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DOYLE DOYLE W Wk 44 "eel Ww,f4 -11?� ZAM 0,PID VV T I DOYLE SAILMAKERS, INC. TIF Plan TAX INCREMENT FINANCING PLAN 1. LOCATION A. Economic Opportunity Area (EOA): SalemEOA B. Municipality: City of Salem C. TIF Zone: i. Map Attachment A— General Location Map Attachment B —Land Use and Zoning Map Attachment C—Parcel Map (property lines, building footprint and all thoroughfares, public right of ways and easements) ii. Description (common and legal) Common Desaiption The proposed TIF Zone is located at 96 Swampscott Road, Unit 8 in the Salem Economic Area (EOA). LegalDesaiption That property situated in Salem in the County of Essex and Commonwealth of Massachusetts described as follows: 96 Swampscott Road, Salem, Massachusetts, Unit 8, described in the UNIT DEED dated September 19, 2006 and filed on September 22, 2006 with the Essex South Registry District of the Land Court as Document Number 471783. The Unit is located in SALEM COMMERCE PARK CONDOMINIUM created by Master Deed dated April 24, 2006 and filed on April 27, 2006 with the Essex South Registry District of the Land Court as Document Number 466707, and noted on Certificate of Title Number C- 205000, as amended by the First Amendment to the Master Deed dated June 2, 2006 and filed on June 13, 2006 with said Registry District as Document Number 468416, and as further amended by the Second Amendment to the Master Deed dated August 1, 2006, and filed on August 4, 2006 with said Registry District as Document Number 470286, and by the Third Amendment to the Master Deed dated September 12, 2006 and filed on September 22, 2006 with said Registry District as Document Number 471780, in accordance with the provisions of G.L. c. 183A. The UNIT contains the AREA listed in the UNIT DEED and is laid out as shown on the plans filed with the Master Deed and to which is affixed a verified statement in the form provided for in G.L. c. 183A, Section 9. iii. Narrative description of TIF Zone, Needs, Problems, and Opportunities The TIF Zone is a 31,000 square foot unit within a 170,000 square foot building that was recently converted to commercial condommiums primarily geared toward smaller industrial and commercial users. Prior to the conversion, the 1 DOYLE SAILMAKERS, INC. TIF Plan building was vacant and deteriorating for over two years. It was difficult to find such a large commercial user for the space. The City worked with different state agencies to try to attract a company to the space without success. The conversion represented an innovative solution to redeveloping the building. The new condominium owners purchased essentially a large space with walls and were requited to invest their own funds in the build-out of their individual space. Doyle Sailmakers, Inc. plans to invest$2,382,000 in the purchase and development of the unit. In addition, they will be investing in new equipment for their expansion into airships estimated at 5101,000. The conversion of the building and the investment the new condominium owners, including Doyle Sailmakers, Inc., creates an opportunity for investment into this industrial corridor of the City and generates more tax dollars, as well as, increased jobs. iv. Property Owners within the propose d zone Robert Doyle R &J Swampsco"Road, LLC (RE Holding Company), 96 Swampscott Rd., Unit 8, Salem, NIA 11. TIME —DURATION OF TIF PLAN AND ZONE DESIGNATION 5 years III.TIF ZONE & ECONOMIC DEVELOPMENT A. Discuss how TIF Zone is poised to create new economic development opportunities The designation of this property as a TIF Zone will create a number of new economic development opportunities. Doyle Sailmakers is investing in a building that has been vacant and deteriorating for over two years. The conversion of the property and interest by companies, like Doyle Sailmakers, led to the redevelopment of this building and will most likely open up opportunities for future development around the site. The City believes that this project will attract interest in Salem, particularly in the Swampscott Road area, as a competitive location for business. If approved, this TIF Plan will demonstrate that the City can and will offer economic development tools to attract business. Success here will invite interest of firms located outside of the City, with an emphasis on smaller commercial and industrial businesses such as Doyle Sailmakers. B. Discuss how TIF Zone will result in a net economic benefit to the local municipality Approving the proposed TIF zone will result in the following net economic benefit to the City of Salem: 2 DOYLE SAILMAKERS, INC. TIF Plan • Generation of$45,600 in ultimate annual tax revenue. An increase of 68% over the current base value. • Relocation of 31 existing permanent full-time jobs to Salem. • Creation of at least 12 permanent full-time jobs in Salem. • job training for entry-level employees. • Relocation of an internationally respected company that will bring visibility to Salem and high-end clientele to Salem hotels, restaurants, and other retail businesses. • Assistance in revitalizing part of a formally abandoned, deteriorating structure. C. Analysis of proposed and potential land uses The project includes the purchase and build-out of approximately 31,000 square feet of space in a 170,000 commercial condominium building. Doyle Saikriakers is moving all of their operations to the space. D. Zoning in TIF Zone Business Park Development (BPD) E. Identify any parcels, public or private, in zone which are confirmed hazardous waste disposal sites, in accordance with Chapter 21 E, MGL N/A F. Analysis of how the land uses are appropriated for anticipated economic development The redevelopment and reuse of 96 Swampscott Road presented a challenge due to the size of the building. It was tough to recruit a company to locate to such a large building with limited highway access. The developer who eventually purchased the abandoned building in early 2006 realized the need for commercial and industrial space for companies looking for under 35,000 square feet of space. They divided the space up based on need and created commercial condominiums. The overall project has been very successful. Doyle Sailmakers is a perfect fit both for the land use and as a part of continued economic development and growth in the city. G. Discuss proximity of TIF Zone to mass transit and to major rail, highway, or other modes of transportation for shipping and delivery The TIF Zone is located approximately a half mile from Route 107/Highland Avenue, a four-lane thoroughfare that connects Salem to Boston. Boston's Logan 3 DOYLE SAILMAKERS, INC. TIE Plan Airport is only 13 miles south of the site and can be reached via Route 107. The site is approximately 4 miles from Route 1-95 and 6 miles to Route 1. Public transportation is also available along Route 107/Highland Ave by the Massachusetts Bay Transportation Authority (MBTA) buses. The MBTA buses provide service daily between the Salem Commuter Rail Station and Haymarket in downtown Boston. The site is located approximately 3.3 miles from the Salem MBTA Commuter Rail Station,which provides service into Boston's North Station in 30 minutes. H. Identify principal commercial and industrial tenants within the TIF Zone Doyle Sailmakers Inc. will occupy the entire unit. IV.TIF ZONE PROJECTS A. Private Projects 1. Proposed R&i Swampscott Road LLC purchased and is renovating approximately 31,000 square feet of space in a 170,000 square foot commercial condominium building (former Atlantic Extrusions). Doyle Saitmakets, Inc. will be relocating their operations from Marblehead. This move will allow the company to consolidate two existing locations to increase efficiency, expand into a new product line (construction of airships), and increase manufacturing capacity to meet a growing market demand for its products. 2. Planned Seeabove 3. Provide documentary evidence of the level of the developer's commitment to construction proposed&required in the TIF project. The company has purchased the unit (unit deed Attachment D) and secured funding commitments (see Attachments E) to construct the project (project budget Attachment F); construction plans have been completed (see Attachments G); and a percentage of the build-out for the project has begun. 4. Budget for proposed project expenditures with supporting data. See Attachment F. 5. Architectural, plans, specs, engineering reports. See Attachment G. 4 DOYLE SAILMAKERS, INC. TIF Plan 6. Letters of commitment from local lending institutions See Attachment D. 7. Participation in other federal, state and local Economic development programs and initiatives The company received equipment and real estate financing through MassDevelopment Industrial Development Bonds. 8. Relevant business plans a. Time schedules for development Properopurebased:September 2006 Build-out:September 2006 —February 2007 Partial move-in:February 19, 2007 Full occupang:March 2007 b. Returns on investment The company is anticipating expanding and growing the business in the new location with the construction of airships. c. Expected Increases in job Creation The expected job growth is 12 full-time permanent jobs in five years. d. Estimated tax revenues based upon increased valuation of the parcel The base value of the condominium is $1,275,969, which is an apportioned value of the entire building at 96 Swampscott Road. The base tax bill is $27,216. The total value of the property after the renovation is projected to be $2,037,900,which is based on 95% of the purchase price plus 50% of the cost of real estate improvements. The increment in value is $761,931. At the end of the TIF Plan the project will generate $45,600 in annual tax revenue. This represents an increase of 68% in tax revenue over the current base value. B. Public Projects 1. Proposed—N/A 2. Planned—N/A 5 DOYLE SAILMAKERS, INC. TIF Plan 3. Budget for proposed project expenditures supporting data—N/A V. FINANCING FOR TIF ZONE PROJECTS A. Anticipated Financing for Private Projects 1. Sources and Amounts for Proposed Projects The company has self-financed all the costs of acquiring and renovating the property. See attached funding commitments (Attachment D). 2. Sources and Amounts for Planned projects Seeabove B. Anticipated Financing for Public Projects N/A C. Detailed projection of costs of public construction N/A D. Will betterment be used to firiance any public-private projects, now or within the proposed life of the TIF plan? No betterment will be used. E. If betterment or Special Assessments are part of the TIF Plan N/A F. Describe how private projects will be financed 1. Evidence of private financing cornmianents See Attachment D (funding commitment letters) 2. Material assumption and requirements See Attachment D (funding commitment letters) and Attachment F (budget for proposed project) VI.TAX INCREMENT FINANCING A. Authorization to use TIF 6 DOYLE SAILMAKERS, INC. TIF Plan The attached City Council Resolution dated March 9, 1995 authorizes the City of Salem to use TIF in the Salem ECA (Attachment H). The City Council will vote on the Resolution authorizing the use of the TIF Plan for Doyle Sailmakers, Inc. on March 22, 2007 and the resolution will be forwarded when executed. B. Amount of proposed tax increment exemptions from property taxes, and applicable criteria The attached spreadsheet (Attachment 1) shows that the City estimates the tax benefit to total approximately$50,412 over five years. C. Maximum percentage of public project costs that can be recovered through betterment or special assessments in heu of the incremental real estate taxes N/A D. TIF Exemption from property taxes 1. Term of exemption: 5 years 2. Calculation The base value of the condominium is $1,275,969,which is an apportioned value of the entire building at 96 Swampscott Road. The base tax bin is $27,216. The total value of the property after the renovation is projected to be $2,037,900, which is based on 95% of the purchase price plus 50% of the cost of real estate improvements. The increment in value is $761,931. The exemption plan works as follows: YEAR COMPANY PAYS I Only base tax bill of$27,216 2 20% of increment, plus base tax 3 40% of increment, plus base tax 4 60% of increment, plus base tax 5 80% of increment, plus base tax 6 Taxed at full value E. Effective date of tax increment exemption July 1, 2007 (Fiscal Year 2008) F. Betterment of special assessments N/A 7 DOYLE SAILMAKERS, INC. TIF Plan VII. APPROVAL OF TAX INCREMENT FINANCING PROJECTS A. Approval Process The City Council was presented with the TIF Plans and corresponding resolutions on February 22, 2007. The Council referred the matter to a Committee that is meeting on Match 19, 2007 to discuss the project. The Council is anticipated to approve the two resolutions accepting the Certified Project Application for the project and allowing the Mayor to enter into a TIF Agreement with the company at their meeting on March 22, 2007. The project will then require approval by the EACC,which is slated to meet to discuss the project on March 29, 2007. B. Person or Board authorized to execute TIF Agreements The Mayor executes the TIF Agreement, upon approval from the City Council. C. Evidence of local approvals of TIF zone Pending City Council approval on Match 22, 2007. See AttachmentJ. D. Evidence of local approvals of TIF plan Pending City Council approval on March 22, 2007. See Attachment K. E. Executed TIF agreements (any and all) Pending City Council approval on March 22, 2007. See Attachment L. F. EACC approval of TlF plan Pending EACC approval on March 29, 2007. 8 CITY OF SALEM, MASSACHUSETrS Kimberley Driscoll Mayor March 12, 2007 Economic Assistance Coordinating Council ATTN: Robert Foley, Program Manager EDIP Massachusetts Office of Business Development One Ashburton Place, Suite 2101 Boston, MA 02108 To the Members of the Economic Assistance Coordinating Council: I am pleased to submit for your review the applications and supporting documentation necessary to designate R& J Swampscott Road, LLC a Certified Project through the Commonwealth's Economic Development Incentive Program(EDIP). R& J Swampscott Road, LLC is the holding company for Doyle Sailmakers, Inc., a leading manufacturer of sails, looking to expand and move their operations to Salem's newest industrial park at 96 Swampscott Road. Shortly after taking office last year, a developer approached me about his purchase of the former Atlantic Extrusions building at 96 Swampscott Road. The 170,000 square foot building had been vacant for over two years, with little interest from companies or developers looking to invest in the property. The developer envisioned redeveloping the property into industrial/commercial condominiums for smaller manufacturing companies. He quickly found interest from local companies looking for space and willing to invest in the property. The building is now home to nine companies, who are investing a great deal in their units. Three of these companies approached the City for assistance, Doyle Sailmakers, being one of them. Doyle Sailmakers, Inc. was established in 1982 in Marblehead, where the company has leased space in the same building for 25 years. They are moving to Salem and purchasing a 3 1,000 square foot unit at 96 Swampscott Road. This move will allow the company to consolidate two existing locations to increase efficiency, expand into a new product line (construction of airships), and increase manufacturing capacity to meet a growing market demand for its products. The company is expanding into the airship field because they believe it is one business that will not go offshore and is a source for entry-level jobs with training. The investment in the purchase and renovation of the unit is anticipated to be $2,382,000. The expectedjob growth is 12 full-time permanent jobs in the next five years. The City is proposing a five-year TIF Agreement for Doyle Sailmakers, Inc. If approved, it will be the first time in nearly six years that the city has used this valuable economic development Salem City Hall—93 Washington Street—Salem, MA 01970-3592 Ph. 978-745-9595 Fax 978-744-9327 tool to promote development in Salem. Projects using this tool in the past have exceeded job creation goals and continue to provide meaningful tax revenue to the City. The financial impact of the project is substantial and will help send the message that we welcome new businesses and encourage economic development in Salem. On February 22, 2007, the project was submitted to the Salem City Council to designate the company as a certified project and endorse a five-year Tax Increment Financing (TIF)plan. The Council is reviewing the project at the Committee level on March 19 and we anticipate a favorable vote on March 22, 2007. The enclosed TIF plan and application for certified project status describe the City's reasons for offering the incentives and the benefits, which the company will bring to Salem. I appreciate your support of our economic development efforts and hope that, once again, you will vote to certify a Salem project. Very truly yours, " �k� Kimberley Driscoll Mayor Salem City Hail—93 Washington Street—Salem, MA 01970-3592 Ph. 978-745-9595 Fax 978-744-9327 130YLF September 28, 2006 Dear Honorable Kimberly Driscoll, As president of Doyle Sailmakers Inc. [ DSI1 I am writing to the City of Salem to notify them of its interest in participating in the MA Economic Development Incentives Program (EDIP). DSI is currently working with the MA Dev. Resource team on a number of initiatives including financing,work force, and training issues DSI is interested in participating with the local community to acquire and train personel as part of these efforts. We've been in business of manufacture of sails since 1982 and plan to continue to do so and to use the new facility in Salem to grow into the airship business. We currently have 33 employees and hope to add 4 to the airship business ASAP and to continue to grow that business until we would have 10 to 12 full time: 2 engineers, I manager, I foreman, and 8 production personnel. We hope the city will agree to assist us in our effort participate in this program. We welcome you to both our existing facility as well as our planned facility in Salem to better understand our goals. I can be reached at: bus. 781-639-1490; Cell 617-510-2099 1 look forward to hearing from you. 7 Re I obert D�oyle;� Pres.Doyle Sailfilakers CC: Peter Milano peter.Milano-sea@state.ma.us Doyle Sailmakers 89 Front St.Marblehead,MA 01945 PH:781-639-1490;Fax 781-639-1497; Email: rdoyle@doyiesails.com: Web: Doylesails.com I � 4 . Certified Project Application —Page I The Massachusetts Economic Development Incentive Program CERTIFIED PROJECT APPLICATION RECEIVED FEB 2 0 2007 APPLICANT INFORMATION DEp r.OF PLANNING& COMMUNITY DEVELOPMENT 1 Name and address of business(es)submitting this application (please list fiscal year end for each business): Doyle Sailmakers, Inc. Fiscal year end is August 31 89 Front Street Marblehead, MA 01945 R & J Swampscott Road LLC 96 Swampscott Road, Unit 8 Salem, MA 01970 2. Name and address of project (if different from above): R & J Swampscott Road LLC Fiscal year end is