10.0. EDSR 04-08-1996 - Laserfiche WebLink

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Genesis Business Centers,Ltd. Q Qfl8/4/96 ' 12.14AM D3/4 Bywa of example,if the operating costs were determined to be$2 per square foot per year andlu the fair marketvalue of the property were determined to be 6per square foot per year,and,if the prospective incubator tenant needed 2,000 square feet of space and the prospective tenant was selling its common stock for$ 1.00 per share, then the prospective incubator tenant would pay$4,000 per share foot per year in cash and the prospective incubator tenant would tender 8,000 shares of its common stock to the ERDC. In this approach,it is intended that the following objectives would be met: •The incubator tenants would be exposed to the realities of the marketplace in terms of the fair market value for rent. "The incubator tenants would become aware of the need for cash funds to cover the direct operation of the facility. •The incubator tenants would be helped by the ERDC accepting their shares of common stock as an'alternative currency' in that their prospective investors would be encouraged by the ERDC's willingness to accept common stock in lieu of cash ( it represents a third party validation of the worth of the stock of the incubator companies). •Long-term, the ERDC would develop a portfolio of common stock earned from the barter transactions with the various incubator tenants. As this portfolio matures and • hopefully appreciates in value, it is possible that the capital gains ultimately realized on this portfolio would provide funding for the following purposes: "Payment of any mortgage placed on the property to finance the acquisition of the facility by the ERDC. "Payment in part or in full of future operating costs of the building after the property is acquired and, among other factors, the costs go up by the amount of the property taxes. •A 'built-in' investment fund dedicated to making investments in the common stock of the incubator tenants is established. The Elk River Development Corporation (ERDC) would need to be established in order to have a legally constituted(for profit entity)to act as the lessee under the short term rental program described above.Then,at the appropriate time,after the short term rental program has been successful,to acquire the property either by outright purchase of the property (or by the placement of a downpayment and the assumption of a mortgage). The ERDC would be established as a limited liability company ( functionally a corporation that confers the limited liability status of a shareholder and at the same