees over the past ten months and will grow even
more rapidly over the next three years; thus the firm needs adequate facili-
ties for expansion.
Because of the continuing relationship with the University of Iowa, close
proximity to it is important. A search of the Iowa City area for new facili-
ties has been unsuccessful, as there appears to be no existing facilities
that would meet CADSI's needs. In order for the company to remain in the
Iowa City area, therefore, a new building must be constructed.
Two avenues were explored in developing this project: 1) the company builds
and owns the new facilities, and 2) a developer builds the project for lease
by CADSI. After investigating leasing options with local developers, CADSI
found the costs prohibitive. CADSI would have to make a lease commitment of
at least five years, with the developer demanding much of his investment back
over that period, Therefore, this option was eliminated.
For CADSI to finance construction entirely on its own would require the
company to commit over $130,000 of its capital to the project. The company
could not afford to commit this level of capital to a project that does not
directly result in increased revenues or growth at this point in its life. In
order for CADSI to obtain the growth levels it is projecting, a substantial
on-going commitment to research and development must be maintained.
With these factors it becomes very difficult for CADSI to make the needed
move without some assistance. The purpose of this request for a grant is to
reduce the up -front capital commitment for new construction to make it
affordable to the company. This would enable CADSI to continue on course
with its business plan without a slowdown caused by inadequate facilities.
Without the grant, CADSI will be forced to put many of its projects on hold
as it would have to remain in its already cramped facilities for a prolonged
period of time. It would immediately be forced to stop its evaluation of
several new product acquisitions, through the KETEK division, for an indefi-
nite period. CAOSI's own growth plans would have to be slowed as space would
not be available to house needed personnel. These actions would cost the
Iowa City area and the whole state of Iowa needed jobs. It also would jeop-
ardize CADSI's strategies for becoming the market leader within three years.
If the grant request is approved, CADSI will build a 6,000-6,500 square foot
building. The building would be designed so that it can be expanded to about
12,000 souare fee; without incurring substantial restructuring costs. About
square feet o' the s: -c- ',.,vlo be occ UrieC Cj ':�.DJ. anC gtner
1,500-2,000 square feet by KETEK. Most of the space will be divided into
individual offices. Some of the special needs include a conputer room ,
customer training space, and a light assembly area.
16
Ile
This initial space is expected to be adequate for the company's needs for 18
months to two years after construction is completed. At that time the second
phase of the building will be added.
CADSI is currently working with the Technology Innovation Center (TIC) to
evaluate the possibility of including space in the new facility that could be
used by other TIC 'graduates.' CADSI may be able to provide tenants access
to secretarial support, office machines and computer equipment. Potential
tenants coning out of TIC have grown and matured to the point where a non-
academic surrounding is needed. However, many may not yet be able to commit
the capital required to obtain equipment and support services lost in the
i
move from TIC.
The new facilities built in this project could provide an intermediate step.
The tenants could obtain many of the same services that were available to
them at the Center and remain in close proximity to the University. There-
fore, this project could conceivably go beyond providing needed aid to one
business and indirectly provide aid to many small fledgling high-tech busi-
nesses trying to stay in Iowa.
If agreements can be reached and leases signed by tenants, CADSI may amend
the project to construct both phases (12,000 square feet) of the building
immediately, This will be done only if a cost analysis justifies it. There
would be no impact on the amount of funds requested from CEB as any addi-
tional costs would be financed through Iowa State Bank on the basis of rental
income.
17
IM
ATTACHMENT 3
OTHER JOB CREATION IMPACTS
Through CADSI's continuing efforts to expand into different market areas, the
entire State of Iowa will benefit from job creations. CAOSI's management is
committed to Iowa's growth and will make a solid on-going effort to contract
for its raw material and service needs from Iowa companies. In so doing,
CAOSI will continue to strengthen its relationships with many of Iowa's
largest manufacturers, such as John Deere and Maytag,
Small businesses in Iowa will feel CAOSI's expansion as well, With the
creation of the KETEK division, three direct jobs were created immediately
and two small Iowa businesses have already experienced job expansion. KETEK
has contracted with a small plastics manufacturer in Independence to manufac-
turer plastic components, even though CADSI could have received slightly
better pricing out-of-state. This contract provided much-needed income to
the manufacturer in a depressed market period for him and allowed the manu-
facturer to hire two additional people that otherwise would not be employed.
Also, a small fabric manufacturer in North liberty w.s able to expand by one
person as a result of KETEK purchasing, This firm is likewise committed to
buying raw materials for CAOSI's product from Iowa companies, such as a
supplier in Waverly.
These two examples indicate the tremendous potential for secondary job crea-
tion resulting from CADSI's growth. As CADSI continues to expand into addi-
tional new ventures similar to KETEK, more job creation throughout the State
will result.
A final note to add 'is that with KETEK, the company is making the effort to
provide jobs to "Special needs' Iowans that normally have a difficult time
locating good jobs. KETEK is working with Goodwill and the cities of Cedar
Rapids and Iowa City to locate such persons to fill open positions, The
company has already hired one handicapped individual through the JTPA pro-
grams and expects to add several more in the next two years.
18 1181
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ATTACHMENT 4
DESCRIPTION OF OTHER ASSISTANCE INVOLVED iN PROJECT
1. Dther assistance for this project can be separated into two gain catego.
ries. The first is the assistance that is applied directly to the pro.
posed building construction project. The second category includes the
assistance involved in the total start-up and expansion of the firm. Both
types of assistance are vitally important to the continued success of
the company.
The first category of assistance, that which directly benefits the pro-
posed project, includes a write-down of the land costs by the owner of
the land where the firm intends to locate. The owner has agreed to
rearrange some lots in his subdivision to allow for CADSI's specific
needs for the present building and future expansion. This has resulted
in an effective income decrease to the owner totaling $13,000
Additional direct assistance is provided by First Capitol Development,
Incorporated (FCDI), the local not-for-profit development corporation.
FCDI will assist CADSI in providing contacts for investment, suppliers
and marketing. There is no precise dollar figure for this assistance,
but Ray Huston, president of FCDI, estimates that he has already spent at
least 25 hours in support of CADSi (not counting time spent in consider-
ing possible local sites for building).
The City of Iowa City, the applicant, agrees to contribute all costs
involved in administering the grant. As the major funder of FCDI, the
City also directly supports continued aid from the development corpora-
tion.
The second category of assistance, which benefits the entire existence
and continuation of the firm, goes back to the formation of CAOSI. Uni-
versity of Iowa officials and the Board of Regents spent many hours
researching how the relationship between the University and CADSi should
be structured, and the University of Iowa Research Foundation (UIRF)
played a major role in making CADSI become a reality. It provided the
expertise to form the corporation and spent over $10,000 in legal, patent
filing and consulting. fees. The UIRF also provided the company with the
necessary seed money to begin operations through a working capital loan
of $250,000. (This loan, with interest, is being repaid through revenues
generated by product sales.) CADSI continued to receive assistance from
the UIRF for about two years through expert advice in legal and business
areas. Even now, one of its staff continues to act as secretary on the
CADSi Board of Directors.
Another major contributor to CADSI's formation and success has been the
University of Iowa's Technology Innovation Center (TIC). CADSI was one
pf t z first :='.anti cTIC :n, rcains a te'1ar: -t :!tis ti^e. �'• -=c
proviaea assistance estimatea at over $20,000 through rent subsicies,
equipment access and shared services.
19
11"
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In 1985, CADSI became one of the first recipie- s of the Iowa
Capital Fund (managed by Invest America Venture
of tear Rapids).
invested 1100,000 in CADSI, showing the Fund's confidence a lofun
ngtl
tern viability of the firm. in the
In 1986 tremendous community support was demonstrated for the company
during CADSI's effort to attract monies from private investors. A large
Des Moines -based company invested $300,000 into CADSI, while forty local
individuals and businesses have invested an additional $950,000. All of
these monies are fully 'at -risk' for these investors. This shows a solid
commitment from the private sector to help achieve Iowa's goal of
I ing high-tech jobs and keeping our brightest minds in Iowa. creat -
Thus, the CADSI project represents the commitment of over $1.6 million in I�
University, City and private sector resources to foster the creation and
expansion of this firm. This indicates the importance attached to ena-
bling firms like CADSI to be created and thrive in Iowa,
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required
submittals
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REQUIRED SUBMITTALS/ATTACHMENTS
xx Business Financial Statements
(3 years historical and at least 2 years projected)
xx Spread Sheet
(completed through line 46 )
xx Business Plan
xx Letter from business committing to project and job creation
xx Letter from lender
_ Other (Specify):
21
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SPREAD SHEET
BALANCE SHEET
CADSI
6-30 84
Historical
6-30-85 5-31-86
6-30-86
Pro eLged
6-30-87
6-30-88
Ceh 6 Mktble
Securities
Accounts
29,978
260,973
795,205
683,125
655,160
778,461
Receiveable
Inventory
-0-
-0-
8,000
42,431
93,431
54,700
98,500
Prepaid Expenses
3,992
-0-
27,563
-0-
14,915
11,737
15,000
Other
-0-
3,621
3,152
1,430
-0-
27,000
-0-
CURRENT ASSETS
Net Fixed Asset
33,970
38,671
300,157
69,225
855,703
117,912
789,723
724,860
903,961
Inv. in
122,787
102,828
82,194
Subsidiaries
Notes Receivable
-0-
-0-
-0-
102,986
70,000
70,000
80,000
100,000
Intangibles
4,997
16,575
-0-
75,395
-0-
72,869
-0-
57,145
44,501
TOTAL ASSETS
Shirt term
77,638
488,943
1,119,010
1,055,379
964,833
1,130,656
N/P- Bank
Shrt term
-0-
-0-
'0'
-0-
N/P- Other'
Accts. Payable
-0-
19,080
-0-
62,845
-0-
37,992
-0-
28,171
-0-
52,232
_0
Accruals
Taxes (income)
9,844
-0-
48,734
86,062
107,664
141,063
18,629
11,500
Current Portion
4,800
2,625
2,625
_p_
-0-
LTD
Other
9,800
-0-
15,500
4,583
19,600
2,159
21,500
11,000
6,000
CURRENT
2,159
'0
-0-
LLABILITIES
Long term debt
38,724
284,120
136,462
271,710
148,438
980,383
162,119
204,195
96,129
Officer debt
-0-
-0-
9703,335
882,000
705,000
Deferred Revenues
-0-
-0-
179,087
142,488
-0-
_0
TOTAL LIABILITIES
Common Stock
322,844
-0-
408,172
1,307,908
1,277,942 1,086,195
801,129
Capital Surplus
-0-
-0-
_0-
80
-0-
80
_
150
250
Retained s Earnin
(Less) Treasury g
(245,207)
80,771
(189,058)
(22222 ,643)
-0-
(121,512
329
329,277
Stock
Total Net Worth
-0-
(245,207)
-0-
80 771,
-0-
(188,978)
-0-
(222,563)
(1211,3362)
TOTAL LL,BILITIES
3 32929,527
6 1;/W
Contingent
77,638
488,943
1,125,691
1,055,379
964,833
1,130,656
Liabilities
( -0-
-0-
-0-
CADSI
SPREAD SHEET
INCOME STATEMENT
(FISCAL YEARS ENDING JUNE 30)
Actwl Proected
Fiscal Yr. Fiscal Yr. 11 Months Fiscal Yr. Fiscal Yr. Fiscal Yr.
1984 1985 . Ended 5/31/86 1986 1987 1988
Sales -0- 812,317 571,198 651,198 1,7630_488 3,1770_000
-COGS -0- -0-
651,198 1,763,488 3,177,000
-Gross Profit 213,259 423,350 737,197 811,859 1,485,625 2,327,335
388,967 (165,999) (160,661) 277,863 849,665
•Operating Profit (213,259)
-Officers Salaries -0- 17,497 24,402 26,736 30,000 30,000
-Depr. Exp. 7,215 3,495 19,964 22,264 34,410 37,636 II
-Interest Exp. 15,583 42,820 59,585 88,347 113,372 96,744
000
-Rent 9,150 10,563 12,637 14,306 31,650 32,300 I.
+Other Inc./Exp. -0- 11,386 12,758 8,900 32,700 ( ) i
.ggT (245,207) 325,978 (269,829) (303,414) 101,131 643,985
-Income Taxes -0- -0- -0- -0- -0- 193,196
.PAT (245,207) 325,978 (269,829) (303,414) 101,131 450,789
I
J
G i
I
23 ��
T-
RETER
BALANCE SHEET
SPREAD SHEET
24
ActualPro
-575178-6
6 30 86
ected
6 0 8
-60678s
Cash 6 Mktable
26,994
24,575
32,147
74,564
Securities
Accts Receivable
12,395
13,000
19,500
25,200
29,000
60,000
95,000
Inventory
21,213
1 701
1,300
4,200
15,000
Prepaid Exp.
CURRENT ASSETS
62,303
58,375
1,305
90,547
7,500
244,564
32,500
Net Fixed Asset
1,350
-0-
-0-
-0-
-0-
Inv. in Subsidiaries
-0-
-0-
-0-
-0-
Notes Receivable
21,265
19,182
15,015
10,848
Intangibles
TOTAL ASSETS
84,918
78,862
113,684
257,634
-o-
Short term N/P-Bank
_0-
12,415
-o-
10 000
-o-
-0-
-0-
Short term N/P-0cher
23,516
18 000
27,300
56,700
Accts. Payable
2,970
2,300
5,500
18,000
Accruals
Taxes (Income)
-0
-0-
-0-
-0-
-0-
-0-
-0-
Current Portion LTD
-0-
CURRENT LIABILITES
38,901
30,300
10,098
32,800
-D-
74,700
-0-
Long Term Debt
10,098
-0-
-0-
-0-
-0-
officer Debt
TOTAL LIABILITIES
48,999
40,398
70,000
32,800
70,000
74,700
70,000
Common Stock
70,000
-0-
-0-
-0-
,-
Capital Surplus
( 34,080)
( 32,158)
10,262
143-,212
Retained Earnings
(Less) Treasury Stock
35,920
38,464
80,062
213,212
Total Net Worth
TOTAL LLlBILITIES i N/N
84,918
78,862
113,
287,912262
Contingent Liabilities
-0-
-0-
-0-
-0-
24
Sales
-COGS
.Gross Profit
-SCA
-operating Profit
-Officers Salary
-Deer. Exp.
-Interest Expense
-Rent
+Other Income/Expense
-EBT
-Income Taxes
-PAT
�
I
I
acted
Piecal Yr.
Fiscal Yr.
KETEK
SPREAD SHEET
INcole STATEMENT
(FISCAL YEARS ENDING JUNE 30)
ActualFro
Pascal Yr.
acted
Piecal Yr.
Fiscal Yr.
5 Months
Ended 5/31/86
1986
1987
1988
t
73,047
111,447
504,000
256,200
1,200,000
610,000
!,
I
35,928
56,088
55,359
247,800
590,000
37,119
70,695
86,895
182,400
378,000
( 33,576)
( 31,536)
65,400
212,000
-0-
j" ;
0-
_o-
-p_
-0-
-0-
�.'....,
-0-
-
52
-0-
-0-
52
570
4,800
9.000
465
_o-
-
i
34 080
(32,158)
60,600
203,000
(
_0_
18 ,180
71 , 050
-p_
( 34,080)
( 32,158)
42,420
132,950
i. ..:
i'
e
t
PROFIT ANO LOSS STATEMENT
S.N10EITAMD=3FGRWMf
S
�E9e 9A
GSNFLOWSTATUIM
N. f�13M f{pN RARlblf
•d1biN
h EMrq
m
KtrtK
l=.sews years cad 7.ALe 30
SVSEAOSIIFE'
ELALANCESNLLT
1
.«,r
i �. page 9A
i
4
PROFITAND LgSS STATEMENT
N. PORT ANO LOSS EMrrANNr
u
USNRDWITATIU MT
r,. usls rlalr sArelAENr
•aAmim
r. Eroro
0
—f
I
tT..AEUT.w.e.sN.w
.ty
f_ t
1
n
o
I
V. L
I
_
eu.wxr AENT.
S
0,
!wenNAw
h3
2-
,
1)
g
! ANeAYe
_-.0
O
H.pli�
2
S".fl
i
I TOTAIA.NI.
.4
U3,.
I EmA T. "—dam
0
(1
0
�.ipITw IN•Oi.
QA.iT
n
1
�}
Tw
O
_Q
I�[vT.Nr.NwET�
.L'.
I
IOWwEgU
,,j, 2.8 1 IVO
3.Sl91r..or
��
or
G!
ra
i,,e.ALw.u,w
as8
�NMww Mr.
'ANwer
2.2
e,
O. /
n ..Ir
y
44M
o..L 713-2—
I;.r.Nwwa.A
TOTAL W.0.m..AWW ,]f
1/3_1
c.lc`wgwu.rw
Lt
i �. page 9A
i
4
PROFITAND LgSS STATEMENT
N. PORT ANO LOSS EMrrANNr
u
USNRDWITATIU MT
r,. usls rlalr sArelAENr
•aAmim
r. Eroro
0
—f
C��)s2 ''I''/KErcK. Con,soC«{4,FecQ
C(H �rAou.Su.11cQs�
� I'=iJc,.P/ea•-s e...ci� Tw.e 30
x KwYbc.A wdy reflec4 roLAA.cI�!!� "Ors
SPREADS I ICE' PROFlT AND LASS STATEMENT
BALANCC'+I IECT
Y.PRWITANOI !MlW NT
I�l _KV sHtT _ r
MTl IMe AIIrlIrJ i0��1C1J`u%
1 CANAYAIYY. VYr
r. Anv. RrtInW! _.8
f
.I
USN FLAW IXOVMW
N.4lH IIDNlIATIYIH•
f
0
id
NOTE TO FINANCIAL STATEMENTS/ SPREAD SHEETS:
A review of the financial statements/spread sheets provided with this appli-
cation shows that the company does not expect its cash position to fall below
$700,000 in the project years. This amount represents �only 7-10 months of
operating capital. One of the biggest problems high tec—inology companies
have is undercapitalization combined with over -enthusiastic projections for
breaking into a new market. CADSI does not intend to commit this error.
Until CADSI has met its revenue projections, these operating funds cannot be
utilized for unliquid, long-term projects such as investments in real estate.
Although the revenue projections are based on outside experts' opinions, I
there are many uncontrollable factors in determining how fast the market
will mature. Also, if revenue projections do prove to be high, the present
allocation of capital will allow CADSI to meet debt repayment terms on con-
vertible debentures due in 1990. If CADSI does meet projections as planned,
these funds will become available to spur further growth and investments in
new entrepreneurial undertakings. This would mean even more job creation than
shown in this application.
i
i
,I
I
j"
..,
is
F
June 30, 1986
Iowa Development Commission
CEB Project Committee
600 E. Court Ave.
Des Moines, IA 50309
RE: CEB Application: City of Iowa City on behalf of Computer Aided Design
Software, Inc.
Members of the Committee:
On behalf of CADSI, I would like to express our commitment to the project
as outlined in the application, if it is approved. We will use all resources
available to us to make sure that all job creation projections will become
reality.
Beyond new job creation, this project will have many other positive
Impacts which the application outlines. We feel that three of these stand
out:
The first is the indirect job creation effects our expansion will
cause in the state. Our commitment to using Iowa suppliers and
manufacturers to provide us with materials will have an impact on
many areas of Iowa outside of our own community.
The second is the aid CADSI can provide the state in presenting an
image of a place where high technology companies can grow and
flourish. Our contacts and relationship with some of the largest
users of high technology in mechanical engineering, both private and
public will help bring more attention to the state of Iowa.'
The third is the retention of highly educated professionals in
Iowa. Our staff consists primarily of degreed engineers and
computer science graduates that frequently leave the state looking
for career opportunities.
30
P.O. BOX 703
OAKDALE. IA 52319
ISm
Iowa Development Commission
Page Two
June 30, 1986
CADSI Is committed to this project as it is in the beat interest of the
company. Without approval of the funds requested, many of our exayion plana
can not be implemented. Therefore, the project is in the beat interests of
the state of Iowa as well.
Thank you for your time and interest.
Sincerely, i
I
4,rd L. Smith
President-CADSI
RS:sg
31
JIM
j
I
I
Iowa Development Commission
Page Two
June 30, 1986
CADSI Is committed to this project as it is in the beat interest of the
company. Without approval of the funds requested, many of our exayion plana
can not be implemented. Therefore, the project is in the beat interests of
the state of Iowa as well.
Thank you for your time and interest.
Sincerely, i
I
4,rd L. Smith
President-CADSI
RS:sg
31
JIM
00
IOWA STATE BANK & TRUST COAPANY
IO2 S. CLINTON STMT
P.O. Box 1700
IOWA CITY, IOWA ilsM
(319) 136-3800
June 23, 1986
j
I
Iowa Development Commission
CSB Project Committee
600 E. Court Ave.
Des Moines, IA 50309
Re: Computer Aided Design Software, Inc.
Gentlemen:
On behalf of Iowa State Bank & Trust Company, I wish to
express our interest in participating in the expansionary
plans of our above referenced client.
Iowa State Bank & Trust Company has not received a loan
request nor has it issued a loan commitnent on this project.
However, any such request would meet with our utmost
attention and review.
If Iowa State Bank & Trust Company can be of any service
in the processing o£ our client's application, please
don't hesitate to contact me.
Sincerely,
Terry N. Vorbrich
Second Vice President
es
32 1��
I
CEBA
PROJECT DESCRIPTION
Name of Recipient City of Iowa City
Program Year: 1986
IOWA CEBA RECIPIENT PROGRAM SCHEDULE
be filled In by DED
yinal
ndment
Activlty2____ _ —J
i
�j
LIE
s
--J
Amount of All
i
TARGET
AMOUNT BUDGETED
x
CEBA
FUNDS
RECIP. USINESS OTHER TOTAL
FUNDS
FUNDS
Loan
l
ActivittL1_Loan to Computer Aid d Design
Software, Inc., to purchase land and construct
a 6,000 to
Create 36 new jobs
$100,000
_0_ $30,000
Cash
6,800 square foot building to
house CADSI's operations.
$216,000 '0' $345,000
loan
Activlty2____ _ —J
i
�j
LIE
s
--J
Amount of All
i
1
CEBA ATTACHMENT D
Name of Recipient City of Iowa City
IOWA CERA RECIPIENT PROGRAM SCHEDULE
PROJECT ACTIVITY: loan to 1987
CamputerAided Design Software, Inc. 13t OTR. 2nd QTR. 3rd QTR.
