10.0. EDSR 04-08-1996 - Laserfiche WebLink

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Genesis Business Centers,Ltd. ? 41;8/4/96 (912:16 AM D 4/4 • time avoids the double taxation of a corporation by being treated as a partnership for tax purposes). A group of between seventy-five (-75-) individuals would subscribe to the common stock of the ERDC. These individuals would each invest$ 10,000. From the total proceeds of$750,000( netting about$730,000 after the legal and accounting costs of organization and the preparation of the securities offering memorandum are paid),the ERDC would do the following: 'Pay the full cost of the building ( $550,000 estimated) and acquire same without any mortgage or financing(fee simple ownership). •Have a working capital reserve fund of$180,000. The 75 shareholders would own a pro rata share of ownership in the ERDC.They would then benefit, as capital gains are realized, from the portfolio to be developed by the operation of the incubator (barter transactions) and ultimately the disposition of the building. To the extent that banks or trusts or foundations or other institutional investors would wish to subscribe for shares of the common stock of the ERDC, the amount of investment per entity could increase to$25,000 or$50,000 or more. If for example, ten institutional investors wished to purchase $ 25,000 of common stock each, then the balance of the funds to be acquired ($ 500,000) could be acquired from either fifty individuals at$10,000 each or from 100 individuals at$5,000 each. ( For purposes of keeping matters simple and less costly, it is necessary to keep the number of • individual investors to 100 or fewer ( primarily to avoid the costs and difficulties imposed by the Securities and Exchange Commission associated with regulated investment companies). Genesis Business Centers,Ltd.,would invest$10,000 in ERDC in order to be a founding shareholder and to underscore Its long-term commitment to the project. The incubator would be managed under a contract with Genesis. Genesis would provide the investment selection management services for the incubator ( who comes in, how much stock is bartered, etc.,). Genesis would hire a person to be on-site manager of the facility. ( Every effort would be made to hire an Elk River resident or a Sherbume County resident for this position.) The management contract would provide a reasonable cash payment on a monthly basis( primarily to cover the cost of the on-site manager). A portion of the bartered common stock portfolio would be allocated to Genesis in consideration for the investment management services to be offered in addition to a modest monthly fee to be paid in cash. S