December 31t 96 Swampscott Road, Unit 8 Salem, MA 01970 3. Location of ETA: Beverly and Salem Regional ETA 4. Location of EOA: Salem 5. Authorization: I/We, (print) Pc)ber A- 00��l le- of the business(es) applying for Certified Project designation, hereby certify that the information within this application is true and accurate, and reflects the project's intentions for job creation and investment. IfVVe understand that the information provided within this application shall be binding for the duration of the project certification. C2�:7 =,� Its 10-7 (Sign�lture) (Yale) (Signature) (Date) (Additional Signatures, if necessary) (Date) Certified Project Application —Page 2 6. Nature and Purpose of Project: Describe briefly the nature and history of the business as well as the specific expansion/growth/relocation plans: the level of new investment (with a breakdown of type of expense: construction, renovation, acquisition of equipment, etc.) and employment levels — both current and projected. Provide time frames for both the projected total investment and job creation. As part of this narrative, please explain why the business is seeking Certified Project designation. Doyle Sailmakers is a well-known international sailmaking business that was started by Robert Doyle in 1982 in Marblehead. Doyle makes sails for boats 6' to 300' and currently has sails on the two most visible yachts in the world, Mirabelia V and the Maltese Falcon. We also produce most of the sails worldwide for the women's keelboat used in the Olympics. Doyle is a very healthy business that needs more space to manufacture.This move will allow the company to consolidate two existing locations to increase efficiency, expand into a new product line (construction of airships), and increase manufacturing capacity to meet a growing market demand for its products. Currently Doyle has 31 employees in Marblehead in two locations. With the move to Salem, there will be an immediate and ongoing need for growth in employment that will benefit the ETA. We will train entry-level employees as there is no preparation in any school system or work experience for sailmaking. As we are all aware manufacturing in many fields is moving offshore. With it go jobs previously available to the residents of our state and region. We are seeking Certified Project designation to help Doyle Sailmakers manufacture in the City of Salem and have the ability to provide job opportunities to the ETA. The cost of the new building location at the Salem Commerce Park is $1,882.000. The projected improvements to the location are in the range of$510,000. The additional piece of equipment required for the airships cost $101,000. The loans Doyle has for this project in the amount of$2,276,400. are projected over 20 years. The build out of the space be .gan in November and is scheduled to be finished for Doyle to move in February 19 Certified Project Application —Page 3 7. Is this business new to Massachusetts? 0 Yes Xo No If no: • Where are the existing Massachusetts facilities? 0 89 Front Street, Marblehead, MA 01945 0 16 Lincoln Avenue, Marblehead, MA 01945 • Will this project require/trigger the closing or consolidation of any Massachusetts facilities? If yes, please explain. • The two leased facilities above will be consolidated into the • new owned facility in Salem. B. Is this project an expansion of an existing business? OX Yes 0 No If yes, check the appropriate box: 0 at existing location El at new location in same municipality X Ll at new location in different municipality 9. Job Creation In order to quality for Certified Project Status, the governing statute and regulations require the creation of new, new, permanent full4ime employees in Massachusetts. On the chart provided (see next page), please fill in the blanks provided. WORK FORCE ANALYSIS AND JOB CREATION PLAN New Jobs: CURRENT JOBS, if any to be TOTAL, New Jobs: New Jobs: New Jobs: New Jobs: New Jobs: Years 6-10 EMPLOYMENT relocated from Projected New Year One Year Two Year Three Year Four Year Five (20__j LEVEL another MA facility Permanent Jobs (2005) (2006) (2007) (2008) (2009) If Applicable Total Employees at Certified Project , Facility in Mass. 0 31 12 4 2 2 2 2 Total Employees in Massachusetts at other sites. 6 # of Employees at Certified Project Location who live in the ETA of the Certified Project 3 #of Permanent Full- Time Employees 30 #of Permanent Part- Time Employees 7 #of Temporary Full- Time Employees #of Temporary Part- Time Employees JOBS BY CLASSIFICATION (11-1 #of Jobs, and verage Wage/S lary. Please feel free to u eyourcorn nV's classification syste #of Management Positions 3 $100,000 #of Professional Positions 4 $56,000 #of Technical Positions 3 $57,000 #of Skilled Positions 27 $17 per hour # of Unskilled Positions Certified Project Application —Page 5 10. Certification for Abandoned Buildings -- Does the proposed project involve the renovation and reuse of an abandoned building? 0 Yes OX No 11 Unsure If yes or unused, please answer the following questions: (a) How long has the building been vacant? (if know, state date) (b) During this period of time, what percentage of the building was vacant and unused? If the percentage varied during this time period, provide information for each change in the percent of vacant space and the applicable time period. 11.Local Employment—What actions will you take to recruit employees from among residents of the ETA? Provide any information, documentation, or studies which demonstrate that: (a) the business has the intention and capacity to achieve the anticipated level of new permanent full4ime jobs for residents of the municipality/Economic Target Area; and Doyle Sailmakers is committed to providing jobs to the ETA. To do this we will work with local agencies, organizations and the Salem High School and Salem State College career offices. We generally advertise in the local newspapers including but not limited to the Salem News, Beverly Citizen, Danvers Herald, Peabody weekly newspaper. Due to space and labor limitations in 2006 Doyle Sailmakers had to contract out $650,000 worth of sails. This represents 6 sailmakers worth of labor. The airships that Doyle has a contract to build will require 4 full time people. Doyle is currently contracting out $75,000 service work and not pursuing more due to space and labor limitations. Plan is to increase service by $250,000 and do all the service in house. This represents an additional 2.5 people. The preceding does not reflect speculative ventures but known work that we have been unable to accept due to existing space and labor limitations. The labor that is required for all of the above is entry-level labor that is not likely to commute any distance. The economic condition of the luxury sailing industry is quite healthy at the moment. The average age of the sailor is increasing. This has the positive effect that the Certified Project Application —Page 6 clientele requires and is willing to pay for more services. The economic condition of the airship industry is that the supply is not keeping up with the demand. Doyle Sailmakers has made the commitment of a larger manufacturing space in Salem in order to create full time jobs that we feel will benefit the people of the ETA. (b) taking into consideration existing economic conditions, the proposed project is likely to succeed in creating and retaining the anticipated level of new permanent full-time jobs for residents of the municipality/Economic Target Area. 12. Affirmative Action -- Does the business have an Affirmative Action/Equal Employment Opportunity Plan or Statement? El X Yes El No If yes, please attach a copy. — Doyle Sailmaker's s Code of Conduct is attached, it includes our Equal Opportunity Statement. If no, describe the business' hiring policies and practices. 13. Agreement Between the Business and Area Banks — Describe briefly the business' local banking relationship(s), if any. Does the institution with which the business banks participate in the Massachusetts Capital Access Program, which is designed to commit a portion of the business' deposits to fund loans to local businesses? Doyle Sailmakers, Inc. and R&J Swampscott LLC bank with Danversbank who participates in the Massachusetts Capital Access Program. 14. Economic Benefits of Project Certification -- Provide a description of the economic benefits that are anticipated for the business and the project, if the project is certified. For example, describe the anticipated state and local tax benefits, municipal road or infrastructure improvements, assistance for local job training programs, the impact of local permit streamlining and other benefits anticipated if the project is certified. Also, provide any information, documentation or studies demonstrating any additional benefits (i.e., reduction of blight, reuse of abandoned buildings, clean up of contaminated property,job training, provision of day care, any contributions to the community etc.) likely to accrue to the area as a result of Certified Project designation. Doyle Sailmakers' plan for the newly acquired space on 96 Swampscott Rd. is to increase our production of sails and sail repair and to enter the production of large Certified Project Application —Page 7 lighter than air ships. We will be increasing our workforce to achieve this end. Our current problem is that we have a very experienced work force, and thus a very expensive work force. We need to balance this work force with entry-level workers that we will train. We have already invested in two key employees being trained to train others in the very exacting and demanding airship assembly process. Doyle Sailmakers has considered space in Salem in the past but the high commercial tax rate in Salem has always been the back breaker. However, this time Ken Goode and Ben Wong were very helpful in pointing out the economic incentives available to business. With this, coupled with our partial MA Development Finance Agency Revenue bond, we made the decision to go forward with new space in Salem. We did not get the 85% financing for which we had hoped, but only 65%. This reduced amount of financing and costs of the build out is making the move much more financially challenging than originally planned. It should be important for the state of Massachusetts as well as the municipality of Salem to retain manufacturing. The cost to manufacture in Massachusetts continues to escalate and as a result companies are reducing manufacturing jobs by sending work offshore. Doyle Sailmakers has made a commitment to expand our manufacturing business and provide more jobs for the people of Massachusetts. We are expanding into the airship field because we believe that is one business that will not go offshore and is a source for entry-level jobs with training. We would appreciate any help that the Mass Economic Development Incentive Program can provide. As a historical note of interest to the City of Salem, the first sail loft in America was located on Derby Wharf. Doyle Sailmakers is seeking to restore a tradition of sailmaking to the city. Doyle is an internationally respected company that will bring visibility to the City of Salem. Hotels, restaurants and other retail businesses will be enhanced by Doyle being located in Salem as our high-end clientele will find the charm of Salem irresistible. Certified Project Application —Page 8 SPECIAL REQUIREMENTS FOR REAL ESTATE PROJECTS I Will the business own or leaseirent the facility? XEI Own Ll Lease/Rent If leasing/renting, please identify the developer/landlord, and state who will be the taxpayer of record for the purpose of paying local real estate taxes. If owning, will the business fully occupy the space? X0 Yes 0 No If no, does the business intend to lease/rent the remaining space? 2. Describe how the various tax benefits and other economic incentives that will result from Cerfified Project designation will be allocated among the business(es) developing the project (i.e., a developer or landlord) and the business(es) intending to purchase, lease or rent space at the facility (i.e., tenant or tenants). The 5% Economic Opportunity Credit will be applied to the cost of qualified property as follows: R&J Swampscott Road LLC— Building & Improvements estimated @ $2,382,000 Doyle Sailmaker, Inc. —Cost of new equipment estimated @ $101,000 The savings generated from the tax exemption schedule on fut ure incremental real property taxes will benefit R & J Swampscott Road LLC, the entity holding the property. SUPPLEMENTAL INFORMATION 1. Name(s)of the business(es) intending to take advantage of the state tax incentives: Business Name: Doyle Sailmakers, Inc. Federal Employer Identification #: 04-2765012 Address: 89 Front Street, Marblehead, MA 01945 Phone: 781-639-1490 Fax: 781-639-1497 Contact Person: Robbie Doyle Type of Organization (check all which applies): F_ X Corporation 0 For-Profit OS-Corp 0 Non-profit 0 Business Trust 0 Partnership E, General Partnership [I Limited Partnership 0 Individual Level of Interest: X El 5% Investment Tax Credit 0 10%Abandoned Building Tax Deduction (if applicable) Certified Project Application —Page 9 Li Local real estate tax incentive beneficiary 2nd Business Name (if applicable): R &J Swampscott Road LLC Federal Employer Identification #: 51-0600068 Address: 96 Swampscott Road LLC, Unit 8 Salem, MA 01970 Phone: 781-639-1490 Fax: 781-639-1497 Contact Person: Robert Doyle Type of Organization (check all which applies): 0 Corporation 0 For-Profit LIS-Corp 0 Non-profit 0 Business Trust E X Partnership D General Partnership 0 Limited Partnership 0 Individual Level of Interest: XD 5% Investment Tax Credit [1 10% Abandoned Building Tax Deduction (if applicable) XLI Local real estate tax incentive beneficiary there are more than two businesses intending to take advantage of these state tax incentives associated wtth this project, please provide the above information for all such businesses. 2. A— If a corporation, please list the names and addresses of the officers and directors— of said corporation, and any person and/or corporation with a financial interest of five percent or greater in said corporation. B — If a partnership, please list the names and addresses of all partners, and include the proportionate share owned by each partner. C — If a business trust, please name all members and beneficiaries of said trust. Corporation = Doyle Sailmakers, Inc. Name and Address of officers and directors: • Robert Doyle, 43 Norman Street, Marblehead, MA • Janet Doyle, 43 Norman Street, Marblehead, MA • Sam Byrne, Bridge Street, Manchester, MA • Gary Gregory, Millpond Road, Marblehead, MA Person or corporation with greater than five percent interest • Robert Doyle • Gary Gregory Partnership = R&J Swampscott Road LLC Name and Addresses of Members • Robert Doyle, 43 Norman Street, Marblehead, MA — 50% interest • Janet Doyle, 43 Norman Street, Marblehead, MA — 50% interest Certified Project Application —Page 10 3. Please provide the name, address, phone number and contact person for any organizations Which may own or control the applicant organization, or who are affiliated with the applicant business organization. Please see above relationship between Doyle Sailmakers, Inc. and R&J Swampscott Road, LLC 4. Certificate of Good Standing — Please provide proof of good tax standing in the Commonwealth of Massachusetts via a Certificate of Good Standing, which is a letter issued by the Massachusetts Department of Revenue. To obtain a Certificate of Good Standing, please see Attachment I of this application. Copy of Certificate is attached. J � 0,9/&y th September 6, 2006 OM rr IVIAY CONCERN: I hereby certify that a certificate of organization of a Limited Liability Company was this office by R &J SWAMPSCOTT ROAD LLC ance with the provisions of Massachusetts General Laws Chapter 156C on September I further certify that said Limited Liability Company has filed all annual reports due and fees with respect to such reports; that said Limited Liability Company has not filed a ,ate of cancellation or withdrawal; and th at, said Limited Liability Company is in good g,with this office. -also certify that.the names of all managers listed in the most recent filing are: ROBERT E,JANET DOYLE I ftirther certify, the names of all persons authorized to execute documents filed with this and listed in the most recent filing are: ROBERT E. DOYLE, JANE,T DOYLE .71le names of all persons authorized to act with respect to real property listed in the most g are: ROBERT E. DOYLE,JANE T DOYLE In testimony of which, I have hereunto affixed the Great Sea] of the Commonwealth on the date first above written. Secretary of the Commonwealth 3 09 21/2006 12:43 FAX 19002/002 Massachusefts partment Revenue PO BOX 7010 BOSTON, VA 02204 LeBOVIDGE.COMMISSIONER 'NEILL,BUREAU CHIEF ROBERT 0 Notice: 80619 'DOYLE SAILMAKERS, INC. TIP ID: 042765012 9 FRONT STREET Date: 9i2l/06 MARBLEHEAD, MA. 01945 BureaW Certificate Unit iA. CERTIFICATE OF GOOD STANDING AND/OR TAX COMPLIANCE The Commissioner of Revenue certifies as of the above date, that (hit above named individual or entity is in compliance with its tax obligations payable under M.G.L..c.62C,including rg corporation excise, sales and use taxes, sales tax on meals,wthholcing taxes,toom occupancy 1.4 excise and personal income taxes,with the following exceptions. This Certificate certifies that individual taxpayers are in compliance with income tax obligations and any sales and use taxes,sales tax on meals,withholding taxes,and/or room occupancy taxes related to a sole proprietorship. Persons deemed responsible tor the payment of these taxes on behalf of a corporation, partnership or other business entity may not use our automated process to obtain a certificate. This certificate does not certify that the entity's standing as to taxes such as unemployment insurance administered by agencies other than the Department of Revenue, or taxes under any Ilowing taxes must submit a ,other provisions of law. Taxpayers required to collect or remit the 10 5eparate requeV to certify compliance:Alcoholic Beverage Excise, Cigarette Excise,Sales Tax on Boats, International Fuels Tax Agreement.Smokeless Tobacco or Ferry Embarkation. �THIS IS NOT A WAIVER OF LIEN ISSUED UNDER GENERAL LAWS, CHAPTER 62C, ECTION 52. Very Irtily yours, tl P'i Robert O'Neill, Bureau Chief CM 0 G.d slillw tow 8061 a 'T "Due Diligence Letter" Doyle Sailmakers, Inc. Doyle Sailmakers, Inc. is a manufacturer of sails, established in 1982 by Robert Doyle in Marblehead Massachusetts where the company has leased space in the same building on the third floor at 89 Front Street for 25 years. As the business grew an additional space was leased at 16 Lincoln Avenue, also in Marblehead. Doyle Sailmakers is in the business of servicing sails and producing new sails for boats from 6' to 300'. Doyle is one of the most respected names in sailmaking in the world with over fifty affiliated lofts in over twenty different countries. Currently Doyle has sails on the two largest privately owned sailing yachts in the world that brings a lot of visibility to the company. With combined loft space of approximately 19,000 square feet between the two leased buildings Doyle has been looking to expand for the past five years. Parking in down town Marblehead is limited. Having manufacturing space on a third floor is not very convenient. Having two different facilities in the same town is not cost effective. Five years ago the search began.for a larger, permanent space in Marblehead with the following characteristics: Approximately 30,000+ square feet of open space to allow for continued growth in the sail manufacturing and servicing business as well as entry into a new field of manufacturing, that being lighter than air ships. Had to be first floor. A site that was"for sale" as opposed to"for lease". No cornmercial/industrial sites that met the above requirements were found available in Marblehead during the last five years. The company began to look to neighboring cities/towns. The company became aware of the industrial property at 96 Swampscott Road in Salem in the summer of 2006. After much consideration and inspection it was deemed that the 32,000 square feet of basically open space met the company's requirements for expansion. With the help of state agencies for funding of loans for Unit 8 as well as the build out, an offer to buy was made and papers passed in September 2006. The build out began in October and will be completed by the end of February 2007 at which time Doyle Sailmakers will take occupancy of its new space. L Robert Doyle, President and Founder of Doyle Sailmakers, Inc., hereby certify that this statement is true and accurate. lc-� Q ua; 1 C)7 R&eg7li—Doyle Date Mimi Michaud From: Kelly Hurley Sent: Monday, February 05, 2007 11:35 AM To: Mimi Michaud Subject: code of conduct CODE OF CONDUCT 1. CODE in any organization such as ours,it is necessary to set down rules governing conduct and procedures to ensure smooth running of the Company. Any conduct which threatens personal health,well-being or security of employees,or which endangers plant, property or p roduct is outside our accepted behavior. 