4th QTR.
Milestone: S 0 N D J F M A M J
I
2. x
Choose construction site
3- Obtained final board approval
p- Finalize financing
5- Begin construction
HSre 2 new so le
6.
Move into buildin
1• v
`r
ty
RESOLUTION NO. 86-356
I RESOLUTION APPROVING LOAN AGREEMENT BETWEEN THE CITY AND COMPUTER
j AIDED DESIGN SOFTWARE, INC. (CADSI) FOR $100,000 OF COMMUNITY ECO-
NOMIC BETTERMENT FUNDS TO ASSIST IN PURCHASE OF LAND AND CONSTRUC-
TION OF A BUILDING TO HOUSE CADSI'S OPERATIONS
WHEREAS, CADSI is a local business which needs Community Economic Betterment
funds to expand into its own facility; and
WHEREAS, the Iowa Department of Economic Development has agreed to loan
$100,000 of Community Economic Betterment Account Funds to the City; and
WHEREAS, the City will, in turn, loan those funds to CADSI to assist it in
acquiring land in Iowa City and constructing a building for its operations;
WHEREAS, it is expected that the CADSI operation will create 36 new jobs
_ during the next few years.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF IOWA CITY, IOWA, THAT:
1. The Loan Agreement and Promissory Note between the City and CADSI, copies
of which are attached hereto, be and hereby are approved in form and
substance.
2. The Mayor is authorized and directed to sign, and the City Clerk to
attest, the Loan Agreement.
It was moved by Zuber I Iand seconded by Dickson
the Resolution be adopted, an upon -77T -call there were:
AYES: NAYS: ABSENT:
X Ambrisco
X Baker
X Courtney
X Dickson
X McDonald
X Strait
! X Zuber
Passed and approved this 16th day of December 1986.
I
h 0
ATTEST:
CITP C ARK
ilN'4:1+v^3 Z', .A,PP'Ovea
f c'•y Tile iii ;R� i :deli 9fil"J:nn e}
LOAN AGREEMENT
ARTICLE 1.0 - GENERAL
1.1 Identification of Parties. This Agreement is entered into by and be-
tween the City of Iowa City, Iowa (hereafter referred to as the "Lender"
or the "City"), and the Computer Aided Design Software, Inc. (hereafter
referred to as the "Borrower" or "CADSI").
1.2 Statement of Purpose.
WHEREAS, the City of Iowa City has been awarded a $100,000 loan from the
Community Economic Betterment Account from the Iowa Department of Eco-
nomic Development; and
WHEREAS, the Borrower has made application to the City for a loan in an
equal amount (herein referred to as the "CEBA Loan"); and
WHEREAS, the Borrower has qualified and been approved for such a loan
and has agreed to the conditions of the receipt of such a loan; and
WHEREAS, the City has agreed to loan the amount of One Hundred Thousand
Dollars ($100,000) to the Borrower to assist in the purchase of land and
construction of a 6,000-6,800 square foot building to house Borrower's
operations;
NOW THEREFORE, the parties hereto, in consideration of the premises, do
agree as described herein.
1.3 The Loan. The Lender agrees, upon the terms and conditions hereinafter
se�ori;h, to make a loan to the Borrower in the amount of $100,000 in
order to assist in the financing of the project described in Article 2.2
of this Agreement. The obligation of the Borrower to repay the loan
shall be evidenced by the Promissory Note of the Borrower to the Lender
in the amount of $100,000 to be in the form attached hereto as Attach-
ment "A." In the event the Borrower fails to spend the full face amount
of the loan as set out herein and in said Promissory Note, then the
amount of the loan shall be reduced accordingly.
1.4 Time of Performance. The Project described in Article 2.2 is to com-
mence as of the 1st day of August, 1986, and shall be undertaken in such
sequence as to assure its expeditious completion. All of the project
activities required hereunder shall be completed on or before July 31,
1988.
1.5 Reports and Products. The Borrower shall submit the following reports:
Report Due Date
Expenditure Report Monthly
Quarterly Progress Report 15th of the month following the end
of each quarter
Annual Financial Statement Within 3-1/2 months of end of CADSI's
fiscal year
2
Final Progress Report
Within 25 days of project completion
Within 25 days of audit completion
Audit Report
1.6 Perforthat it has
mance of cCond t ionss anrecrequ remennt hts precedent to the e Borrower certifies
award of the
sates ie a
Agreement. application to the
1,7 Assurances. The assurances appear in the Lender's app art of
State of Iowa for the loan are in
herein and made a p
this Agreement.
ARTICLE 2.0 - gORMR'S PROJECT
as a ermined by the Lender, complete the Project as
2.1 Statement of Work and Services. The Borrower shall ample a the
satisfactory Project
as
an proper nt
manner, roved Community
written and described in the Attachment B to this Agreement. This
made a part of this Agreement by reference. In
Account Application Package,
Attachment is herebyk activities and the
addition,PBogrw Budget form, Attachment C rtocthishAgreement,m to the
approved Project Schedule, Attachment D to this Agreement. application
2.2 Pro'ect Oestri tion. As described in Lender's approved CERA
a e o owa (Attachment B), the funds will be loaned to Com
-
° e Software, Inc, to purchase land and construct n
puter Aided Designto house CADSI s operations (herein
6,000-6,800 square foot building
referred to as the Project").
2.3 Conveyance or Disposas70or ootherwisetThe dispose ofrtherProject or shall ofany
transfer, convey,
ntil
part thereof, without the aidein accords cen with Attachment
the aA. on whit
the loan has been fully P
2,4 Project Total
Lender Borrower
$100,000
CEBA Loan ;100,000
$30,000 b 30,000
CADSI Cash
E21_T5 000 $51
'
First Mortgage Loan 3T�6 �b0' ,
either expressed or
The Lender makes no warranty, of the
2.5 ;mpt 1euffica�nc a proceeds of the loan available for payment
{ costs of the Project will be sufficient to pay all the costs which will
be incurred inithat cn additiontoithe amohunt specified e Lender is uineArticle r no obligati gation to
i
3
ARTICLE E 3_ O -BORROWER'S CONTRIBUTION TO THE PROJECT
3.1 Borrower's Contribution. The Borrower has agreed and is therefore
required to contr ute unds to the Project in the amount of Two Hundred
Forty -Five Thousand Dollars ($245,000) as shown in Article 2.4 of this
Agreement.
3.2 Source of Borrower's Contribution. The sources of the Borrower's con
} tribution to the Project shall be:
Internally generated cash $ 30,000
15,000
First Mortgage Loan 245,
ARTICLE 4.0 - SECURITY
1,
4.1 The obligations of the Borrower to pay the principal of and interest on
the bank loan referred to in 3.2 above, and to perform its other obliga-
loan agreement and related security documents will
be secured by a real estate mortgage providing for a first mortgage lien
tions under the bank
om which the loan was issued.
in favor of the bank fr
4.2 The obligation of the Borrower to pay the principal of and interest on
the CEBA Loan and to perform its other obligations as described within
this loan agreement will be secured by a real estate mortgage, in the
form of mortgage and security agreement attached hereto as Attachment E,
only itontheomortgagenreferred age olin Section in far 4.1 aboveLender, subordinate
ARTICLE 5.0 - TERNS OF THE LOAN.
5.1 Maximum Amount of Loan: It is expressly understood and agreed that the
maximum amoun o e loaned to the Borrower by the Lender shall be i
$100,000.
5.2 Loan Rate. The Lender and Borrower agree that all funds loaned to
orrower shall bear interest at the rate or rates set forth in the
Promissory Note, Attachment "A."
5.3 Loan Term. The Lender and Borrower agree that the term of the loan
shall be fifteen (15) years from the date of the first disbursement
hereunder.
5.4 pae a yentL11eofoLoan rrower Th o timenwithoutipenalty le of the loan may be pre -
ARTICLE 6.0 - CONDITIONS OF PAYMENT OF LOAN FUNDS TO RECIPIENT.
6.1 Requisition for Payment.
er
hall be
6.1.1 Payments to the Borrower. thelLenderces to the of requisitiionswforspayment
sq ,7ec o e recei y
as work
ording tothe
e on
formatspethe c
ified ecified byctheeLenderion shall be
madeacc
/9fe
4
6.1.2 Supporting Evidence to Accompany Requisition. The Borrower shall
submit to the Lender such supporting evidence as may be reasona-
bly required by the Lender to substantiate all advances which are
requested and to substantiate all payments then made with respect
to the Project. In addition, the Lender may require the Borrower
to secure and provide evidence to the Lender of lien waivers from
any contractor or subcontractor for all work done and for all
materials furnished by them for the Project.
6.2 Time of Re uisitions. Borrower shall request loan funds only as needed
N A never ave more than $500.00 in loan funds on hand for a
period longer than 30 days.
6.3 Use of Loan Proceeds. Proceeds of the loan are to be disbursed only for
uses an purposes escribed in Articles 2.1 and 2.2. Borrower under-
stands and agrees that loan proceeds shall not be spent on any other
purpose(s) or project(s) than that described in Article 2.2.
6.4 Investment of Loan Proceeds. Temporarily idle loan funds held by the
Borrower may a invested y the Borrower, provided that such investments
shall be in accord with state law, shall be controlled by the Borrower,
and that the interest accruing from such investments shall be credited
to and expended on the Project prior to the expenditure of other loan
funds. In the event that loan funds remain after project completion,
and after all charges, including audit costs or estimated audit costs,
to the Project have been paid or obligated, such funds shall be returned
to the Lender within thirty days. Any loan funds plus any interest
accrued on loan funds, that are not expended in a timely fashion, shall
be returned to the Lender upon request.
6,5 Sus ension of Payments, The Lender reserves the right to suspend,
withhold, or delayn payments to the Borrower if it is determined
that the Borrower's Project has been changed, interrupted, or signifi-
cantly delayed, or if the Borrower is determined to be not in compliance
with any provision of this Agreement.
6.6 Promissor Note Re uired. The Lender shall not provide loan funds to
e orrower prior to the completion and execution of the promissory
note, Attachment A to this Agreement, and the Mortgage and Security
Agreement, Attachment E to this Agreement.
ARTICLE 7.0 — LOAN REPAYIENT
7.1 Repayment Schedule. Repayment of the loan shall be made by the Borrower
to the Lender as specified in Attachment A, the Promissory Note,
7.2 Default. If any of the following events ("Event of Default") shall
occur and be continuing, the Lender may declare the Borrower to be in
default:
7.2.1 Any representation or warranty made by the Borrower under or in
connection with this Agreement shall prove to have been incorrect
in any material respect when made; or
/?fd
5
7.2.2 The Borrower shall fail to perform or observe any other term or
condition contained in this Agreement and any such failure shall
remain unremedied for thirty (30) days after written notice
thereof shall have been given to the Borrower by the Lender; or
7.2.3 Execution shall have been levied against the Project or any lien
creditor's suit to enforce a judgment against the Project shall
have been brought and (in either case) shall continue unstayed
and in effect for a period of more than thirty (30) consecutive
calendar days; or
7.2.4 The Borrower shall sell, transfer, lease or convey the Project,
or any part thereof, except as herein provided, without the prior
( written consent of the Lender.
7.3 Actions Upon a claration of Default. Upon declaration of default by
the Lender, the DeLender may:
7.3.1 due and without Borrower, l
By res presendeclare tment, demand, nLforthwithoan to be
d mad,protest, or
eandfurther
notice of any kind, all of which are hereby expressly waived by
the Borrower;
7.3.2 Take whatever action at law or in equity as may appear necessary
or desirable to collect the payments and other amounts then due
and thereafter to become due or to enforce performance and obser-
vance of any obligation, agreement or covenant of the Borrower
under this Agreement. No remedy herein conferred upon or reserved
to the Lender is intended to be exclusive of any other remedy or
remedies, and each and every such remedy shall be cumulative, and
shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute.
ARTICLE 8.0 - ADMINISTRATIVE REQUIREMENTS.
8.1 Administration. The Agreement shall be administered in accordance with
520 - Chapter8, Iowa Administrative Code and all applicable state and
federal laws and regulations.
8.2 Adminseistrative Costs. The Borrower agrees that no loan proceeds shall
be ud for administrative expenses.
8.3 Accounts and Records. The Borrower shall maintain books, records,
ocumen s, an o er evidence pertaining to all costs and expenses
incurred and revenues acquired under this Agreement to the extent and in
such detail as will properly 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
Agreement.
8.4 Inspection of Records. Any time during normal business hours and as
Tr—equen thenIowadeemed
Department f EconomicBorrower
Development, and available
bState
the City,,
Auditor, for their examination, all of its records pertaining to all
matters covered by this Agreement and permit these agencies to audit,
/99a
examine, make excerpts or transcripts from such records, contracts,
invoices, payrolls, personnel records, conditions of employment, and all
matters covered by this Agreement.
8.5 Monitoring_ Lender. The Lender reserves the right to make scheduled
and unsc e u e visits to the Borrower in order to monitor Project
performance and compliance with this Agreement.
8.6 Reports Required. The Borrower is required to submit to the Lender
reports specified in Article 1.5 and such other reports or documents as
may be reasonably required by the Lender in the administration of its
agreement under the Community Economic Betterment Account.
ARTICLE s 9.0 - BORROYER'S REPRESENTATIONS ANO YARRANTIES Borrower represents
an warran hat:
9.1 This Agreement is, and the Promissory Note, the Mortgage and Security
Agreement, and other documents and agreements required by the Agreement,
when delivered hereunder or pursuant thereto will be, legal, valid and
binding obligations of the Borrower enforceable against the Borrower in
accordance with their respective terms.
I
9.2 Neither the execution, delivery nor performance of this Loan Agreement
or the Promissory Note, the consummation of the transactions contem-
plated hereby, nor the fulfillment of or compliance with the terms and
conditions of this Loan Agreement conflicts with or results in a breach
of any of the terms, conditions or provisions of any restriction in any
organizational document or any agreement or instrument to which the
Borrower is now a party or by which the Borrower is bound, or consti-
tutes a default under any of the foregoing, or results in the creation
or imposition of any lien, charge or encumbrance whatsoever upon any of
the property or assets of the Borrower under the terms of any instrument
or agreement, other than as provided in this Loan Agreement.
9.3 There is no litigation or proceeding pending, or to the knowledge of the
Borrower, threatened against the Borrower affecting in any manner what-
soever the right of the Borrower to execute this Agreement or the other
agreements required to be executed by the Borrower under this Agreement,
or the ability of the Borrower to make the payments required hereunder
or to otherwise comply with the Borrower's obligations contained herein
or therein.
her work
or on
9.4 thecProject tsite beforenthe Mortgagerading orist filed for hrecord inno
No the Office
of the Recorder for Johnson County, Iowa.
ARTICLE 10.0 - OTHER CONDITIONS
The Borrower will comply in all material respects with all applicable
laws, rules, ordinances, regulations
d orders suchame become delinquent
include, without limitation, paying
ay 9
all taxes, assessments and governmental charges imposed upon the Bor-
rower or upon the Borrower's property, except to the extent contested in
good faith.
10.1
/9Qd
M
10.2 The Borrower agrees that the Lender shall have
incur any expense for maintenance or preservation
the payment of any taxes, assessments or other
assessed or levied with respect to the Project.
ARTICLE 11.0 - MISCELLANEOUS.
11.1 Agreement Coverage.
-I
no responsibility nor
of the Project, or for
governmental charges
11.1.1 This instrument, and any referenced attachments hereto or docu-
ments referred to herein, contains the entire agreement between
the parties and any statements, inducements or promises not
contained herein shall not be binding upon said parties. This
Agreement shall be binding upon the successors and assigns of
the respective parties.
11.1.2 If any of the provisions herein shall be in conflict with the
laws of the State of Iowa, or shall be declared to be invalid by
any court of record of this state, such invalidity shall be
construed to affect only such portions as are declared invalid
or in conflict with the law and such remaining portion or pur-
tions of the agreement shall remain in effect and shall be
construed as if such invalid or conflicting portion of such
agreement were not contained herein.
11.2 Term of the A reement. This Agreement shall be in full force and effect
from tie a eh and shall continue in effect so long as the CEBA
Loan is outstanding and unpaid.
11.3 Maintenance of the Project and Insurance_. The Borrower covenants that,
so long as the loan is outstanding and unpaid, the Borrower shalt keep,
or cause to be kept, the Project in as good repair and condition, as
same may be, or may be hereafter placed upon completion, ordinary wear
and tear only excepted; and shall not suffer or commit waste or damage
upon the Project. In addition, the Borrower shall be required to keep
cep
in force insurance, premiums therefore to be prepaid without notice or
demand, against loss by fire, tornado, and other hazards, casualties,
and contingencies as the Lender may require on the Project, in an amount
not less than the full insurable value of the Project, or not less than
the unpaid balance of principal on the loan with such insurance payable
Borrowerto the Lender their
pear. The
Bor owermay be required todeposit such polinterests
policies with proper riders
with the Lender.
er
the
11.4 Amendment hiss greement, deem eitenecessary nder or htoOmake walteratalterations the
approved
per vednb othethis
Lendereshall beAincorporatedes ointothis
thiAgreement
Agreement. The
provisionsyof the amendment shall be in effect as of the date of the
amendment unless otherwise specified within the amendment. A waiver of
any condition of this Agreement must be in writing signed by a duly
authorized official of the Lender.
/99d
11.5 Indemnity, Fees and Expenses.
11.5.1 The Borrower will indemnify and save harmless the Lender and its
officers and employees from and against any and all losses, by
it or them while it or they are acting in good faith to carry
out the transactions contemplated by this Agreement or to safe-
guard its or their interests or ascertain, determine or carry
out its or their obligations under this Agreement or any law or
contract applicable to said transaction.
11.5.2 The Borrower will upon demand pay to the Lender the amount of
any and all reasonable expenses, including the reasonable fees
and expenses of their counsel and of any experts and agents,
which the Lender may incur in connection with the exercise or
enforcement of any of the rights of the Lender hereunder, the
failure by the Borrower to perform or observe any of the provi-
sions hereof, the collection of payments due under this Agree-
ment, and any other reasonable expenses of the Lender related to
the Project or this financing (including reasonable attorneys'
fees) which are not otherwise expressly required to be paid by
the Borrower under the terms of this Agreement.
11.5.3 The Borrower agrees to pay all appraisal fees, survey fees,
recording fees, license and permit fees and insurance premiums
related to Borrower's Project.
It is the intention of the parties that the Lender shall not
incur pecuniary liability by reason of the terms of this Agree-
ment and the Borrower shall indemnify and hold harmless the
Lender (including any person at any time serving as an officer
or employee of the Lender) against all claims by or on behalf of
any person, firm or corporation, arising out of the same, and
all costs and expenses incurred in connection with any such
claim or in connection with any action or proceeding brought
thereon.
The obligation of the parties under this Section shall survive
the termination of this Agreement.
11.6 Successors andAssigns:_ Governing Law. This Agreement shall be binding
uponupona�e o the benefit of the Borrower and the Lender and their
respective successors and assigns, except that the Borrower shall not
have the right to assign its rights hereunder or any interest herein
without the prior written consent of the Lender. This Agreement shall
be governed by, and construed in accordance with, the laws of the State
of Iowa.
11.7 obli ations of the Borrower Hereunder Unconditional. The obligations of
e Borrower o
make the payments requ re inAttachment A and other
articles hereof and to perform and observe the other agreements con-
tained herein shall be absolute and unconditional and shall not be
subject to any defense or any right of set-off, counterclaim or recoup-
ment arising out of any breach by the Lender of any obligation to the
Borrower, whether hereunder or otherwise, or out of any indebtedness or
liability at any time owing to the Borrower by the Lender and until such
time as the principal of the CEBA Loan shall have been fully paid or
provision for the payment thereof shall have been made in accordance
with this Agreement, the Borrower (i) will not suspend or discontinue
any payments provided for in Attachment A hereof, (ii) will perform and
observe all other agreements contained in this Agreement, and (iii)
except as provided in Article 11.10.3 hereof, will not terminate the
term of this Agreement for any cause, it being the intention of the
parties that the payments required hereunder will be paid in full when
due without delay or diminution whatsoever.
11.8 Waivers. No waiver by the Lender of any default hereunder shall operate
as a waiver of any other default or of the same default on a future
occasion. No delay on the part of the Lender in exercising any right or
remedy hereunder shall operate as a waiver thereof. No single or par-
tial exercise of any right or remedy by the Lender shall preclude future
exercise thereof or the exercise of any other right or remedy.
11.9 Additional Provisions. The following items or requirements are also
agree to:
The Borrower represents that it will take all actions necessary and
required to secure the accomplishments of the following benefits to
the community:
To create 36 permanent jobs in the State of Iowa in addition to the
current employee total.
11.10 Suspension and Termination of this Agreement.
11.10.1 Suspension - If the Borrower fails to comply with the condi-
tions of this Agreement, the Lender may, after notice to the
Borrower, suspend the Agreement and withhold further payments
or prohibit the Borrower from incurring additional obligations
of funds on the Project, pending corrective action by the
Borrower or a decision to terminate in accordance with provi-
sions 11.10.2 and 11.10.3 hereof. The Lender may determine to
allow such necessary and proper costs which the Borrower could
not reasonably avoid during the period of suspension.
11.10.2 Termination for cause - The Lender may terminate this Agree-
ment in whole, or in part, at any time before the date of
completion, whenever it is determined that the Borrower has
failed to comply with the conditions of the Agreement. The
Lender shall promptly notify the Borrower in writing of the
determination and the reasons for the termination, together
with the effective date. Payments made to Borrower or
recoveries by the Lender if this Agreement is terminated for
cause shall be in accord with the legal rights and liabilities
of the parties. Payments and recoveries may include, but are
not limited to, costs determined to be in compliance with
10
this Agreement up to the date of termination, based on ac-
cepted audits. The Borrower shall return to the Lender all
unspent funds within one week of notice of termination.
Further, any costs previously paid by the Lender which are
subsequently determined to be unallowable through audit shall
be returned to the Lender within thirty (30) days of such
determination.
11.10.3 Termination for convenience - The Lender or Borrower shall
terminate the Agreement in whole, or in part, if both parties
agree that the continuation of the Project would not produce
beneficial results commensurate with the future expenditure of
funds. The two parties shall agree upon the termination
conditions, including the effective date and, in the case of
partial terminations, the portion to be terminated. The Bor-
rower shall not incur new obligations for the terminated
portion after the effective date, and shall cancel as many
outstanding obligations as possible. The Lender shall allow
full credit to the Borrower for the Lender share of the non -
cancellable obligations, properly incurred by the Borrower
prior to termination.
