HomeMy WebLinkAbout01-125 Resolution No. 01-125
RESOLUTION
APPROVING LOAN UNDER THE SPECIAL BUSINESS LOAN PROGRAM
FOR BUILDING IMPROVEMENTS IN ELGIN CENTER CITY
(50 S. Grove Avenue)
WHEREAS, the City of Elgin and certain banks and savings and loan
institutions have established a special business loan program for
building improvement in Center City Elgin for revitalization purposes;
and
WHEREAS, Togaworld.com, Inc. has submitted an application to the Fox
Valley Micro Loan Fund for a loan under the special business loan
program; and
WHEREAS, Fox Valley Micro Loan Fund has approved this loan under the
special business loan program; and
WHEREAS, the loan is for the improvement of a type of business
located in an area of the Center City of Elgin which meets the
eligibility requirements of the special business loan program; and
WHEREAS, the loan application meets the general requirements
concerning type of financing, contractor bids of the special loan
program; and
WHEREAS, the loan applicants meet the qualifying standards as set
out in the special business loan program; and
WHEREAS, it is determined that funds are available for the loan, the
development plans are compatible with the Center City development plans,
and the application is in adherence to the objectives and regulations of
the program.
NOW, THEREFORE, IT IS RESOLVED BY THE CITY COUNCIL OF THE CITY OF
ELGIN, ILLINOIS, that Joyce A. Parker, City Manager, and Dolonna Mecum,
City Clerk, are hereby authorized to approve the special business loan
agreement as set forth in the loan approval of the Fox Valley Micro Loan
Fund attached hereto and made a part hereof by reference, and to make
monthly interest payments in accordance with the terms of the agreement
so long as the borrower continues to make regularly scheduled loan
payments.
s/ Ed Schock
Ed Schock, Mayor
Presented: May 9, 2001
Adopted: May 9, 2001
Omnibus Vote : Yeas 6 Nays : 0
Attest :
s/ Dolonna Mecum
Dolonna Mecum, City Clerk
CITY OF ELGIN CENTER CITY SPECIAL
BUSINESS LOAN AGREEMENT
This Agreement made and entered into on this ((4 day of
Pit_a7 2001, by and between the City of Elgin, Illinois, a
municipal corporation, (hereinafter referred to as the "City" ) ,
and Togaworld. com, Inc . , an Illinois Corporation (hereinafter
referred to as the "Business" ) ,
WHEREAS, the City has established a City of Elgin Center
City Special Business Loan for building improvements in the
Center City area in an effort to stimulate expansion,
reinvestment and business retention, a copy of such Center City
Special Business Loan Program for building improvements being
attached hereto and made a part hereof by reference as Exhibit
A (hereinafter referred to as the "Program" ) ; and
WHEREAS, pursuant to the Program, the City would pay a
portion of the financing costs for eligible business expansion,
and
WHEREAS, Business is the owner of the business located at
iOA/46
South Grove Avenue, Elgin, Illinois, (hereinafter referred
to as the "Subject Property" ) which is located in the Center
City area as described in Exhibit A hereto; and
WHEREAS, Business has applied for and obtained approval
for a loan agreement to finance the cost of the proposed
business expansion at the subject property, a copy of the
subject loan agreement being attached hereto and made a part
hereof by reference as Exhibit B (hereinafter referred to as
the "Subject Loan Agreement" ) ; and
WHEREAS, Business has completed an application for
participation in the subject Program which identifies the
proposed improvements to the Subject Property, a copy of
Businesses application for participation in the Subject Program
being attached hereto and made a part hereof by reference as
Exhibit C.
NOW, THEREFORE, for and in consideration of the mutual
promises, covenants and undertakings contained herein, and
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties
hereto agree as follows :
1 . That the foregoing recitals are hereby incorporated
into this agreement in their entirety.
2 . That Businesses application for participation in the
Program is hereby approved.
3 . That as long as the Business continues to make
regularly scheduled loan payments on the Subject Loan Agreement
and otherwise complies with the terms of this agreement the
City agrees to pay an interest subsidy on the Subject Loan
Agreement as described in this paragraph. In such event, the
City agrees to pay an interest subsidy on the Subject Loan
Agreement whereby the City agrees to pay to the lender on a
monthly basis for the 60 month term of the Subject Loan
Agreement the difference between the actual annual interest
rate of the Subject Loan Agreement of fifteen (15%) , less six
percent (6%) which is to be paid by the business .
For example, if the current annual interest of the Subject Loan
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Agreement is fifteen (15%) percent the City would pay nine (9%)
percent interest to the lender monthly and the Business would
pay principal and six (6%) percent interest to the lender
monthly. In no event shall the interest rate exceed fifteen
(15%) percent . In no event shall the total loan amount exceed
$150 , 000 . The Business shall make all other principal and
interest payments and all other payments on the Subject Loan
Agreement . It is expressly agreed and understood that the City
is not and shall not be deemed to be a party to the Subject
Loan Agreement or an obligor thereunder. The City' s agreement
to make interest payments as provided in this paragraph may not
be relied upon or enforced by any other party including but not
limited to the lender in the Subject Loan Agreement or any
successor or assign thereof .
