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Economic Development Authority Minutes April 11, 2005 Page 3 is 3 percent interest, a 10-year amortization, and a balloon payment due in May of 2007. She noted that both the Micro Loan Policy and Subsidy Agreement state that the loan must be repaid if the company relocates outside of Elk River. Ms. Steinmetz provided three options for the EDA to consider regazding the Display Solutions request. Commissioner Motin stated he wished to disclose that Display Solutions was a client of his, but that he has no financial interest in the company. The Commission concurred that this did not constitute a conflict of interest. Commissioner Dwyer stated that the fact that there is no space available in Elk River for Display Solutions to expand creates a special circumstance. Bob Michalek, Display Solutions -Explained that the company has been awarded several large contracts that force him to look for a larger space, and that he was not able to find space in Elk River. He stated that a 2 -3 year lease is required for most of the properties he has checked. Mr. Michalek indicated that his goal is to come back to Elk River, as a number of his employees live here. President Gongoll stated that would be the EDA's goal, also. Commissioner Dwyer stated that the interest rate to a market rate of prime plus one. Commissioner Tveite stated that he felt if Display Solutions returns to Elk River when space becomes available, the EDA would be open to lowering the rate. MOTION BY COMMISSIONER TVEITE AND SECONDED BY COMMISSIONER GUMPHREY TO MODIFY THE TERMS OF THE MICRO LOAN FOR DISPLAY SOLUTIONS TO REQUIRE AN INTEREST RATE ON THE LOAN OF PRIME PLUS ONE. THE MOTION CARRIED 6-0. g. Consider Earl Release of Sublease for Business Incubator Tenant - La Two Technolo Corporation Ms. Steinmetz provided background information regarding LapTwo Technology Corporation's Business Incubator lease and product development. She explained that LapTwo has "graduated" from the Incubator and recently moved its operations to market rate rental space in Elk River. Staff requests that LapTwo be released of is current Incubator sublease with two conditions: 1) that LapTwo must be curent on cash rent payments through April 11, 2005; and 2) that the company submit legally acceptable stock offering certificates as noted in the staff report to the Commission dated April 11, 2005. Rob Henrungsgard, LapTwo Technology Corporation -Reviewed products developed by LapTwo including AdDireceor, HII'PA-Filter, and WarmSpot. He explained how Topnotch Computer Services evolved and its success. He noted that LapTwo moved to the commercial space on March 21, 2005. Conunissioner Dwyer stated that he did not see a problem with Mr. Henningsgazd's request to be released from the Incubator Sublease, since the intent of the program is for businesses to eventually move into market rate space within the City. President Gongoll asked if LapTwo was current on their rent. Ms. Steinmetz stated yes, that LapTwo is paid through the end of April. Mr. Henningsgazd stated that he is working on