11.11 Litigation. The Borrower agrees to pay the cost of any litigation
arising rom failure of the Borrower to comply with the terms and
conditions of this Agreement or resulting from the negligence or incom-
petence of the Borrower. In carrying out the provisions of this
Agreement or in exercising any power or authority granted to the Bor-
rower thereby, there shall be no liability, personal or otherwise, upon
the Lender, it being understood that in such matters the Lender acts
for the State. Furthermore, the Borrower shall indemnify and save
harmless the Lender and the State from suits, actions or claims of any
character brought for or on account of any injuries or damages received
by any person or property resulting from operations of the Borrower or
any persons working under its carrying out the terms of this Agree-
ment.
11.12 Resolution of Disagreement. In the event of any disagreement between
the Borrower and the Lender relating to the technical competence of the
work and services being performed and its conformity to the require-
ments of this Agreement, the decisions of the Lender shall prevail.
IN WITNESS THEREOF, the parties hereto have executed this Agreement on the
day and year last specified below:
Borrower: Lender:
COMPUTER AIDED DESIGN SOFTWARE, INC. CITY OF IOWA CITY, IOWA
Computer Alaep Design Software, Inc.( William 1Am
iliamAm risco, Mayor
Received & AppN,rou
By Te Lc0a1 Deparinkay
�9?d
11
Attest: 'l
BYAttest:
Corporate secretary arian K. Karr, CiilerT
Date: Date: 12/16/86
Date: August 1, 1986
Attachment A
$100,000.00
PROMISSORY NOTE
FOR VALUE RECEIVED, Computer Aided Design Software, Inc. (CADSI or the Makerj
promises to pay to the order of the City of Iowa City, Iowa, at its principai
place of business, or at such other place as may be designated from time to
time by the holder of this note, the principal sum of one hundred thousand
dollars ($100,000) to be paid as follows:
1. Repayment of the loan shall begin when the Iowa Department of Economic
Development determines that CADSI has reached a level of $500,000 in net
worth and has operated with a positive net income for three years run-
ning. CADSI shall provide copies of their annual financial statement in
conformance with Article 1.5 of the Loan Agreement described below, until
such time as these conditions have been met.
2. The $100,000 loan shall be amortized over the remaining term (expected to
be 12 to 13 years) of CADSI's first mortgage on the project building and
property, commencing on the first day of the first fiscal year of CADSI
after it has satisfied the net worth and income conditions. Repayments
shall be made on the last day of each fiscal quarter of CADSI.
3. The loan shall be interest free until the first day of the fiscal year in
which repayment commences. From that time interest will accrue at the
prime rate published in the Wall Street Journal on the day interest
begins to accrue, adjusted annually on the anniversary date of the first
repayment.
In the event the Maker fails to requisition and spend the full face amount of
the loan as set out above and as set out in the Loan Agreement, then the
amount of each installment payment shall be reduced accordingly in equal
amounts.
If default is made in the payment of this note, or if holder believes itself
insecure, the entire principal shall at once become due and payable without
notice at the option of the holder of this note, and thereupon the Maker
agrees to pay all costs of collection, including attorney fees. Failure to
exercise this option shall not constitute a waiver of the right to declare
the entire principal amount of this note due and payable at once any subse-
quent time.
Maker represents and warrants that the extension of credit evidenced by this
note is for the purposes described in the Loan Agreement.
This Promissory Note is the note referred to in, and is entitled to the
benefits of, the Loan Agreement dated August 1, 1986 (the "Loan Agreement")
between the Maker and the City of Iowa City. The Loan Agreement, among other
things, contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events and also for prepayments on account of
principal hereof prior to the maturity hereof upon the terms and conditions
therein specified,
0140
p
The indebtedness evidence by this Note may be prepaid, in whole or in part,
at any time without prepayment premium or penalty.
COMPUTER AIDED DESIGN SOFTWARE, INC.
By: "_
Presidegt
Attest:�0002�
(Seal) Secretary
r-
ATTACHMENT B
CITY OF 10\VA CITY
CEBA
COMMUNITY ECONOMIC
6ETTEKMENT ACCOUNT
application
package
110 East \c/ashington St.
IOWA City, lova 52210
JUIY 2, 1986
-7
COMMUNITY ECONOMIC BETTERMENT ACCOUNT
GENERAL INFORMATION
Date Submitted: July 2, 1986
Applicant Name: City of Iowa City
Address: 410 East Washington St., Iowa City, IA Zip Code: 52240
Phone Number:(AC) (319) 356-5000
Economic Develop -
Contact Person: Patt Cain* Title: ment Coordinator
Address: (same) Phone No.: (319) 356-5230
Type of Application (Check one below):
xxGrant for Buydown of principal or interest of Business Loan
Grant/Other (Specify: )
_Loan to a Business
—Loan/Other (Specify: )
Other (Specify: )
Explanation/Justification for Type of Application:
The purpose of this application and the paramount need of CADSI is the
reduction of up -front capital. necessary for construction of new facilities
so that the firm can become established according to its business and
marketing plan without jeopardizing its financial solvency. A grant for
buy -down of the loan principal or interest is the most effective and
assured means of achieving this.
Business Name: Computer Aided Design Software, Inc. (CADSI)
Address: P.O. Box 203, Oakdale, Iowa Zip Code: 52319
Phone Number:(AC) (319) 353-7248
Contact Person: Rex Smith/Bill Pearce Title: President/Controller
Address: (same) Phone No.: (same)
Amount of CEBA Funds Requested: S 100,000.00
Indicate Application Timing: xx Regular corpetition
Emergency submittal
*Alternate City Contact (7-7-86 through 7-18-86): Dale Melling,
Acting City Manager
(319) 356-5010
4
/'Pro
U
DESCRIPTION OF BUSINESS (history, product or service provided, etc.):
See Attachment 1.
PROJECT DESCRIPTION
The project for which CEBA funds are requested is the purchase of land
and construction of a 6,000-6,500 square foot building to house CADSI's
operations as the fine moves out of the University of Iowa's Technology
Innovation Center and continues a period of rapid growth and expansion.
The background and details of this project are explained in Attachment 2.
Has any part of this project been started? _Yes xx No
If yes, explain:
Does the project involve relocation of economic activity from elsewhere in Iowa?
_Yes xx No
If yes, explain:
5
i
i
i
DESCRIPTION OF BUSINESS (history, product or service provided, etc.):
See Attachment 1.
PROJECT DESCRIPTION
The project for which CEBA funds are requested is the purchase of land
and construction of a 6,000-6,500 square foot building to house CADSI's
operations as the fine moves out of the University of Iowa's Technology
Innovation Center and continues a period of rapid growth and expansion.
The background and details of this project are explained in Attachment 2.
Has any part of this project been started? _Yes xx No
If yes, explain:
Does the project involve relocation of economic activity from elsewhere in Iowa?
_Yes xx No
If yes, explain:
5
V
JOB CREATION/ RETENTION (Full —time equi vaI ents) *
2 Number of permanent jobs retained as a result of the project.
10 Number of permanent jobs created within 12 months of grant award.
36 Number of permanent jobs created within 24 months of grant award (cumula-
tTve, includes 12 month figure).
*See projected staffing schedule attached.
OTHER JOB CREATION IMPACTS (Describe)
See Attachment 3.
DESCRIPTION OF THE PROPOSED FINANCIAL PACKAGE
escr pt on: sou include a sources an uses of funds, type of assis-
tance•grants, loans, or loan guarantees, repayment terms, etc.)
CADSI is working with Iowa State Bank in Iowa City to help fund this
project. They have indicated strong interest to become the major
source of capital for this project. No formal loan application has
been prepared or any specific terms worked out as the project depends
on the approval of this application. The loan would be guaranteed by
CADSI and collateralized with the new building and real estate. Iowa
State Bank is also willing to apply through the Iowa Finance Authority
for tax-exempt status on their part of the financing.
SOURCES OF REVENUE EXPENDITURES
Source Amount Item Amount
Mortgage Loan $215,000 land $ 55,000
CEO Grant 100,000 Building Construction 260,000
Private Capital 30,000 Site Preparation 10,000
Exterior Fixtures 3,000
Interior Fixtures 17,000
TOTAL j 345,000 TOTAL $ 345,000
9�e
-I
STAFFING SCHEDULE
(FISCAL YEARS ENDING JUNE 30)
1987-88
GENERAL AND
ADMINISTRATIVE
President
1
1
1
1
1
1
1
1
1
Corporate
Secretary
1
1
1
1
1
1
1
1
1
TOTAL
2
2
2
2
2
2
2
2
2 jI
ENGINEERING
Development
4
4
5
5
5
6
6
7
7
Software
3
3
4
4
4
5
6
6
6
Consulting
1
1
1
2
2
3
3
4
5
Secretary
1
1
1
1
1
1
2
2
2
TOTAL
9
9
11
12
12
15
17
19
20
SALES"
Sales
Engineer
1
1
1
2
2
3
4
4
4
Customer
Support
1
1
1
1
2
3
3
4
4
Secretary
0
0
0
0
0
0
0
1
1
i
TOTAL
2
2
2
3
4
6
7
9
9
FINANCE AND
ACCOUNTING
Controller
1
1
1
1
L
1
1
1
1
Acct. Support
0
0
0
0
0
1
1
2
2
TOTAL
1
1
1
1
1
2
2
3
3
L
TOTAL CADSI STAFF
14
14
16
18
19
25
28
33
34 �.
KETEK DIVISION
I .,.
Production Staff
2
3
4
4
5
6
LO
10
12
Marketing Staff
1
1
1
2
2
2
4
4
4
Administrative
Staff
0
0
1
1
1
2
2
3
3
TOTAL KETEK STAFF
3
4
6
7
8
10
17
17
19
TOTAL STAFF
17
18
22
25
27
35
45
50
53
NEN POSITIONS ADDED
1
5
8
10
18
28
33
36
(cumulative)
e
/
6a
U
DESCRIPTION OF OTHER ASSISTANCE INVOLVED IN PROJECT
For examp e, describe use o Jo training programs
1. , local assistance, etc)
See Attachment 4.
2. Amount of Funds Contributed by Applicant: $ * .•
Amount of Funds Contributed by Business: E 30,000
Amount of Funds Contributed.by Others: 5-13.000 is
(Others: Funds --fore one by landowner. )
*The applicant will contribute all expenses involved in the
administration of a CERA grant or contract.
IESCRIPTION OF NEED FOR PROJECT i•
Description should nc ude d scussion of unemployment, per capita income, tax I
lase, business closings, etc.)
See next page.
l'
L
i
7
1
DESCRIPTION OF NEED FOR PROJECT
The need for this project locally is directly related to the type of firm and
type of jobs that would be created, This area is fortunate to have a highly
educated resident population as well as new University of Iowa graduates
looking for jobs every year. Iowa City needs firms like CADSI for employment
opportunities for its population and for diversification of its tax base to
support municipal services.
Although the Iowa City/Johnson County area enjoys a relatively low unemploy.
ment rate (3.2% annual average CPS rate in 1984 and 3.1% in 1985) compared to
national and state averages, this statistic masks what has been termed an
"elastic labor market" in which the large number of students and seasonably
employed persons work when jobs are available but do not consider themselves
unemployed otherwise. Nor does the unemployment rate indicate the number of
university graduates who move elsewhere because they cannot find professional
employment in this area. Such individuals do not remain in the community to
be counted as "unemployed." Thus, the pool of potential workers is considera-
bly larger than the unemployment rate would indicate.
Also relevant to this application, the unemployment rate does not reflect the
difficult to document but widely perceived problem of "underemployment,'
which occurs when the workforce is over -educated and, by reference, over -
skilled for the work available. Iowa City has many captive workers who
remain here as part of a family unit and are often employed in positions that
do not utilize their full abilities or training.
To add to the ever-present underemployment, within the last 12 months there
have been several lay-offs directly within Iowa City. Mercy Hospital laid
off 50 workers, Oral B laid off 138, and 10 positions were lost when Pharma-
ceutical Development Systems closed. Thus, almost two hundred jobs were
lost within Iowa City while additional ones were lost within the metropolitan
area (e.g., the Oakdale Security Medical Facility lost 14 positions) . Note
that these were primarily skilled positions.
Another need for this project stems from the City's over -reliance on the
residential and commercial sectors for providing property taxes. Land be-
longing to the University, the city's largest "industry," is not taxable, and
the industrial tax base is only about half of that expected for an average
city of this size, with the residential and commercial sectors paying rela-
tively higher percentages of the city's revenues.
The Iowa City area's 1983 personal per capita income ($11,141) is just
slightly above the Iowa average of $10,697. Compared with the eight Iowa
metropolitan statistical areas, the Iowa City MSA's personal per capita
income ranks fifth.
The need for this project from the point of view of the firm was explained
in Attachment 2 (Project Description).
/ 900
IOWA. CITY
ESS'c..1'.`.1T,1ZEN
•Oral=B to, lay off
100 in ,Iowa City
rl I ..
aytyb Malber ° ' , ' I aredtl reOmWlalla aerplus
the FM, cIlllee _ ( 'Thew Wo'W of :-a" WNOAYIG
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lay oft 100 worka}f et lU tmlh—
bitterness, Wad POOP6 .':
ale VSl Ve U 1.r
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dlct wren ftt reall weW.ba.
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•MfaamY rYdal,Ru
The layoff V ane of rive largest
I
In tM btdory d re 70.y..role
m Ilyrle•
actssodohe
ft a enfey:• ,.. •
77a ryofh wen aareleel.r
"M wE to eke dawn rn week
4a.rlrnea. lgftfln ctrinn
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W41 fdlawe n delala us llar
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"Awarken lul wed. Ouse �.
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rdrwa.wkreeetwnanaYtly.
' on. dtbouah meq of those later
wen caOad Gck rwwk.
Diger, wAo doused b {� Sr•
. am6aW rewday.••romra Id
' ABB ptedalrn reaanr. pet•
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of biltemeae, etl people an M
relay upset,"
vuwydlYdea�ae Nndatthe
prdrrr,pdy,
H reseuron at the plant, "Id lay.
After the layoffs, Uw work fop
TbdIo"WgvWbBraddl0on
'. off, were ordered because of prod-
u<Um faroesXU and a surplus In
}�
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DESCRIPTION OF IMPACT OF PROJECT 011 APPLICANT AND STATE
The impact of this project on the City of Iowa City, the applicant, is two-
fold. First there is the creation of 36 new jobs, which will be offered to
qual ified individuals in the community, FSany of the jobs will go to highly
educated professionals in the areas of mechanical and computer engineering.
Such jobs are ideally suited to the local labor force, which is highly edu-
cated and professionally trained,
Second, establishment of this firm within the boundaries of Iowa City will
help diversify the local tax base, which is now heavily dependent on commer-
cial and residential sectors. CADSI, as a high-technology firm, could begin
the formation of a nucleus of similar companies and would , therefore, be
expected to have an eventual impact far greater than the tax revenue solely
from its individual property. Studies of high-technology businesses indicate
that the growth and multiplication of local companies creates a sei f -sustain-
ing process that ultimately produces a healthy cluster.
Other important impacts of this project are those which directly benefit the
State of Iowa and the University of Iowa. one of the economic development
goals of the State has been the formation and expansion of high-technology
firms. CADSI is a prime example of the type of investment in the future that
Iowa has been seeking. The jobs created will give our State's new college
graduates an opportunity to remain in Iowa in challenging and competitive
positions otherwise found only if they left the State. The secondary job
creation impacts within the entire state were described in a previous sec-
tion --and these have already begun, as was detailed. The need now is to keep
that momentum going and to aid this company during its vulnerable period of
rapid growth and diversification.
The University of Iowa is also a beneficiary of this project. The jobs
created will be complementary to the University, as they will provide some of
the State's brightest minds a chance to use their skills in the private
sector while still remaining close to the academic environment. Possibili-
ties will also exist for consulting contracts and occasional joint venturing.
But more important to the University and the entire state, CADSI actually
serves as a model for the process of technology incubation at the University
to the establishment of a new self-sufficient private enterprise within the
state. The emergence of success models has been shown to be an important
condition supporting the start-up and growth of high-tech enterprises.
Success models not only stimulate entrepreneurship but also reduce risks for
investors, suppliers and bankers who are called on to assist new endeavors.
The following letters from the University of Iowa and FCBI further emphasize
and support this point.
CADSI is the result of the University of Iowa, the State of Iowa, and many
individuals committed to bringing high-technology firms and job expansion to
Iowa. The company is already an example of chat io.cans can do if they work
together to achieve their goals. For its part, CADSI will remain committed
to helping the State economy and image as the firm continues to grow.
10 f 9f Id
The University of Iowa
Iowa City. Iowa 52242
Office of the Vice president for (
Educational Development 6 Research, 111'
Dean of the Graduate College
(319) 3535531
11147
July 2, 1986
F. Forbes Olberg, Chairman
Iowa Development Commission
600 East Court Avenue
Des Moines, IA 50309
Dear Mr. Olberg:
The University of Iowa is proud that the technology that has enabled
CADSI to emerge as a competitive new business was developed on its campus.
We are equally proud that the UI Research Foundation was instrumental in
creating the corporation and that so far it has been housed in the UI
Technology Innovation Center.
The application to which this letter is attached will make clear the
commercial prospects of the company. Others can tell you what the presence
of CADSI means to our area's economic picture. I would like to remind you
and your colleagues what the success of CADSI can mean as a valuable
precedent.
Because it is clear that CADSI offers a textbook case for the creation
of new businesses based on university technology, we are eager to see the
company prosper and grow. It serves as a model for those throughout Iowa
who wish to encourage this sort of technology transfer. CADSI is a techni-
cal pioneer in its field. It also represents a pioneering effort, the
value of which goes beyond the documented economic value of the company.
We encourage favorable action on the request for a Community Economic
Betterment Award.
Sinc1ely,
D. C. 'priestersbach
Vice resident and Dean
T
1
First Capitol Development, Inc.
P.O. Box 2567
11f1 Iowa City, Iowa 52244
eli (319) 354-3939
July 2, 1986
F. Forbes 01berg
Chairman
Iowa Development Commission
600 East Court Avenue
Des Moines, Iowa 50309
Dear Mr. Olberg:
I am writing to support positive review of the proposal for an
economic development betterment grant from the City of Iowa City
in behalf of Computer Aided Design Software, Inc.
As you know, Computer Aided Design Software is our first and
perhaps most exciting example of university, public and private
partnership in the development of a new technology and
corporation through entrepreneurship. The company began with the
research and development of Professor Haug in the College of
Engineering with substantial support from the University of Iowa
Research Foundation. The Foundation was instrumental in
soliciting financial support from local private investors as well
as the High Technology Council and other agencies through the
product development stage. The company has also received support
from the Iowa Venture Capital Fund.
From the outset, Iowa City officials have worked hand in hand
with First Capitol Development, their economic development
organization, to assist CADSI officers in their continuing
development plans, We are strongly committed to continue that
support in the future in cooperation with the state and other
local government agencies.
The company has been housed as one of the charter occupants of
the University of Iowa Technology Innovation Center during its
organizational period. They are now capitalized and ready to
"graduate" to their own facility. It is especially imperative
that this transition be made without dilution of resources which
have been assembled to support operational costs of completing
the projected growth of the corporation during these first
critical years. Consequently, we seek your support of this
application to support physical facilities to house the company.
The commercial implications of this corporate initiative extend
far beyond the immediate projections of jobs and technology
li 12 // /Q
outlined in the application. The demonstrative example of a high
technology "success model" will have a direct effect on our
ability to encourage and attract similar entrepreneurs to
stimulate businesses in Iowa. Researchers at Harvard University
have specifically .identified this factor as critical in breeding
new high tech industries. We are excited about the near term
economic impact of new jobs which will be generated by CADSI. We
are even more excited about the symbolic message this project
will represent... that state, local and private partnerships can
sand do succeed in Iowa.
We are grateful for your consideration and support.
S1'nc rely,
On �
Pr sir e
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outlined in the application. The demonstrative example of a high
technology "success model" will have a direct effect on our
ability to encourage and attract similar entrepreneurs to
stimulate businesses in Iowa. Researchers at Harvard University
have specifically .identified this factor as critical in breeding
new high tech industries. We are excited about the near term
economic impact of new jobs which will be generated by CADSI. We
are even more excited about the symbolic message this project
will represent... that state, local and private partnerships can
sand do succeed in Iowa.
We are grateful for your consideration and support.
S1'nc rely,
On �
Pr sir e
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ATTACHMENT 1
DESCRIPTION OF BUSINESS
Computer Aided Design Software, Inc. (CADSI ) was formed in late 1983 with the
aid of several departments and individuals at the University of Iowa. The
company was the University's first experiment with direct involvement in
turning an academic idea into a viable commercial enterprise.
The purpose of CADSI's formation was to develop and market computer software
to the mechanical engineering industry. The initial product was software
called Dynamic Analysis Design System (DADS), originally conceived in the
University's College of Engineering. CADSI continued development of DADS to
a commercially viable product that represents the highest technology avail-
able in the market today in the dynamic analysis application area. DADS is
licensed from theUniversity_in exchange for a substantial royalty to be paid
on all DADS related revenues.
DADS has been available to the market for less than one year, but has already
seen great success. It's main competition is a ten (10) year old package
called ADAMS which is sold by MDI from Ann Arbor, Michigan. With aggressive
marketing and product superiority. DADS is already challenging ADAMS for the
market leadership position. The two have had head-to-head evaluations at
companies such as FMC and Polaroid with DADS coming out on top. Other compa-
nies using CAOSI's products include Boeing, General Dynamics, BMY Corpora-
tion, McDonnell -Douglas, General Motors, and Penske Cars Ltd, of Great
Britain.
Even with CADSI's initial successes, there are still hurtles to cross for
the company to survive in the long term. The technology imbedded in DADS has
been available to a fairly select group of people. Because it is new, only
people and companies staying on top of the changes in their industry have had
the ability to use it. This creates a fairly limited market in which to sell
DADS. Only large companies with significant research and development budg-
ets (such as General Motors, FMC, General Dynamics and firms performing
research for the government) could afford its product.
Several things are now changing this. First, this new technology is being
taught at the bachelor's level in universities across the country and around
the world. Within a few years there will be a very large base of acceptance
of this technology. Over the past ten months DADS software has been
installed at 15 universities, with many more interested in getting it.