4 . That the terms, requirements and conditions of the
Program as set forth in Exhibit A hereto are hereby
incorporated into this agreement in their entirety. The City' s
obligations under this agreement including but not limited to
the City' s obligations to make continued interest payments are
subject to Businesses ongoing compliance with all terms and
requirements of the Program and this agreement .
5 . Following receipt of reasonable documentation that
the following five (5) positions have been hired by the
Business Owner, the City shall pay the owner the sum of $5, 000 .
Position Annual Salary
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1 . Sales Representative (2) $65, 000
2 . Vice President, Sales $96, 000
3 . Chief Financial Officer $78 , 000
4 . Director of Production $60, 000
6 . That this agreement may not be assigned without the
prior written consent of the City.
7 . That the Business hereby holds harmless and
indemnifies the City from and against any and all causes of
actions, suits, claims for damages and any and all other
liability which may arise out of or in connection with the
proposed improvements or other work at the Subject Property or
with Business or Businesses agents, employees, contractors and
permitted assigns negligent performance of any of the terms of
this agreement .
8 . That this agreement shall not be construed to create
a partnership, joint venture or employment relationship between
the parties hereto.
9 . Business shall also pay when due all other
obligations for the subject property including but not limited
to payments on any other loans, real estate taxes and
insurance .
10 . That this agreement shall be subject to and governed
by the laws of the State of Illinois . The parties hereto agree
that venue for any and all actions which may be brought by each
and either of them to enforce the provisions of this agreement
shall be in Kane County, Illinois .
11 . That the terms of this agreement shall be severable .
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•
In the event that any of the terms or provisions of this
agreement are deemed to be void or otherwise unenforceable for
any reason, the remainder of this agreement shall remain in
full force and effect .
12 . That notices regarding in this agreement shall be
sent to the parties at the following addresses :
To: City of Elgin
150 Dexter Court
Elgin, IL 60120-5555
Attention: City Manager (with a copy to
Corporation Counsel)
To: Mr. Brad Bialas
Business Owners
South Grove Avenue
Address
Elgin, IL 60120
City, State, Zip Code
847-697-5213
Telephone Number
South Grove Avenue
Property Location
Ownership Interest
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IN WITNESS WHEREOF, the parties hereto have entered
into and executed this agreement the day and year first written
above .
CITY OF EIGIN OWNERS
By:
J e A Par r Brad . Bialas
/+(City Manager
G
Attest : /k
$1444'41—
Dolonna Mecum, City Clerk Jas.. Adair
Robert Geras
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0.5,`02'01 13:24 FAX 8474800132 LASALLE lJ02
05/02/01 WED 14:14 FAX 8477422934 Togaworld.co® a 002
IN WITNESS WHEREOF, the parties hereto have entered
into and executed this agreement the day and year first written
above .
CITY OF ELGIN OWNERS
By:
Joyce A. Parker Brad M. Bialas
city Manager
Attest ;
Dolonna Mecum, City Clerk Jason Adair
R•" Ge as
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•
CITY OF ELGIN
Center City Special Business Loan Program
for Business Development and Building Improvements
PURPOSE STATEMENT:
The City of Elgin and the Elgin financial institutions have
established a special loan program for building improvements and
business development in Center City Elgin in an effort to stimulate
expansion, reinvestment and business retention.
LOAN TERMS:
Interest Rate : 6% paid by borrower.
Term of Loan: Up to a 10 year amortization.
Collateral : First or Second mortgage on
property.
Maximum Loan: Up to $150 , 000 per building
project .
Purpose of Loan: Loan proceeds must be used for
business development and
expansion * , building
improvements (interior &
exterior) .
City of Elgin pays additional
interest to Lender monthly in
the amount of the difference
between the actual interest
rate in the approved loan
agreement less six (6%) to be
paid by the Borrower. The
maximum or ceiling for an
interest rate in an approved
loan agreement is fifteen per-
cent (15%) per year.
Monthly Payment : Separate bills sent to borrower
(for principal payment plus 6%
interest) and to City (for
additional interest between 6%
and 15% .
* Expansion is defined as the addition of multiple employees,
and/or the occupancy of additional office, manufacturing,
retail or storage space in order to enhance a new or existing
business .
ELIGIBILITY REQUIREMENTS:
To be eligible to apply for this special loan program, the applying
business must satisfy both of the following criteria:
1 . Geographic : The business must be located in Center City
Elgin, in the areas outlined in Appendix A.
•
2 . Type of Business : The business must be engaged in
retailing, wholesaling, distribution, professional
services, technology industry and other types of general
commercial and retail lines of business consistent with
those business uses identified as desirable in the
adopted Riverfront/Center City Master Plan.
GENERAL REQUIREMENTS:
1 . Loan proceeds must be used strictly for business
development, expansion and/or for building improvements .
This program does not include financing for furniture or
standard office equipment (i .e . personal computers and
related equipment) .
