7.0. EDSR 05-10-2004 - Laserfiche WebLink

Home Browse Search

D � A C�� O MEETING OF THE EDA FINANCE COMMITTEE HELD AT THE ELK RIVER CITY HALL TUESDAY, MAY 4, 2004 Members Present: Dan Tveite,Tom McNair,Steve King,Cliff Lundberg and Jim Simpson Members Absent: Jeff Gongoll,Paul Motin and Chris Carlson Staff Present: Assistant Director of Economic Development Heidi Steinmetz 1. Presentation by Tom Buchta and Bob Michalek of Display Solutions,Inc. Mr. Buchta and Mr.Michalek provided an overview of the project. The Finance Committee asked the company questions regarding the following issues: • Jobs to be created • Product details including product style and price • Competitors • Project timeline • Product shipping/delivery • Origination of the company • Machinery • Company lease • Company name • Non-compete clauses held from Mr. Buchta's prior company • Accounts receivable Steve King of American National Bank provided details of the bank loan. Mr.Buchta and Mr.Michalek were excused from the meeting,allowing the committee to discuss the application and determine a recommendation for EDA consideration. Per Mr. King's committee membership,he was also excused from the discussion. 2. Finance Committee Discussion The committee discussed the bank's request for a.5% servicing fee for the proposed participation loan. It was of committee consensus that a servicing fee was not appropriate since the Micro Loan would be secured by a 2nd lien position on the equipment in addition to Micro Loan criteria and the interest rate being offered by the program. The following terms for the Micro Loan were accepted by the committee: • Personal guarantee from owners and spouses • Additional financing sources secured • Secured by 2nd lien position on equipment • Term: 10-year amortization,3-year balloon payment @ 1 point below prime with a 2% floor • Structured as participation loan with American National Bank • Job performance agreement(7 full-time jobs @ no less than$12.00/hour within 2 years)