Second, computer equipment is becoming more powerful and less expensive. Two
years ago CADSI software required a system costing in excess of $250,000.
Today a computer costing $30,000 will run the software, and within another
year there will be $15,000 computers that can use DADS products. This allows
medium and small companies affordable access to this technology.
Finally, the marketplace is just now beginning to realize the need for such
technology. Large manufacturers are demanding higher levels of testing and
quality, which can only be done using technology found in CADSI's products.
14
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i
As all of these factors converge, the market for CADSI's products will expand
rapidly. To make sure CADSI is ready for this expansion and becomes a large
part of it, solid, well-placed marketing strategies will have to be employed
and adequate capital must be available to finance the company through this
transition stage. As with all new high technology developments in the past,
one of the crucial elements of successfully marketing a new product is to
become an educator to the marketplace. This helps create and develop the
marketplace and position the firm as the market leader at the same time. This
is the mode CADSI is in now and will be in during the next two years. Within
three years, the company expects to see itself as a solid market leader
within a rapidly growing area. This is discussed in further detail in the
enclosed business plan.
Since the dynamic analysis area is one of the fastest growing segments of the
mechanical engineering industry, CADSI expects DADS to remain its mainstay
product for several years to come. However, to continue growth and reach the
company's potential, several new products are being developed. Many of these
are extensions of DADS and will increase the average sales amount per cus-
tomer. Two of these products are near completion with marketing efforts just
beginning. Three more are planned for completion by the end of 1986.
CADSI has also just started work on a new software package that is completely
separate from DADS and has a market potential even greater in size. It is in
the design optimization area of mechanical engineering and is expected to be
completed by early 1987. CADS] is working closely with the University of
Iowa on this project and is supporting research in this area at the College
of Engineering.
Early this year CADSI's management decided to expand into the personal com-
puter peripheral business. A separate subsidiary was formed in February 1986
for this purpose. In April this subsidiary, KETEK, introduced its first
product: a cabinet for the Commodore computer line. The organization is
expected to grow rapidly over the next two years as additional products are
added. This market area does not have many of the negative points of the
dynamic analysis software market, such as long sales cycles and huge overhead
costs. (However, this market is much more competitive.) This diversifica-
tion will allow CADSI to lower its business risk factors. CADSI will con-
tinue to explore additional entrepreneur opportunities that fit its business
goals.
15
1994
ATTACHMENT 2
PROJECT DESCRIPTION
CADSI has been located on the Oakdale Campus of the University of Iowa since
it was formed. Over the past two years, the company has expanded into all of
the excess space that the University facilities have available for it. CADSI
has grown from 6 to 17 employees over the past ten months and will grow ever.
more rapidly over the next three years; thus the firm needs adequate facili-
ties for expansion.
t Because of the continuing relationship with the University of Iowa, close
proximity to it is important. A search of the Iowa City area for new facili-
ties has been unsuccessful, as there appears to be no existing facilities
that would meet CADSI's needs. In order for the company to remain in the
Iowa City area, therefore, a new building must be constructed.
Two avenues were explored in developing this project: 1) the company builds
and owns the new facilities, and 2) a developer builds the project for lease
by CADSI. After investigating leasing options with local developers, CADSI
found the costs prohibitive. CADSI would have to make a lease commitment of
at least five years, with the developer demanding much of his investment back
over that period. Therefore, this option was eliminated.
For CADSI to finance construction entirely on its own would require the
company to commit over $130,000 of its capital to the project. The company
could not afford to commit this level of capital to a project that does not
directly result in increased revenues or growth at this point in its life. In
order for CADSI to obtain the growth levels it is projecting, a substantial
on-going commitment to research and development must be maintained.
With these factors it becomes very difficult for CADSI to make the needed
move without some assistance. The purpose of this request for a grant is to
reduce the up -front capital commitment for new construction to make it
affordable to the company. This would enable CADSI to continue on course
with its business plan without a slowdown caused by inadequate facilities.
Without the grant, CADSI will be forced to put many of its projects on hold
as it would have to remain in its already cramped facilities for a prolonged
period of time. It would immediately be forced to stop its evaluation of
several new product acquisitions, through the KETEK division, for an indefi-
nite period. CADSI's own growth plans would have to be slowed as space would
not be available to house needed personnel. These actions would cost the
Iowa City area and the whole state of Iowa needed jobs. It also would jeop-
ardize CADSI's strategies for becoming the market leader within three years.
If the grant request is approved, CADSI will build a 6,000-6,500 square foot
building. The building would be designed so that it can be expanded to about
12,000 square feet without incurring substantial restructuring costs. About
4,500 square feet of the space would be occupied by CADSI and the other
1,500-2,000 square feet by KETEK. Most of the space will be divided into
individual offices. Some of the special needs include a computer room,
customer training space, and a light assembly area,
16
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This initial space is expected to be adequate for the company's needs for 18
months to two years after construction is completed. At that time the second
phase of the building will be added.
CADSI is currently working with the Technology Innovation Center (TIC) to
evaluate the possibility of including space in the new facility that could be
used by other TIC 'graduates.' CADSI may be able to provide tenants access
to secretarial support, office machines and computer equipment. Potential
tenants coming out of TIC have grown and matured to the point where a non—
academic surrounding is needed. However, many may not yet be able to commit
the capital required to obtain equipment and support services lost in the
move from TIC.
The new facilities built in this project could provide an intermediate step.
The tenants could obtain many of the same services that were available to
them at the Center and remain in close proximity to the University. There—
fore, this project could conceivably go beyond providing needed aid to one
business and indirectly provide aid to many small fledgling high-tech busi—
nesses trying to stay in Iowa.
If agreements can be reached and leases signed by tenants, CADSI may amend
the project to construct both phases (12,000 square feet) of the building
immediately. This will be done only if a cost analysis justifies it. There
would be no impact on the amount of funds requested from CEB as any addi—
tional costs would be financed through Iowa State Bank on the basis of rental
income.
i
ATTACHMENT 3
OTHER JOB CREATION IMPACTS
Through CADSI's continuing efforts to expand into different market areas, the
entire State of Iowa will benefit from job creations. CADSI's management is
committed to Iowa's growth and will make a solid on-going effort to contract
for t service
CADSIwill w continue to d strengthen
eeiits frelatio sh prIowa snpwiths many of Iowa'anie. In so s
largest manufacturers, such as John Deere and Maytag.
Small businesses in Iowa will feel CADSI's expansion as well. With the
creation of the KETEK division, three direct jobs were created immediately
and two small Iowa businesses have already experienced job expansion. KETEK
has contracted with a small plastics manufacturer in Independence to manufac-
turer plastic components, even though CADSI could have received slightly
better pricing out-of-state. This contract provided much-needed income to
the manufacturer in a depressed market period for him and allowed the manu-
facturer to hire two additional people that otherwise would not be employed.
Also, a small fabric manufacturer in North Liberty was able to expand by one
berson as a result of EKuying raw materials for CADSI's sproduct hfrom Iowa companies,is firm is likewiseosuchtasta
supplier in Waverly.
These two examples indicate the tremendous potential for Iob crea-
secondary
tion resulting from CADSI's growth. As CADSI continues to expand into addi-
tional new ventures similar to KETEK, more job creation throughout the State
will result.
A final note to add is that with KETEK, the company is making the effort to
provide jobs to -special needs- Iowans that normally have a difficult time
locating good jobs. KETEK is working with Goodwill and the cities of Cedar
Rapids and Iowa City to locate such persons to fill open positions. The
company has already hired one handicapped individual through the JTPA pro-
grams and expects to add several more in the next two years.
18
ATTACHMENT 4
DESCRIPTION OF OTHER ASSISTANCE INVOLVED IN PROJECT
1. Other assistance for this project can be separated into two nain catego-
ries. The first is the assistance that is applied directly to the pro-
posed building construction project. The second category includes the
assistance involved in the total start-up and expansion of the firm. Both
types of assistance are vitally important to the continued success of
the company,
The first category of assistance, that which directly benefits the pro-
posed project, includes a write-down of the land costs by the owner of
the land where the fine intends to locate. The owner has agreed to
rearrange some lots in his subdivision to allow for CADSI's specific
needs for the present building and future expansion. This has resulted
in an effective income decrease to the owner totaling $13,000
Additional direct assistance is provided by First Capitol Development,
Incorporated (FCDI), the local not-for-profit development corporation.
FCDI will assist CADSI in providing contacts for investment, suppliers
and marketing. There is no precise dollar figure for this assistance,
but Ray Muston, president of FCDI, estimates that he has already spent at
least 25 hours in support of CADSI (not counting time spent in consider-
ing possible local sites for building),
The City of Iowa City, the applicant, agrees to contribute all costs
involved in administering the grant. As the major funder of FCDI, the
City also directly supports continued aid from the development corpora-
tion.
The second category of assistance, which benefits the entire existence
and continuation of the firm, goes back to the formation of CADSI. Uni-
versity of Iowa officials and the Board of Regents spent many hours
researching how the relationship between the University and CADSI should
be structured, and the University of Iowa Research Foundation (UIRF)
played a major role in making CADSI become a reality, It provided the
expertise to form the corporation and spent over $10,000 in legal, patent
filing and consulting fees. The UIRF also provided the company with the
necessary seed money to begin operations through a working capital loan
of $250,000. (This loan, with interest, is being repaid through revenues
generated by product sales,) CADSI continued to receive assistance from
the UIRF for about two years through expert advice in legal and business
areas, Even now, one of its staff continues to act as secretary on the
CADSI Board of Directors.
Another major contributor to CADSI's formation and success has been the
University of Iowa's Technology Innovation Center (TIC). CADSI was one
of the first tenants of TIC and remains a tenant at this time. TIC has
provided assistance estimated at over $20,000 through rent subsidies,
equipment access and shared services,
19
M46
In 1985, CADSI became one of the first recipients of the Iowa Venture
Capital Fund (managed by Invest America of CeCar Rapids). The fund
invested $100,000 in CADSI, showing the Fund's confidence in the long-
term viability of the firm.
In 1986 tremendous community support was demonstrated for the company
during CADSI's effort to attract monies from private investors. A large
Des Moines -based company invested $300,000 into CADSI, while forty local
individuals and businesses have invested an additional $950,000. All of
these monies are fully 'at -risk' for these investors. This shows a solid
commitment from the private sector to help achieve Iowa's goal of creat-
ing high-tech jobs and keeping our brightest minds in Iona.
Thus, the CADSI project represents the commitment of over $1.6 million in
University, City and private sector resources to foster the creation and
expansion of this firm. This indicates the importance attached to ena-
bling firms like CADSI to be created and thrive in Iowa.
20
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REQUIRED SUBMITTALS/ATTACHMENTS
xx Business Financial Statements
(3 years historical and at least 2 years projected)
xx Spread Sheet
(completed through line 46 )
xx Business Plan
xx Letter from business committing to project and job creation
xx Letter from lender
_ Other (Specify):
21
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REQUIRED SUBMITTALS/ATTACHMENTS
xx Business Financial Statements
(3 years historical and at least 2 years projected)
xx Spread Sheet
(completed through line 46 )
xx Business Plan
xx Letter from business committing to project and job creation
xx Letter from lender
_ Other (Specify):
21
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22
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SPREAD SHEET
BALANCE SHEET
CADSI
Historical
Projected
'
6-30-84
6-30-85
5-31-86
6-30-86
6-30-87
6-30-88
I
Csh b Hktble
Securities
29,978
260,973
795,205
683,125
655,160
778,461
Accounts
Recelveable
-0-
8,000
42,431
93,431
54,700
98,500
Inventory
-0-
-0-
-0-
-0-
-0-
-0-
Prepaid Expenses
3,992
27,563
14,915
11,737
15,000
27,000
Other
-0-
3,621
3,152
1,430
-0-
-0-
CURRENT ASSETS
33,970
300,157
855,703
789,723
724,860
903,961
Net Fixed Asset
38,671
69,225
117,912
122,787
102,828
82,194
Inv. in
Subsidiaries
-0-
-0-
70,000
70,000
80,000
100,000
Notes Receivable
-0-
102,986
-0-
-0-
-0-
-0-
Intangibles
4,997
16,575
75,395
72,869
57,145
44,501
TOTAL. ASSETS
77,638
488,943
1,119,010
1,055,379
964,833
1,130,656
Shrt term
N/P- Bank
-0-
-0-
-0-
-0-
-0-
-0-
Shrt term
N/P- Other
-0-
-0-
-0-
-0-
-0-
-0-
A'ects. Payable
19,080
62,845
37,992
28,171
52,232
78,629
Accruals
9,844
48,734
86,062
107,664
141,063
11,500
Taxes (income)
-0-
4,800
2,625
2,625
-0-
-0-
Current Portion
LTD
9,800
15,500
19,600
21,500
11,000
6,000
Other
-0-
4,583
2,159
2,159
-0-
-0-
CURRENT
LIABILITIES
38,724
136,462
148,438
162,119
204,195
96,129
Long tern debt
.284,120
271,710
980,383
973,335
882,000
705,000
Officer debt
-0-
-0-
-0-
-0-
-0-
-0-
Deferred Revenues
-0-
-0-
179,087
142,488
-0-
-0-
70M LIABILITIES
322,844
408,172
1,307,908
1,277,942
1,086,195
801,129
Common Stock
-0-
-0-
80
80
150
250
Capital Surplus
-0-
-0-
-0-
-0-
-0-
-0-
Retained Earnings
(245,207)
80,771
(189,058)
(222,643)
(121,512
329,277
(Less) Treasury
1 Stock
-0-
-0-
-0-
-0-
-0-
-0-
Total Net North
(245,207)
80,771
(188,978)
(222,563)
(121,362)
329,527
TOTAL LIABILITIES
6 N/W
77,638
488,943
1,125,691
1,055,379
964,833
1,130,656
Contingent
liabilities
-0-
-0-
-0-
-0-
-0-
-0-
22
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CADSI
SPREAD SHEET
INCOMr STATEMENT
(FISCAL YEARS ENDING JUNE 30)
23
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Actual
E
preJ!cted
Pascal Yr.
Fiscal Yr.
11 Months
Fiscal Yr.
Fiacal Yr.
Fiscal Yr.
1984
1985
Ended 5/31/86 1986
1987
1988
Sales
-0-
812,317
571,198
651,198
1,763,488
3,177,000
-COGS
Profit
-0-
-0-
-0-
812,317
-0-
571,198
-0-
651,198
-0-
1,763,488
-0-
3,177,000
-Groas
-SCA
213,259
423,350
737,197
811,859
1,485,625
2,327,335
operating profit
(213.259)
388,967
(165,999)
(160,661)
277,863
30,000
849,665
30,000
-Officers Salaries
-Depr.
-0-
7,215
17,497
3,495
24,402
19,964
26,736
22 264
,
34,410
37,636
Exp.
-Interest Exp.
15,583
42,820
59,585
88,347
113,372
31,650
96,744
39,000
'
-Rent
Inc./Exp.
9,150
-0-
10,563
11,386
12,637
12,758
14,306
8,900
32,700
( 2,300)
4 -Other
-EST
(245,207)
325,978
(269,829)
(303,414)
101,131
643,985
-Income Taxes
-0-
(245,207)
-0-
325,978
-D-
(269,829)
-0-
(303,414)
-0-
101,131
193,196
450,789
SpA=
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KETEK
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BALANCE SHEET
1:
I
i
i
,
i
SPREAD SHEET
i
Actual
5 1 86
Projected
0 86
i.
6 0 88
Cash 6 Nktable
Securities
Accts Receivable
26,994
12,395
24,575
32,147
74,564
Inventory
21,213
13,000
25,200
60,000
Prepaid Exp.
1,701
19 500
29,000
95,000
1,300
4,200
15,000
CURRENT ASSETS
Net Fixed Asset
62,303
58,375
90,547
244,564
Inv. in Subsidiaries
1,350
-0_
1,305
7,500
32,500 j
Notes Receivable
_0-
-0'
-0-
Intangibles
210265190182
_a
15,015
-0
10,848
TOTAL ASSETS
Short term N/P-Bank
84,918
_o-
78,662
113,684
257,634
Short term N/P-Other
12 415
-0-
-0-
-0-
i
Accra. Payable
23,516
10,000
-0-
-0-
Accruals
2,970
18,000
27,300
56,700
Taxes (Income)
_0
2 300
5,500
18,000
Current Portion LTD
-0-
-0_
-0'
-0-
-0-
-0-
CURRENT LLlBILITES
Long Term Debt
38,901
30,300
32,800
74,700
Officer Debt
10,098
-0
10,098
-0-
_0_
-0-
-0-
-0-
TOTAL LIABILITIES
Conon Stock
48,999
40,398
32,800
74,700
1 Capital Surplus
70 000
'
70,000
70,000
70,000
0,0
' Retained Earnings
( 34,4,080) (
32,155)
10,262
(Leas) Treasury Stock
-0_
143,212 i
Total Net Worth
35,920
-0
38,464
-0-
80,262
-0-
TOTAL LIAEILITIES 6 N/N
84,918
213,212
Contingent Liabilities
'
_0
78,862
113,062
287,912
I
i
i
-0-
-D-
-0-
24
P? ?40
i
I
1:
I
i
i
,
i
25
Me
-I
SPREAD S9EET
INCOME STATEMENT
(FISCAL YEARS ENDING J= 30)
Actual
Projected
5 Months
Fiscal Yr.
Fiscal Yr.
Fiscal Yr.
Ended 5/31/86
1986
1987
1988
Sales
73,047
111,447
504,000
1,200,000
-COGS
35,928
56,088
256,200
610,000
Cross Profit
37,119
55,359
247,800
590,000
-SGA
70,695
86,895
182,400
378,000
-Operating Profit
( 33,576)
( 31,536)
65,400
212,000
-Officers Salary
-0-
-0-
-0-
-0-
-Depr. Exp.
-0-
-0-
-0-
-0-
-Interest Expense
52
52
-0-
-0-
-Rent
465
570
4,800
9,000
+Other Income/Expense
-0-
-0-
-0-
-0-
-EBT
( 34,080)
( 32,158)
60,600
203,000
-Income Taxes
-0-
-0-
18,180
71,050
-PAT
( 34,080)
( 32,158)
42,420
132,950
25
Me
-I
i c�Dsz
I C iKousawcl)
FLsco,� Years e. g-
SPREADSHEET
BALANCE SHEET
PROFIT AND LASS STATEMENT
ll.PRHATAWLMSTATKMEp
CASHPLAWBTODMWT
"-CWIFLDWWA MlDIT
.0I ft
M Earp
KtrtK
l �5c�(years each T.we 30
SPREAD SHEET
011LANCESNEET
I
J,MW�D SH[R _ _
W
, 11
��
��
���
*mom
E W..=-
■
ffm zmma
rl�7O��
F1m m rffc�
PROFIT AND LOSS STATEMENT
H.MDRTAHCI STAT VIT
0
GSHFLOWSTATU MT
x. usHrsoa nATess[Hr
�a MHun.
F. EN/q
non.
rl�7O��
PROFIT AND LOSS STATEMENT
H.MDRTAHCI STAT VIT
0
GSHFLOWSTATU MT
x. usHrsoa nATess[Hr
�a MHun.
F. EN/q
C�1)Sr �KETi'K Con.soCEc(�L.�e.�Q
iCIH �u,SEEA.�C'f S)
i . n
iJca Q I/caA^s GAc X U"Ae 30
4 Kw be.t YIA" Kflect rou/ A,'Mj GrrDr5
SPREAD SNEE• PROFIT AND LASS sTATEMENT
BALANCE SHEET
A IWFI T AIM) IMI STAT W ENT
I
GSH RDW STATCMINT
N,GlNIIONlTI1TlYENI
Iq YbI�AI
1w�wIM.MFM
,
MOUR l
��__I_!._
GSH RDW STATCMINT
N,GlNIIONlTI1TlYENI
Iq YbI�AI
T
..,
NOTE TO FINANCIAL STATEMENTS/ SPREAD SHEETS:
A review of the financial statements/spread sheets provided with this appli-
cation shows that the company does not expect its cash position to fall below
$700,000 in the project years. This amount represents only 7-10 months of
operating capital. One of the biggest problems high teccinology canpanies
have is undercapitalization combined with over -enthusiastic projections for
breaking into a new market. CADSI does not intend to commit this error.
Until CADSI has met its revenue projections, these operating funds cannot be
utilized for unliquid, long-term projects such as investments in real estate.
Although the revenue projections are based on outside experts' opinions,
there are many uncontrollable factors in determining how fast the market
will mature. Also, if revenue projections do prove to be high, the present
allocation of capital will allow CADSI to meet debt repayment terms on con-
vertible debentures due in 1990. If CADSI does meet projections as planned,
these funds will become available to spur further growth and investments in
new entrepreneurial undertakings. This would mean even more job creation than
shown in this application.
29
C..
convu icrr nnc o a sicn su rLL wt. enc
June 30, 1986
Iowa Development Commission �.
CEB Project Committee
600 E. Court Ave.
Des Moines, 1A 50309
RE: CEB Application: City of Iowa City on behalf of Computer Aided Design
Software, Inc.
Members of the Committee -
On behalf of CADSI, I would like to express our commitment to the project
as outlined in the application, if it is approved. We will use all resources
available to us to make sure that all job creation projections will become
reality.
Beyond new job creation, this project will have many other positive
impacts which the application outlines. We feel that three of these stand -
out: .. �..
The first is the indirect job creation effects our expansion will "
cause in the state. Our commitment to using Iowa suppliers and
manufacturers to provide us with materials will have an impact on '
many areas of Iowa outside of our own community.
The second is the aid CADSI can provide the state in presenting an
image of a place where high technology companies can grow and
flourish. Our contacts and relationship with some of the largest (i
users of high technology in mechanical engineering, both private and
public will help bring more attention to the state of Iowa.
I
The third is the retention of highly educated professionals in
Iowa. Our staff consists primarily of degreed engineers and
computer science graduates that frequently leave the state looking
for career opportunities.
30
P.O. BOX 203
OAKDALE, IA 52319
17191 W4.77AR
/99e
Iowa Development Commission
Page Two
June 30, 1986
CADSI is committed to this project as it is in the beat interest of the
company. Without approval of the funds requested, many of our expansion plans
can not be implemented. Therefore, the project is in the best interests of
the state of Iowa as well.
Thank you for your time and interest.