2 . Building improvements must be done by an independent
contractor. Agreement with contractor must be supported
by two different contractor bids .
3 . Any business which is approved and is to receive benefits
under this Center City Special Business Loan Program must
execute a written agreement with the City in a form as
directed by the City which shall include the terms
necessary to comply with the provisions of the program
requirements and which shall include an agreement by such
business to complete building improvements within a
specified time period and to thereafter remain in
business at the specified location for a period of not
less that three years . If the business is required to
vacate the Center City location due to action directed or
supported by the City, the business must relocate within
the Center City in order to retain the benefits of the
Business Loan Program.
QUALIFYING STANDARDS:
1 . Applicant business and owner must have an acceptable
credit history with a record of timely loan payments .
2 . Business profits and cash flow must be sufficient to
support loan payments in accordance with the customary
loan (with the loan to value ratio not to exceed 75% to
80%) unless other collateral or financial strength is
provided.
APPLICATION PROCESS:
1 . Eligible businesses should complete the loan program
application form and submit it to the bank, savings and
loan official, or other pre-approved lending program.
2 . Once the loan is conditionally approved and structured by
the lending institution, the lender shall complete a loan
proposal for submission to the City of Elgin for final
approval .
3 . Approval by the City of Elgin will be conditioned upon
(1) available funds, (2) compatibility with Center City
development plans, (3) adherence to the objectives and
regulations of the program and (4) entry into a program
agreement with the City in the form as directed by the
City.
4 . The lending institution and business applicant may elect
to proceed with a conventional market rate loan in the
event that the City of Elgin denies the special loan
program application.
SUPPLEMENTAL LOAN AMOUNTS :
If a lending institution approves subsequent increases in the
original loan amount approved for a project under this program,
application can be made for an interest subsidy on the increment .
Provision of the subsidy is subject to approval by the City of
Elgin. The City of Elgin is under no obligation to provide benefit
beyond that previously approved.
ADDITIONAL TERMS AND CONDITIONS:
1 . The interest rate ceiling shall be 15%, at which point
the City will be paying 9% and the borrower 6% .
2 . The City shall make monthly interest payments so long as
the borrower continues to make the regular scheduled loan
payments and otherwise complies with the terms of the
agreement to be entered into between the City and the
borrower. If the borrower fails to pay all required loan
payments or otherwise fails to comply with the terms of
the agreement to be entered into with the City, the City
will cease paying.
NO VESTED RIGHTS:
The provisions of this program are intended to provide guidelines
for considering applications for businesses that are seeking to
participate in the Center City Special Business Loan Program. The
City Council of the City of Elgin, in its sole and exclusive
discretion, shall determine whether to provide any of the
incentives contemplated in this program after duly considering the
costs incurred by the City of Elgin for providing the incentives
and after considering the relative gain derived by the public from
those incentives . The City Council of the City of Elgin further
expressly reserves the right and option to decide at any time
whether or not to provide continued or additional funding for this
program.
•
The creation or existence of this program shall not be construed to
create or provide any vested rights in any person or organization
to obtain approval of a program application, a program agreement or
any incentive, grant, rebates or funding thereunder.
APPLICATION FOR
CITY OF ELGIN
CENTER CITY SPECIAL BUSINESS LOAN PROGRAM
Date :
Loan Amount Requested: $ Total Project Cost : $
Company Name :
Address :
Phone :
Owner' s Name (s) :
Type of Business :
Purpose of Loan:
Does this loan represent an addition to a loan previously approved
for this project? YES NO
If yes, please indicate original amount, date approved and total
loan amount with proposed increment .
Original loan approved: $
Date Approved:
Total loan with proposed increment : $
BREAKDOWN OF PROJECT
AMOUNT CONTRACTOR DESCRIPTION OF WORK
1 . $
2 . $
3 . $
4 . $
OTHER CONTRACTOR BIDS OBTAINED
DESCRIPTION OF PROPERTY:
(Size & Description)
APPRAISED VALUE :
OWNER IN TITLE :
EXISTING MORTGAGE
ON PROPERTY:
OTHER INFORMATION REQUIRED INITIALLY:
1 . Business Year end Financial Statements - last two years .
2 . Business Interim Financial Statement - current year-to-date.
3 . Personal Financial Statement - current .
4 . Copy of Contractor Estimates.
5 . Corporate and/or Personal Tax Returns may be required.
6 . Appraisal of property may be required.
The undersigned applicant hereby certifies that the loan funds
obtained shall be used for the purposes outlined in this
application.
DATE
Applicant Business
BY:
Owner
Please deliver this completed application to the bank or savings
and loan official of your choice. They will process your credit
application and submit a loan proposal to the City of Elgin for
final approval .