2. GENERALCONDUCT All employees are expected to maintain a high standard of conduct and performance relating to the operational requirements and reputation of the Company. This standard is to be maintained at all times while engaged on Company business so as to avoid bringing the Company into disrepute. The following indicates the Company position on a number of such standards: 2.1 PUBLIC RELATIONS Your future with the Company,your security and your promotion depends on the continuing prosperity of the Company. Success however, is not achieved automatically, it must be worked for. All employees are expected therefore to act in such a way as to maintain the reputation of the Company. 2.2 EQUAL EMPLOYMENT OPPORTUNITIES Doyle Sailmakers, Inc. is an Equal Opportunity Employer. This means that the company will extend equal opportunity to all individuals without regard for race, religion, color, sex, national origin, age, disability, handicaps or veteran status. This policy affirms Doyle Sailmakers' commitment to the principles of fair employment and the elimination of all vestiges of discriminatory practices that might exist. The company encourages all employees to take advantage of opportunities for promotion as they occur. 2.3 SEXUAL HARASSMENT Doyle Sailmakers will not, under any circumstances, condone or tolerate conduct that may constitute sexual harassment on the part of its management, supervisors or non-management personnel. It is our policy that all employees have the right to work in an environment free from any type of illegal discrimination, including sexual harassment.Any employee found to have engaged in such conduct will be subject to immediate discipline up to and including discharge. Any employee found to be engaged in the conduct of sexual harassment will be subject to immediate discipline up to and including discharge. 1 Sexual harassment is defined as: i. Making submission to unwelcome sexual advances or requests for sexual favors a term or condition of employment; 2. Basing an employment decision on submission or rejection by an employee of unwelcome sexual advances, requests for sexual favors or verbal or physical contact of a sexual nature; 3. Creating an intimidating,hostile or offensive working environment or atmosphere either by a) verbal actions,including calling employees by terms of endearment; using vulgar or demeaning language; or b) physical conduct that interferes with an employee's work performance. Doyle Sailmakers encourages healthy fraternization among its employees; however,employees, especially management and supervisory employees, must be sensitive to acts of conduct that may be considered offensive by fellow employees and must refrain from engaging in such conduct. it is also expressly prohibited for an employee to retaliate against employees who bring sexual harassment charges or assist in investigating charges. Retaliation is a violation of this policy and may result in discipline, up to and including termination. No employee will be discriminated against or discharged because of bringing or assisting in the investigation of a complaint of sexual harassment. 2.4 SAFETY& SECURITY Safety is a joint venture at Doyle Sailmakers. Doyle Sailmakers provides a clean, hazard free, healthy, safe environment in which to work in accordance with the Occupational Safety and Health Act Of 1970. As an employee,you are expected to take an active part in maintaining this environment.You should observe all posted safety rules, adhere to all safety instructions provided by your supervisor and use safety equipment where required.Your work place should be kept neat, clean and orderly. All safety equipment will be provided by Doyle Sailmakers, and employees will be responsible for the reasonable upkeep Of this equipment.Any problems with or defects in equipment should be reported immediately to management. As an employee,you have a duty to comply with the safety rules of Doyle Sailmakers, assist in maintaining the hazard free environment,to report any accidents or injuries - including any breaches of safety - and to report any unsafe equipment,working condition, process or procedure, at once to a supervisor. Employees may report safety violations or injuries anonymously to the Safety Officer,if they , are not the injured or violating party. NO EMPLOYEE WILL BE PUNISHED OR REPRIMANDED FOR REPORTING SAFETY VIOLATIONS OR HAZARDS. However, any deliberate or ongoing safety violation, or creation of hazard, by an employee will be dealt with through disciplinary action by Doyle Sailmakers, up to and including termination. Employees who are injured on the job at Doyle Sailmakers are covered by Worker's Compensation Insurance. It is your responsibility to immediately notify your immediate supervisor- or in the absence of your supervisor, the next available supervisor- of any injuries you sustain while on the job at Doyle Sailmakers. 2 This supervisor will notify your personnel representative.The company encourages injured employees to seek immediate medical attention.All medical expenses related to the treatment of an injury, sustained on the job, are paid in full direct to the medical providers.After a specified waiting period,you are also eligible for disability payments set forth by state law, where necessary. The Worker's Compensation plan is administered by a separate insurance company who win be notified by your personnel representative.You will be contacted by a representative of the administering company. information on the current company administering this plan will be provided to you by your personnel representative and is available on posters displayed in your work area.Additional information on Worker's Compensation Insurance is available through the Accounting office. 2.5 LOSSCONTROL All incidents or accidents involving loss or damage to Company property must be reported immediately to the supervisor concerned. 2.6 PERFORMANCE OF DUTIES Employee's attitudes to work and performance of duties are to be of a consistently high standard. The Company's standard procedures for all jobs must be followed to ensure integrity of service or result, quality of performance and product and timeliness of completion. In particular, the Company's procedures of accounting, contract administration and quality assurance must be followed. 2.7 ABSENCE/TARDINESS Employees who cannot attend work because of personal illness or emergency are to notify their manager or supervisor as soon as possible on the day of absence. All other absences must have prior approval of the manager or supervisor. A medical certificate will be required. Tardiness will not be tolerated. If an employee is late for work with frequency he/she will be dismissed. Productivity amongst the group is affected by each person's promptness. 2.8 PERSONALAPPEARANCE Personal appearance is a matter of Employee's own personal taste and common sense,but the Company does expect employees to look neat and dress appropriately for their jobs. Where protective clothing and/or equipment is issued, it must be worn/used. 2.9 SECONDARY EMPLOYMENT AN D COMMERCIAL INTERESTS The company has no objection to Employees taking on secondary employment,being self- employed, or involved in other commercial activities providing: a) Prior consent&knowledge of the employee's manager has been obtained, b) The secondary employment does not adversely affect the performance of duties, c) The Company has first call on employee's services, d) Company property, facilities and information are not used in activities that are not connected with Company business interests, d) The work takes place entirely outside employee's working hours with the 3 Company, d) There is no possible conflict of interest or activities between the Company and those with whom it does business, g) Company employees and members of their families should not accept gifts and favors from any source that could be seen as influencing a business relationship. 2.10 SMOKING Doyle Sailmakers endeavors to provide a healthy environment,therefore prohibits any form of tobacco consumed in company buildings.Additionally, no smoking is allowed within ten (1o) feet of exterior entranceways. Smoking breaks are to be taken at the two set break periods or at lunch,no other time is acceptable. 2.11 ANTI SUBSTANCE ABUSE Doyle Sailmakers takes seriously the problem of drug and alcohol abuse,and is committed to provide a substance abuse free work place for its employees.This policy applies to all employees of Doyle Sailmakers,without exception, including part-time and temporary employees. No employee is allowed to consume, possess, sell or purchase any alcoholic beverage on any property owned by or leased on behalf of Doyle Sailmakers, or in any vehicle owned or leased on behalf of Doyle Sailmakers. No employee may use, possess, sell,transfer or purchase any drug or other controlled substance on any property owned by or leased on behalf of Doyle Sailmakers, or in any vehicle owned or leased on behalf of Doyle Sailmakers. Exceptions are aspirin or ibuprofen based products and legal drugs that have been prescribed to that employee,which are being used in the manner prescribed. Doyle Sailmakers will not tolerate employees who report for duty while impaired by use of alcoholic beverages or drugs. All employees should report evidence of alcohol or drug abuse to a supervisor or a personnel representative immediately. In cases where the use of alcohol or drugs pose an imminent threat to the safety of persons or property,an employee must report the violation. Failure to do so could result in disciplinary action for the non-reporting employee. 2.12 CONFIDENTIALITY Any confidential information including trade secrets for example relating to business connections and technical information or processes,clients or suppliers lists of private affairs acquired by an employee in the course of employment following the cessation of employment must remain confidential. Kelly Hurley Doyle Sailmakers 89 Front Street Marblehead, MA 01945 Tel 781.639.1490 Fax 781.639.1497 www.doyiesails.com 4 CITY OF SALEM, MASSACHUSETrS Kimberley Driscoll Mayor March 12, 2007 Economic Assistance Coordinating Council ATTN: Robert Foley, Program Manager EDIP Massachusetts Office of Business Development One Ashburton Place, Suite 2 101 Boston, MA 02108 To the Members of the Economic Assistance Coordinating Council: I am pleased to submit for your review the applications and supporting documentation necessary to designate R & J Swampscott Road, LLC a Certified Project through the Commonwealth's Economic Development Incentive Program(EDIP). R& J Swampscott Road, LLC is the holding company for Doyle Sailmakers, Inc., a leading manufacturer of sails, looking to expand and move their operations to Salem's newest industrial park at 96 Swampscott Road. Shortly after taking office last year, a developer approached me about his purchase of the former Atlantic Extrusions building at 96 Swampscott Road. The 170,000 square foot building had been vacant for over two years, with little interest from companies or developers looking to invest in the property. The developer envisioned redeveloping the property into industrial/commercial condominiums for smaller manufacturing companies. He quickly found interest from local companies looking for space and willing to invest in the property. The building is now home to nine companies, who are investing a great deal in their units. Three of these companies approached the City for assistance, Doyle Sailmakers, being one of them. Doyle Sailmakers, Inc. was established in 1982 in Marblehead, where the company has leased space in the same building for 25 years. They are moving to Salem and purchasing a 3 1,000 square foot unit at 96 Swampscott Road. This move will allow the company to consolidate two existing locations to increase efficiency, expand into a new product line (construction of airships), and increase manufacturing capacity to meet a growing market demand for its products. The company is expanding into the airship field because they believe it is one business that will not go offshore and is a source for entry-level jobs with training. The investment in the purchase and renovation of the unit is anticipated to be $2,382,000. The expectedjob growth is 12 full-time permanentjobs in the next five years. The City is proposing a five-year TIF Agreement for Doyle Sailmakers, Inc. If approved, it will be the first time in nearly six years that the city has used this valuable economic development Salem City Hall —93 Washington Street—Salem, MA 01970-3592 Ph. 978-745-9595 Fax 978-744-9327 tool to promote development in Salem. Projects using this tool in the past have exceeded job creation goals and continue to provide meaningful tax revenue to the City. The financial impact of the project is substantial and will help send the message that we welcome new businesses and encourage economic development in Salem. On February 22, 2007, the project was submitted to the Salem City Council to designate the company as a certified project and endorse a five-year Tax Increment Financing (TIF) plan. The Council is reviewing the project at the Committee level on March 19 and we anticipate a favorable vote on March 22, 2007. The enclosed TIF plan and application for certified project status describe the City's reasons for offering the incentives and the benefits, which the company will bring to Salem. I appreciate your support of our economic development efforts and hope that, once again, you will vote to certify a Salem project. Very truly yours, 44Aot Kimberley Driscoll Mayor Salem City Hall—93 Washington Street—Salem, MA 01970-3592 Ph. 978-745-9595 Fax 978-744-9327 o 13VLE September 28,2006 Dew Honorable Kimberly Driscoll, As president of Doyle Sailmakcrs Inc. [DSIJ I am writing to the City of Salem to notify them of its interest in participating in the MA Economic Development incentives Program(EDIP). DSI is currently working with the MA Dcv. Resource team on a number of initiatives including financing,work force, and training issues DSI is interested in participating with the local community to acquire and train personel as part of these efforts. We've been in business of manufacture of sails since 1982 and plan to continue to do so and to use the new facility in Salem to grow into the airship business. We currently have 33 employees and hope to add 4 to the airship business ASAP and to continue to grow that business until we would It ave 10 to 12 full time: 2 engineers, I manager, I foreman, and 8 production personnel We hope the city will agree to assist us in our effort participate in this progTam. We welcome you to both our existing facility as well as our planned facility in Salem to better understand our goals. I can be reached at: bus. 781-639-1490; Cell 617-510-2099 1 look forward to hearing from you. Reg*WWI!Y Aobert E. Doyle;� Pres.Doyle Sailinakers CC: Peter Milano peter.Milano-sea@state.maus Doyle Sailmakers 89 Front St.Marblehead,MA01945 PH:781-639-1490;Fax 781-639-1497; Email: rdoyle@doyiesails.com:Web: Doylesails.com Certified Project Application —Page I The Massachusetts Economic Development Incentive Program CERTIFIED PROJECT APPLICATION RECEIVED FEB 2 0 2007 APPLICANT INFORMATION DEP`r OF PLANNING& GrM"ffY MEVELOPMENT I Name and address of business(es)submitting this application (please list fiscal year end for each business): Doyle Sailmakers, Inc. Fiscal year end is August 31 st 89 Front Street Marblehead, MA 01945 R & J Swampscott Road LLC 96 Swampscott Road, Unit 8 Salem, MA 01970 2. Name and address of project(if different from above): R & J Swampscott Road LLC Fiscal year end is December 31't 96 Swampscott Road, Unit 8 Salem, MA 01970 3. Location of ETA: Beverly and Salem Regional ETA 4. Location of EOA: Salem S. Authorization: I/We, (print) Pobcr-ir noNle- of the business(es) applying for Certified Project desig on, hereby certify that the information within this application is true and accurate, and reflects the project's intentions for job creation and investment. I/We understand that the information provided within this application shall be binding for the duration of the project certification. C�� �Q I i (Sigri`kure) (Yale) (Signature) (Date) (Additional Signatures, if necessary) (Date) Certified Project Application —Page 2 6. Nature and Purpose of Project: Describe briefly the nature and history of the business as well as the specific expansion/growth/relocation plans: the level of new investment (with a breakdown of type of expense: construction, renovation, acquisition of equipment, etc.) and employment levels — both current and projected. Provide time frames for both the projected total investment and job creation. As part of this narrative, please explain why the business is seeking. Certified Project designation. Doyle Sailmakers; is a well-known international sailmaking business that was started by Robert Doyle in 1982 in Marblehead. Doyle makes sails for boats 6' to 300' and currently has sails on the two most visible yachts in the wodd, Mirabella V and the Maltese Falcon. We also produce most of the sails woddwide for the women's keelboat used in the Olympics. Doyle is a very healthy business that needs more space to manufacture.This move will allow the company to consolidate two existing locations to increase efficiency, expand into a new product line (construction of airships), and increase manufacturing capacity to meet a growing market demand for its products. Currently Doyle has 31 employees in Marblehead in two locabons. With the move to Salem, there will be an immediate and ongoing need for growth in employment that will benefit the ETA. We will train entry-level employees as there is no preparation in any school system or work experience for sailmaking. As we are all aware manufacturing in many fields is moving offshore. With it go jobs previously available to the residents of our state and region. We are seeking Certified Project designation to help Doyle Sailmakers; manufacture in the City of Salem and have the ability to provide job opportunities to the ETA. The cost of the new building location at the Salem Commerce Park is $1,882.000. The projected improvements to the location are in the range of$510,000. The additional piece of equipment required for the airships cost $101,000. The loans Doyle has for this project in the amount of$2,276,400. are projected over 20 years. The build out of the space be ,aan in November and is scheduled to be finished for Doyle to move in February 19 Certified Project Application —Page 3 7. Is this business new to Massachusetts? 