Sincerely,
ce
/ ` %i
Rexford L. Smith
President—CADSI
RS:sg
: D
0J IOWA STATE BANK & TRUST COMPANY
102 S. CLWTON STREET
P.O. Box 1700
IOWA CRY, IOWA 52144
(319) 336-5900
June 23, 1986
Iowa Development Commission
CEB Project Committee
600 E. Court Ave.
Des Moines, IA 50309
Re: Computer Aided Design Software, Inc.
Gentlemen:
on behalf of Iowa State Bank & Trust Company, I wish to
express our interest in participating in the expansionary
plans of our above referenced client.
Iowa State Bank & Trust Company has not received a loan
request nor has it issued a loan commitment.on this project.
However, any such request would meet with our utmost
attention and review.
If Iowa State Bank & Trust Company can be of any service
in the processing of our client's application, please
don't hesitate to contact me.
�Siinncerreel'yy,
Terry N: V brick
:�
Second Vice President
es
32 I &?
/ D
I;
.1
I
102 S. CLWTON STREET
P.O. Box 1700
IOWA CRY, IOWA 52144
(319) 336-5900
June 23, 1986
Iowa Development Commission
CEB Project Committee
600 E. Court Ave.
Des Moines, IA 50309
Re: Computer Aided Design Software, Inc.
Gentlemen:
on behalf of Iowa State Bank & Trust Company, I wish to
express our interest in participating in the expansionary
plans of our above referenced client.
Iowa State Bank & Trust Company has not received a loan
request nor has it issued a loan commitment.on this project.
However, any such request would meet with our utmost
attention and review.
If Iowa State Bank & Trust Company can be of any service
in the processing of our client's application, please
don't hesitate to contact me.
�Siinncerreel'yy,
Terry N: V brick
:�
Second Vice President
es
32 I &?
/ D
I;
i
I
4
Name of Recipient City of Iowa City
CEBA Program Year: 1986
�• IOWA CEBA RECIPIENT PROGRAM SCHEDULE
PROJECT DESCRIPTION PERFORMANCE. AMOUt
I IAL ntril L
be filled in by DED;
pinal
Indment N
-
CEBA
FUNDS
Loan
RECIP. USINESSJ OTHER
FUNDS FUNDS
TOTAL
i
;
a
AcHvitte Loan to Computer Aii4d Design
$30,0'0
Software, Inc., to purchase land and construct
Create 36 new jabs
$100,000
0- Cash
a 6;000 to 6,800 square foot building to
_p_ (345,000 -
$215,000
house CADSI',s operations.
loan
I'
Activity T______J
4;
[Activity 5;____
Amount of All Funds Budgeted]$ 100,000 1 -0-
r r n� ATTACHMENT D
Name of Recipient Cit of
Y owa City
IOWA CEBA RECIPIENT PROGRAM SCHEDULE
t
1986 1987
E PROJECT ACTIVITY: Loan to
Computer Aided Design Software, Inc. ist QTR, 2nd QTR, 3rd QTR. 4th QTR,
Milestones: S 0 N D J F M A M J
w .....
2, Choose construction site
ov
3. Obtained final board approval
4. Finalize financing
nnip
I
s, Begin construction
Hire 2 new eo le
6.
Move into building
7.
/994
S
a
Attachment E
MORTGAGE ANO SECURITY AGREEMENT
19 , by and
THIS MDRTWGE, made this day ,e ere n re ferfe3 to az
betwer� fmpuler Aided es xqn oftware, n:.,
'Mortgagor' and the City of iowa City,lows, an Iowa municipal corporation
Iowa, Mere in referrN to
With Its principal place of business at Iowa City,
as 'Metgegee.'
WITNESSETH:
IHAT, MEAS, the Mortgagor is Justly indebtee ed in the incipal alumto the ofg On! ee upon
undre^_
promissory note hereinafter descrievidenced by one certain Promissory Note of the
ThouianC Dollars (f100,000), m a a.le to the order of and delivered
Mortgagor of even date hereinwith, ade D y ` a coDY of which is
to the Mrtgagee (hereinafter referrer] to as the 'NDte;
attached hereto). in end by which said Note the Mortgagor pro.mises to pay the
said principal e, sun and and all of saidst at the principal rate o and inter esti aror e madehe e� Mablrns as e a'Ysueh
In said Nste,
place as the holder of the Note may, from time to time, in writing, appoint.
Fin annd ise Department, ofsuch
Appointment, then at 41.0 East
Washi nglon Street. Attn:
a City. Iowa
RDW, prDEFORE, the Mortgagor to secure the payment of said principal
lons sr or
suns of honey and said Merestin acorea :e with the
secured kerns, ,and the per-
linilations of this mortgage, ,
formmce Of the covenants These agreementsherein
hMORTGAGi-nand YARRANI and GRNMortgagorA
to be performed, does by its successors and assigns, in and to all
SECURITY INTERESI to the Mortgagee,
ate
of its estate, right, title and interStatenst of iIo r. realandstbeing situated,
particularly
being in the County of Johnson,
describe: in Exhibit 'A" attached hereto, and hereinafter referred to as the
'prerAses
IOGEIREP with all improvece:ts, temr-e-•ts, easements, fixtures and
appurtenances thereto belonging, and all rents, Issues and Profits thereof
for so long and during all such times as Mx'gagorih may
yr bel eestate) thentitltd reto
(which Ale pledged Primarily and on a parity furniture fixtures, appliances
secondarily), and all equipment, machinery, i
and personnel property of every kind or description whatsoever now or hereafto
-
ter owmd by Mortgagor and located in, uDor or about, or used or inter elt of he
be prents^s�tth or in including connection
extensions. the
additionsoperation
improvements,o betterments,
renewals and replacmenls of the foregoing, and all fixtures, apparatus,
equip^cal or articles now or hereafter
lfi i• tpowerr, sprinkler or protection, wto aste
heat, gas. air [matt n (wheing. 9
rernoral, refrigeration (whether' single tints he centrally controlled), and
ventila:1Or, including (Wiit hono.•rortherea�ur husedoror ocl,fulalin connection
tures , Pp it being
enure atlonhe
lof anytzpec otic sartidees of hof Oroperly�sha11 in AD waysexclude orbe
held to exclude any Items of Drooerty not S e:ificafeyalmentioned. er eand mixedAll Of e
Land, estate and property hereinabove described,
fied)eandffixallaor jAnexrights hereby omortgag1.eer not x are I cept ,tendedere l soh to s be ase, unithet end are
nd part
hereby understood. agroriated to eked use oto ol the n a Areal art aestate,eandfshall r for
estate end to be e0D P
the purposes of this mortgage be deenee to be real estate and mortgage
hereby.
TO HAY: AND TO NOLO the above -granted prr.ises, with all the rights, improve-
ments and appurtenances thereunto belongin;, or in anywise appertainfng unto
Bald lDrtgeRpor, and its successors and assigns forever_ And said Mortgagor
coven ads and It that Is hasadof 9 goo arighntdeto aselle convey end moestate in rtgage the sane,
promises,
as aforesaid; that all of said property Is free and clear of all genera and
special taxes, liens, charges and encumbrances of every kind and character,
except for the Senior Mortgage described in Section 16 below and other encum-
brances
ncum-
en thsltd tt described
war Eantoit an",• e,everattached
der^!-eto the ( title ltted thereto against sthe
lawful claims of all persons wno�speve'.
/ ffJ
.2'
1T 15 FURTHER INDERSTODD AND AGREED TIL:;;
Maintenance, Repair and Restoration of ImPro eme is Payments of Prior liens
Etc.
1. Mortgagor shall (a) promptly repair, restore or rebuild any buildings o•
improvements now or hereafter on the premises which may become danaged or
be destroyed; (b) keep said premises in good condition and repair, with-
out waste, and free from mechanics' liens or other liens or claims for
lien not expressly subordinated to the iter hereof; (c) as hereinafter
provided, pay when due any indebtedness which may be secured by a lien or
charge or. the premises superior to the lien hereof, and upor. request
exhibit satisfactory evidence of the discharge of such prior lier. to
Mortgagee; (d) complete within a reasonable, time any building c• bcilc-
ings nowor at any time in process of erection upo: said preises; (e)
comply with all requirements of law, muMcipel ordinances, or restric-
tions of record with respect to the premises and the use thereof; (f)
make no material alterations in said pre-ises without Mortgagee's prior
consent except as required by law or municipal ordinance; (g) suffer or
permit no change it the general nature of the occupancy of the p -anises,
without Mortgagee's written consent; (h) net initiate or acquiesce in anv
zoning reclassiffcatior., without Mortgagee's written. consent; (t) p}j
each iter,, of indebtedness secured by tkis mortgage when due accordinc to
the terms hereof or of the Note.
Payment of Taxes
2. Mortgagor shall pay before an) penalty attaches all general lues an:
shall pay Special taxes, spe:ial assessaests, water charges,- sewer serv-
ice charges, and other charges against the premises Men due, acd shall,
upon writter. request, furnis" to Mortgagee duplicate receipts therefor.
To orevent default hereunder Mortgaoon Shall Day it, full under protest,
ir, the manner provided by statute, any ta, or assessment wnict Mortgagor
may desire to contest.
Insurance
3. Mortgagor shall keep all buildings and improvements now or hereafter
situated on said premises insure: against loss or damage by fire, tor•
nado, and such othe' hazards as may reasonely be required by Mortgagee,
including without limitation o'. the generality of the foregoing, war
damage insurance whenever in the opinior of Mortgagee suet Protection is
necessary. Mortgagor shall also provide liability insurance witr. suet,
limits for personal injury one death art property damage as Mortgagee may
require. The premises will be continuously insure: under one or more
Policies Providing coverage for loss by fire, tornado and Diner extended
coverage to its full insurable value, w�icn shall not be less than the
total of the unpaid principal balances or. the first and second mortgage
loans on the premises, until the indebtedness hereby secured is fully
paid. All policies of insurance required hereunder shall be to forms,
companies and amounts satisfactory to Mortgagee, with mortgagee clauses
attache: to all policies it favor of and fD a form satisfactory to
Mortgagee, including a provision requirir that the coverage evidenced
thereby shall not be terminated or mudifie- without ten (10) days' prior
written notice to the Mortgagee. Mortgagor shall deliver all policies,
Including additional and renewal policies, to Mortga ee and, Ir. the case
of insurance about to expire, shall deliver renewal policies not less
than. ten (10) days prior to their respectnve dates of expiration,
Escrow Payments
a. The Mortgagor may at its option require the deposit by the Mortgagor, at
the time of each monthly payment or ar. installment of interest and prin-
cipal under the Note, of ar. additional Amount sufficient to discharge the
obligations under Sections 2 and 3 when they became due. The detemira-
Litt, of the anount so Payable and of the fractional part thereof to be
depose let with the Mortgagee, so that the aggregate of the monthly depos-
its Sell be su "icier: fe' itis Purpose, snail be made by the }Urtgagep
in its sole discretion.
Sue!. d'. p9 :} ShLll be, heie ty tnd Mp-tgag L wt; ` inter": L'C114-
' rf:Pe ,
la •C',•L:e ... ...rc' Dm. ,w.. S9:- L.g V,t< .£ g...
geS .. -c . of s!': r4
/99a
-3-
such order or priority as the Mortgagee shall determine, or or before the
respective dates u. which the same or any of them would become delin-
quent. If, one month prior to the due date of the aforementioned
amounts, the amount then on deposit therefor shall be insufficient for
the payment of such iter. In full, the Mortgagor within ten (10) days
after written demand, shall deposit the amount of the deficiency with the
Mortgagee.
Nothing contained in this Section shall be deemed to affect any right or
remedy of the Mortgagee under any provisions of this mortgage or of any
statute or rule or law to pay any such amount and to ad: the amount so
Palo together with interest at the legal rate to the indebtedness hereby
secured.
1
Adjustments of Losses with Insurer and Application of Proceeds of Insurance
5. In case of loss, the Mortgagee (or after entry of decree of foreclosure, '
purchaser at the sale, or the decree creditor, as the case may be) is
hereby authorized either (a) to settle and adjust any Claim under such I -
insurance policies Without consent of Mortgagor, or (C) to allow Mort-
gagor to agree with the insurance company or companies on the amount to
be paid upoc the loss. In either case, Mortgagee is authorized to collectand to j!
obligated givereceipt
rrestoref or replace the insurancemoney.
or destroyed buildings o• !
improvements under the terms of any mortgage which is o• may be prior to
the lien of this mortgage, (b) such damage or destruction does not result
in cancellation or termination of such mortgage, and (c) the insurers dD
not deny liability as to the insured, such proceeds, after deduction
therefrom an) expenses incurred in the collection thereof, shall be use.
to reimburse Mortgago• for the Yost of rebuilding 0• restoration o'
buildings and improvenents on said premises. In all other cases, pro- i.
vided Mortgagor is not in default under the terms herein o• under the
Note secured by this Mortgage, such. insurance proceeds may. at the option
Of the Mortgagor, either be applied in reduction of the indebtedness
secured hereby, whether due or not, or be held by the Mortgagee and uset
to reimburse Mortgagor for the cost of the rebuilding or restoration of
the building or Improvements or. the premises; however, if MertgagD• is in
default, such insurance proceeds may, at the option of the Mortgagee,
either be applied ir. reduction of the indebtedness secured hereby,whether ho "
Mortgagordu fol the , or [ cost bebof held
rebuildingthe
rebuilding
estoration u of buildingsd to aa,
Improvements on said premises. Inc buildings and Improvements shall be
so restored or rebuilt by mutual agreement of the Mortgagor and
Mort-gagee, as to be at least of equal value and substantially the same Char -
entitled
as prior to such damage or destrucaar„ In the ever.: Mortgage• is l
entitled to reimbursement out of insurance proceeds, such proceeds shall
be made available, frog time to time, upon the Mortgagee bein- furnished- 1.
with satisfactory evidence of the estimated cost of corpletior, thereof
an. Witt.such. architect's certificates, waivers of tier, contractor's
sworn statements and other evidence of cost and of payments as the Kort-
gagee may reasonably require and approve, and if the estimated cost of
the work exceeds ter. percent (I0:) of the original principal amount of
the indebtedness secured hereby, or if the exterior of the building or.
the premises is to be altered in any way, with all plans and specifica-
tions for such rebuilding or restoration as the Mortgagee may reasonably
require and approve. No payment made prior to the final completio, of
the work shall exceed ninety percent (90:) of the value of the worn
performed, frog limo=w, to timnd at all times the undisbursed balance of d
said proceeds remaining in 'Althhands of the Mortgagee shall be at leas:
�letion o/ the wrk free and clear
sufficient to pay for the cost of con<
of liens.
In case of loss after foreclosure proceedings have been instituted, the
proceeds of any such insurance policy or policies, if not applied as
aforesaid in rebuilding or restoring the buildings or improvements, shall
be used to pay the amount due in accordance with any decree of fore•
closure that may be entered in any such proceedings, and the balance, if
any, shall be paid to the owner of the equity of redemption if such owner
shell then be entitlee tc the Sal or as the court ms) ' d' -e::. It. sh •
ca
if,: forr:lesat rf t-.1: ny;pa gc, toe roc-: it j:SCf:-ea r!.,
tr'at the n:•:gagee's clt_sr a::a: 5t'- lc enol of said irs:•ar.:( pcli:if!
me. b;. cares1le: a': :r.a: Pd eF:ren ere:i:D' r;) Cade t ns,. I:eS elect•
:e Ds a!tt:r.e: t: e::' [' SO: C:•i: lei mNin? tH 1D[a :.:-F:r{c. pe).
/990
able to said decree creditor; and any such foreclosure decree may further
provide, that in case of one or more redemptions under said decree,
pursuant to the statute in such case aide and provided, then and in every
such case, each successive redeoptc' my cause the preceding loss Claus
attached to each insurance policy to be cancelled and a new loss clause
to be attached thereto, inking the loss thereunder payable to such
redecytor. In the event of foreclosure sale. Mortgagee is hereby author-
_, iced, without the consent of Mortgage,, to assign any and all insurance
policies to the purchaser at the sale, or to take such other steps as
Mortgagee may dee: advisable, to cause the interest of suet. purchase• tc
be protected by any of the said Insurance policies,
-, Stamp To.
6. If, by the laws of the United States of America, or of any slate having
L' jurisdiction over the Mortgagor, a+y tax is due or becomes due in respect
Of the issuance of the Note or notes hereby secured, the Mortgagor cove-
nants and agrees to pay suet tad Ir. the manner required by any such law.
The Mortgagor further covenants to hold harmless and agrees tc indemnify
the Mortgagee, its successors or assigns, against any liability incurred
by reason of the imposition of any tax or• the issuance of the Note or
notes secured hereby.
Prepayment privilege
7. At su;e, time as the hbrtgagor is no: in default either under the terms of
the Note secure, hereby, or under the terns of this Mortgage, the
Mortgagor shall have the privilege of nakin, prepayments on the principal
of said Note (in additior, to the require: payments) but only fr. accor-
dance with the terms and conditions set forth fr. said Note.
Wservanct of Lease Assignment '
B. In the event the Mortgagor, as additional security for the payment cc the
Indebtedness described in and secured hereby, has sold, transferrer and
ass i gored,or may hereafter sell, transfer and assig-., to the M,.Ytgagec,
its successors and assigns, any interest of the Mortgagor as lessor fr.
any lease or leases, the Mortgagor expressly convenants and agrees that
if the lessee or any of the lessees under said lease or leases at as.
at me: or the Mortgagor, as lessor therein, shall fail to pe.rforc and
fulfill any tern,, covenant, condition or previslor. in said lease er
leases, at the Limas enc in the manner in said lease or leases provided,
or if Mortgagor Shall suffer or perch to occur any breach or default
under the provisions of any provisions of any assignment of any lease o•
leases of the premises giver, as additional security for the payment of
the indebtedness secured hereby ac: suet default shall continue for
thirty (30) days, the.. and ir. any such event, suet breach or default
shall constitute a default hereunder and a: the option of the Mortgagee,
and without notice to the Mortgage•, all unpaid indebtedness secure: bu
this mortgage shall, noWtnstanding anything in said Note or in this
mortgage to the contrary, become due and payable as in the case of other
defaults.
Effect of Extensions of Time
9. If the payment of the indebtedness or any pert thereof be extended or
varied or if any part of the security be released, all persons now or at
any Lima hereafter liable therefor, or interested in said premises, shall
be held to assent to such extension, variatiot or release, and their
liability and the lien and all prmisions hereof shalt continue in full
force, the right of recourse against all suck. persons being expressly
reserved by the Mortgagee, notwithstanding such extension, variation or
release.
Further Assurances; After Acquired Property
10. At amy time, and from time to time, upon request by Mortgagee, Mortgagor
will mile, execute and deliver or cause to be nada, executed of daily•
ere:, tc Mortgagee and, ww4rE apt':: -fat,, came to be recorded an:;or
file: and fro-. firm! tt tins tharee'ter fr be rt•ra:oru'e; an:'o• refile:
a: s-atine are ir. sc U, offices an: places e! sial' b. gee f: as ira: it
b, M:rtgagfc, ar.y ar: a71 su:- o: -f- er: far:ae. n:•:;a;as, std rid.
ag'ee-tets, fintn:in; statene-.ts, ec':inga::r s:a:c-: •. ;s, ira: •ra-:! c'
:,.
/Q1a
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further assurance, certificates and other documents as nay, in the opin-
ion of Mortgagee, be necessary or desirable in order to effectuate,
conplete, or perfect, or to continue and preserve (a) the obligation of
Mortgagor under the Note and under this Mortgage and (b) the lien of this
Mortgage as a second lien (subject only to the Senior Mortgage, as de-
fined in Section 16 hereof, and Permitted Encumbrances, if any, as show..
on Exhibit '6') upon and security interest in and to all of the Premises,
whether now owned or hereafter acquired by Mortgagor. Upon any failure by
Mortgagor so to do, Mortgagee may make, execute, record, file, re-record
and/or refile any and all such mortgages, security agreements, financing
statements, continuation statements, instruments, certificates, and
documents for and in the name of Mortgagor, and Mortgagor hereby irrevo-
cably appoints Mortgagee the agent and attorney-in-fact of Nortgagor so
to do. The lien hereof will automatically attach, without further act,
to all after acquired property attached to and/or use in the operation
of the Premises or any part thereof.
Expenses
Il. Mortgagor will pay or reimburse Mortgagee, upon demand therefor, all
reasonable attorney's fees, costs ant expenses incurred by Mortgagee in
any suit, action, legal proceeding or dispute of any kind in which
Mortgagee is made a party or appears as party plaintiff or defendant,
affecting the indebtedness secured hereby, this Mortgage or the interest
created herein, or the Premises, in:ludin;, but not limited to, the
exercise of the power of sale contained in this Mortgage, any Conde -a -
tion action involving the Premises or any actio- to protect the security
hereof; and any such amounts paid by Mortgagee shall be adds: to the
indebtedness secured by the line of this Mortgage.
Estoppel Affidavits
12. Mortgagor, upon ten (10) days' prior written notice, shall furnish Mo-t-
gagee a written statement, duly acknowledget, setting forth the unpaid
principal of, and interest on, the indebtedness secured hereby and
whether or not any offsets or defenses exist against such. p•ir:ipel and
interest.
Subrodatio-
13. Mortgagee shall be subrogated to the claims and liens of all parties
whose claims or liens are discharged or paid Witt, the proceeds of the
indebtedness secured hereby.
Limit of Validity
14. If fror. any circumstances whatsoever fulfillment of any provision or this
Mortgage or of the Note, at the time performance of such provision shell
be due, shall involve transcending the limit or validity presently pre-
scribed by any applicable usury statute or any other applicable law. With.
regard to obligations of like character and amount, then _is o facto the
obligation to be fulfilled shall be reduced to the limit o s—ivalid-
ity, so that in no event shall any exaction be possible under this Mort-
gage, or under the Note, that is ir. excess of the current limit of such
validity, but such obligation shall be fulfilled to the limit of such
validit). The provision of this Section shall control every other provi-
sior. of this Mortgage.
Transfer of Premises
15. Mortgagor hereby acknwledges to Mortgagee that (a) the identity ant
expertise of Mortgagor, and the location of Mortgagor's business on, the
prerises, were and continue to be material circumstances
upor. Mich Mortgagee has relied in connection with, and which constitute
valuable consideration to Mortgagee for, the extending to Mortgagor of
the indebtedness evidenced by the Note and (b) any change in such iden-
tity or expertise, or the location of Mortgagor's business could materi-
ally impair or jeopardize the security for the payment of the Note
granted to Mortgagee by this Mortgage as well as thf ecano-ic develppmert
benf`its e.er:te: tc result fro- M.drt; ;d•'s Ic:a:io• a: tat p -e -lies.