Revised 03-19-01
• . Mar 08 01 08: 02p Brad Bialas 847-844-8192 p. 3
• MAR-07-01 WED 01.46 PM CITY OF ELGIN/CITY MGR, FAX NO. 18479315610
P. 02
APPLICATION FOR
CITY OF ELGIN `'
CENTER CITY SPECIAL BUSINESS LOAN PROGRAM
Date: 07,10SV0(
Loan Amount Requested: $ Soi000 Total Project Cost; $ —
Company Name : — [Qq� 1p� � � ,
Address : �C? S, 6 r c. S f, Sc.. �� �,_J 0
Phone : ?ci7- (09 7-Salk
Owner' s Names) : 8c-v.a 510'-k c,„ Vc1So,v A f
Type of business :_,_-__ S0.1e.5 (Jik(•,(0_v.-kt-,ory
Purpose of Loan :
Does this loan represent an addition to a loan previously approved
for this project? YES
41)
If yes, please indicate original amount, date approved and total loan
amount with proposed increment.
Original loan approved:$ ,Sp opo `"U
Date Approved:
Total loan with proposed increment:$__
•
BREAXDOWN OF PROJECT
AMOUNT CONTRACTOR DESCRIPTION OF WOR.X
1 . $
2 . $
3 . $
4. S
BUSLOANA. PPL/TEXT081/NEWCENTU.12Y
Mar 08 01 08: 02p Brad Bialas 847-844-8182 p. 4
MAR-07-01 WED 01 :46 PM CITY OF ELGIN/CITY MGR. FAX Na 18479315610 P, 03
OTHER CONTRACTOR BIDS OBTAINED
DESCRIPTION OF PROPERTY: _
(Size & Description)
APPRAISED VALUE: -
OWNER IN TITLE:
EXISTING MORTGAGE
ON PROPERTY: •
• OTHER INFORMATION REQUIRED INITIALLY: •
1 . Business Year end Financial Statements - last two years .
2 , Business Interim Financial Statement - current year-to-date.
3. Personal Financial Statement - current.
4 . Copy of Contractor Estimates .
5 . Corporate and/or Personal Tax Returns may be required.
6 . Appraisal of property may he required.
The undersigned applicant hereby certifies that the loan funds
obtained shall be used for the purposes outlined in this application.
DATE Oa /f81Q\ a� � a , c.o =ws_
Applicant Business
Owner
Please deliver this completed application to the bank or savings and
loan official of your choice. They will process your credit applica-
tion and submit a loan proposal to the City of Elgin for final
approval .
' • M , • .
February 21 , 2001
Brad M. Bialas and Jason Adair
Togaworld. com, Inc .
28 South Grove
Elgin , IL 60120
Re: Proposed Loan to Togaworld.com, Inc .
Dear Messrs. Bialas and Adair :
You have requested, and Fox Valley Micro Loan Fund, an Illinois not for
profit corporation (Lender) does hereby consent to providing installment term
financing in the amount of the Credit for the purposes of providing working
capital upon the following terms and conditions.
Borrower: Togaworld .com, Inc.
Guarantor: Brad M. Bialas, Jason Adair and Robert Geras shall
personally guaranty payment of all sums due under the
Credit and the performance of all terms and provisions
of all loan documentation.
Amount of Credit: $50,000.00
Term: The Credit shall be evidenced by the Commercial
Promissory Note of the Borrower (Lender' s form)
payable to Lender as follows:
Monthly payouts of $10,000 per month up to ,550,000
Maximum. With initial payout of $20,000
5 year term after final disbursement.
Rate: The Commercial Promissory Note will bear interest at
the per annum rate of 15%
Service fee: Lender shall be entitled to a service fee of $50.00
payable at the time of the initial disbursement of the
Credit , provided that the fully earned commitment fee
payment received upon acceptance of the Commitment as
herein provided shall be credited against such fee.
•
Preconditions to
Disbursement:
No portion of the Credit shall be disbursed until all
1
documentation requirements have been as required by
the. Lender. Borrower must secure participation in the
City of Elgin program that provides interest rate
subsidy.
Collateral : As collateral security for repayment of the Credit ,
you shall execute and deliver , or cause to be executed
and delivered to Lender, the following documents (some
of which shall be filed and recorded as required by
Lender' s counsel to establish valid first liens in
favor of Lender) :
a) A second mortgage on the Property executed by the
Guarantors which shall contain a waiver of the
statutory right of redemption, due on sale and anti -
transfer and assignment provisions .
b) Security Agreement - Goods (if applicable) and
applicable UCC Financing Statements.
c) Other as may be required by the lender
Insurance: You shall furnish full insurance coverage on the Property as
required by Lender written by companies satisfactory to
Lender , containing without limitation all risk insurance
coverage reflecting the interest of Lender as mortgagee or
as additional insured, as well as rent loss insurance (if
applicable) in an amount acceptable to Lender .
Other Documents : Lender shall receive such other documents , in form and
substance satisfactory to Lender , as Lender may reasonably
request, including without limitation those specified on the
Checklist.
Costs and
Expenses: You shall pay Lender to all out-of-pocket expenses
including, without limitation, Lender's title, recording,
and escrow charges (and shall pay Lender' s legal fees and
expenses. Legal fees due Lender' s attorney will be paid
from the proceeds of the Credit) . All closing costs and
expenses will be billed subsequent to loan closing and paid
promptly.
•
Tax and Insurance
Premium Deposits: As shall be required and set forth in the Mortgage.