0 Yes XE No If no: 0 Where are the existing Massachusetts facilities? & 89 Front Street, Marblehead, MA 01945 0 16 Lincoln Avenue, Marblehead, MA 01945 0 Will this project require/trigger the closing or consolidation of any Massachusetts facilities? If yes, please explain. • The two leased facilities above will be consolidated into the • new owned facility in Salem. 8. Is this project an expansion of an existing business? r.7X Yes Ei No If yes, check the appropriate box: 0 at existing location 1i at new location in same municipality X El at new location in different municipality 9. Job Creation In order to quaiify for Certified Project Status, the governing statute and regulations require the creation of new, new, permanent full-time employees in Massachusetts. On the chart provided (see next page), please fill in the blanks provided. WORK FORCE ANALYSIS AND JOB CREATION PLAN New Jobs: CURRENT JOBS, if any to be TOTAL, New Jobs: New Jobs: New Jobs: New Jobs: New Jobs: Years 6-10 EMPLOYMENT relocated from Projected New Year One Year Two Year Three Year Four Year Five (20_--) LEVEL another MA facility Permanent Jobs (2005) (2006) (2007) (2008) (2009) If Applicable Total Employees at Certified Project Facility in Mass. 0 31 12 4 2 2 2 2 Total Employees in Massachusetts at other sites. 6 #of Employees at Certified Project Location who live in - the ETA of the Certified Project 3 #of Permanent Full- Time Employees 30 #of Permanent Part- Time Employees 7 #of Temporary Full- Time Employees #of Temporary Part- Time Employees JOBS BY CLASSIFICATION (Li #of Jobs, and verage Wage/S lary. Please feel free to u a your com ny's classification syste #of Management Positions 3 $100,000 #of Professional Positions 4 $56,000 #of Technical Positions 3 $57,000 #of Skilled Positions 27 $17 per hour #of Unskilled Positions Certified Project Application —Page 5 10. Certification for Abandoned Buildings — Does the proposed project involve the renovation and reuse of an abandoned building? 11 Yes E-X No El Unsure If yes or unused, please answer the following questions: (a) How long has the building been vacant? (if know, state date) (b) During this period of time, what percentage of the building was vacant and unused? If the percentage varied during this time period, provide information for each change in the percent of vacant space and the applicable time period. 11. Local Employment—What actions will you take to recruit employees from among residents of the ETA? Provide any information, documentation, or studies which demonstrate that: (a) the business has the intention and capacity to achieve the anticipated level of new permanent full-time jobs for residents of the municipality/Economic Target Area; and Doyle Sailmakers is committed to providing jobs to the ETA. To do this we will work with local agencies, organizations and the Salem High School and Salem State College career offices. We generally advertise in the local newspapers including but not limited to the Salem News, Beverly Citizen, Danvers Herald, Peabody weekly newspaper. Due to space and labor limitations in 2006 Doyle Sailmakers had to contract out $650,000 worth of sails. This represents 6 sailmakers worth of labor. The airships that Doyle has a contract to build will require 4 full time people. Doyle is currently contracting out $75,000 service work and not pursuing more due to space and labor limitations. Plan is to increase service by $250,000 and do all the service in house. This represents an additional 2.5 people. The preceding does not reflect speculative ventures but known work that we have been unable to accept due to existing space and labor limitations. The labor that is required for all of the above is entry-level labor that is not likely to commute any distance. The economic condition of the luxury sailing industry is quite healthy at the moment. The average age of the sailor is increasing. This has the positive effect that the Certified Project Application —Page 6 clientele requires and is willing to pay for more services. The economic condition of the airship industry is that the supply is not keeping up with the demand. Doyle Sailmakers has made the commitment of a larger manufacturing space in Salem in order to create full time jobs that we feel will benefit the people of the ETA. (b) taking into consideration existing economic conditions, the proposed project is likely to succeed in creating and retaining the anticipated level of new permanent full-time jobs for residents of the municipality/Economic Target Area. 12. Affirmative Action — Does the business have an Affirmative Action/Equal Employment Opportunity Plan or Statement? 0 X Yes o N o If yes, please attach a copy. —Doyle Sailmaker's s Code of Conduct is attached, it includes our Equal Opportunity Statement. If no, describe the business' hiring policies and practices. 13. Agreement Between the Business and Area Banks — Describe briefly the business' local banking relationship(s), if any. Does the institution with which the business banks participate in the Massachusetts Capital Access Program, which is designed to commit a portion of the business' deposits to fund loans to local businesses? Doyle Sailmakers, Inc. and R&J Swampscott LLC bank with Danversbank who participates in the Massachusetts Capital Access Program. 14. Economic Benefits of Project Certification — Provide a description of the economic benefits that are anticipated for the business and the project, if the project is certified. For example, describe the anticipated state and local tax benefits, municipal road or infrastructure improvements, assistance for local job training programs, the impact of local permit streamlining and other benefits anticipated if the project is certified. Also, provide any information, documentation or studies demonstrating any additional benefits (i.e., reduction of blight, reuse of abandoned buildings, clean up of contaminated property, job training, provision of day care, any contributions to the community etc.) likely to accrue to the area as a result of Certified Project designation. Doyle Sailmakers' pfan for the newly acquired space on 96 Swampscott Rd. is to increase our production of sails and sail repair and to enter the production of large Certified Project Application —Page 7 lighter than air ships. We will be increasing our workforce to achieve this end. Our current problem is that we have a very experienced work force, and thus a very expensive work force. We need to balance this work force with entry-level workers that we will train. We have already invested in two key employees being trained to train others in the very exacting and demanding airship assembly process. Doyle Sailmakers has considered space in Salem in the past but the high commercial tax rate in Salem has always been the back breaker. However, this time Ken Goode and Ben Wong were very helpful in pointing out the economic incentives available to business. With this, coupled with our partial MA Development Finance Agency Revenue bond, we made the decision to go forward with new space in Salem. We did not get the 85% financing for which we had hoped, but only 65%. This reduced amount of financing and costs of the build out is making the move much more financially challenging than originally planned. It should be important for the state of Massachusetts as well as the municipality of Salem to retain manufacturing. The cost to manufacture in Massachusetts continues to escalate and as a result companies are reducing manufacturing jobs by sending work offshore. Doyle Sailmakers has made a commitment to expand our manufacturing business and provide more jobs for the people of Massachusetts. We are expanding into the airship field because we believe that is one business that will not go offshore and is a source for entry-level jobs with training. We would appreciate any help that the Mass Economic Development Incentive Program can provide. As a historical note of interest to the City of Salem, the first sail loft in America was located on Derby Wharf. Doyle Sailmakers is seeking to restore a tradition of sailmaking to the city. Doyle is an internationally respected company that will bring visibility to the City of Salem. Hotels, restaurants and other retail businesses will be enhanced by Doyle being located in Salem as our high-end clientele will find the charm of Salem irresistible. Certified Project Application —Page 8 SPECIAL REQUIREMENTS FOR REAL ESTATE PROJECTS 1. Will the business own or leaseirent the facility? X0 Own o Lease/Rent If leasingirenting, please identify the developer/landlord, and state who will be the taxpayer of record for the purpose of paying local real estate taxes. If owning, will the business fully occupy the space? X13 Yes E No If no, does the business intend to lease/rent the remaining space? 2. Describe how the various tax benefits and other economic incentives that wrill result from Certified Project designation vAll be allocated among the business(es) developing the project (i.e., a developer or landlord) and the business(es) intending to purchase, lease or rent space at the facility (i.e., tenant or tenants). The 5% Economic Opportunity Credit will be applied to the cost of qualified property as follows: R&J Swampscott Road LLC; — Building & Improvements estimated @ $2,382,000 Doyle Sailmaker, Inc. —Cost of new equipment estimated @ $101,000 The savings generated from the tax exemption schedule on future incremental real property taxes will benefit R & J Swampscott Road LLC, the entity holding the property. SUPPLEMENTAL INFORMATION 1. Name(s)of the business(es) intending to take advantage of the state tax incentives: Business Name: Doyle Sailmakers, Inc. Federal Employer Identification#: 04-2765012 Address: 89 Front Street, Marblehead, MA 01945 Phone: 781-639-1490 Fax: 781-639-1497 Contact Person: Robbie Doyle Type of Organization (check all which applies): X Corporation D For-Profit ES-Corp Fi Non-profit 7 Business Trust Partnership General Partnership Limited Partnership Individual Level of Interest: X 0 5% Investment Tax Credit FD 10%Abandoned Building Tax Deduction (if applicable) Certified Project Application —Page 9 [I Local real estate tax incentive beneficiary 2nd Business Name (if applicable): R&J Swampscott Road LLC Federal Employer Identification#: 51-0600068 Address: 96 Swampscott Road LLC, Unit 8 Salem, MA 01970 Phone: 781-639-1490 Fax: 781-639-1497 Contact Person: Robert Doyle Type of Organization (check all which applies): 1i Corporation 11 For-Profit DS-Corp 0 Non-profit 11 Business Trust 11 X Partnership 0 General Partnership [I Limited Partnership Cl Individual Level of Interest: X11 5% Investment Tax Credit 0 10%Abandoned Building Tax Deduction (if applicable) XEI Local real estate tax incentive beneficiary �ff there are more than two businesses intending to take advantage of these state tax incentives associated with this project, please provide the above information for all such businesses. 2. A— If a corporation, please list the names and addresses of the officers and directors— of said corporation, and any person and/or corporation with a financial interest of five percent or greater in said corporation. B — If a partnership, please list the names and addresses of all partners, and include the proportionate share owned by each partner. C — If a business trust, please name all members and beneficiaries of said trust. Corporation = Doyle Sailmakers, Inc. Name and Address of officers and directors: • Robert Doyle, 43 Norman Street, Marblehead, MA • Janet Doyle, 43 Norman Street, Marblehead, MA • Sam Byrne, Bridge Street, Manchester, MA • Gary Gregory, Millpond Road, Marblehead, MA Person or corporation with greater than five percent interest • Robert Doyle • Gary Gregory Partnership = R&J Swampscott Road LLC Name and Addresses of Members 0 Robert Doyle, 43 Norman Street, Marblehead, MA —50% interest & Janet Doyle, 43 Norman Street, Marblehead, MA — 50% interest Certified Project Application —Page 10 3. Please provide the name, address, phone number and contact person for any organizations Which may own or control the applicant organization, or who are affiliated with the applicant business organization. Please see above relationship between Doyle Sailmakers, Inc. and R&J Swampscott Road, LLC 4. Cerfificate of Good Standing — Please provide proof of good tax standing in the Commonwealth of Massachusetts via a Certificate of Good Standing, which is a letter issued by the Massachusetts Department of Revenue. To obtain a Certificate of Good Standing, please see Attachment I of this application. Copy of Certificate is attached. J&m-el A&zse- 05ozjz-ol?l Gahrin f the th September 6, 2006 NHOM IT MAY CONCERN: I hereby certify that a certificate of organization of a Limited Liability Company was in, this office by R & J SWAMPSCOTT ROAD LLC .cordance with the provisions of Massachusetts General Laws Chapter 156C on September 06. I further certify that said Limited Liability Company has filed all annual reports due and all fees with respect to such reports; that said Limited Liability Company has not filed a .cate of cancellation or withdrawal; and that, said Limited Liability Company is in good ng with this office. I also certify that the names of all managers listed in the most recent filing are: ROBERT OYLE, JANET DOYLE I further certify, the names of all persons authorized to CXCCLIte documents filed with this e and listed in'the most recent filing are: ROBERT E. DOYLE, JANET DOYLE The names of all persons authorized to act with respect to real property listed in the most filing are: ROBERT E. DOYLE, JANET DOYLE ....... in testimony of which, have hereunto affi:xed the Great Se�d of the Commonwe:11th ,?A q: on the clate first abovc written. 7-; Sticretary of the Commoriwe.Lith 9/2 1 1/2006 12:43 FAI 4002/002 Massachusetts epartment Revenue PC)BOX 7010 BOSTON.MA 02204 ALAN LeBOVIDGE, COMMISSIONER ROBERT O'NEILL,BUREAU CHIEF Notice: 80619 OYLE SAILMAKERS, INC. TIP 107 042765012 FRONT STREET Date: W21/06 ARBLEHEAD, MA. 01945 Bureaw Certificate Unit CERTIFICATE OF GOOD STANDING AND/OR TAX COMPLIANCE A The Commissioner of Revenue certifies as of the above date. that tho above named individual or entity is in compliance with its tax obligations payable under M.G.L..c.62C, including corporation excise, sales and use taxes, sales tax on meals,withholaing taxes,room occupancy excise and personal income taxes,with the following exceptions. This Certificate certifies that individual taxpayers are in compliance with income tax obligations and any sales and use taxes, sales tax on meals,withholding taxes.and/or room occupancy taxes related to a sole proprietorship. Persons deemed responsible ior the payment of these taxes on behalf of a corporation. partnership or other business entity may not use our automated process to obtain a certificate. This certificate does not certify the(the entity's standing as to taxes such as unemployment insurance administered by agencies other than the Department of Revenue, or taxes under any ' 11 in a a other provisions of law. Taxpayers required to collect or remit the ro ow 9 1 x S must submit a separate request to certify compliance:Alcoholic Beverage Excise, Cigarette Excise, Sales Tax on Boats, International Fuels Tax Agreement, Smokeless Tobacco or Ferry Embarkation. THIS IS N OT A WAIVER OF LI EN ISSUED UND ER GEN ERAL L AVv S, CHAPTER 62C, SECTION 52. Very troly yours, Robert O'Neill, Bureau Chief "Due Diligence Lefter" Doyle Sailmakers, Inc. Doyle Sailmakers, Inc. is a manufacturer of sails,established in 1982 by Robert Doyle in Marblehead Massachusetts where the company has leased space in the same building on the third floor at 89 Front Street for 25 years. As the business grew an additional space was leased at 16 Lincoln Avenue, also in Marblehead. Doyle Sailmakers is in the business of servicing sails and producing new sails for boats from 6' to 300'. Doyle is one of the most respected names in sailmaking in the world with over fifty affiliated lofts in over twenty different countries. Currently Doyle has sails on the two largest privately owned sailing yachts in the world that brings a lot of visibility to the company. With combined loft space of approximately 19,000 square feet between the two leased buildings Doyle has been looking to expand for the past five years. Parking in down town Marblehead is limited. Having manufacturing space on a third floor is not very convenient. Having two different facilities in the same town is not cost effective. Five years ago the search began for a larger, permanent space in Marblehead with the following characteristics: Approximately 30,000+ square feet of open space to allow for continued growth in the sail manufacturing and servicing business as well as entry into a new field of manufacturing, that being lighter than air ships. Had to be first floor. A site that was"for sale"as opposed to "for lease". No commercial/industrial sites that met the above requirements were found available in Marblehead during the last five years. The company began to look to neighboring cities/towns. The company became aware of the industrial property at 96 Swampscott Road in Salcm in the summer of 2006. After much consideration and inspection it was deemed that the 32,000 square feet of basically open space met the company's requirements for expansion. With the help of state agencies for funding of loans for Unit 8 as well as the build out, an offer to buy was made and papers passed in September 2006. The build out began in October and will be completed by the end of February 2007 at which time Doyle Sailmakers will take occupancy of its new space. L Robert Doyle, President and Founder of Doyle Sailmakers, Inc., hereby certify that this statement is true and accurate. lc-� a uc� 1 C)7 Mbeg-E—.Doyle Date Mimi Michaud From: Kelly Hurley Sent: Monday, February 05, 2007 11:35 AM To: Mimi Michaud Subject: code of conduct CODE OF CONDUCT 1. CODE in any organization such as ours,it is necessary to set down rules governing conduct and procedures to ensure smooth running of the Company. Any conduct which threatens personal health, well-being or security of employees,or which endangers plant, property or product is outside our accepted behavior. 