Mpftgt gd• therefor covera'.:s and agrees W"r P.:•tgepea. as part c' ttf
fonside'atio• fen Ins e,tendin; tc Y.: •:gl;?• c' VS indF:4fdsr r, e,..
dente: I'!. thf Note, bre: In Mr ere-: t.-. ,.f Pre'iscs o- a part
T
M„
1
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there.` are told, exchanged, assigned, conveyed, transferred, leased or
otherwise disposed of by Mortgagor, or in the event that either legal or
epuilablr title of the Premises shall vest in any other person, or per-
sons, fire or corporation then the Mortgagor for any reason wnatsoever,
or in the event ownership of fifty percent (SOL) or wore ofMortgagor's
capital stock shall vest in persons who are not presently shareholders of
Nortga; •, or in the event the principal offices of the Mortgagor are
relocated outside of Johnson County, lova, the indebtedness, pursuant to
this Mortgage and the Note, shall become due and payable forthwith at thr
optiorr of the Mortgagee or the Director of the Iowa Department of Eco-
nomic Development, (hereinafter the 'Director'), without further notice,
EnHowever, that acceleration of the indebtedness secured heresy
she rq; app y to any of the following: (a) sales or exchanges in
tonne:: ion with the replacement of any furniture, fixtures and equipment
with si-filar items of equal or better quality; or (b) any other sale,
exchan;s, lease• or transfer if the Mortgagee and Inc Director consent to
in writing.
Senior MDr::aae
16. This M: rlgage shall be and remain subject and subordinate tr a first
mortga,e D. the Prmnises securing a provissory note, or to ary replace•
ment or extension thereof, in a•. amount not to exceed Two Hwndre: Fifteer.
TMDuaar: and no/100 Dollars (1215,000). (Such first mortgaoe, and other
relate: security device or devices shall hereinafter, collectively, be
referre: to as the 'First Mortgage'). Mowever, in no even: shall the
indebte:ness secures by the First Mortgage exceed 3215,00D. lbtwitn-
standir, any other provision of this Mortgage, or the Note, subject tv
the p•:visions of subsections (a) and (o) o` this Section 16, Mortgagor
may re•inance the First Mortgage in an amount equal to the First Hort-
gage, end this Mortoace shelf continue to be subordinate to any refiner-
cinc c` the First Mortgage which, complies wile. the teres hereof.
Mortal;: -'s right to refinance the First Mortgage is subje:t to the
follov'n; conditions:
(a) Trf Mortgagee shall agree in writing to any change in the amount of
the indebtedness secured by the First Mortgage as a result of such
rf • inane ing ;
(b) he Mortgage and other lie, instruments securing the refinancing of
Ile First Mortgage shall be subject to the prior written approval of
t'e Mortgagee, which approval shall not be unreasonably withheld.
The Fist Mortgage, together with the security devices related is any one
or more refinancings thereof sten hereir be referred to as the 'Senior
Mortga•: and the indebtedness secured by such Senior Mortgage, regard-
less C' the fort of the evidence of such indebtedness, shelf be referre:
to as Ire 'Senior Note.' Mitt regard to the Senior Mortgage, Mortgagor
and Mc—gagee covenant and agreed as follows:
(i) The occurrence of any default under the Senior Mortgage or under
the Senior Note shall, a: the optior. of Mortgagee, constitute a
Default under this Mortgage. In the event any Senior Mortgage is
hereafter foreclosed, Mortgagor hereby assigns to Mortgagee ary
proceeds from. the fore:losure sale (or any transfer in. lieu
thereof) in excess of the amount necessary to tmy ofd the
indebtedness then validity secured by the Senior Mortgage, vh ice.
excess proceeds shall be applied by Mortgagee to redu:e the
Indebtedness secured by this Mortgage.
(i1) Mortgagor will notify the holder of the Senior Mortgage of the
existence of this Mortgage and will request that such holder
Provide all notices, demands and requests (or copies thereof)
tereafter given by such holder pursuant to the Senior Mortgage to
'ne 'Mortgagor" therein to Mortgagee at Mortgagee's address set
forth on the first page of this Mortgage.
(fit) In addition to all other rights and remedies provided hereunder or
t) law to Mortgagee, and not in substitution therefor or limita-
trcr tke•ec •, M:rtdapcf niy, but s•,= •
_'i n:t D, obligate: , tem,
V, Ptior or adva;ce m.•1 fun:! d, e -e: •. Y.:'y e,ft is .a c.
sary or desi-etlf to orevr... Cure V- u•Ge•;a.e tc o'e".. :• CRs
e•c
of At b, M}rtce;^r un:f• Chis_e 1m.• w: •toe ct Or tet Sfr i..
-7 -
Note, or to protect the priority of the lien hereof, and any funds
expended or expenses incurred by Mortgagee in so doing, shall be
immediately due and payable by Mortgagor, shall bear interest at
the rate of twelve percent (12%) per annm and shall be secured by
the lien of this Mortgage. Mortgagee shall be subrogated to the
claims and liens of all parties whose claims or liens arc dis-
charged or paid with the proceeds of any funds thus advanced by
Mortgagee.
(iv) In addition to all other rights and remedies provided hereunder or
by law to Mortgagee, but not in suhstitution therefor or limita-
tion thereof, if an event of default has occurred under the Senior
Mortgage or the Senior Nate, and if the Senior Mortgagee has
accelerated the indebtedness thereunder, Mortgagee may, but shall
not be obligate_ to, prepay, in whole o' in part, the indebtedness
secured by the Senior Mortgage. In the event Mortgagee elects to
male Such. prepayment, Mortgagor shall advance any prepayment
veniums or penalties require: by the notes evidencing suO.
indebtedness. In any such event the amounts thus expended by
Mortgagee (including the &,Dunt of any prepayment preriu-. of
penalty to the extent same is advance: by Mortgagee) shall be
isirediately due and payable by Mortgagor, shall bear interest at
the rate of twelve percent (121) per annr, and shall be secured by
the lien of this Mortgage.
(v) pithoul firs! obtaining'the prior written consent o' M?rtgaget,
Mortgagor will not este, into or consent to any modifications or
amendnents whatsoever in the Senior Mortgage or ant Senior (lots,
or any other documents executed in conn ext for therewiir .
(vi) Mortgagor will mato ell reoored parents of principsl and inter•
est under the Senior Note, as well as any tar and insurar:e escro.
payments required by the Senior Mortgage; and Mb-tgagec stall have
nc right to collect such escrow payments hereunde- w..ile the
Senior Mortgage is outstanding.
(vii) During the ter., of any Senior Mortgage this Mortgags shall be
subordinate to sud Senior Mortgage in all respects arc, in the
event of any inconsistency between the terns ant conditions o.'
this Mortgage and such, Senior Mortgage, the provisions of the
Senior Mortgage shall control. Non-ccnpl iance by the Mortgagor
with any covenant or agreement conte ine. herein (other than ay
covenant or agreement here!r. relating to repayment o' the in.
debtedness) wMch conflicts with a similar provision in suet
Senior Mortgage, shall not be a default hereunder sc long as IN
Mortgagor is in cmplian.-e with such similar provision in the
Senior Mortgage.
Effect of Chanoes in Laws Regarding laxation
17. In the event of the enactment after this date of any law of lows deduct.
Ing fro- the value of Ian! for the purpose of taxation any lier thereon,
or imposing upon, the Mortgagee the payment of the whole gr any part of
the taxes or assessments of charges or liens herein require: to be paid
by Mortgagor, or changing in any way the laws relating to the taxation of
mortgages or debts secured by mortgages or the Mortgagee's interest it
the Promises, or the manner of collection of taxes so as to affect this
mortgage or the debt secure^ hereby or the holder hereof, the-., and it
any suit event, the Mortgago-, upon demand by the Mortgages, shall pay
such taxes or assessments, or reimburse the Mortgagee therefor; provided,
however, that if in the opinion of counsel for the Mortgagee (a) it would
be unlawful to require Mortgagor to male such payment or (o) the making
of such payment would result in the imPosltior, of interest beyond the
maxim: amount permitted by law, Ther, and in such, event, the Mortgagee
may elect, by notice in writing giver. to the Mortgagor, to declare all of
the indebtedness secured hereby to be and becme due and payable sixty
(65) days few, the giving of such notice.
M.orlgeoee's Performance of Defaulted Act!
'r. 1, cast 0 Cefev': thereirI M:'lgage! may, b:: ree' n,:. mays e'.
V. Pe fcrr try a:t bere'.n r be" C' M:':ge]^r It t'. 1:-a': r,.rnc-
dee-e: e,ceaert, ar,d ri., Lc•reC nut, nate fol' Dr P' -"•it' is .
/"10
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print spas or interest or. Prior encumbrances, if any, and Purchase, dis-
charge, compromise or settle any tax lien or other prior lien or title or
claim thereof, or redeem front any tax sale or forfeiture affecting said
premises or contest any tax assessments. All moneys paid for any of the
purposes herein authorized and all expenses paid or incurred in Connec-
tion therewith, including attorneys' fees, and any other moneys advanced
by Mortgagee to protect the mortgaged premises and the lien hereof, shall
be so much additional indebtedness secured hereby, and shall become
immediately due and payable without notice and with interes: thereon at
the rate of twelve percent 1121) per annul. Inaction of Mortgagee shall
never be considered as a waiver of any right accruing to it o• account of
any default on the part of Mortgagor.
Mortgagee's Reliance on Tax Bills Etc.
19. Mortgagee in making any payment hereby authorize:: (a) relating to taxes
an; assessments, may do so accordine to any bill, statement or estimate
procured frog the appropriate public office without inquiry into the
accuracy of such bill, statement or estimate or into the validity of any
tax, assessment, sale, forfeiture, tax lien or title or clai- thereof; or
(b) for the purchase, discharge, comprozise or settlement c' any other
Prior lien, may de so without inquiry as to the validity or anount of any
Clair for lien w`JCh may be asserted.
Acreleratio'. of Indebtedness in Lase of Default
20. If (a) default be made in the due and punctual payment of t -e Note se.
cured hereby, in a:Ccrdtnce wit{. the terms thereof, either o' principal
or interest; or (b) execu:iD• shall have been levied ageins: the prem-
ises, or any lien creditor's suit to enforce a Judgement against the
precdses shall have beer. brouCht and (in either case) shall continue
unstaged and in effect for a eriod
pof more thar thirty (30) consecutive
Calenzar days; or (c) ins M.Drtgago- shall nal:, a• assign -int for the
benefit of creditors, o- shell agenic in writing its inability to pay its
debts generally as they become due, or shall consent to the appDintment
of a receiver or trustee or liquidator of all
of his properly or the
major part thereof; or (d) a default shall have occurred an: be contfnu-
ine under the terms of the Senior Mortgage Mich could pernit fore-
closure of the Senior Mortgage; or (e) subject to Sectio'. 16 hereof,
default shall be male in the due observance or performance of any other
of the covenants, agremests or conditions hereinbefore or hereinafter
contained, or in any security agreement executed if,, connection with the
tranSA:tio: which is the subject of this Mortgage and required to be kept
or performed or observed by the Mortgagor, and such default shall not be
cure- within thirty (30) days after notice of such default b Mortgagee;
V (f) Mortgagor shall sell, transfer, lease or convey the p•e-.ises or
any part thereat without the prior written consent of the M:rtgageE, then
and in every case the wcle of said principal sur hereby secured shall,
at once, at the option of the Mortgagee or the Director, become immedi-
a:ely due and payable, together with accrued interest thereon, without
notice to Mortgagor.
Foreclosure: Expense of Litigation
21. Men the indebtedness hereby secured, or any part thereof, shall become
due, whether by acceleration or otherwise, Mortgage, shall Aare the right
to foreclose the lien hereof for such indebtedness or part thereof. In
any suit to foreclose the lien, hereof, there shall be allowed an: in.
Cluded as additional indebtedness in the decree for the sale, all expen-
ditures and expenses which may be paid or incurred by or or. behalf of the
Mortgagee for attorneys' lees, appraiser's fee, outlays for documentary
an: experts evidence, steno;raphers' charges, publication costs, and costs
o items
be exndeJ after ettrof the
u tree) of procuring be call such ted as l abstracts oof title of continuation thereof,
title searches and examinations, title insurance policies, and similar
data and assurances with respect to title as Mortgagee may deem reasona.
bly necessary either to prosecute such suit or to evidence tc bidders at
any sale which may be had pursuant to such decree the true condition of
the title to or the value o' the premises. All expenditures and expenses
0' Vi nature re-.:IC'P' i' 'H! Se:tio.. a5d Sv:e Pr Oenf^f a : fes as
e'• of is:Dere: Ir Ir, D'Dte::iOF 0! said pre-ISES a•: tnf rE'-•:Pnance of
ttE lie• 0' {�1S R:QAQ' I' a•1 li:ipa:ior or Dr D:eeiinp a"f-:ir; thlf
M: r R; :e p• fat: p'e-ises, irrlu:,n; Gari•.. :y D^....:inn
es, o-
1190
,
9 -
in PlloafatiOns for the Cornencement or defense of amy p'oceedipg or
threatened suit or proceeding, Stell be immediately due ami payable by
Mortgagor, with interest thereon at twelve percent p2t) per annum ane
shin be secured by this Mortgage.
Application of Proceeds of Foreclosure Sale
22. The proceeds of any foreclosure sale o1 the premises shall be distributed
and applied in the following order or priority: First, on account of all
costs and expenses incident to the foreclosure proceedings, including all
such items as are mentioned in the preceding Section hereof; Second, all
other iters which under the terms hereof constitute secure: indebtedness
additional to that evidence, by the Note, with interest thereon as hereir
provided; Third, all principal and interest remaining unpaid or. the Note;
Fourth, any overplus to Mortgagor, its successors or assigns, as their
rights may appear.
Appointment of Receiver
21. U)or•., or at any time after the filin;, of a petition tc fore:lose this
mortgage, the court in which such petitior is file, may appoint a re-
ceiver of said premises. Such appointment may be made either before or
afte- sale, without notice, without regard to the solvency or insolvency
of Mortgagor, at the time of applicatior. for such re:eiver avd without
regard to the then value of the prrises an, the Mortgaciee hereunder p
any holder of the Note may be appointee as such receiver -Such.. Such. receive -
shall have Powe- to collect the rents, issues and profits c' said prer-
ises du-ing the pendency of such foreclosure suit ane, in case of a sale
and a deficiency, during the full statutory period of rederptie', whether
there be redemption or not, as well as during any further times M.e.
Mortgagor, except for the interventior, of such receiver, W.ld be esti•
flee to Collett such rents, issues and p•ofils, arc all ower pon-s
whitk may be necessary or are usual in. such cases for the proteaio-,
Possession, control, management an: operation of the prerises during the
whole of said period. The tour, fro' time to time new authorize the
receiver to apply the net inco-•e in his hands in payment in. Mole or it
pelt of: (a) the indebtedness secure: hereto, or by any decree fore:los•
in; tvis mortgage, or any lax, special assessment or other lie- Mick mar
be or became superior to the lien hereo' or of such decree, Prodded suc�
application is made prior to foreclosure sale; (b) the def itien.y in Cass
of a sale and deficiency.
Assignment of Rents and Leases
24. To further secure the indeSledness secure: hereby, horlganar does hereo,
sell, assigr. and transfer unto ins Mo-tgagee all the rents, issues, en:
profits no. def and which may herea!:e- be:ome due under or b. virtue o`
any lease, whether written or verbal, or any letting
Of, or of any agree•
meat for the use or occupancy of the p -rises or any part thereof, Mieh
may have beer heretofore 01 may be hereefte- made or agree: to or Mice
may be made or agreed to by the Mortgagee under the powers herein
grantee, it being the Intention hereby to establish an absolute transfer
and assignment of all of such leases ane agreements, and all the avails
thereunder, unto the Mortgagee, an, Mortgagor does hereby appoint irrevo-
eabiy the Mortgagee its true and la-eul attorney in its rale and stead
(with or without taking possession of the premises as provide: in Se:tion
25 hereof) to rent, lease or lel all or any portion of sa it p -rises to
any party or parties at such rental and upor. such terns is said Mortgapef
shall, in its discretion, determine, and to collect all of said avails,
rents, issues and profits arising frog, or accruing at any time hereafter,
and all now due or that hereafter may become due under each ane every of
the leases and agreements, written or verbal, or other tenancy existin;,
or which may hereafter exist or, said premises, with the same rights ane
powers subject to the same innunities, exoneration of liability ane
rights of recourse and indemnity as the Mortgagee would have on taking
possession pursuant to the provisions o1 Section 25 hereof.
The Mortgagor represents and agrees that no rent has been or will be paid
by any person. in possession of env portior of the above•des:ribe! gone, -
isel it, mare tha- o.. -.f ma -.P in. LL e'.:f an: Slat par,.,. or rer: w.icr
m, a:nue for an'v portior. of ter saic ore-isef hes not bee- no- will bf
wei, e:, rf n ease:re:a:e:, ciscoele: er ct'e""V els-hype: e- ccr-p-c-
r'se. ey tta Nor pa;c . the N,•-tqe; waives a -.v- se: rid _c,e
-
97e
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CHO
against any person in possession of any portion of the above-described
premises. If any lease provides for the abatement of rent during repair
of the premise demised hereunder by reason of fire or other casualty, the
Mortgagor shall furnish to the Mortgagee loss of rental or business
interruption insurance, the policies to be in an amount and form and
wrilter, by such insurance companies as shall be satisfactory to the
Mortgagee. Mortgagor agrees that, except for an assignment in connection
with the Senior Mortgage, he will not assign any of the rents or profits
of said premises except to a purchaser or grantee of the premises in
connection with a transaction conforming to the requirements of Section
15 hereof.
Nothing herein contained shall be construed as constituting the Mortgagee
a mortgagee in possession in the absence of the taking of actual posses-
sion of the pre. ises by the Mortgagee pursuant to Section 25 hereof. In {
-- - the exercise of the powers herein granted the Mortgagee, no liability
shall be asserted or enforced against the Mortgagee, all such liability
being expressly waived and released by Mortgagor.
7.,
L...
+ The Mortgagor further agrees to assign and transfer the Mortgagee all
faturr leases upon all or any part of the Premises Aer describe!
and
ae scrlDec
an: to execute ant deliver, at the request of the Mortgagee, all such
further assurances and assignments in the Premises as the Mortgagee shall
fro-. time to tine require.
Although it is the intention of the parties that the assignment contained
it this paragrap'. shall be a present assignment, it is expressly under-
stood and agreed, anything herein contained to the contrary notwithstand- I
inn., that the Mortgagee shall not exercise any of the rights or pavers
conferredupon it by this Sectior. until a default as describe: in Section
20 hereof shall exist and be continuing hereunder.
Mortoaoee's Richt of Possession. in Case of Default �
25. In any case in which the Mortgagee has a right to institute foreclosure
proceedings, w',ether before or after the whole principal sun secured
hereby is declared to be immediately due as aforesaid, or whether before l..
or after sale thereunder, forthwith upon demand of Mortgagee, Mortgagor i -
shall surrender to Mortgagee and Mortgagee shall be entitled to take
actual possession of the premises or any part thereof personally, or by
itsagent or attorneys, as for conditions broken, and Mortgagee ir. its
discretion may, with or without force and with or without process of law,
enter upon and take and maintain possession of all or any part of said
premises, together with all documents, books, records, papers and ac-
counts of the Mortgagor or the then wne• of the pre-lses relating there-
to, and may exclude the Mortgagor, its agents or servants, wholly
therefrm and may as attorney in fact or agent of the Mortgagor, Or in �..
'1 its name as Mortgagee and under the powers herein granted, hold, operate, f
manage and control the premises and conduct the business, if any, there-
of, either personally or It its agents, and with full power to use such
measures, legal or equitable, as in its discretion or in the discretion
of Its successors or assigns may be deemed proper or necessary to enforce
the payment of security of the avails, rents, issues and profits of the 1 -
premises, including actions for the recovery of rent, actions in forcible
detainer and actions in distress for rent, Hereby granting full paver and .1
authority to exercise each and every of the rights, privileges and powers
herein granted at any and all times hereafter, without notice to the
Mortgagor, and with full power to cancel or terminate any lease or sub-
lease for any cause or on any ground which would entitle Mortgagor to
cancel the same, to elect or disaffirm any lease or sublease made subse-
quent to this mortgage or subordinated to the lier, hereof, to make any
necessary or proper repairs, decorating, renewals, replacements, altera-
tions, additions, betterments and Improvements to the premises as to it
nay seen judicious, insure and reinsure the same and all risks incidental
to Mortgagee's possession, operation and management thereto and to re-
ceive all o1 such evails, rents, issues and profits.
The Mortgagee shall not be obligated to perform.. or discharge, nor does 1t
hereby undertake to perforr or discharge, any obligation, duty or liabil-
Ity under ar., leases, ane the Mortgagor shalt an; does hereby agree to
ince-•fly an, tc hold the Mortgagee harmless o' and frog, any art all
lia:i1ity, lot: or daaan.t w`,1p 1t msy or rio-t ince• unae• saic leases -
c• ender o. D; reaso•. Cf the atsignit-i tnered' an: cv and Ino- art a••:
I r
alt claims and demands whatsoever which my be Asserted against it by
reason of alleged obligations or undertakings on its pert to perform or
discharge any of the terms, covenants or agreements contained in said
lease. Should the Mortgagee incur any such liability, loss or damage
under said lease or under or by reason of the Assignment thereof, or in
the defense of any claims or demands, the amount thereof, including
costs, expenses and reasonable attorneys' fees, shall be secure.- hereby,
and the Mortgagor shall reimburse the Mortgagee therefore immediately
upon demand.