Miscellaneous : A. Lender shall not be required to disburse any portion
of the Credit if it determines that any party
described herein is insolvent at the time of any
requested disbursement, or if any such party has filed
a voluntary petition in bankruptcy or availed itself
of any law for the protect.ion'or benefit of debtors ,
or have had any such petition or action initiated
against any one of them (which is not dismissed within
thirty (30) days of the date of filing) or have made
an assignment for the benefit of creditors , or Lender
2
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may otherwise deem itself insecure,
B. All business accounts applicable to your business and
to the Property shall be established as may be
recommended by Lender.
C. Borrower represents and warrants to Lender, and this
Commitment is made in partial reliance upon Borrower' s
representations and warranties to Lender that Borrower
shall :
1) Attend and actively participate in not less than '
two meetings with representatives from the Elgin
Community College Small Business Development
Center annually , for the purpose of evaluation
of Borrower's business operations and
consultation on matters relating to Borrower's
business operations; and
2) Submit not less than monthly internally prepared
income statements and balance sheets; and
4) Submit monthly bank statements from Borrower's
regular business checking account.
In the event that all of the conditions precedent to the opening of the
loan described herein shall not have been performed on or before April 30,
2000, Lender may, at its option at any time thereafter, terminate this
commitment and all of its obligations hereunder. In the event of such
termination , you shall , nevertheless, pay Lender's service fees, attorneys'
fees to the extent earned, and all loan-related expenses theretofore incurred
by Lender.
The terms of this commitment may not be waived or modified unless such
waiver or modification is expressly stated and specifically agreed to by the
parties hereto in writing. Further, this commitment is personal as to the
parties to whom it is addressed and/or the Borrower named herein and may not
be assigned to or relied on by any third party. This commitment supersedes
any and all prior commitments, agreements , provisions , offers, and statements ,
whether written or oral, made by Lender or anyone acting on its behalf and
represents the entire agreement between the parties.
In the event that Lender fails to perform the obligations of Lender as
set forth in this commitment for any reason whatsoever (other than the right
of Lender to terminate and void this commitment by reason of your failure to
perform in conformity with the terms contained herein) the sole recourse
against Lender shall be the payment of an amount equal to the fees paid to
Lender in accordance with this Commitment, said amount being acknowledged by
you as the total amount of liquidated damages ; you hereby waive the right to
sue for specific performance.
•
By acceptance of this letter, you acknowledge that this letter is issued
at a time when Lender and its counsel have not fully completed their due
diligence investigation, including, without limitation, a full business,
credit, and legal analysis of Borrower, Guarantors , and the transaction
contemplated by this Commitment. As a result of further investigation and
3
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•
analysis by Lender and its counsel , information that Lender is not currently
aware of may be discovered and/or certain impediments to closing may come to
Lender's attention. As a result of such new information and/or impediments ,
Lender may require that the proposed transaction be restructured or, in
Lender' s sole and absolute discretion, that this Commitment be terminated.
To indicate your acceptance hereof , kindly execute the duplicate copy of •
this letter as provided below and return it to Lender no later than April 30,
2000, together with your check in the amount of $50.00 as payment of Lender' s
commitment fee hereunder , which commitment fee shall be deemed fully earned
and nonrefundable upon your acceptance of this commitment and the payment of
which shall be credited against the loan service fee referred to above.
Very truly yours ,-
FOX VALLEY MICRO LOAN FUND,
an Illinois not for profit corporation ,
By:
AGREED TO AND ACCEPTED
this day of
By:
Its:
•
•
• o aworld.com
Integrated Services You Can Wear.
City of Elgin Proposal
-
Mar 08 01 08: O1p Brad Bialas 847-844-8182 p. l
•
ogaworld.com
Integrated Services You Can near.
March 7, 2001
Raymond H. Moller
Director of Economic Development
&Business Services
City of Elgin
150 Dexter Court
Elgin, IL 60120-5555
Mr.Moller,
Based upon our conversation earlier this week, Togaworld.com would like to present
the attached proposal to the City of Elgin. I believe that there can be a very beneficial
relationship between the two entities in the near future. Our goal is to begin the relationship
slowly and develop a comfort level from both sides.
Togaworld.com has already begun to impact the revitalization process of the
downtown area in the following areas:
• Active involvement with the Technology Action Team (Staffing the Booth at the Tech Fair)
• Joining and becoming involved with the Chamber of Commerce
• Relocating to the Downtown area
• Migrating 15 high paying jobs to the area(Expectations to add 40+in next 18 months)
• Highlighting the Elgin area via our regional press coverage
• Working to establish an internship program with local academic institutions
Togaworld.com has an incredibly bright future that will surely prosper over the next
number of years. However,with the current economic status, funding a technology company
brings along with it a number of challenges. We have identified that our model"works"and
that our profitability will come over time. The gap between now and then is our largest issue.