2. GENERALCONDUCT All employees ar e expected to maintain a high standard of conduct and performance relating to the operational requirements and reputation of the Company. This standard is to be maintained at all times while engaged on Company business so as to avoid bringing the Company into disrepute. The following indicates the Company position on a number of such standards: 2.1 PUBLIC RELATIONS Your future with the Company,your security and your promotion depends on the continuing prosperity of the Company. Success however, is not achieved automatically, it must be worked for. All employees are expected therefore to act in such a way as to maintain the reputation of the Company. 2.2 EQUAL EMPLOYMENT OPPORTUNITIES Doyle Sailmakers, Inc. is an Equal Opportunity Employer. This means that the company win extend equal opportunity to all individuals without regard for race, religion, color, sex, national origin, age, disability, handicaps or veteran status. This policy affirms Doyle Sailmakers' commitment to the principles of fair employment and the elimination of an vestiges of discriminatory practices that might exist. The company encourages all employees to take advantage of opportunities for promotion as they occur. 2.3 SEXUAL HARASSMENT Doyle Sailmakers will not, under any circumstances, condone or tolerate conduct that may constitute sexual harassment on the part of its management, supervisors or non-management personnel. It is our policy that all employees have the right to work in an environment free from any type of illegal discrimination, including sexual harassment. Any employee found to have engaged in such conduct will be subject to immediate discipline up to and including discharge. Any employee found to be engaged in the conduct of sexual harassment will be subject to immediate discipline up to and including discharge. Sexual harassment is defined as: i. Making submission to unwelcome sexual advances or requests for sexual favors a term or condition of employment; 2. Basing an employment decision on submission or rejection by an employee of unwelcome sexual advances, requests for sexual favors or verbal or physical contact of a sexual nature; 3. Creating an intimidating,hostile or offensive working environment or atmosphere either by a)verbal actions, including calling employees by terms of endearment; using vulgar or demeaning language; or b) physical conduct that interferes with an employee's work performance. Doyle Sailmakers encourages healthy fraternization among its employees; however,employees, especially management and supervisory employees, must be sensitive to acts of conduct that may be considered offensive by fellow employees and must refrain from engaging in such conduct. It is also expressly prohibited for an employee to retaliate against employees who bring sexual harassment charges or assist in investigating charges. Retaliation is a violation of this policy and may result in discipline, up to and including termination. No employee will be discriminated against or discharged because of bringing or assisting in the investigation of a complaint of sexual harassment. 2.4 SAFETY& SECURITY Safety is a joint venture at Doyle Sailmakers. Doyle Sailmakers provides a clean, hazard free, healthy, safe environment in which to work in accordance with the Occupational Safety and Health Act Of 1970.As an employee,you are expected to take an active part in maintaining this environment.You should observe all posted safety rules,adhere to all safety instructions provided by your supervisor and use safety equipment where required.Your work place should be kept neat, clean and orderly. All safety equipment will be provided by Doyle Sailmakers,and employees will be responsible for the reasonable upkeep of this equipment.Any problems with or defects in equipment should be reported immediately to management. As an employee,you have a duty to comply with the safety rules of Doyle Sailmakers, assist in maintaining the hazard free environment,to report any accidents or injuries - including any breaches of safety - and to report any unsafe equipment,working condition, process or procedure, at once to a supervisor. Employees may report safety violations or injuries anonymously to the Safety Officer, if they are not the injured or violating party. NO EMPLOYEE WILL BE PUNISHED OR REPRIMANDED FOR REPORTING SAFETY VIOLATIONS OR HAZARDS. However, any deliberate or ongoing safety violation, or creation of hazard, by an employee will be dealt with through disciplinary action by Doyle Sailmakers, up to and including termination. Employees who are injured on the job at Doyle Sailmakers are covered by Worker's Compensation Insurance. It is your responsibility to immediately notify your immediate supervisor -or in the absence of your supervisor, the next available supervisor- of any injuries you sustain while on the job at Doyle Sailmakers. 2 This supervisor will notify your personnel representative.The company encourages injured employees to seek immediate medical attention.All medical expenses related to the treatment of an injury, sustained on the job, are paid in full direct to the medical providers.After a specified waiting period,you are also eligible for disability payments set forth by state law, where necessary. The Worker's Compensation plan is administered by a separate insurance company who will be notified by your personnel representative.You will be contacted by a representative of the administering company. information on the current company administering this plan will be provided to you by your personnel representative and is available on posters displayed in your work area.Additional information on Worker's Compensation Insurance is available through the Accounting office. 2.5 LOSSCONTROL All incidents or accidents involving loss or damage to Company property must be reported immediately to the supervisor concerned. 2.6 PERFORMANCE OF DUTIES Employee's attitudes to work and performance of duties are to be of a consistently high standard. The Company's standard procedures for all jobs must be followed to ensure integrity of service or result, quality of performance and product and timeliness of completion. in particular,the Company's procedures of accounting,contract administration and quality assurance must be followed. 2.7 ABSENCE/TARDINESS Employees who cannot attend work because of personal illness or emergency are to notify their manager or supervisor as soon as possible on the day of absence. All other absences must have prior approval of the manager or supervisor. A medical certificate win be required. Tardiness will not be tolerated. if an employee is late for work with frequency he/she will be dismissed. Productivity amongst the group is affected by each person's promptness. 2.8 PERSONALAPPEARANCE Personal appearance is a matter of Employee's own personal taste and common sense,but the Company does expect employees to look neat and dress appropriately for their jobs. Where protective clothing and/or equipment is issued, it must be worn/used. 2.9 SECONDARY EMPLOYMENT AND COMMERCIAL INTERESTS The company has no objection to Employees taking on secondary employment,being self- employed, or involved in other commercial activities providing: a) Prior consent&knowledge of the employee's manager has been obtained, b) The secondary employment does not adversely affect the performance of duties, c) The Company has first call on employee's services, d) Company property, facilities and information are not used in activities that are not connected with Company business interests, d) The work takes place entirely outside employee's working hours with the 3 Company, d) There is no possible conflict of interest or activities between the Company and those with whom it does business, g) Company employees and members of their families should not accept gifts and favors from any source that could be seen as influencing a business relationship. 2.10 SMOKING Doyle Sailmakers endeavors to provide a healthy environment,therefore prohibits any form of tobacco consumed in company buildings.Additionally, no smoking is allowed within ten (1o) feet of exterior entranceways. Smoking breaks are to be taken at the two set break periods or at lunch,no other time is acceptable. 2.11 ANTI SUBSTANCE ABUSE Doyle Sailmakers takes seriously the problem of drug and alcohol abuse, and is committed to provide a substance abuse free work place for its employees.This policy applies to all employees of Doyle Sailmakers, without exception,including part-time and temporary employees. No employee is allowed to consume, possess, sell or purchase any alcoholic beverage on any property owned by or leased on behalf of Doyle Sailmakers,or in any vehicle owned or leased on behalf of Doyle Sailmakers. No employee may use,possess, sell,transfer or purchase any drug or other controlled substance on any property owned by or leased on behalf of Doyle Sailmakers, or in any vehicle owned or leased on behalf of Doyle Sailmakers. Exceptions are aspirin or ibuprofen based products and legal drugs that have been prescribed to that employee,which are being used in the manner prescribed. Doyle Sailmakers will not tolerate employees who report for duty while impaired by use of alcoholic beverages or drugs. el All employees should report evidence of alcohol or drug abuse to a supervisor or a personn representative immediately. In cases where the use of alcohol or drugs pose an imminent threat to the safety of persons or property,an employee must report the violation. Failure to do so could result in disciplinary action for the non-reporting employee. 2.12 CONFIDENTIALITY Any confidential information including trade secrets for example relating to business connections and technical information or processes,clients or suppliers lists of private affairs acquired by an employee in the course of employment following the cessation of employment must remain confidential. Kelly Hurley Doyle Sailmakers 89 Front Street Marblehead, MA 01945 Tel 781.639.1490 Fax 781.639.1497 www.doylesails-com 4 DOYLE SAILMAKERS, INC. TIF Plan TAX INCREMENT FINANCING PLAN 1. LOCATION A. Economic Opportunity Area (EOA): SalemEOA B. Municipality: City of Salem C. TIF Zone: i. Map Attachment A —General Location Map Attachment B —Land Use and Zoning Map Attachment C —Parcel Map (property lines, building footprint and all thoroughfares, public right of ways and easements) ii. Description (common and legal) Comnon Deserption The proposed TIF Zone is located at 96 Swampscott Road, Unit 8 in the Salem Economic Area (EOA). Le ,gal Description That property situated in Salem in the County of Essex and Commonwealth of Massachusetts described as follows: 96 Swampscott Road, Salem, Massachusetts, Unit 8, described in the UNIT DEED dated September 19, 2006 and filed on September 22, 2006 with the Essex South Registry District of the Land Court as Document Number 471783. The Unit is located in SALEM COMMERCE PARK, CONDOMINIUM created by Master Deed dated April 24, 2006 and filed on April 27, 2006 with the Essex South Registry District of the Land Court as Document Number 466707, and noted on Certificate of Title Number C- 205000, as amended by the First Amendment to the Master Deed dated June 2, 2006 and filed on June 13, 2006 with said Registry District as Document Number 468416, and as further amended by the Second Amendment to the Master Deed dated August 1, 2006, and filed on August 4, 2006 with said Registry District as Document Number 470286, and by the Third Amendment to the Master Deed dated September 12, 2006 and filed on September 22, 2006 with said Registry District as Document Number 471780, in accordance with the provisions of G.L. c. 183A. The UNIT contains the AREA listed in the UNIT DEED and is laid out as shown on the plans filed with the Master Deed and to which is affixed a verified statement in the form provided for in G.L. c. 183A, Section 9. iii. Narrative description of TIF Zone, Needs, Problems, and Opportunities The TIF Zone is a 31,000 square foot unit within a 170,000 square foot building that was recently converted to commercial condominiums primarily geared toward smaller industrial and commercial users. Prior to the conversion, the DOYLE SAILMAKERS, INC. TIF Plan building was vacant and deteriorating for over two years. It was difficult to find such a large commercial user for the space. The City worked with different state agencies to try to attract a company to the space without success. The conversion represented an innovative solution to redeveloping the building. The new condominium owners purchased essentially a large space with walls and were required to invest their own funds in the build-out of their individual space. Doyle Sailmakers, Inc. plans to invest$2,382,000 in the purchase and development of the unit. In addition, they will be investing in new equipment for their expansion into airships estimated at$101,000. The conversion of the building and the investment the new condominium owners, including Doyle Sailmakers, Inc., creates an opportunity for investment into this industrial corridor of the City and generates more tax dollars, as well as, increased jobs. iv. Property Owners within the proposed zone Robert Doyle R &J Swampscott Road,LLC (RE Holding Company), 96 Swampscott Rd., Unit 8, Salem, NIA II. TIME—DURATION OF TIF PLAN AND ZONE DESIGNATION 5 years III.TIF ZONE & ECONOMIC DEVELOPMENT A. Discuss how TIF Zone is poised to create new economic development opportunities The designation of this property as a TIF Zone will create a number of new economic development opportunities. Doyle Sailmakers is investing in a building that has been vacant and deteriorating for over two years. The conversion of the property and interest by companies, like Doyle Sailmakers, led to the redevelopment of this budding and will most likely open up opportunities for future development around the site. The City believes that dus project will attract interest in Salem, particularly in the Swampscott Road area, as a competitive location for business. If approved, this TIF Plan will demonstrate that the City can and will offer economic development tools to attract business. Success here will invite interest of firms located outside of the City, with an emphasis on smaller commercial and industrial businesses such as Doyle Sailmakers. B. Discuss how TIF Zone will result in a net economic benefit to the local municipality Approving the proposed TIF zone will result in the following net economic benefit to the City of Salem: DOYLE SAILMAKERS, INC. TIF Plan • Generation of$45,600 in ultimate annual tax revenue. An increase of 68% over the current base value. • Relocation of 31 existing permanent full-time jobs to Salem. • Creation of at least 12 permanent full-time jobs in Salem. • job training for entry-level employees. • Relocation of an internationally respected company that will bring visibility to Salem and high-end clientele to Salem hotels,restaurants, and other retail businesses. • Assistance in revitalizing part of a formally abandoned, deteriorating structure. C. Analysis of proposed and potential land uses The project includes the purchase and build-out of approximately 31,000 square feet of space in a 170,000 commercial condominium building. Doyle Sailmakers is moving all of their operations to the space. D. Zoning in TIF Zone Business Park Development (BPD) E. Identify any parcels, public or private, in zone which are confirmed hazardous waste disposal sites, in accordance with Chapter 21 E, MGL N/A F. Analysis of how the land uses are appropriated for anticipated economic development The redevelopment and reuse of 96 Swampscott Road presented a challenge due to the size of the building. It was tough to recruit a company to locate to such a large building with limited highway access. The developer who eventually purchased the abandoned building in early 2006 realized the need for commercial and industrial space for companies looking for under 35,000 square feet of space. They divided the space up based on need and created cornmercial condominiums. The overall project has been very successful. Doyle Sailmakers is a perfect fit both for the land use and as a part of continued economic development and growth in the city. G. Discuss proximity of TIF Zone to mass transit and to major rail, highway, or other modes of transportation for shipping and delivery The TIF Zone is located approximately a half mile from Route 107/Highland Avenue, a four-lane thoroughfare that connects Salem to Boston. Boston's Logan 3 DOYLE SAILMAKERS, INC. TIF Plan Airport is only 13 miles south of the site and can be reached via Route 107. The site is approximately 4 miles from Route 1-95 and 6 miles to Route 1. Public transportation is also available along Route 107/Highland Ave by the Massachusetts Bay Transportation Authority (MBTA) buses. The MBTA buses provide service daily between the Salem Commuter Rail Station and Haymarket in downtown Boston. The site is located approximately 3.3 miles from the Salem MBTA Commuter Rail Station, which provides service into Boston's North Station in 30 minutes. H. Identify principal commercial and industrial tenants within the TIF Zone Doyle Sailmakers Inc. will occupy the entire unit. IV.TIF ZONE PROJECTS A. Private Projects 1. Proposed R &i Swampscott Road LLC purchased and is renovating approximately 31,000 square feet of space in a 170,000 square foot commercial condominium building (former Atlantic Extrusions). Doyle Sailmakers, Inc. will be relocating their operations from Marblehead. This move will allow the company to consolidate two existing locations to increase efficiency, expand into a new product line (construction of airships), and increase manufacturing capacity to meet a growing market demand for its products. 2. Planned See above 3. Provide documentary evidence of the level of the developer's cortunitment to construction proposed &requited in the TIF project. The company has purchased the unit (unit deed Attachment D) and secured funding commitments (see Attachments F) to construct the project (project budget Attachment F); construction plans have been completed (see Attachments G); and a percentage of the build-out for the project has begun. 4. Budget for proposed project expenditures with supporting data. See Attachment F. 5. Architectural, plans, specs, engineering reports. See Attachment G. 4 DOYLE SAILMAKERS, INC. TIE Plan 6. Letters of commitment from local lending institutions See Attachment D. 7. Participation in other federal, state and local Economic development programs and initiatives The company received equipment and real estate financing through MassDevelopment Industrial Development Bonds. 