!2plicatio0 of Income Received by Mortgagee
26. The Mortgagee in the exercise of the rights and powers hereinabove con-
ferred upor. it by Section. 24 one Section 25 hereof shall have full power
to use and apply the avails, rents, issues and profits of too praises to
the payment Of Or Or, account of the following in suck order as the
Nortgagee may determine:
(a) to the payment of the operating expenses of said property, including
cost of management an: leasing thereof (which shall include reason-
able compensation to the Mortgagee and its agent or agents, if
management be delegate: to An agent or agents, and shall also in.
clude lease comissiuns and other compensation and expenses of
seeking and procuring Worts and entering into leases), established
claims for damages, if any, and premises on insurance hereinabove
aithofizel;
(b) to the payment of taxes ane spec ial assessments now due or wtich ma;
hereafter become- due o-, said premises;
(c) to the payment of all repairs, decorating, renewals, reclacements,
alterations. additions, betterments, and improvements a' safe pre -
ises, including the cost from Ifni to time of installin; or replac-
ing heating, ventilating or air-conditioning equipment thereon., and
of placing said property in such condition as will, in the judgment
of the Mortgagee, take it readily rentable;
(d) to the payment of any Indebtedness secured by the Senior Mortgage or
hereby, or any deficiency which may result Iron.. any foreclosure
sale.
Martoagee's Right of Inspectlor.
27. Mortgagee shall have the right to inspect the premises at all reasonable
times and access thereto shall be perr. itte: for that purpose.
Late Charge
26, In the event the Mortgagee shall, fror time to time, accept payment of
any ancunt required on the Note and under this Mortgage which is more
than five (5) days in arrears without exacting payment of interest at the
higher rate payable after maturity. Mortgagee may, in lieu of such higher
rate of interest, collect a 'late charge' not to exceed five cents ($.05)
for each one dollar of each such delinquent payment to cove• the extra
expense involved in handling delinquent payments; provided, however, that
nothing contained in this Section shall authorize the Mortgagee to col-
lect or demand any payment which would result in the imposition. of inter -
est in excess of the maximm amount allowed by law.
Condemnation
29. Mortgagor hereby assigns, transfers and sets over unto Mortgagee the
entire proceeds of any award or any claim for damages for any of the
prenises taken or damaged under the power of eminent domain or by condem.
nation. Mortgagee may elect to apply the proceeds of the award upon or
in reduction of the indebtedness setured hereby, whether due or not, or
by mutual agreement of the Mortgagee and Mortgagor may allow the Mort-
gagor to restore or rebuild, in which event the proceeds shall be held b
Nprtgagee ane used to relyds-se Me-tgeon- for the cost of the rebuildin;
o- restoring of buildings or im;rovemntson said premises, If accordance
wit' :lens or specifications to be su or ittee to and ap;•o:e: by Mcrt-
gagfc. If the Mortgagor is otllgeted tc restore cr replace the da-,eg?f e•
eeW:ie! buildings br ir;rovenfnis unto• the Terms or ttt Se•.icr Mort-
/` fd
-12-
gage, if such taking does not result In cancellation or termination of
such Senior Mortgage, and if the Senior Mortgagee does no, collect and
disburse the
proceeds, the award shall be held by Mortgagee and used to
reimburse Mortgagor for the
cost of the rebuilding or restoring of the
buildings or Improvements
on said premises. In the event Mortgagor is
oof authorized
sor 1
bygvirtueuired
Senior Mortgage, t oMortgagee'sectior store a the proceeds or
rebuild of
the award shall be in
paid out the Sam manner as is Provided in Section
5 hereof for the insurance
payment of proceeds toward the cost of re-
building or restoration. If the
amount of such aware Is insufficient to
cover the cost of rebuilding or restoration, Mortgagor shall
t
pay such
cost in excess of the award, before being entitle: to reimbursement out
Of the
award. Ar.) surplus which may remain out Of said award after
Payment of such cost
of rebuilding or restoration shall, at the option of
the Mortgagee, be applied on
j
account of the indebtedness secured hereby
or be paid to any
'
other Party entitle: therein.
�...
_
Release Upon Payment all Discha Oe of Mortgagor's Obliat io s
r .
30. Upon Payment an: discharge of all Indebtedness secure] hereby and payment
of a reasonable fee
-
to Mortgagee for the executiorof such release,
Mortgagee shall release this Mortgage and the lier
instrument. thereof by proper
i
-
6ivind of notice
-i-
31. Any notice which either party hereto may desire or ba repired to to
give
the other Dart)shall be in writing ani the mailin; It reof by certified
mail addressed
tc the IUrtgagor at
the
4 eshmq;o•. tree:, uwe City, lmeeqee at 52240 Rt or •at
suet, othernplace
as an) party here;: may b) notice to writing desiq•rtt as a
ll place for
service of notice, scaconstitute service of notice herewder.
i--
Waiver of Defense
32. Nc aation for the enforcement of the tier or of art) provision hereof
shall be subject tc
any defense which would not be gox and available to
the Darty interposin; the sane to
-
an action at la. upon the Note secured
hereby,
Waiver of Statutory Pio`ts
33. to the extent perritted by law•. Mortgagorshall not and will not apply
for or
-
avail itself of any appraisement, valuet too, stay, extension or
exem;tion laws, or •Mcratritrr
any so-celled Laws,' now existing ling or
hereafter enacted, in order to prevent or hinder
the enforcement or
foreclosure Of tots MDrtgage, but hereby waives the benefit of such laws.
To the
i
extent permittee by law, Mortgagor for itself and all who may
clatr through or it
-
under waives any and all right tc have the Property
and estates comprising the Premises marshalled
E
upo• any foreclosure D!
the lien hereof and agrees that any court having jurisdiction to fare-
close such lien, may order the mortgaged property sold as entirety. To the
extent permitted by law, the
Mortgagor hereby waives any and all rights
of redemption fro, sale under any order or decree
of foreclosure of thisMort
ge Of, its and on of
i
II
er Judgmentehalf
decree credito s of thelf
Mortgagor, acquiring any, On.nteexcept
title in
or to the Prer.Ases subsequent to the date of this mxst
tgage.
:
Six Months' and 6D Dar Periods of Redemption
34. It 1s further agree: that if the premises cover less than 10 acres of
land, and in the
•
event of the foreclosure of this mortgage and sale of
the property by sheriff's in
sale such foreclosure proceedings, the time
of one year for redemption from said sale provided by the
statutes of
the State of Iowa shall be reduced to 6 months provided the Mortgagee,
in
'--
against tnet Xortgagprswhich election
tar lseoout waive
lDsure judgment
-
the ores proceed.
in;s; all to be consistent with the provisions
iO. t. It of Checter 626, Code of
is fu•t•s• agree, tt.et the period of reser 10- after t fore.
clos:re
..
o! ,rim r:•tge;t shall be reeccec to 6D days if e11 Of the thref
cortin;t•:ies
develop:11) Ind pre'.ise[ tocsis: Of less thaw
It e:res; (I{ ;hi Ccu-; fir.tt a.,firmetively
C;:..
toe: t ,tai estett has
.i�
H
-13-
been abandoned by the owners and those persons personally liable under
this mortgage at .he time of such foreclosure; and (3) the mortgagee
files an election to waiveany deficiency judgment against the Mortgagor
•-•-1•
or Its successors In interest in the foreclosure action. If the redemp-
tion period is so reduced, the Mortgagor or its successors In interest
or the owner shall have the exclusive right to redeem for the first 30
days after such sale, and the times provided for redemption by creditors
in Sections 628.5, 628.15 and 628.16 of the Code shall be reduced to 10
days. Entry of appearance by pleading or docket entry by or on behalf
of the mortgagor shall be a presumption that the property is not aban-
doned•
Furnishing of Financial Statements to Mortgagee
35• Mortgagor covenants and agrees to furnish to Mortgagee the following
reports:
r
Report Due Date
Monthly Expenditure Report 7th of following month
i
)
- Quarterly Financial and 10th of month following the
Progress Report end of each quarter
_I
Mortgagor's Annual Financial Within 3-1/2 months of end
i.".
' Statement of Mortgagor's fiscal year
Final Progress Report Within 30 days of completion
- of construction
-
. ; Said reports shall be prepared in accordance with generally accepted princi-
- pies of accounting consistantly applied, by certified public accountants
`
acceptable to Mortgagee. Mortgagor's quarterly financial statements shall be
similar in substance to the year-end statements, and verified by an author-
ized officer of Mortgagor,
-
Mortgage to Secure any Advances
"
36. This mortgage shall secure any advances made by the Mortgagee to the
Mortgagor, or its successors In title, for any purpose, at any time
before the release and cancellation of this Mortgage.
-
Subordinate Financing
i
37. Subordinate financing of the Premises will be allowed only when the
Mortgagor receiving prior written consent from the Mortgagee.
Binding on Successors and Assigns
!
38. This Mortgage and all provisions hereof shall extend to and be binding
upon Mortgagor and all persons claiming under or through Mortgagor, and
the word 'Mortgagor' when used herein shall include all such persons and
-
i -
all persons liable for the payment of the Indebtedness or any part
I
thereof whether or not such persons have executed the Note secured by
-r
this mortgage. The wmrd.'Mortgagee' when used herein shall include the
successors and assigns of the Mortgagee named herein, and the holder or
holders, from time to time, of the Note secured thereby,
Security Agreement
i
- 39. With respect to any portion of the Pronises which constitutes personal
"
i
property or fixtures governed by the Uniform Comercial Code of the State
of Iowa (the 'UCC'), this Mortgage shell constitute a .Icurity agreement
between Mortgagor and Mortgagee, and Mortgagor hereby grants to Mortgagee
a security interest in such portion of the Premises. In addition to all
of the Mortgagee's other rights hereunder, but subject to Section 16
" hereof, Mortgagee shall have all of the rights conferred upon secured
"
Ponies by the Code. Mortgagor will execute and deliver to Mortgagee all
_ financing statements that may from time to time be required by Mortgagee
.o perfect and maintain such security interest of KOrtgigee, or any
modification thereof, and all costs and expenses of filing such financing
statements and any UCC searches reasonably required by Mortgagee shall be
paid by Mortgagor. Mortgagee may exercise any or all of the remedies of
t
.g4.
e secured Party available to it under the code with respect to such
property, and its expressly agreed that If 'upon defa,ll as described in
Section 20 hereof Mortgagee should proceed to dispose of such properly in
accordance with the provisions of the Code, then ten )10) days' notice by
Mortgagee to Mortgagor shall be deemed to be reasonable notice under any
provision of the Code requiringsuch notice; provided, hoverer, that
Mortgagee may et its option dispose of such property in accordance with
Mortgagee's rights with respect to the Premises under this Mortgage in
lieu of proceeding under the Code.
Mortgagor shall give to Mortgagee advance notice in writing of any pro-
pose. changes in Mortgagor's name, identity or business structure and
will execute and deliver to Mortgagee, prior to or concurrently with the
occurrence of any such change, all additional financing statements that
Mortgagee may require to establish and maintain the validity and priority
of M_rtgagec's security interest with respect to any of the property
refe•red to in this Section.
Spm of the stens of property referred to in this Sect dor. are or are to
beco ., fixtures related to the Premi
suses, and it is intended that, as to
U. property, this Mortgage shall be effective as a ,financing statement
file: as a fixture filing from the date of its filing in the real estate
records of Johnson County, Iowa.
The name and mailing address of the record owner of the Premises is
Com. -ter Ii
Design Software, Inc.,
InfO•natios concerning the security interest created by this Mortgage may
be aDlained from Mortgagee, as secured party, Attention: Development
Coordinator, at 410 East Washington Street, Iowa City, Iowa 52240.
I.-
Captions
40, The captions and headings of various paragraphs of this mortgage are for
convenience only and are not to be construe: as defining or limiting, in
any way, the scope or Intention, of the provisions hereof.
Interpretation
41. This Mortgage shall be deemed to be a contract made in the Stale of Iowa
and shall be construed and interpreted in accordance with the laws of
said State.
Severability
42. If any provision of this Mortgage, or its application to any individual,
entity or circumstance, is invalid or unenforceable, them the remainder
of te.is Mortgage or the application of such provision to other Individu.
als, entities or circumstances shall not be affected thereby, provided,
however, that if any provision or application thereof Is invalid or
unenforceable, then a suitable and equitable provision shall be substi.
tuted therefor in order to carry out, so far as my be valid and enforce-
able, the Intent and purpose of the invalid or unenforceable provision,
IN WITNESS WHEREOF, said Mortgagor has caused his signature to be hereunto
affixed and these presents to be signed on the day and year first above
written.
COMPUTER AIDED DESIGN SOFTWARE, INC.
I
ji By:
' ex t , res en
ATTEST:
ecrele•y
MOO
T
STATE Of )
COUNTY OF ; SS:
On this day of A.D. 19 before me,
the undersigneB_,a Notary ub a in and for the Statt of T, personally
appeared Rex Smith and to aw: Person-
ally known, who, being by me duly sworn, did say that the, are the President
and Secretary, respectively, of the corporation executing the instrument to
'Mich this is attached, (no seal has been procured by the( (the seal affixed ,
thereto is the seal of the) corporation; that the instrurent was signed (and -
sealed) on behalf of the corporation by authority of its Board of Directors;
and that Rex Smith and as sutt officers acknowl-
edged the execution of the instrumentto
a the '0'
o untary act and deed of the
corporation, by it and by then, voluntarily executed.
1
Notary Pub I sc in an c•sal tae
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RESOLUTION NO. 86-357
RESOLUTION AUTHORIZING EXECUTION OF ANNUAL CONTRIBUTIONS CONTRACT KC -9033
WHEREAS, the City of Iowa City, Iowa (herein called the "Local Authority")
proposes to enter into a revised contract (herein called the "Annual Contributions
Contract") with the United States of America (herein called the "Government") with
respect to any "Project" as defined in the Annual Contributions Contract and which
at any time now or hereafter is incorporated under the terms of such Contract.
BE IT RESOLVED BY THE LOCAL AUTHORITY, as follows:
Section 1. The Annual Contributions Contract KC -9033 in substantially the form
Te- efo aitached and marked "Exhibit A" is hereby approved and accepted both as to
form and substance and the Mayor or Mayor Pro tem is hereby authorized and
directed to execute said Contract in two copies on behalf of the Local Authority,
and the City Clerk is hereby authorized and directed to impress and attest the
official seal of the Local Authority on each such counterpart and to forward said
executed counterparts, or any of them, to the Government together with such other
documents evidencing the approval and authorizing the execution thereof as may be
required by the Government.
Section 2. Whenever the following terms, or any of them, are used in this
eslFTon, the same, unless the context shall indicate another or different
meaning or intent, shall be construed, and are intended to have meanings as
follows:
(1) The term "Resolution" shall mean this Resolution.
(2) All other terms used in this Resolution and which are defined in the revised
Annual Contributions Contract shall have the respective meanings ascribed
thereto in the revised Annual Contributions Contract.
Section 3. This Resolution shall take effect immediately.
It was moved by Dickson and seconded by McDonald the
Resolution be adop e , and upon roil call there were:
AYES: NAYS: ABSENT:
X Ambrisco
X Baker
X Dickson
X Courtney
X McDonald
X Strait
X Zuber
Passed and approved this 16th day of December 1986.
O -MA YO
ATTEST: q{/o w�
T LERK
Recen•td IS Aperoted
By The Legal Department
IIY v
IA05-EO22-011 `•
ACC Parti Number. KC -9033E E Mt
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-Ci
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U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 1•
SECTION 8 EXISTING M
v
n
ANNUAL CONTMBUTIONS CONTRACT—PART I
fiz '
HOUSING CERTIFICATE PROGRAM
M
EPINMONS. • o
}o .
A. ACC. Annual Co toGrtiais Contract.
ton
H. Fb=1 Year. The PHA Fiscal Year as Wed in section L2.0 of j
this ACC PartL
0
C. BUD. U.S. Department of Housing and Urban Deve]opmeM m
D. Na$Mum Annual Contribution Coxmitment. See section LID of ; 3
this ACC. : z
E. PHA. Public Haling Agency. i =
ya
F. Program. The PHA%Housing Ce tiScabe Program. M
G. Program Receipts Amamds paid by HOD to the PHA under this W m
A C C fa the Program, and any of em r amounts received by the P EA Z, ai
in connection with the Program. nw. m
X
H. Program Runnel. Amounts wbirh ■ay be dOrged against w
Program Receipts in aODxdanae wish the ACC and HDD Z
requirements. w
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Page 1 of 6 pages BUD 52520 B (June 1985) o
CCa
A. li Exhiibbiprogram
Iof this ACC PPaztALC� ch �� i
5nili1g increment fur the Program. G
i..
B. Term of ACC fir Program. The term of this ACC for the Program mi
�aII ed on
Qreat last date d ACC term. If this date is not entered P= to r;
sere of the ACC by the PHA, the date may be entered ml
g1seq eptly by HUD, and wrb atEleguent gay of the date by
BUD dkM oorstiriie an amedme t of the ACC Partly m'
,
x
C. PHAFivcalYear. t
V
n
L The fid fiscal year for the Program don begin
the effective
date for the first proms listed in E:hititI of PartI of- the
ACC. If this date is not entered pia to signature of the
ACC by the PHA, the date may be edged subsequently by
.
B U D, and such a- i�""t entry of the date by H U D dk
Atte an amendment of the ACC Part I.i The fiat '
Fiscal Year far the Program shall end on the ]art gay of
the PHA Final Year which ends not les than 12 marths,
s
} c
more than 23 m s, after this date.
a and
2. Thereafter, the fiscal year for the Program shall be the 12
mph Pedpd erdim Jame 30 of each calendar
D
-�
year, the day and month used as the Fiscal Year
ending date for other section 8 assistance admhnstered by
C
the PHA undrr an ACC with HQDJ
<
M
D. Number of Units by number of bedmomsl. To the maximum
into cDnhacts for housing
z
S'
estat feadhle.. the PSA shall enter
for units odes the Program in a000rdanuoe
t z
1
assistanceassistancepayme�s
with the ant d>gbibrtion st;dvd in this section. , No substantial
is
! x
`
deviatim, as determined by HUD, from this unit mstabndion
L
allowed without Ina[ BUD app oval.
x
lumber of bedrooms Numb of Q�
(0
Z12 zm
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10
M
1 190
x
2 237
32
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Page 2 of 6 pages BUD 52520 B (June 1985)
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1.3. ANML CONTRIBUTION.
n
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A. Payment. BOD shall pay the PHA annual
>y
oontr butions for the Program in accordance with
BUD regulations and requirements.
i.
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B. Amount and Purpose. The annual contribution for
the Program for a Fiscal Year shall be in the
zl
amount approved by HUD for the Fiscal Year to
m
cover:
Z.
1. The amount of housing assistance payments
"T
by the PHA.
n
2. The amount of PBA costs for Program
administration.
The amount of the annual contributions by BUD 'say _
be reduced, as determined by HUD, by the amount
of Program Receipts (such as interest income)
other than annual contributions.
C. Limit on Payments for Program. Except for
payments from the ACC reserve account as provided
i O
in section 1.3.P of this ACC, the annual
4 ;
contribution payment by BUD for the Program for
any Fiscal Year shall not be more than the
o
Maximum Annual Contribution Commitment for the
>
Program In effect during the Fiscal Year.
O
D. Maximum Annual Contribution Commitment for
m
Program. The Maximum Annual Contribution
Mfit
Z
Comm, •for --the Program for each PHA Fiscal
Year shall be equal to the sun of the contract
z
authority amounts reserved by BUD for the
-�
projects in the Program. The amount of contract
'
i
authority reserved for each project in the
a
Program is stated in Exhibit I of this ACC Part I
r"
x
(subject to reduction in accordance with section
V
1.3.2 and section 2.3 of this ACC). iE the first
y
z
Fiscal Year for the Program is more than 12
W' CO
months, the Maximum Annual Contribution
Q.
Commitment for the Program. for the first Fiscal
x
Year may be adjusted in an amount as determined
w
by BUD by the addition of the pro rata amount
m
applicable to the period in excess of 12 months.
F
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.Page 3 of 6 pages BUD 52520 B (June 1985)
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4
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E.
Reduction of Amount'Pa ap ble• HDD Nay seduce the
by BUD
v
amount of the annual conbutions, payable
may
for any project or for the Program, and
authority for
D
-+)
reduce the amount of the contract
any by giving the PHA written notice of
c.t
project,
ceduction to the PER in accordance with section
2.3 of this ACC. The notice by BUD may include a
M
revision of Exhibit I of this ACC Part I to
of contract
3
reflect the reduction in the amount
for a project. BUD notice of the
z!
authority
revision shall constitute an amendment of Exhibit
m'
I and the revised Exhibit I supersedes any
1
previous Exhibit I for the Program.14nl
f.
ACC Reserve Account. An ACC reserve account
in an
shall be establisbed and maintained by HUD,
amount as determined by BUD consistent with its
responsibilities under section 8(c)(6) of the
D.S. Housing Act of 1937. The ACC reserve
�—
yme nt of
ybe used yontifor onmpayment�y
port on ofthe annual cribut
approved by BUD.
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1.4. ACC.
c
A.
This ACC consists of this ACC Part I (including
II by
v
Exhibit I) and the form ACC Part prescribed
BUD for the Housing Certificate Program and
i
Housing voucher Program, designated as form BUD
o
52520 E, and dated June 1985. these documents
0
constitute the whole ACC for the Program.
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Page 4 of 6 pages HUD 52520 B (June 1985)
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B.
Signatures:
This ACC supersedes any previous 'ACCs for the'
Program. Matters relating to operation of the o
Program under a previous ACC shall W governed by
this ACC. it
C..
Fn
PUBLIC HOUSING AGENCY z
3
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I0R CITY HOUSING AUn4iaM Z'
1
hers^e of _PHA m
if( �,
Signature Date signed
;]i
ei
name
Page 5 of 6 pages
By'
^7—^
Date signed -
HUD 52520 B (June 1985)
,ed & Approved
.Casal Dqm me
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1991
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IA05-BO22-006
KC -78-086
84,180
07-01-78
IA05-BO22-007
KC -79-146
132,300
07-01-79
LAOS -E022-008
KC -81-213
92,700
06-26-81.
IMS -E022-009
KC -83-207
87,300
10-18-83
IA05-EO22-010
KC -84-166
58,464
.. 0
IAOS-E022-011
KC -86-076
129,600
02-01-87
m
ACC Part I Ntaber:
K0 -9033E E
ai
EXHIBIT I
G
?
NUMBER
NUMBER
AUTHORITY 0)
EFFECTIVE DATE
3
m
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i
IROS-EO22-001
KC -78-120
193,968
01-01-76
UDS -E022-002
KC -78-119
89,244
07-01-76
xf
IA05-EO22-003
KC -76-126
169,524
07-01-76 N
q�
IROS-EO22-004
KC -78-118
168,552
07-01-78
j
IA05-BO22-006
KC -78-086
84,180
07-01-78
IA05-BO22-007
KC -79-146
132,300
07-01-79
LAOS -E022-008
KC -81-213
92,700
06-26-81.