For this reason we are looking to the City of Elgin to assist us in anyway possible. The
following request will allow us to continue to add an additional 5-8 employees over the next
2-4 months. (In addition to the 4 new hires we have made since our relocation to the
downtown area 2 weeks ago). Once we have done that,we are forecasting to have upwards of
40-50 total employees by this time next year. To accomplish this,we need to rent additional
space at our current location. The figures requested will help us to accomplish this and
continue our growth.
Mar 08 01 08: 02p Brad Bialas 847-844-8182 p. 2
17;gaWOrld.COM
Integrated Services You Can Wear.
Togaworld.com City Assistance Proposal
Employee Bonus Program-
During our conversation you had identified the precedence of an Employee/Hiring bonus
that the City has awarded in the past. Togaworld.com would like to propose to be awarded
this same bonus for the employees that we have hired since we have relocated to the
downtown area.
Breakdown—
Start Date Position Salary
11/09/00 Sales Representative $65,000/yr
11/13/00 Vice President/Sales $ 96,000/yr
11/13/00 Sales Representative $65,000/yr
2/1/01 Chief Financial Ofc. $78,000/yr
3/5/01 Production Director $ 60,000/yr
Ray,thank you for considering this proposal. We are excited about the opportunity to
add value to the downtown Elgin area now and into the future. More importantly,we
appreciate the creativity the City has portrayed in discovering ways to assist our growing
organization.
Please contact me once you have reviewed the information and let me know when we
can meet again to discuss our next steps.
Thanks again,
Brad M. Bialas
President/CEO
Togaworld.com
847-697-5213
Mar 08 01 08: 02p Brad Bialas 847-844-8182 p. 3
• MAR-07-01 WED 01:46 PM CITY OF ELGIN/CITY MGR, FAX NO. 18479315610 P. 02
•
•
APPLICATION FOR
• 1h
CITY OF ELGXN .' '
CENTER CITY SPECIAL BUSINESS LOAN PROGRAM
. Date: C;17OS1p(
•
Loan Amount Pequested: $ S-04_00o Total Project Cost: $
Company Name: /c."q c-o'vh
Address : .SCE S. 6r� Vt Sf. _ Sc-' c - ?N (D
Phone: Q`i 7- ( 9 7- Sal
Owner' s Name( s) : a.lc& Jc-ks v A ,r .
Type of Business: �_ - Gc1y/y4ledC� . /SoAe.s (Jis ��'�lau��',ory
Purpose of Loan:
Does this loan represent an addition to a loan previously approved '
for this project? YES p, O
•
If yes, please indicate original amount, date approved and total loan
amount with proposed increment.
vo
Original loan approved:$ 5-0, 000,
Date Approved: `
•Total loan with proposed increment:$_
BREAKDOWN OF PROJECT
AMOUNT - CONTRACTOR DESCRIPTION OF WORK
1. $
2.
3. $_- -
4 S
BUSLOANA.PPL/TEXT081/NEWCENTU.RY111
Mar 08 01 08: 02p Brad Bialas 847-844-8182 p. 4
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MAR-07-01 WED 01:46 PM CITY OF ELGIN/CITY MGR. FAX NO, 18479315610 P. 03
OTHER CONTRACTOR BIDS OBTAINED
DESCRIPTION OF PROPERTY:
(Size & Description)
APPRAISED VALUE: _ •
OWNER IN TITLE:
EXISTING MORTGAGE
ON PROPERTY:
OTHER INFORMATION REQUIRED INITIALLY:
1. Business Year end Financial Statements - last two years .
2 , Business Interim Financial Statement - current year-to-date.
3. Personal Financial Statement - current.
4. Copy of Contractor Estimates.
5. Corporate and/or Personal Tax Returns may be required.
6 . Appraisal of property may he required.
The undersigned applicant hereby certifies that the loan funds
obtained shall be used for the purposes outlined in this application.
DATE Oa 71e/0\ /��0.1aZpr a r Go -rhus., __
Applicant Business
BY:
4.
Owner
Please deliver this completed application to the bank or savings and
loan official of your choice. They will process your credit applica-
tion and submit a loan proposal to the City of Elgin for final
approval .
•
Togaworld.com
Integrated Services You Can Wear,
November 14, 2000
Raymond H. Moller
Director of Economic Development
& Business Services
City of Elgin
150 Dexter Court
Elgin, IL 60120-5555
Mr. Moller,
Based upon our conversation earlier this week, Togaworld.com would like to present
the attached proposal to the City of Elgin. I believe that there can be a very beneficial
relationship between the two entities in the near future. Our goal is to begin the relationship
slowly and develop a comfort level from both sides.
Togaworld.com has already begun to impact the revitalization process of the
downtown area in the following areas:
• Active involvement with the Technology Action Team (Staffing the Booth at the Tech Fair)
• Joining and becoming involved with the Chamber of Commerce
• Relocating to the Downtown area
• Migrating 15 high paying jobs to the area(Expectations to add 40+in next 18 months)
• Highlighting the Elgin area via our regional press coverage
• Working to establish an internship program with local academic institutions
Togaworld.com has an incredibly bright future that will surely prosper over the next
number of years. However, with the current economic status, funding a technology company
brings along with it a number of challenges. We have identified that our model "works" and
that our profitability will come over time. The gap between now and then is our largest issue.