8. Relevant business plans a. Time schedules for development Pmper�,putrbased:September 2006 Build-ont:September 2006 —February 2007 Padial move-in:February 19, 2007 Full occupangi:Match 2007 b. Returns on investment The company is anticipating expanding and growing the business in the new location with the construction of airships. c. Expected Increases injob Creation The expected job growth is 12 full-time permanent jobs in five years. d. Estimated tax revenues based upon increased valuation of the parcel The base value of the condominium is $1,275,969,which is an . apportioned value of the entire budding at 96 Swampscott Road. The base tax bill is $27,216. The total value of the property after the renovation is projected to be $2,037,900, which is based on 95% of the purchase price plus 50% of the cost of real estate improvements. The increment in value is $761,931. At the end of the TIF Plan the project will generate $45,600 in annual tax revenue. This represents an increase of 68% in tax revenue over the current base value. B. Public Projects 1. Proposed—N/A 2. Planned—N/A 5 DOYLE SAILMAKERS, INC. TIF Plan 3. Budget for proposed project expenditures supporting data —N/A V. FINANCING FOR TIF ZONE PROJECTS A. Anticipated Financing for Private Projects 1. Sources and Amounts for Proposed Projects The company has self-financed all the costs of acquiring and renovating the property. See attached funding commitments (Attachment D). 2. Sources and Amounts for Planned projects See above B. Anticipated Financing for Public Projects N/A C. Detailed projection of costs of public construction N/A D. Will betterment be used to finance any public-private projects, now or within the proposed life of the TIF plan? No betterment will be used. E. If betterment or Special Assessments are part of the TIF Plan N/A F. Describe how private projects will be financed 1. Evidence of private financing commitments See Attachment D (funding commitment letters) 2. Material assumption and requirements See Attachment D (funding commitment letters) and Attachment F (budget for proposed project) VI.TAX INCREMENT FINANCING A. Authorization to use TIF 6 DOYLE SAILMAKERS, INC. TIF Plan The attached City Council Resolution dated March 9, 1995 authorizes the City of Salem to use TIF in the Salem EOA (Attachment H). The City Council will vote on the Resolution authorizing the use of the TIF Plan for Doyle Sailmakers, Inc. on March 22, 2007 and the resolution will be forwarded when executed. B. Amount of proposed tax increment exemptions from property taxes, and applicable criteria The attached spreadsheet (Attachment 1) shows that the City estimates the tax benefit to total approximately 550,412 over five years. C. Maximum percentage of public project costs that can be recovered through betterment or special assessments in heu of the incremental real estate taxes N/A D. TIF Exemption from property taxes 1. Term of exemption: 5 years 2. Calculation The base value of the condominium is $1,275,969, which is an apportioned value of the entire building at 96 Swampscott Road. The base tax bill is $27,216. The total value of the property after the renovation is projected to be $2,037,900,which is based on 95% of the purchase price plus 50% of the cost of real estate improvements. The increment in value is $761,931. The exemption plan works as follows: YEAR COMPANY PAYS 1 Only base tax bill of$27,216 2 20% of increment, plus base tax 3 40% of increment, plus base tax 4 60% of increment, plus base tax 5 80% of increment, plus base tax 6 Taxed at full value E. Effective date of tax increment exemption July 1, 2007 (Fiscal Year 2008) F. Betterment of special assessments N/A 7 DOYLE SAILMAKERS, INC. TIF Plan VIL APPROVAL OF TAX INCREMENT FINANCING PROJECTS A. Approval Process The City Council was presented with the TIF Plans and corresponding resolutions on February 22, 2007. The Council referred the matter to a Committee that is meeting on Match 19, 2007 to discuss the project. The Council is anticipated to approve the two resolutions accepting the Certified Project Application for the project and allowing the Mayor to enter into a TIF Agreement with the company at their meeting on March 22, 2007. The project will then require approval by the EACC,wl-�ich is slated to meet to discuss the project on March 29, 2007. B. Person or Board authorized to execule TIF Agreements The Mayor executes the TIF Agreement, upon approval from the City Council. C. Evidence of local approvals of TIF zone Pending City Council approval on Match 22, 2007. See AttachmentJ. D. Evidence of local approvals of TIF plan Pending City Council approval on March 22, 2007. See Attachment K. E. Executed TIF agreements (any and all) Pending City Council approval on March 22, 2007. See Attachment L. F. EACC approval of TIF plan Pending EACC approval on March 29, 2007. 8 ATTACHMENT A General Location Map BEVERLY AND SALEM ECONOMIC TARGET AREA ------------------------// k, v IF C a BEVERLY4 I y A CITY OF SALEM SQAf ALE 0 1 2 4 Map created by SalcmGls and Applied Geographits,Februai-,,2007 FOR PLkNN1NG PURPOSES ONLY DATASOURGES Rwrai trom cit,d Sam T— a.W..,�. GIS Econom�Thr,el Area —.5-r T.T1r. Esmx Cwnl,T,,rrns ATTACHMENT B Land Use and Zoning Map ATTACHMENT C Parcel Map (property lines, building footprint and all thoroughfares, public right of ways and easements) ATTACHMENT D Unit Deed SALEM COMMERCE PARK CONDOMINIUM UNIT DEED GRANTOR: 96 Swampscott Road, LLC, a Massac hu' setts limited liability company, having an address at 5 Com Point Road, Marblehead, MA 01945 GRANTEE: R & J Swampscott Road LLC, a Massachusetts limited liability company having its principal place of business at 43 Norman Street,Marblehead, MA 01945 UNIT: 8 PERCENTAGE INTEREST: 18.8% AREA: 31,366 sq. ft. PARKING SPACES:Nos. 15-24,43-52, 96-97, 114-�23 4 ,,, ,tbo E W W El U "I UNIT POST OFFICE ADDRESS: 96 Swampscott Road, Salem, kvl�=�Uubm� V I CONSIDERATION: S1,882,000,00 8 El: GRANTOR, owner of the UNIT described above in SALEM COMMERCE PARK CONDOMINIUM created by Master Deed dated April 24, 2006, and filed on April 27, 2006 e with the Essex South Registry District of the Land Court as Document Number 466707, and noted on Certificate of Title Number C-205000, as amended by the First Amendment to the Master Deed dated June 2, 2006 and filed on June 13, 2006 with said Registry District as Document Number 468416, and as further amended by the Second Amendment to the Master Deed dated August 1, 2006 and filed on August 4, 2006 with said Registry District as Document Number 470286, and by the Third Amendment to the Master Deed dated September 12, 2006 and filed on September Z) �- 2006-with said Registry District as Document Number t-1-1 ?j 0 in accordance w ith the provisions of G.L. c. 183A, grants the UNIT to GRANTEE with QUITCLAIM COVENANTS for the CONSIDERATION stated above. The UNIT contains the AREA listed above and is laid out as shown on a plan filed herewith, which is a copy of a portion of the plans filed with the Master Deed and to which is affixed a verified statement in the form provided for in G.L. c. 183A, Section 9. The UNIT is conveyed together with the above-listed PERCENTAGE INTEREST (a) in the common areas and facilities of the Condominium, as described in the Master Deed, and (b) in SALEM COMMERCE PARK CONDOMINIUM TRUST, under Declaration of Trust dated April 24, 2006, and filed with the Essex South Registry District of the Land Court as Document Number 466708 and noted on Certificate of Title Number C-205000, and amended by the First �-PPROVED FOR REGIMqA-17(o BYTHECOURT. 471783 (C205 Doe,) Btoh:205693! ScUthern E ox 01 trict Registry 51 9/22/2008 1 :53.RM UDEE0 Amendment to the Declaration of Trust dated September 12, 2006 and filed on September 2006 with said Registry District as Document Number 4-11-7c6 .1 The UNIT is to be used in accordance with the Master Deed only for commercial purposes to the extent permitted from time to time under the Zoning Ordinance of the City of Salem (the "Zoning Law"), including all special permits and variances granted thereunder, and for no other purpose. No Unit shall be used for the storage of hazardous materials of any kind except in accordance with all applicable laws and regulations. The UNIT is conveyed together with the right and easement to the exclusive use of the PARKING SPACES stated above and shown on the Site Plan recorded with the Master Deed, for the purpose of parking legally registered cars and trucks in regular use by Unit Owners, their employees� customers, visitors, guests and invitees during the existence of the Condominium. Such parking rights may be transferred,but only among the Unit Owners or to the Condominium Trust, by instrument duly filed in the Registry District, and shall end upon the permanent withdrawal of the premises from condominium status. Such parking rights shall be subject to the provisions and limitations set forth in section 5.1 of the Master Deed. Any transfer of a parking space to other than the Condominium Trustees or a Unit Owner, or lease of a parking space to other than the Condominium Trustees or a Unit Owner, in each case shall be void. The GRANTEE acquires the UNIT with the benefit of, and subject to, the provisions of G.L. c. 183A, relating to condominiums, as that statute is written as of the date hereof and as it may hereafter be amended, the Master Deed and Condominium Trust referred to above and any by- laws and rules and regulations from time to time adopted thereunder, and all matters of record stated or referred to in the Master Deed as completely as if each were fully set forth herein; and subject to real estate taxes attributable to the UNIT which are not yet due and payable. EXECUTED UNDER SEAL this_Lqtday of September,2006. 9 '1 6S , ROAD LLC By: J. Hi oc ett, Jr. r 'ry t' By Jose M.Thiibert� anager 471793 (Pass 2 of 5) Southerm Essex District Resistry 912212096 11:63 AM UDEED Page 2 of 3 THE COMMONWEALTH OF MASSACHUSETTS ss. On this -J��day of September, 2006, before me, the undersigned notary public, personally appeared sr. 4,T22!�Ql% Manager as aforesaid, proved to me through satisfactory evidence of identification, which was El photographic identification with signature issMued by a federal or state governmental agency, El oath or affirmation of a j credible witness, Eapersonal knowledge of the undersigned, to be the person whose name is signed on the preceding or attached document, and acknowledged to me that he signed it voluntarily for its stated purpose as Manager of 96 Swampscott Road, LLC, a Massachusetts limited liability company. MY commission expires: rAaa, rr, 46 4717 3 P808 3 th.,n E. of 5) I&X DistrIct 9/22/2006 11:53 AM UOEE D Page 3 of 3 10111. T� ' UN rr 94 UNrr#6 UpqfT 06 UNff$3 1UNff UNTr#2 UNIT 97 -,;rT FIT UNIT#1 #9 #10 BUILDING KEY PLAN (NTS) LEGEND AND NOTES UNrr#8 DEPICTS COMMON AREA 1? 31.366 GSF %lRt:u A - DEPICTS UNIT BOUNDARY op,14 A. ), DEPICTS MAIN ENTRANCE NO. 3386 MARSLEHM 12 SQUARE FOOTAGES SHOWN ARE APPROAMATE, ROUNDED TO THE NEAREST WHOLE. MASS. 4; OF IMA UNIT#8, PLAN CEIT171FICATION I HEREBY CERTIFY THAT THIS PLAN WAS PREPARED IN CONFORMITY NTH THE RULES AND REGULATIONS OF THE REGISTRY OF DEEDS OF THE COMMONWEALTH OF MASSACHUSETTS. I HERE13Y CERTIFYTHAT THIS PLAN SHOWS THE UNIT DESIGNATION OF THE UNIT BEING CONVEYED AND OF 94MEDIATE ADJOINING UNITS,AND THAT IT Z) FULLY AND ACCURATELY DEPICTS THE LAYOUT OF THE UNIT,ITS LOCATION, DIMENSIONS,APPROXIMATE 6REA,MAIN ENTRANCE AND IMMEDIATE COMMON T s. AJWuILT- 09-65�04p William A.Yuhas, Reistered Architect Date: S VV UNIT PLAN FOR UNIT #8 SALEM COMMERCE PARK CONDOMINIUM 4 Of 51 96 SWAMPSCOTT ROAD,SALEM,MA 01970 47j793 (Paveo Registry SOL'thern Essex L 912212006 11153 0 U0FED 0 10 20 40 DATE: Septernber 5.2006 Page 1 of 1 LIJ CC C%j LLJ cc cm 471783 (page 5 of 6) s,,thern Essex Distric I Registry 9/2212006 li:53 AM UDEED AYf ACHMENT E Funding Commitments nw au cuuv jj%i vc-44 iii umtv"now�in i M 11U. 0 ILI I I [VWU 1 . Ut Main Offim;Onc Vkwant Stmet, Danwn,MA 01923 Nft� Danversbank 978-777-2200 -�wdanvvmbank.corn August 19,2006 Mr.Robbie R Doyle Doyle Sailmakers,Inc. 89 Front Street Marblehead�MA 01945 Dew Robbie: We are pleased to advise you that Danvorsbank(the Bank)has approved the following financing arrangement for Doyle Sailmakers,Inc.and a nominee real estate entity(the Borrower)subject to the following torus and coodifions: RgvohiBg Lim of Cred Borrower. Doyle Sailmakers, Inc. Amount* $450,000 Purpose: To support working capital needs. Term: Demand Repayment: Monthly payments of interest only. Expiration Date: Unless renewed by the Bank,the line will automatically expire on June 30,2007. Rate: Bank's Base Lending Rift plus 1.001A floating. Advances: The Line will be advanced on a formula of 90%of eligible A/R under 90 days. Advances will only be made if, in the opinion of the Bank, there has been no material cheap in circumstances and if them exist no default under any loan documentation executed by the borrower. Collateral: All Assets of borrower. AD loans in the relationship will be cross-collateralized. cross-guaranteed and cross-defaulted. Guarantors: A+stock. .1 7V Eguitiment Financing via Industrial D—evel-OP—MeRIBORd Borrower- Doyle Sailmakers,Inc. Amount: $101,000. Purpose: Finance the acquisition of equipment. Term: Five years Rate: Fixed at time of closing at 5.75%. In the event that this transaction should not continue to carry the tax-exempt status originallY aPPFOvet4 the interest rate charged on the bond will revert 10 at taxable rate equal to the Federal Home Loan Bank 5120 amortizing advance rate plus 3.00% Repayment: Monthly payments of principal and interesL Prepayment Penalty: This loan may be prepaid in whole or in part at any time, subject to the prepayment penalty set fort herein. Payments will be applied in inverse order of maturity. The followinix P-r-PROM—ent 99 aby will V21y only if the arm Pnte hy 100%; Rn �nc,�W reductions exceed the regglar scheduled rinci years I -3%of the loan balance;years 2-2%of the loan balance;year 3 - 1% of the loan balance; years 4 - 1% of the loan balance; and year 5 - 1% of the balance. Collateral: A valid first security interest on the equipment to be purchased as well as a lien on all assets of borrower. All loans in the relationship will be cross- collateralized,cross-guaranteed and cross-defaulted. Guarantor. All stockholders of Doyle Samakers, Inc. Real Estate Financing via MassDeveloyment Industrial Development Bond Borrower. Nominee Real Estate Entity Amount: $1,375,400 Purpose: Finance the acquisition of the commercial condominium located at 96 Swampscott Road, Salem, MA and provide funds to rehab the facility according to specifications. .1 Term: Term of the construction period will be the earlier of 6 months from closing or completion of construction. Bond term will not exceed 20 1/2 years from the date of closing. Principal payments will begin immediately following construction period and will be amortized over 20 years. Rate: Fixed at time of closing to 5.75%for the first five years followed by three subsequent five-year adjustments to the then Federal Home Loan Bank 5/20 2 amortizing advance rate plus 5 basis points. In the event that this transaction should not continue to carry the tax-exempt status originally approved, the interest rate charged on the bond will revert to at taxable rate equal to the Federal Home Loan Bank 5120 amortWng advance rate plus 3.00% Repayment: Monthly payments,during the construction term,of interest only for the first 6 months; followed by monthly payments of principal and interest for the Bond term. Advances: At time of closing, the full, face amount of the Bond will be issued and placed in an investment account with the Bank. The Bank, as trustee, will advance funds for construction based on an approved budget to be submitted by the Borrower, as well as terms outlined in the Construction Loan Agreement to be delivered at a later date. Plans and Specs to be reviewed by bank approved construction consultants as well as monitor construction process and approve all requisitions for funding. Prepayment: This loan may be prepaid in whole or in part at any time, subject to the prepayment penalty set fort herein. Payments will be applied in inverse order of maturity. The following pEWMent penalty will gpply only if the annual principal reductions exceed the regular scheduled principal paments by 100*/91- years I —3%of the loan balance;years 2—2% of the loan balance; year 3 — 1% of the loan balance; years 4 — 1% of the loan balance; and year 5 - 1% of the balance, recurring at each subsequent rate adjustment period. Underwriting: This bond issue shall conform to the Bank's underwriting criteria at the time of closing, including the satisfactory review of 21E and real estate appraisals. Appraisal: At the Borrower's expense,an appraisal of the collateral to be pledged as security will be performed before closing to determine the market value of the property. The Bank will lend up to 65%of the appraised value. Collateral: Valid first mortgage as well as an assignment of leases and rents on the commercial condominium located at 96 Swampscott Road, Salem, MA. A more complete description on the secured property will be obtained prior to closing. Guarantors: Doyle Sailmakers, Inc., Robbie E. Doyle as well as any principal of the new real estate entity to be formed. Surveys: At the Borrower's expense, 21 E Hazardous Waste Site Assessment Report will be submitted before closing satisfactory to the Bank and Bank's counsel, indicating that the site is free from haza dous waste. Zoning and Other Matters: The Bank shall be provided with proper evidence acceptable to Bank's counsel that the buildings on the Mortgaged Premises comply in all material respects with all applicable building, sewerage, zoning, environmental protection, sanitary and safety laws,rules and regulations. 