IMS -E022-009
KC -83-207
87,300
10-18-83
IA05-EO22-010
KC -84-166
58,464
01-31-85
IAOS-E022-011
KC -86-076
129,600
02-01-87
---ro �ozz-oi�
BUDGET LOA
UNRS SOUVFARR AUDTHomN �• _?. �� T�10?ITY <AlJ1NDl
' +
�qg& I129��00
071ITED STATES OF AMERICA
BECRETARY•OP HOUSING AND URBAN DEVELOPMENT
Date signed
Page 6 of 6 pages BUD 52520 B (June 1985)
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CERrrFICATE OF RE CINDING 0"rCEN
Marian K. Karr a the duly SIPP010ted, qualified
and acting City Clerk of Iowa City
do hereby certify that the attached extract from the
Minutes of the December 16, 1986 noting of the City Council
of the City Of Iowa City hold on December 16, 1986
le a true and correct copy of the original minutes of such meting on file and cf.
record to so far as they relate to the matters set forth in the attached extract,
and I do furtber certify that each Resolution appearing in such extract is a true
and correct copy Of A Piabolution adopted at such Meting and an file and of record.
IN USTrIOWY minor, r have hereunto set my hand and the soal, at mid
this 16th day of December 1986
(SGL)
,,44 dMWAM 06M UFO; 10:AWSM'
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(11-68)
EKTRACf rRcH WArrES OF MEETING
E(TRAcT FROM TFM N(INVM OF A Regular
11EEFIFIG OF THE City Council
OF THE City of Iowa Ci*v — —
MMD ON TRE 16th DAy OF December ^�, 19 E6
The City Council
of the City of Iota City
met in regular meeting at
Civic Center in the city of
at the place, hour,
Iowa City � Iowa
and date duly established for the holding of such meeting.
The Mayor celled the meting to order and on roll call ttw
j tolloving ansesred present: Ambrisco
Baker
MlJO•feu •;:
(:: Ott •
The following resolution was introduced by ptayor Ambrisco
read in full and considered:
Dickson moved that the foregoing resolution be
adopted as introduced and read, which motion was seconded by McDonald
and upon roll call the "Ayes" and "Nays" were as follows:
AYES NAYS
Dickson I
W McDonald
ME The Mayor thereupon declared said motion carried and
siid resolution adopted.
I
srese*e�eei�e ••'+ I
There being no further business to come before the meeting upon motion duly mede' .,
and seconded, the meeting was adjourned.
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Iowa City, Iowa
The City Council of Iowa City, Iowa, met in regular session
on December 16 , 1986, at 7:30 o1clock p.m. at the City Hall in
the City. The meeting was called to order by Ambrisco
Mayor, and to rollcall, the following named Councl Me ers were
present: Ambrisco Baker Courtne Dickson AtDonald Strait Zuber.
Absents nt,..,�
The Council investigated and found that notice of intention
to issue not to exceed $2,000,000 Variable Rate Demand Industrial
Development Refunding Revenue Bond (Millard Warehouse Project),
had, as directed by the Council, been'duly given according to law
and a hearing held thereon and the Council determined to
with the issuance of such Bonds. Council Member with
introduced and caused to be read a Resolution ent 1 d.
$200o"Resolution authorizing sale of
000VariableRate issuance and
DemandlndustrialDevelopment
Refunding Revenue Bond (Millard Warehouse Project), the
execution and delivery of an Indenture of Trust to
secure said Bond, the execution and delivery of a Loan
Agreement with Millard Warehouse, Iowa city, a Nebraska
general partnership, and the execution and delivery of
a Bond Purchase Agreement with Millard Warehouse, Iowa
City, a Nebraska general partnership, Larry A. Larsen,
L & B corporation, a Nebraska corporation, Norwest Bank
Minneapolis, N.A., and Daily Tax Free Income Fund,
Inc. 11
and moved its adoption, which motion was seconded by Council
Member Dickson After due consideration of said
Resolution y Lne Council, the Mayor put the question on the
motion and upon the roll being called, the following named
Council Members voted:
Whereupon, the Mayor declared said Resolution duly adopted
and signed his approval thereto.
Upon motion and vote the meeting adjourned.
ATTEST: M or
c�'�_
/9fol—
RESOLUTION NO. 86-358
-I
"RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF
$2,000,000 VARIABLE RATE DEMAND INDUSTRIAL DEVELOPMENT
REFUNDING REVENUE BONDS (MILLARD WAREHOUSE PROJECT),
THE EXECUTION AND DELIVERY OF AN INDENTURE OF TRUST TO
SECURE SAID BONDS, THE EXECUTION AND DELIVERY OF A LOAN
AGREEMENT WITH MILLARD WAREHOUSE, IOWA CITY, A NEBRASKA
GENERAL PARTNERSHIP AND THE EXECUTION AND DELIVERY OF A
BOND PURCHASE AGREEMENT WITH MILLARD WAREHOUSE, IOWA
CITY, A NEBRASKA GENERAL PARTNERSHIP, LARRY A. LARSEN,
L & B CORPORATION, A NEBRASKA CORPORATION, NORWEST BANK
MINNEAPOLIS, N.A., AND DAILY TAX FREE INCOME FUND,
INC."
WHEREAS, the City of Iowa City, Iowa (hereinafter referred
to as the "City"), is a municipal corporation organized and
existing under the laws and constitution of the State of Iowa,
and is authorized and empowered by Chapter 419 of the Code of
Iowa (hereinafter referred to as the "Act"), to issue revenue
bonds and loan the proceeds from the sale of said bonds to one or
more parties for the
yp purpose of refunding opputstanding principal
of bonds constructing, orad for e ippinthefacilities whichose of ashallinbe
suitable for the use of anyequipping
or
engaged in processing, storing, warehousing commercialenterprise
products of agriculture which will be located within the
corporate boundaries of the City; and
WHEREAS, the City has previously passed Resolutions No.
83-301, 83-406 and 85-192 authorizing the issuance and sale of
certain Industrial Development Revenue Bonds, specifically the
Millard Warehouse Project, in a combined amount of $2,450,000;
and
WHEREAS, the City has passed Resolution No. 86-358
! authorizing the issuance of certain Variable Rate Demand Indus-
trial Development Refunding Revenue Bonds (Millard Warehouse
r Project); and
WHEREAS, the Issuer is authorized by the Act to issue bonds
to refund the Industrial Development Revenue Bonds issued
pursuant to Resolution Nos. 83-301, 83-406 and 85-192, secured by
a mortgage and security agreement on all or any part of the
project acquired, constructed, improved, or equipped, through the
issuance of the refunded bonds and payable solely out of the
revenues derived from the agreement pursuant to which the
proceeds from the sale of said Variable Rate Demand Industrial
Development Refunding Revenue Bonds are loaned to the owner of
the Project to pay the outstanding principal of the refunded
bonds; and
WHEREAS, notice of intention to issue Variable Rate Demand
Industrial Development Refunding Revenue Bond (Millard Warehouse
/&? 9X
Project) of the City (the "Bond"), has heretofore been duly given
and the City has conducted a public hearing on the proposal to
issue the Bond, all in the manner required by the Act, and the
City deems it necessary and advisable to proceed with the
issuance, sale, and delivery of the Bond in the amount of
$2,000,000 as authorized and permitted by the Act to finance the
cost of refunding the City of Iowa City, Iowa, $1,400,000
Industrial Development Revenue Bond (Millard Warehouse Project),
Series A, dated September 15, 1983; City of Iowa City, Iowa,
$700,000 Industrial Development Revenue Bond (Millard Warehouse
Project), Series B,dated December 1, 1983; and City of Iowa
City, Iowa, $400,000 Industrial Development Revenue Bond (Millard
Warehouse Project), Series C, dated June 15, 1985 (the "Refunded
Bonds"); and
WHEREAS, the City will loan the proceeds of the Bonds to the
Company pursuant to the provisions of a Loan Agreement dated as
of December 1, 1986 (the "Loan Agreement"), which provides, in
part, for an obligation of the Company which will be sufficient
to pay the principal of and interest and prepayment premium, if
any, on the Bond as and when the same shall be due; and
WHEREAS, the City will sell the Bond to the Original
Purchaser as named and identified in the Indenture (the
"Purchaser") at a price of par and accrued interest, and the City
will execute and deliver an Indenture of Trust dated December 1,
1986 (the "Indenture") to Norwest Bank Nebraska, N.A., Omaha,
Nebraska (the "Trustee"), as Trustee for the bondholder; and
WHEREAS, the City will sell the Bond to the Purchaser
pursuant to a Bond Purchase Agreement dated December 1, 1986 (the
"Purchase Agreement") with the Company, Larry A. Larsen and L & B
Corporation (the "Guarantors"), Norwest Bank Minneapolis, N.A.,
and the Purchaser, and the City will execute and deliver the
Purchase Agreement to the Purchaser; and
WHEREAS, the Issuer has not judged the merits or value, if
any, of the Bond, if issued, shall be a limited obligation of the
Issuer, and shall not constitute nor give rise to a pecuniary
liability of the Issuer or a charge against its general credit or
taxing powers, and the principal of and interest on the Bond
shall be payable solely out of the revenue derived from the
Project financed by the Bonds.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF IOWA
CITY, IOWA, AS FOLLOWS:
Section 1. It is hereby found and determined that the
Project is located within the boundaries of the City.
Section 2. It hereby elects that the provisions of Section
144(a)(4) of the Internal Revenue Code shall apply to the
issuance of the Bond.
-2-
/Ay fa&
Section 3. That the Bond in an aggregate principal amount
of $2,000,000 to be and the same is hereby authorized and ordered
to be issued by the City, and to provide for the authorization of
and to secure the Bond under the Act, to finance the refunding of
the City of Iowa City, Iowa, $1,400,000 Industrial Development
Revenue Bond (Millard Warehouse Project), Series A, dated
September 15, 1983; City of Iowa City, Iowa, $700,000 Industrial
Development Revenue Bond (Millard Warehouse Project), Series B,
dated December 1, 1983; and City of Iowa City, Iowa, $400,000
Industrial Development Revenue Bond (Millard Warehouse Project),
Series C, dated June 15, 1985, to be secured by a Mortgage and
Security Agreement on all or part of the Project acquired,
constructed, improved or equipped through the issuance of the
Refunded Bonds; and to prescribe the terms and conditions upon
which the Bond is to be secured, executed, authenticated,
accepted, and held, the Mayor is hereby authorized and directed
to execute and acknowledge the Indenture, and the clerk is hereby
authorized and directed to attest the same and to affix the seal
of the City thereto and to cause the Indenture to be delivered
to, accepted, and acknowledged by the Trustee, the Indenture
which constitutes and is hereby made a part of this authorizing
Resolution, to be substantially the form text and containing the
provisions set forth in the official record of the proceedings of
this meeting by the Council. It is heretofore approved by the
Attorneys of the City and given due consideration and approval by
this Council.
Section 4. That the City loan to the Company the proceeds
of the Bond pursuant to the Loan Agreement. That there be and
there is hereby authorized the execution of the said Loan
Agreement in the form and with the contents hereinafter set
forth, and the Mayor is hereby authorized and directed to execute
and acknowledge the said Loan Agreement, and the Clerk is hereby
authorized and directed to attest the same and affix the seal of
the City thereto, the Loan Agreement, which constitutes and is
hereby made a part of this authorizing Resolution, to be in
substantially the form, text, and containing the provisions set
forth in the official records of the proceedings hereof. It is
hereby declared that the official form of the Loan Agreement has
been heretofore approved by the Attorneys for the City and given
due consideration and approval by this Council.
Section 5. That the sale of the Bond to the Purchaser upon
the terms of par and accrued interest be and the sane is hereby
directed and approved. In conjunction therewith, that there be
and there hereby is authorized the execution of the said Purchase
Agreement in the form and with the contents hereinafter set
forth, and the Mayor is hereby authorized and directed to execute
and acknowledge the said Purchase Agreement, which constitutes
and is hereby made a part of this authorizing Resolution, to be
in substantially the form, text and containing the provisions set
forth in the official records of the proceedings hereof. It is
hereby declared that the official form of the Purchase Agreement
-3-
Max
has been heretofore approved by the Attorneys for the City and
given due consideration and approval by this Council.
Section 6. That the Mayor and the Clerk are hereby
authorized and directed to execute any and all documents and do
any and all things deemed necessary in order to effect the
accomplishment of refunding the bonds issued to finance the
Project, the issuance and sale of the Bond and the execution and
delivery of the Loan Agreement, the Indenture and the Purchase
Agreement and to carry out the intent and purpose of this
Resolution. That the City Manager is hereby authorized to
approve any and all substantive modifications in and to the
documents heretofore approved, which modifications may be made
hereafter.
Section 7. That the provisions of this Resolution are
hereby declared to be separable and if any section, phrase, or
provisions shall for any reason be declared to be invalid, such
declaration shall not affect the validity of the remainder of the
sections, phrases, and provisions.
Section e. That all resolutions and parts thereof in
conflict herewith are hereby repealed to the extent of such
conflict.
Section 9. That this Resolution shall become effective
immediately upon its passage and approval.
PASSED AND APPROVED on December 16 , 1986.
ATTEST:
city cleric
(SEAL)
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/ 0 �y
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i
I
Iowa City, Iowa
The City Council of Iowa City, Iowa, met in regular session
on the 16th day of December , 1986, at 7:30 P.M. at the
City Hall n the City. The meeting was called to order by
Ambrisco , Mayor, and to roll call, the following
named
Council
Members were present: Ambrisco, Baker. Courtney
Dickson. McDonald Strait. Zuber.
The Council investigated and found that notice of intention
to issue not to exceed $2,500,000 Industrial Development Revenue
Bond (Millard Warehouse Project), Series 1986, had, as directed
by the Council, been duly given according to law and a hearing
held thereon and the Council determined to proceed with the
issuance of such Bonds. Council Member Zuber
introduced and caused to be read a Resolution entitled:
"Resolution authorizing a Resolution for the issuance
and sale of $2,000,000 Industrial Development Revenue
Bond (Millard Warehouse Project), Series 1986, the
execution and delivery of an Indenture of Trust to
secure
of a
Loan Agreement
owith tMillard cuWarehouse, tion and dIowa eTCity, a
Nebraska general partnership, and the execution and
delivery of a Bond Purchase Agreement with Millard
Warehouse, Iowa City, a Nebraska general partnership,
L 8 B Corporation, a Nebraska corporation, Larry A.
Larsen, Merrill Lynch, Pierce, Fenner& Smith,
Incorporated and Norwest Bank Minneapolis, N.A.°
and moved its adoption, which motion was seconded by Council
Member After due consideration of said Resolution by
the Counc a Mayor put the question on the motion and upon
the roll being called, the following named Council Members voted:
Whereupon, the Mayor declared said Resolution duly adopted
and signed his approval thereto.
upon motion and vote the meeting adjourned.
ATTEST: M yor
ui c.ierx
,"P
RESOLUTION NO. 86-359
"RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF
$2,000,00OALES1986, APHEEXECUTION REBOND VENUE
WAREHOUSEPROJECT) AND
I DELIVERY OF AN INDENTURE OF TRUST TO SECURE SAID BOND,
THE EXECUTION AND DELIVERY OF A LOAN AGREEMENT WITH
MILLARD WAREHOUSE, IOWA CITY, A NEBRASKA GENERAL
PARTNERSHIP, AND THE EXECUTION AND DELIVERY OF A BOND
PURCHASE AGREEMENT WITH MILLARD WAREHOUSE, IOWA CITY, A
NEBRASKA GENERAL PARTNERSHIP, L & B CORPORATION, A
NEBRASKA CORPORATION, LARRY A. LARSEN, MERRILL LYNCH,
PIERCE, FENNER & SMITH, INCORPORATED AND NORWEST BANK
MINNEAPOLIS, N.A."
WHEREAS, the City of Iowa City, Iowa (hereinafter referred
to as the "City"), is a municipal corporation organized and
existing under the laws and constitution of the State of Iowa,
and is authorized and empowered by Chapter 419 of the Code of
Iowa (hereinafter referred to as the "Act"), to issue revenue
bonds and loan the proceeds from the sale of said bonds to one or
{ more parties for the purpose of acquiring, constructing,
imptherusengof ranyuindustryfacilities
commercial enterprisesuitable
engaged for
in
processing, storing, warehousing, or distributing products of
agriculture which will be located within the corporate boundaries
u of the City; and
WHEREAS, the Issuer is authorized by the Act to issue
Industrial Development Revenue Bonds secured by a mortgage and
j' security agreement on all or any part of the project acquired,
constructed, improved, or equipped, through the issuance of such
revenue bonds and payable solely out of the revenues derived from
the agreement pursuant to which the proceeds from the sale of
said Industrial Development Revenue Bonds are loaned to the owner
of the Project; and
WHEREAS, the City has made the necessary arrangements with
i the Company for the acquisition, construction and equipping of
the "Project," the subject of and as defined in the Ineure of
Trust dated November 1, 1986, suitable for use by the Company as
a commercial enterprise, the "Project"; and
WHEREAS, notice of intention to issue Industrial Development
Revenue Bond (Millard Warehouse Project), Series 1986 of the
City (the "Bond"), has heretofore been duly given and the City
has conducted a public hearing on the proposal to issue the Bond,
all in the manner required by the Act, and the City deems it
necessary and advisable to proceed with the issuance, sale, and
delivery of Bond in the amount of $2,000,000 as authorized and
permitted by the Act to finance the cost of the Project to that
amount; and
/"5
-I
WHEREAS, the City will loan the proceeds of the Bonds to the
Of Company pursuant to the provisions of a Loan Agreement dated as
N 1986 ovember
obligationtof the he aCompanyewhich)
willibe sufficient in
to
I
onytheeBondnasPand henal of dtheinterest pe due; andremium, if any,
WHEREAS, the Cit
j
Purchaser as named andwilidentified l sell heinBothe tIndenturerig(the
j "Purchaser") at a price of par and accrued interest, and the City
will execute and deliver the Indenture of Trust dated November 1,
1986 (the "Indenture") to Norwest Bank Nebraska, N.A., Omaha,
Nebraska (the "Trustee"), as Trustee for the bondholder; and
the
Cit
l sell
I
Pursuant Bond PurchaselAgreementhdatednd to Novemberh1, 1986 (the
"Purchase Agreement") with the Company, Purchaser
Corporation (the "Guarantors" p e Larry A. Larsen and L & B
and the Purchaser, and the Cit Norwest Bank Minneapolis, N.A.,
Purchase Agreement to the Purchaser; and
ill execute and deliver the
WHEREAS, the Issuer has not judged the merits or value, if
Issuerany, of the Bond, if issued, shall be a limited obligation of the
liability nshall
constitute
tyoftheIssueroracharge nagainst itsegeneral creditto a aor
taxing powers, and the principal of and interest on the Bond
shall be payable solely out of the revenue derived from the
Project financed by the Bonds.
IOWA NOW, TIOWAFOREI BE I
SOLVED BY THE CITY
COUNCIL or
Section 1. It is hereby found and determined that the
Enlarged project is located within the boundaries of the City.
V Section 2. It hereby elects that the provisions of Section
issuance
of the Internal Revenue Code shall apply to the
issuance of the Bond.
c
G Section 3. That the Bond in an aggregate principal amount
lE of $2,000,000 to be and the same is hereby authorized and ordered
to be issued by the City, and to provide for the authorization of
and to secure the Bond under the Act, to finance the Project and
nand condecessaryi expenses incidental thereto and to prescribe the terms
is
authenticated, accepionuon tedchandhheld,dthe Mayor beisecured, authorized
and directed to execute and acknowledge the Indenture, and the
Clerk is hereby authorized and directed to attest the same and to
affix the seal of the City thereto and to cause the Indenture to
be delivered to, accepted, and acknowledged by the Trustee, the
Indenture which constitutes and is hereby made a part of this
authorizing Resolution, to be substantially the form text and
containing the provisions set forth in the official record of the
Proceedings of this meeting by the council. It is heretofore
-2-
approved by the Attorneys of the City and given due consideration
and approval by this Council.
Section 4. That the City loan to the Company the proceeds
of the Bond pursuant to the Loan Agreement. That there be and
there is hereby authorized the execution of the Loan Agreement in
the form and with the contents hereinafter set forth, and the
Mayor is hereby authorized and directed to execute and
acknowledge the said Loan Agreement, and the Clerk is hereby
authorized and directed to attest the same and affix the seal of
the City thereto, the Loan Agreement, which constitutes and is
hereby made a part of this authorizing Resolution, to be in
substantially the form, text, and containing the provisions set
forth in the official records of the proceedings hereof. It is
hereby declared that the official form of the Loan Agreement has
been heretofore approved by the Attorneys for the City and given
due consideration and approval by this Council.
Section 5. That the sale of the Bond to the Purchaser upon
the terms of par and accrued interest be and the same is hereby
directed and approved. In conjunction therewith, that there be
and there hereby is authorized the execution of the said Purchase
Agreement in the form and with the contents hereinafter set
forth, and the Mayor is hereby authorized and directed to execute
and acknowledge the said Purchase Agreement, which constitutes and
is hereby made a part of this authorizing Resolution, to be in
substantially the form, text and containing the provisions set
forth in the official records of the proceedings hereof. it is
hereby declared that the official form of the Purchase Agreement
has been heretofore approved by the Attorneys for the City and
given due consideration and approval by this.Council.
section 6. That the Mayor and the Clerk are hereby
authorized and directed to execute any and all documents and do
any and all things deemed necessary in order to effect the
accomplishment of the Project, the issuance and sale of the Bond
and the execution and delivery of the Loan Agreement, the
Indenture and the Purchase Agreement and to carry out the intent
and purpose of this Resolution. That the City Manager is hereby
authorized to approve any and all substantive modifications in
and to the documents heretofore approved, which modifications may
be made hereafter.
Section 7. That the provisions of this Resolution are
hereby declared to be separable and if any section, phrase, or
provisions shall for any reason be declared to be invalid, such
declaration shall not affect the validity of the remainder of the
sections, phrases, and provisions.
Section 8. That all resolutions and parts thereof in
conflict herewith are hereby repealed to the extent of such
conflict.
-3-
/"Ip
W,
Section 9. That this Resolution shall become
immediately upon its
effective
passage and approval.
PASSED AND APPROVED on December 16 1986.
,
�&Ma or
ATTEST:
city'c1erK
s
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i
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