For this reason we are looking to the City of Elgin to assist us in anyway possible. The
following request will allow us to continue to add an additional 5-8 employees over the next
2-4 months. (In addition to the 4 new hires we have made since our relocation to the
downtown area 2 weeks ago). Once we have done that, we are forecasting to have upwards of
40-50 total employees by this time next year. To accomplish this, we need to rent additional
space at our current location. The figures requested will help us to accomplish this and
continue our growth.
Togaworld.com
Integrated Services You Can Wear.
Togaworld.com City Assistance Proposal
Employee Bonus Program -
During our conversation you had identified the precedence of an Employee/ Hiring bonus
that the City has awarded in the past. Togaworld.com would like to propose to be awarded
this same bonus for the employees that we have hired since we have relocated to the
downtown area.
Breakdown —
Name Start Date Position Salary
10/31/00 Graphic Designer $ 12 /hr
11/09/00 Sales Representative $ 65,000 / yr
11/13/00 Vice President/ Sales $ 96,000/ yr
11/13/00 Sales Representative $ 65,000/ yr
Total proposed allocation from the City = $4,000.00
General Financial Assistance— •
As discussed previously, Togaworld.com is in a position to hire additional employees to
assist us in growing our business. Unfortunately, we are lacking the needed funding for the
additional office space required to execute on the staff enhancement. Originally we had
explored subsidized rent as an option for City assistance. However, I believe the lack of
precedence for such a program as well as the adolescence of our company made an
arrangement such as this infeasible. In lieu of this, Togaworld.com would like to begin this
relationship with a more traditional form of assistance. Our proposal is that the city loan
Togaworld.com a total amount of$36,000 to be paid back over 5 years with an interest rate
of 8.5%. We would also like to propose that the city allow Togaworld.com a grace period of
120 days prior to the commencement of payment.
Breakdown —
Monthly Rent allocation (including needed space) - $6,000
Gap financing needed to cover 6 month period = $ 36,000.
ogaworld.com
Integrated Services You Can Wear.
Ray, thank you for considering this proposal. We are excited about the opportunity to
add value to the downtown Elgin area now and into the future. More importantly, we
appreciate the creativity the City has portrayed in discovering ways to assist our growing
organization.
Please contact me once you have reviewed the information and let me know when we
can meet again to discuss our next steps.
Thanks again,
Brad M. Bialas
President/ CEO
Togaworld.corn
847-697-5213
Ogaworld.com
Integrated Services You Can Wear,
Personnel Projections
Togaworld.com will be experiencing extreme growth to our staff over the next 1-
3 years. Being a young company, the first 3 years of our existence will be those that will
requires the largest increase in personnel. This situation historically poses a cash flow
burden on the on the organization during the first year. Below is a breakdown of our
staffing projections along with the pay grades they will reside in.
Pay grades—
A- 100+k/ year--Executives, Top Performing Sales Representative
B- 75-100k/ year—Sales Representatives, Top Developers, Dept Directors
Developers,C- 60-75k/ year—Technicalp , DBA's, Web Architect
D- 35-60k/ year- Accounting, Customer Service, Sales Admin, Mngrs, Gen Office
E- 25-35k/ year— Graphic Designers, Entry Level Developers, Shipping Receiving
F- Hourly ($8-12/hour) —Production (other than Managers and Directors)
Togaworld.com Staffing Projections
1
45 0 ANEW
40 0 . 1
35 0 1
30 / A j
Number of 25
Bi
Employees 20 - ❑C 'il
15e10 0 "'"? 12 r RE
fi
iyx
5 ii j �' A
0 ..YAi ;' .i. .At , E`#
One Two Three
Year/ Pay Grade
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February 21, 2001
Brad M. Bialas and Jason Adair
Togaworld.com, Inc.
28 South Grove
Elgin. IL 60120
Re: Proposed Loan to Togaworld.com, Inc.
Dear Messrs. Bialas and Adair:
You have requested, and Fox Valley Micro Loan Fund, an Illinois not for
profit corporation (Lender) does hereby consent to providing installment term
financing in the amount of the Credit for the purposes of providing working
capital upon the following terms and conditions.
Borrower: Togaworld.com, Inc.
Guarantor: Brad M. Bialas, Jason Adair and Robert Geras shall
personally guaranty payment of all sums due under the
Credit and the performance of all terms and provisions
of all loan documentation.
Amount of Credit: $50,000.00
Term: The Credit shall be evidenced by the Commercial
Promissory Note of the Borrower (Lender' s form)
payable to Lender as follows:
Monthly payouts of $10,000 per month up to $50,000
Maximum. With initial payout of $20,000
5 year term after final disbursement.
Rate: The Commercial Promissory Note will bear interest at
the per annum rate of 15% .
Service fee: Lender shall be entitled to a service fee of $50.00
payable at the time of the initial disbursement of the
Credit, provided that the fully earned commitment fee
payment received upon acceptance of the Commitment as
herein provided shall be credited against such fee.