3 Tide and Documents: The Borrower shall execute all such documents, agreements or other instruments as the Bank or Bank's counsel shall request in conjunction with this transaction each in form and substance satisfactory to Bank and Bank's counsel. The Bank is to be ftimished with a title insurance policy on mortgage properties in the amount of the Bond containing no exceptions (other than those approved by the Bank and counsel to the Bank) in a company or companies acceptable to the Bank and Bank's counsel. Insurance: Borrower shall provide Bank with liability,hazard and contents insurance in an aggregate sum equal to the lesser of the outstanding loan balances from time to time or the maximum insurable value thereof,naming Bank as loss payee and mortgagee as the case may be. Flood Insurance: The Borrower authorizes the Bank to research whether or not the Mortgage Premises is located in the HUD-FHA designated flood area. If the determination has been made that the Mortgaged Premises is located in the HUD-FHA designated flood area,the Mortgaged Premises must be insured by a flood insurance policy in the amount of the Loan,or the maximum coverage limit, whichever is less. Borrower agrees to pay flood certification fees of$12. Legal Fees: The borrower will be responsible for all legal fees associated with this arrangement. Bond Fees: The Borrower will be responsible for all fees due MassDevelopment for the Bond transaction. Trustee Fee: The Bank, as Trustee in this transaction,will require an annual fee of One Thousand Five Hundred Dollars($1,500)annually. Late Charge: The Borrower shall pay a late charge equal to five (5.00116) percent of any payment with a minimum late charge of $35. for any payment not received within ten(10)days of the due date thereof. Title 5 Septic Inspection: If Swampscott Road is not serviced by municipal sewer, the Borrower shall provide the Bank with a current septic system certification from a qualified inspector. Said certification shall deem the septic system to be fully operational and in compliance with revisions effective March 31, 1995 to Title 5 of the State Environmental Code,as amended. The cost of this inspection and certification shall be the responsibility of the Borrower whether or not the Loan closes. Tax Escrow and Fee: At Bank's option,the Borrower shall deposit with Bank monthly such amounts as may be necessary to pay the real estate taxes assessed or estimated with respect to Swampscott Rd on a current basis. The Borrower agrees to pay a tax service escrow fee of$175 at closing whether or not the Lender actually collects 4 such an escrow since the service provides the Bank with periodic reports relative to property tax status. Opinion of Counsel: There shall be furnished to Bank an opinion of counsel to the Borrower dealing with such matters as the Bank or Bank's counsel may request relating to the Borrower,the loan documents,and the various terms and conditions provided herein. Such opinion shall be in form and substance satisfactory to Bank and BanVs counsel. Conditions Precedent: Unless otherwise indicated,the conditions provided for herein are conditions precedent to the Bank's obligation to enter into the Loan transactions and disburse any funds thereunder. In order to facilitate the Bank's review of the material necessary to evidence the compliance with such conditions,the Borrower agrees to deliver any and all material required hereunder to Bank or Bank's counsel at least ten(10)days before the closing. Costs: Whether or not the transaction herein contemplated is completed for any reason whatsoever,the Borrower will pay all costs which may be incurred by Bank in connection with the within hwisaction, including without limitation,all costs of filing fees and fees of Bank's counsel,so that Lender shall bear no expenses whatsoever in connection with this commitment and the Loans contemplated hereby. In the event that Bank is made or becomes a party to any litigation arising otrt of this commitment,Borrower agrees to pay Bank's court costs and attorneys'fees in connection with such litigation through and including the cost of any appeals;provided,however, in the event such litigation is between the Borrower and the Bank,the Borrower shall have no obligation to pay said costs incurred by the Lender if there is a final judicial determination in favor of the Borrower. In any such litigation, Bank shall have the right to select its own counsel. The obligations of the Borrower under this paragraph shall survive the expiration,cancellation or termination of this commitment,and the closing of the Loans. Scope of Commitment: This commitment sets forth the entire agreement of the parties with respect to the subject matter hereunder, and supersedes ail prior written(including. but not limited to,any loan application executed in connection with the Loans)or oral understandings with respect hereto; provided, however,that all representations, warranties and certifications in any manner made by Borrower to the Bank with respect to the subject matter hereunder shall survive the execution of this commitment. No modification or waiver of any provision of this commitment shall be effective unless the same shall be in writing and signed by the parties hereto. 5 This proposal is further subject to the following: 1.Reporting: The Borrowers shall be required to provide annual financial statements prepared on an a review level basis by an independent certified public accountant acceptable to the Bank within ninety(90)days after the close of each fiscal Year- Personal financial statements and tax returns on the Guarantor shall be submitted annually. 2.Covenants: While the credit arrangements remain in effect,the Borrower will be required to maintain the following: a. Borrower to maintain its primary deposi.t relationship with the Bank. b. All debt due officers shall be subordinated to the Bank. c. Debt service coverage ratio shall not be less than 1.25x as measured at FYE. d. The Bank shall receive a collateral assignment of life insurance on Robbie E. Doyle in die amount of$500,000. Robbie,we are pleased to provide this financing arrangement and I personally look forward to working with you,Janet and all the staff at Doyle Sailmakers. You ery Frank omano Sen' rVice President is 2006. Agreed to and accepted th —2�wL dayof--A�-�-� Doyle Sail a er , I By: Title:--41- ob e o le ie E.Doyle,Individually 6 MASSACHUSETTS BUSINESS DEVELOPMENT CORPORATION 500 Edgewater Drive,Suite 555,Wakefield,MA 01880 (781)928-1100 a Fax (781) 928-1101 wu;w.mass-bu=wm.coYn September 15, 2006 Mr. Robert E. Doyle President Doyle Sailmalters,Inc. 89 Front Sh-M Marblehead,MA 01945 Re: $600,000 Term Loan Dear Robbie: We are pleased to advise you that the Executive Committee of Massachusetts Business Develop- ment Corporation(the "BDC")has approved a term loan for R&J Swampscott Road LLC subject to the following terms and conditions: Borrower: R&J Swampscott Road LLC(the"Borrower"). Loan Amount: $600,000. Purpose: Assist with the acquisition of an industrial condominium located at 96 Swampscott Road, Salem,MA(the"Propert3el. Interest Rate: Fixed annually at the Wall Street Journal prime rate at the time of closing plus 2.01/o. Commitment Fee: I%of the loan amount($6,000). Maturity Date: Twenty years from the date of closing. Repayment: Interest only for six months, followed by two hundred and thirty-four principal and interest payments of$5,936.24 per month. Monthly payments shall be automatically debited from the Borrower's bank account Please note that the monthly payment will change(i) if the prime rate changes before closing,and(ii)on each anniversary date of the note if the prime rate has changed since the preceding anniversary date. Mr. Robert E. Doyle September 15,2006 Page 2 Prepayment Penalty: 5%in year one; 41/o in year two;3% in year three; 2%in Year four, I%in year five. Additional principal payments totaling$100,000 in any calendar year shall not be subject to the prepayment penalty. Collateral: 1) Second mortgage on the Property,subject to a first mortgage in the amount of U,X;6,960 to be held by Danversbank(the"Bank'J. 0 114,1L,*M 0 ,2P 2) Secondary assignment of leases and rents on the Property. 3) Second mortgage on the personal residence of Robert and Janet Doyle located at 43 Norman Street, Marblehead, MA.subject to a first mortgage held by Chase Manhattan in the approximate amount of $248,000. 4) Second lien on all business assets of Doyle Sailmakers,Inc-,subject to the proposed$450,000 fine of credit and$101,000 term loan from the Bank. 5) Assigriment of insurance on the Ii&of Robert E. Doyle in the amount of$500,000. Guarantors: Robert E. Doyle and Doyle Sailmakers,Inc. (the-Corporate Guarantor-) shall be required to guarantee the loan on a joint, several and unlimited basis. Janet Doyle shall be required to guarantee the loan to the extent of her ownership interest in the 43 Norman Street,Marblehead,MA residence. Insurance: The Borrower, Corporate Guarantor and Robert E. Doyle shall maintain in effect at their own expense until said loan is paid in full any and all hazard insurance required by the BDC with the BDC named as loss pa yee and/or mortgagee,as applicable. Reporting: The Borrower shall be required to provide a copy of its Federal tax return annually. A review-level financial statement prepared by an independent certified public accountant shall be required within runety days of the Corporate Guarantor's fiscal year end. An internally generated interim financial statement of the Corporate Guarantor shall be due within thirty days of the end of each quarter. Robert and Janet Doyle shall be required to submit an updated personal financial statement on an annual basis. Legal Fees: The Borrower shall be required to pay all legal fees incurred by the BDC in connection with the closing of the loan regardless of whether or not the loan closes. W, kobert E. Doyle September 15,2006 Page 3 Right to Cancel: The BDC reserves the right to cancel and terminate this Commitment in the event there has been an adverse change in the Corporate Guarantor's business or financial condition from that reflected in the most recent financial statements submitted to the BDC in connection with the loan request. Other Conditions: The loan shall be subject to the following other conditions: 1) Receipt of a recent appraisal of the Property. 2) Receipt of a recent site assessm ent of the Property showing no evidence of contamination. 3) Satisfactory Intercreditor Agreement with the Bank. Robbie,please note that the purpose of this commitment letter is to outline the general terms and conditions of the loan but not to include every single term contained in the documentation for loans of this type. A draft of the legal documents will be available for your review prior to closing. Please also note that the$6,000 good faith deposit held by the BDC will be returned when the loan closes,net of any expenses incurred. In the event you decline this commitment,we reserve the right to keep all or a portion of the deposit to offset due diligence costs. If the terms and conditions of this commitment are acceptable to you,please sign and date this letter below and return it to me at your earliest convenience. Unless sooner terminated as hereinafter ' provided,this commitment shall remain in effect until October 15,2006. In the event that the loan has not closed by that date,all obligations of the BDC to Borrower shall cease. To be accepted in a timely manner, this commitment must be executed and returned to the BDC by September 18, 2006. Failure to return this commitment by September 18,2006 shall, at the option of the BDC,result in this commitment being terminated. Robbie,it has been a pleasure working with you on this transaction. We look forward to a mutually beneficial relationship between our two companies. Sincerely, Massachusetts Business Development Corporation By: CtU-re T-::. (7�— tu il� Carol F. Cipriani, Serfibr Vice Piesident By: Ygnnetfi J. Smith,President Mr. Robert E. Doyle September 15,2006 Page 4 Agreed to and accepted this day of September,2006. Rw Swampscott Road LLC Z- By-_( Robert E. Doyle.Manager Guarantors: Doyle Sailmakers. Inc. By: Robert E. Doyle,President ;7 Robert E. Doyle,ln(hviduallY MODIFICATION OF COMMERCIAL REAL ESTATE MORTGAGE AND CONDITIONAL ASSIGNMENT OF LEASES AND RENTS This Modification of Mortgage (the "Amendment") is entered into as of this_day of 2007, by and between R& J SWAMPSCOTT ROAD LLC, a Massachusetts limited liability company (the "Mortgagor"), having a indiling address of 43 Norman Street, Marblehead, Massachusetts, and MASSACHUSETTS BUSINESS DEVELOPMENT CORPORATION, a Massachusetts corporation duly organized by law and having a mailing address of 500 Edgewater Drive, Suite 555, Wakefield, Massachusetts(the "Mortgagee"). -WHEREAS, on or about September 22, 2006,the Mortgagor executed and delivered to the Mortgagee, a Commercial Real Estate Mortgage and Conditional Assignment of Leases and Rents each dated September 22, 2006, and filed with the Land Registration Office of the Essex South District Registry of Deeds on September 22, 2006 as Document No. 471786 and 471787, respectively(individually and collectively, the "Mortgage"), encumbering certain property owned by the Mortgagor and known as Unit 8 in the Salem Commerce Park Condominium, 96 Swampscott Road, Salem, Massachusetts(the "Premises"), all as more specifically described in the Mortgage; WHEREAS, at the request of the Mortgagor,the Mortgagee has modified the terms of the $600,000.00 Commercial Promissory Note secured by the Mortgage(the "Loan") pursuant to that certain Amended and Restated Commercial Promissory Note dated as of September 22, 2006 (the "Restated Note"); and WHEREAS, the Mortgagor and Mortgagee desire to modify the Mortgage to refer to the Restated Note under which the maximum principal amount of the Loan was increased from $600,000.00 to the sum of$800,000.00 and to confirm that the modifications contained in the Restated Note are secured by the Mortgage. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Mortgagor and Mortgagee hereby agree as follows: The Mortgagor agrees that the Mortgage shall secure the Mortgagor's prompt, punctual and faithful payment and performance of(i) the Restated Note, whereby the Loan was increased from$600,000.00 to $800,000.00 and any extensions, renewals, substitutions, modifications or replacements thereot (H) any and all liabilities of the Mortgagor to the Mortgagee under the Mortgage and this Modification, and(iii) any and all of the liabilities, debts and obligations,now existing or hereafter arising, or at any time owing by the Mortgagor to the Mortgagee, of each and every kind, nature and description, including, without limitation, all costs of collection, attorneys'reasonable fees, and all court and litigation costs and expenses. Any default under the terms of the Restated Note shall be a default hereunder. Except as specifically modified here4 all terms and conditions of the Mortgage, specifically including the Statutory Condition for breach of which the Mortgagee may have the Statutory Power of Sale, shall remain in full force and effect as originally constituted and are hereby ratified and confirmed. IN WITNESS WHEREOF, the Mortgagor and Mortgagee have executed this Amendment under seal as of the date first above written. Signed in the presence of R&J SWAMPSCOTT ROAD LLC By ROBERT E. DOYLE, Manager By JANET DOYLE, Manager 2 MASSACHUSETTS BUSINESS DEVELOPMENT CORPORATION By CAROL F. CIPRIANI, Senior Vice President COMMONWEALTH OF MASSACHUSETTS Middlesex, ss. On this day of 2007,before me,the undersigned notary public, personally ifi n, appeared Robert E. Do, yle, proved to me through satisfactory evidence of ident catio which was a driver's license, to be the person whose name is signed on the preceding or attached document, and acknowledged to me that he signed it voluntarily for its stated purpose as Manager of R&J Swampscott Road LLC. Notary Public My Commission Expires: 3 AMENDMENT AND RESTATEMENT OF COMMERCIAL PROMISSORY NOTE This Amendment and Restatement of Commercial Promissory Note("Amendment and Restatement"), entered into this day of 2007, by and between R&I SWAMPSCOTT ROAD LLC, a Massachusetts limited liability company (hereinafter the "Bor rower"), DOYLE SAILMAKERS, INC., a Massachusetts corporation, ROBERT E. DOYLE, individually, JANET DOYLE, individually(individually and collectively, the "Guarantors"), all having a mailing address of 43 Norman Street, Marblehead, Massachusetts, and MASSACHUSETTS BUSINESS DEVELOPMENT CORPORATION, a Massachusetts corporation duly organized by law and having a mailing address of 500 Edgewater Drive, Suite 555, Wakefield, Massachusetts (hereinafter the "Lender"). RECITALS WHEREAS, on or about September 22, 2006, the Lender and Borrower entered into a loan arrangement providing, among other things, that the Lender would lend the Borrower the sum of $600,000.00 (the "Mortgage Loan") to provide funds to assist in the acquisition of the premises located at Unit 8 in the Salem Commerce Park Condominium, 96 Swampscott Road, Salem, Massachusetts (the "Premises"), evidenced by a Commercial Prontissory Note in the original principal sum of$600,000.00 (the "Note"); and WHEREAS, the Borrower's obligations under the Note are secured by: (a) a Commercial Real Estate Mortgage (the "Mortgage") granted to the Lender on the Premises; (b) a Conditional Assignment of Leases and Rents (the "Collateral Assignment") granted to the Lender with respect to all rents and leases pertaining to or derived from the Premises; (c) a Loan Agreement (the Page I of 10 "Loan Agreement"); (d)the unlimited guarantees and limited guaranty (individually and coffectively, the "Guaranty") by the Guarantors of all obligations under the Note, the Mortgage, the Loan Agreement and the Collateral Assignment, which documents, together with the Guaranty and all other documents securing, collateral to, or executed in connection with the Mortgage Loan are hereinafter collectively referred to as the "Original Loan Documents"; and WHEREAS, the Borrower has requested the Lender to increase credit availability under the Mortgage Loan by $200,000.00 to the sum of$800,000.00, and the Lender is willing to accede to such request upon certain conditions; and WHEREAS, the parties desire to amend and restate the terms of the Note pursuant to the provisions of this Amendment and Restatement, and to acknowledge and continue the validity of the Original Loan Documents, as amended or modified by this Amendment and Restatement (collectively the "Loan Documents"). NOW, THEREFORE, in consideration of$1.00 in hand paid each to the other, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: THAT THE ORIGINAL LOAN DOCUMENTS ARE HEREBY AMENDED AND MODIFIED TO THE EXTENT NECESSARY TO REFLECT THAT THE CREDIT AVAILABILITY UNDER MORTGAGE LOAN IS INCREASED FROM THE PRESENT SUM OF $600,000.00 TO THE SUM OF $800.000.00. UPON EXECUTION, THIS AMENDMENT AND RESTATEMENT SHALL BE A REPLACEMENT AND SUBSTITUTION OF THE NOTE, AND THE TERMS OF THE NOTE SHALL BE SUPERSEDED BY THIS AMENDMENT AND RESTATEMENT. THE PARTIES ACKNOWLEDGE THAT Page 2 of 10 $200,000.00 OF NEW PRINCIPAL DEBT OVER THAT PRESENTLY EXISTING IS EVIDENCED AND CREATED HEREBY. THE PARTIES ACKNOWLEDGE THAT THE DEBT EVIDENCED BY THE NOTE, UPON THE EXECUTION OF THIS AMIENDM[ENT AND RESTATEMENT, SHALL BE MERGED INTO AND BE EVIDENCED HEREBY; THAT THE TOTAL SUM OF SUCH INDEBTEDNESS SHALL BE AS SET FORTH IN THIS AMENDMENT AND RESTATEMENT, AND THAT THE NOTE SHALL HAVE NO FURTHER INDEPENDENT EFFECT EXCEPT AS SET FORTH HEREIN. THE ORIGINAL LOAN DOCUMENTS SUPPORTING THE NOTE SHALL BE DEEMED MODIFIED TO THE EXTENT NECESSARY TO REFLECT THAT THE MORTGAGE LOAN HAS BEEN INCREASED FROM THE PRESENT UNPAID PRINCIPAL SUM OF $600,000.00 TO $800,000.00. EXECUTION OF TIES AMENDMENT AND RESTATEMENT BY THE BORROWER SOLELY ON THE FINAL SIGNATURE LINE SHALL BE THE ONLY EXECUTION REQUIRED TO CREATE A BINDING EXECUTION BY THE BORROWER. THE PARTIES AGREE AND ACKNOWLEDGE THAT THE TERMS OF THE AMENDMENT AND RESTATEMENT EVIDENCING $200,000.00 OF NEW DEBT OVER THAT PRESENTLY EXISTING, TOGETHER WITH THE DEBT PREVIOUSLY EVIDENCED BY THE NOTE, SHALL BE AS FOLLOWS: Page 3 of 10 MASSACHUSETTS BUSINESS DEVELOPMENT CORPORATION AMENDED AND RESTATED COMMERCIA1 PROMISSORY NOTE Wakefield, Massachusetts $800,000.00 As of September 22, 2006 FOR VALUE RECEIVED, the undersigned, R&J SWAMPSCOTT ROAD LLC!, a Massachusetts limited liability company (hereinafter the "Borrower"),jointly and severally if more than one, promise(s) to pay to MASSACHUSETTS BUSINESS DEVELOPMENT CORPORATION, a Massachusetts corporation duly organized by law and having a mailing address of 500 Edgewater Drive, Suite 555, Wakefield, Massachusetts 01880(hereinafter called the "Lender"), or order, the sum of EIGHT HUNDRED THOUSAND AND 00/100 ($800,000.00) DOLLARS, with interest thereon in arrears at the initial per annum rate of 10.25% (the "Initial Fixed Rate"), based on a three hundred sixty(360) day year and actual days elapsed, due and payable as follows: (i) Interest on the unpaid principal balance shall be payable monthly commencing on the I st day of November, 2006, and on the same day of each month thereafter until April 1, 2007 (the "Adjustment Date"); (ii) Thirty(30) days following the Adjustment Date and on the same day of each month thereafter, until October 1, 2007 (the "Initial Change Date"), the Borrower shall make consecutive monthly payments of principal and interest each in the amount of$7,914.99, said sums representing payments of principal and interest on a direct-reduction mortgage-style basis based upon an amortization schedule of two hundred thirty-four (234) months; (iii) On the Initial Change Date, and on each annual anniversary thereafter(each such annual anniversary, including the Initial Change Date, being referred to as a "Change Date"), the interest rate shall be recast and fixed for the ensuing twelve (12) months at an annual percentage rate equal to the aggregate of the national Prime Rate of interest published in the Wall Street Journal under the heading "Money Rates" (the "Index") in effect at each Change Date, plus two (2.00%) percent (the "Margin"). (iv) Thirty (30) days following each Change Date and on the same day of each month thereafter, the Borrower shall make consecutive monthly payments of principal and interest on a direct-reduction mortgage-style basis, which payments shall be computed by the Lender as of each Change Date, based upon(a) a continuation of Page 4 of 10 the original amortization schedule; (b) a fixed per annurn interest rate equal to the Index in effect at each Change Date, plus the Margin; and (c)the then outstanding principal balance due under this Note; and (v) A final payment equal to the full unpaid principal balance and all unpaid interest shall be due and payable two hundred forty(240)months from the date of this Note. If at any time while this Note remains outstanding, the Index is no longer available, the Lender may select a new index which is based upon comparable information. SECTION 1. PAYMENT TERMS AND COVENANTS. 