Preconditions to
Disbursement:
No portion of the Credit shall be disbursed until all
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documentation requirements have been as required by
the.Lender. Borrower must secure participation in the
City of Elgin program that provides interest rate
subsidy.
Collateral : As collateral security for repayment of the Credit,
you shall execute and deliver, or cause to be executed
and delivered to Lender , the following documents (some
of which shall be filed and recorded as required by
Lender's counsel to establish valid first liens in
favor of Lender) :
a) A second mortgage on the Property executed by the
Guarantors which shall contain a waiver of the
statutory right of redemption, due on sale and anti -
transfer and assignment provisions.
b) Security Agreement - Goods (if applicable) and
applicable UCC Financing Statements.
c) Other as may be required by the lender
Insurance: You shall furnish full insurance coverage on the Property as
required by Lender written by companies satisfactory to
Lender, containing without limitation all risk insurance
coverage reflecting the interest of Lender as mortgagee or
as additional insured, as well as rent loss insurance (if
applicable) in an amount acceptable to Lender.
Other Documents: Lender shall receive such other documents, in form and
substance satisfactory to Lender, as Lender may reasonably
request, including without limitation those specified on the
Checklist.
Costs and
Expenses: You shall pay Lender to all out-of-pocket expenses
including, without limitation, Lender's title, recording,
and escrow charges (and shall pay Lender 's legal fees and
expenses. Legal fees due Lender's attorney will be paid
from the proceeds of the Credit) . All closing costs and
expenses will be billed subsequent to loan closing and paid
promptly.
Tax and Insurance
Premium Deposits: As shall be required and set forth in the Mortgage.
Miscellaneous: A. Lender shall not be required to disburse any portion
of the Credit if it determines that any party
described herein is insolvent at the time of any
requested disbursement, or if any such party has filed
a voluntary petition in bankruptcy or availed itself
of any law for the protection'or benefit of debtors,
or have had any such petition or action initiated
against any one of them (which is not dismissed within
thirty (30) days of the date of filing) or have made
an assignment for the benefit of creditors , or Lender
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may otherwise deem itself insecure.
B. All business accounts applicable to your business and
to the Property shall be established as may be
recommended by Lender.
C. Borrower represents and warrants to Lender , and this
Commitment is made in partial reliance upon Borrower' s
representations and warranties to Lender that Borrower
shall :
1) Attend and actively participate in not less than '
two meetings with representatives from the Elgin
Community College Small Business Development
Center annually, for the purpose of evaluation
of Borrower's business operations and
consultation on matters relating to Borrower's
business operations; and
2) Submit not less than monthly internally prepared
income statements and balance sheets; and
4) Submit monthly bank statements from Borrower's
regular business checking account.
In the event that all of the conditions precedent to the opening of the
loan described herein shall not have been performed on or before April 30,
2000, Lender may, at its option at any time thereafter, terminate this
commitment and all of its obligations hereunder. In the event of such
termination, you shall , nevertheless, pay Lender's service fees, attorneys'
fees to the extent earned, and all loan-related expenses theretofore incurred
by Lender.
The terms of this commitment may not be waived or modified unless such
waiver or modification is expressly stated and specifically agreed to by the
parties hereto in writing. Further, this commitment is personal as to the
parties to whom it is addressed and/or the Borrower named herein and may not
be assigned to or relied on by any third party. This commitment supersedes
any and all prior commitments, agreements, provisions, offers, and statements,
whether written or oral , made by Lender or anyone acting on its behalf and
represents the entire agreement between the parties.
In the event that Lender fails to perform the obligations of Lender as
set forth in this commitment for any reason whatsoever (other than the right
of Lender to terminate and void this commitment by reason of your failure to
perform in conformity with the terms contained herein) the sole recourse
against Lender shall be the payment of an amount equal to the fees paid to
Lender in accordance with this Commitment, said amount being acknowledged by
you as the total amount of liquidated damages; you hereby waive the right to
sue for specific performance.
s
By acceptance of this letter, you acknowledge that this letter is issued
at a time when Lender and its counsel have not fully completed their due
diligence investigation, including, without limitation, a full business,
credit, and legal analysis of Borrower, Guarantors, and the transaction
contemplated by this Commitment. As a result of further investigation and
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analysis by Lender and its counsel , information that Lender is not currently
aware of may be discovered and/or certain impediments to closing may come to
Lender' s attention. As a result of such new information and/or impediments,
Lender may require that the proposed transaction be restructured or, in
Lender's sole and absolute discretion, that this Commitment be terminated.
To indicate your acceptance hereof, kindly execute the duplicate copy of
this letter as provided below and return it to Lender no later than April 30,
2000, together with your check in the amount of $50.00 as payment of Lender's
commitment fee hereunder, which commitment fee shall be deemed fully earned
and nonrefundable upon your acceptance of this commitment and the payment of
which shall be credited against the loan service fee referred to above.
Very truly yours,
FOX VALLEY MICRO LOAN FUND,
an Illinois not for profit corporation,
By:
AGREED TO AND ACCEPTED
this day of
By:
Its:
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