1.1 PAYMENTS, PREPAYMENTS. All payments hereunder shall be made by the Borrower to the Lender in United States currency at the Lender's address specified above (or at such other address as the Lender may specify), in immediately available funds, on or before 2:00 p.m. (Boston, Massachusetts time) on the due date thereof Payments received by the Lender prior to the occurrence of an Event of Default will be applied first to fees, expenses and other amounts due hereunder(excluding principal and interest); seco to accrued interest;and third to outstanding principal; after the occurrence of an Event of Default payments will be applied to the Obligations under this Note as the Lender determines in its sole discretion. The Borrower may pay all or a portion of the amount owed earlier than it is due, provided that the Lender shall be entitled to a prepayment premium based on the following schedule: (i) 5.00% of the sum(s)prepaid during the first (I st) Loan Year; (ii) 4.00% of the sum(s) prepaid during the second(2nd) Loan Year; (iii) 3.00% of the sum(s)prepaid during the third (3rd) Loan Year; (iv) 2.00% of the sum(s) prepaid during the fourth(4th)Loan Year; and (v) 1.00% of the sum(s) prepaid during the fifth(5th) Loan Year. Notwithstanding the foregoing, the Borrower shall be permitted to prepay without penalty up to V 00,000.00 of principal during any Loan Year. Prepayments shall be applied to installments of principal in the inverse order of the date on which they become due. Amounts prepaid may not be reborrowed. The above-referenced prepayment premium shall be effective also upon the Lender's acceleration of all sums due hereunder after the occurrence of an Event of Default. 1.2 DEFAULT RATE. To the extent permitted by applicable law, upon and after the occurrence of an Event of Default (whether or not the Lender has accelerated payment of this Page 5 of 10 Note), interest on principal and overdue interest shall, at the option of the Lender, be payable on demand at a rate per annum.(the "Deffiult Rate")equal to five (5.00%) percent per annum above the rate of interest otherwise payable hereunder. 1.3 LATE PAYMENT. Without limitation of the foregoing Section 1.2, if a payment of principal or interest hereunder is not made within ten(10) days of its due date, the Borrower will pay on demand a late payment charge equal to five (5.00%) percent of the amount of such payment. Nothing in the preceding sentence shall affect the Lender's right to accelerate the maturity of this Note in the event of any default in the payment of this Note. SECTION 2. DEFAULTS AND REMEDIES. 2.1 DEFAULT. The occurrence of any of the following events or conditions shall constitute an"Event of Default" hereunder:' (a) (i) default by the Borrower in the payment within ten(10) days of the date when due of the principal of or interest or other sum due on this Note or due under any mortgage securing this Note or due under any other Obligation; or(ii) any other default by the Borrower in the performance of this Note or of any other Obligation, which defitult remains uncured after the expiration of any applicable grace or cure period, or if no grace or cure period is specifically enumerated, which default remains uncured for thirty(30) days after notice to Borrower or if incapable of being cured within thirty(30) days, failure by the Borrower within such thirty(30) day period to commence and diligently pursue same and to finally effect such cure within ninety(90) days of the giving of such notice by the Lender; (b) fliflure of any representation or warranty of any Obligor hereunder or under any agreement or instrument constituting or relating to any collateral for the Obligations or of any representation or warranty, statement or information in any documents or financial statements delivered to the Lender in connection herewith to be true and correct; (c) default or breach of any condition by the Borrower under any mortgage, security agreement, assignment of lease, or other agreement securing or otherwise relating to any collateral for the Obligations; (d) failure by the Borrower to fiimish the Lender promptly on request with financial information about, or to permit inspection by the Lender of any books, records and properties ot the Borrower upon reasonable notice by the Lender to the Borrower; (e) death, dissolution, termination of existence, insolvency, appointment of a receiver or other custodian of any part of the property o� assignment for the benefit of creditors by, or the commencement of any proceedings under any bankruptcy or insolvency laws by or against (and if against, remaining undismissed and unstayed for forty-five (45) days after commencement), or any change in control o� any Obligor. Page 6 of 10 2.2 REMEDIES. Upon the occurrence of an Event of Defitult, or at any time thereafter, at the option of the Lender, all Obligations of the Borrower shall become immediately due and payable without notice or demand and, if the Obligations are secured, the Lender shall then have in any jurisdiction where enforcement hereof is sought, in addition to all other rights and remedies provided by agreement or at law or in equity,the rights and remedies of a secured party under the Uniform Commercial Code of Massachusetts. AD rights and remedies of the Lender are cumulative and in addition to any rights or remedies provided by law or any other agreement, and may be exercised separately or concurrently. SECTION 3. DEFINITIONS. For purposes of this Note, the following definitions shall apply: "Loan Year" shall mean a period commencing on September 22, 2006(or an annual anniversary thereof) and ending on the day before the next succeeding annual anniversary thereof By way of example, the Sec6nd Loan Year will commence on September 22, 2007 and end on September 21, 2008; "Obligation"means any obligation hereunder or otherwise of any Obligor to the Lender or to any of its subsidiaries or affiliates,whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising; and "Obligor" means the Borrower, any guarantor or any other person primarily or secondarily liable hereunder or in respect hereot including any person or entity who has pledged or granted to the Lender a security interest or other lien in property on behalf of the Borrower to constitute collateral for the Obligations. SECTION 4. MISCELLANEOUS. 4.1 WAIVER, AMENDMEN . No delay or ornission on the part of the Lender in exercising any right hereunder shall operate as a waiver of such right or of any other right under this Note. No waiver of any right or amendment hereto shall be effective unless in writing and signed by the Lender nor shall a waiver on one occasion be construed as a bar to or waiver of any such right on any future occasion. Without limiting the generality of the foregoing, the acceptance by the Lender of any late payment shall not be deemed to be a waiver of the Event of Default arising as a consequence thereof Each Obligor waives presentment, demand, notice, protest, and all other demands and notices in connection with the delivery, acceptance, perfortnance, default or enforcement of this Note or of any collateral for the Obligations, and assents to any extensions or postponements of the time of payment or any and all other indulgences under this Note or with respect to any such collateral, to any and all substitutions, exchanges or releases of any such collateral, or to any and all additions or releases of any other parties or persons primarily or secondarily liable hereunder, which from time to time may be granted by the Lender in connection herewith regardless of the number or period of any extensions. Page 7 of 10 4.2 SECURITY. SET-OFF. The Borrower grants to the Lender, as security for the fiffl and punctual payment and performance of the Obligations, a continuing hen on and security interest in all securities or other property belonging to the Borrower now or hereafter held by the Lender and in all deposits(general or special, time or demand, provisional or final) and other sums credited by or due from the Lender to the Borrower or subject to withdrawal by the Borrower; and regardless of the adequacy of any collateral or other means of obtaining repayment of the Obligations, the Lender is hereby authorized at any time and from time to time, without notice to the Borrower (any such notice being expressly waived by the Borrower) and to the fullest extent permitted by law, to set off and apply such deposits and other sums against the Obligations of the Borrower upon the occurrence of an Event of Default. 4.3 TAXES. The Borrower agrees to indemnify the Lender from and hold it harmless from and against any transfer taxes, documentary taxes, assessments or charges made by any governmental authority by reason of the execution, delivery, and performance of this Note and any collateral for the Obligations. 4.4 EXPENSES. The Borrower will pay on demand all reasonable expenses of the Lender in connection with the preparation, administration, default, collection or enforcement of this Note or any collateral for the Obligations, or any waiver or amendment of any provision of any of the foregoing, including, without limitation, attorneys' fees of outside legal counsel or the allocation costs of in-house legal counsel, and including without limitation any fees or expenses associated with any travel or other costs relating to any appraisals, examinations, adnikistration of the Obligations or any collateral therefor, and the amount of all such expenses shall,until paid, bear interest at the rate applicable to principal hereunder (including any Default Rate)and be an Obligation secured by any such collateral. 4.5 BANK RECORDS. The entries on the records of the Lender(including any appearing on this Note) shall be prima facie evidence of the aggregate principal amount outstanding under this Note and interest accrued thereon. 4.6 FINANCIAL INFORMAII The Borrower shall flirnish the Lender from time to time with such financial statements and other information relating to any Obligor or any collateral securing this Note as the Lender may require. Without limiting the generality of the foregoing if this Note is secured by a mortgage, such information shall include a rent roll with respect to the property mortgaged, certified by the Borrower to be complete and accurate, copies of all leases of such property and such financial and other information concerning lessees as the Lender shall require. Financial information about the Borrower fimiished to the Lender shall be true and correct and fairly represent the financial condition of the Borrower as of the date(s) fin-nished and the operating results of the Borrower for the periods for which the same are fimlished. The Borrower shall permit representatives of the Lender to inspect its properties and its books and records, and to make copies or abstracts thereof upon reasonable notice. Page 8 of 10 4.7 GOVERNING LAW: CONSENT TO JURISDICTION' This Note is intended to take effect as a sealed instrument and shall be governed by, and construed in accordance with, the laws of The Commonwealth of Massachusetts, without regard to its conflicts of laws rules. The Borrower agrees that any suit for the enforcement of this Note may be brought in the courts of The Commonwealth of Massachusetts or any Federal Court sitting in such Commonwealth and consents to the non-exclusive jurisdiction of each such court and to service of process in any such suit being made upon the Borrower by mail at the address specified below. The Borrower hereby waives any objection that it may now or hereafter have to the venue of any such suit or any such court or that such suit was brought in an inconvenient court. 4.8 SEVERABILITY. PARAGRAPH HEADINGS. If any provision of this Note shall be invalid, illegal or unenforceable, such provisions shall be severable from the remainder of this Note and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Paragraph headings are for the convenience of reference only and are not a part of this Note and shall not affect its interpretation. Signed in the presence of- R&J SWAMPSCOTT ROAD LLC By ROBERT E. DOYLE, Manager By JANET DOYLE, Manager Address: 43 Norman Street Marblehead, 01945 MASSACHUSETTS BUSINESS DEVELOPMENT CORPORATION B CAROL F. CIPRIANI, Senior Vice President Page 9 of 10 The undersigned hereby consent to the terms and provisions of the within Amended and Restated Commercial Promissory Note and hereby jointly and severally reaffmn the validity of their written Unlimited Guarantys and Limited Guaranty, each being dated September 22, 2006, and acknowledge the undersigned!s continuing liability thereunder as it relates to the within Amended and Restated Commercial Promissory Note as of the 22nd day of September, 2006. Signed in the presence of DOYLE SAILMAKERS, INC. By ROBERT E. DOYLE, President and Treasurer ROBERT E. DOYLE, Individually JANET DOYLE, Individually Page 10 of 10 ATTACHMENT F Project Budget CONTINUATION SHEET AIA DOCUMENT G703 PAGE 2 OF 2 PAGES AIA Docunient G702,APPLICATION AND CERTIFICATION FOR PAMNT,containing I APPLICATION NO: 0 �Onmactor's signed certification is anached, 3 APPIfCAVOT4 DATE: 02,01.07 In tabulations below,amounts are stated to the nearest dollar. Use Colunin I on Contracts where variable retainage for line item my apply. PERIOD TO: 02.01.07 ARcHrmcrs PROJECT NO: A B F G H TT—Em —j)EscRIpI 17N OF WORK --WH—EDULED �0;;;;E;;E:D: MATERWAS NO, VALUE % BALANCE RETAINAGE FROM PREVIOUS —TMT—PERIOD pjij�MfjLy C-- (G-C) PLEMAINING -INVOICES STORED AND ON BUDGET TO GENERAL REQUIREMENTS $2.20.00.00 $11,851.69 $4,162.10 DORE) INSURANCE@ 1.25% $6,305.02 $16,013.79 71% S6,586.21 $3,157.77 $886.46 640/ $2,260.79 DEMOLITION --S16,700.00 $8,140.0 1 0 $7 1 9-7.00- SITE WORK ------- ... . ...... S8,937.00 54%. S7,763.00 $13.850.GO ------ 96% $600.00 $13,850.00 CONCRETE $1 s�0 7 .30 $14,435.00 109% (SI,501.30) —COn" it iiy�?5.00 $8X0.00 $10.715.00 CONCRETE FLOOR EPDXY Ut $18,965.00 105% ($870.00) MASONRY $1,600.00 $-1,600.00 --3.9..% $2.55.0.00 V00Y ifoy STRUCTURAL.STEEEL/MISC.METALS $8,3 $6,195.0-0 $6,195.00 75% $2,105.00 CARPENTRY MATERIALS $15,450.00 ifi� .— $646.87 4% $14,803.13 CARPENTRY LABOR . ..... $3,395.00 ROOFING $8,015.00 49% $8,383.00 $1,449.00 -1.00 $1,449.00 29% S3,55 WINDOWS S0170-92. $3,�ROO ---$3,5.20.00 58%. $2,556.00 DOORS&HARDWARE ---- $5,830.00, $7,794.99 $7,794.99 134% ($1,964.99) —C)I00y5h 1OAdW STOREFRONT DOORS $5,64(10)0 $7,326.90 $7,326.90 ------130% ($1,686.90) ckoCp OVERHEAD DOORS $1,715.00. il,715.00 $0.00 $21,030.00 $5,435.GO $26,465.00 101% METAL STUD/DRYWALL CEILING ($270.00) —mek5+�AA PRODUCTION F_LOOR/INST SLpo.og $0.00 S6,890.00 Kol ALL $15,12S:00 13,579.98 PAINTING $13,579.98 90% $1,545.02 BATH ACCESSOMES $6,250.00 $0.00 S6,250.00 $50.0.00 PLUMBING $0.00 $5KOO S23,050.00 $18,600.00 $186.20 S18,786.20 82% S4,26.80 . FIRE PROTECTION $19,809.00 :��J�17�S20.oq HVAC ........ $17,820.00 90% $1,980.00 ELECTRIC -.---.—S45,000;00,-- $45,000.00 -- $45,000.00 i0ov. $6-.60 $110,000.00. $987.80 $37,654.46 34% i72,345.54 $3CW. FIRE DETECTION LIGHTING $9,5GO.00 $0.00 Sq,-500.00 S I8,5ft00 $7,102.00 $7,102.00 38% $11,398.00 GC OY ERHEAD&PROFIT @ 15% $65,79L50 $32,950.59 $9,250.03 64% $23,590.88 S42,200.62 GRAND TOTAL S ... �S]10,70&52 1 $255,779.00 $0.00 $327,582.341 64 $183,124.18 L!M- -- -"'7- - --f', -ji7l,803.34 — —T- I isers may obtain validation of thht doc ent by requ;StIng Of thill 11COM9 a COM016ted AIA Dacument DMI Carfifi�mln..1 n='..�. APPLICATION AND CERTIFICATION FOR PAYMENT AL4 DOCUMENT G702 PAGE ONE OF PAGES TO OWNER; Robert E, Doyle PROJECT: Doyle Sailmakers APPLICATION.N( 3 Distribution to: 89 Front Street 96 Swamps con Road,Unit No.8 =OWNER Marblehead,MA 01945 Salem,MA 01970 =ARCHITECT PERIOD TO: 02.01.07 =CONTRACTOR FRO)ICONTRACTOR: VIA ARCE[ITECT: Groom Construction Co.,Inc. 324 Essex Street PROJECT NOS: Swampscott,MA 0 1907 CONTRACTFOR: CONTRACT DATE: CONTRACTOR'S APPLICATION FOR PAYMENT The undersigned Contractor certifies that to the bat of the Contractors knowledge, Application is made for payment,as shown below,in connection with the COnftcL Continuation Sheet,AIA Document G703,is attached. inforritation and belief the Work covered by this Application for Payment has been a completed in accordance with the Contract Documents,that all amounts have been paid by the Contractor for Work for which previouis Certificates for Payment were issued and payments received fi6m the Owner.and that current payment shown herein is now due. 1. ORIGINAL CONTRACT SUM $ 510,106.52 2. Net change by Change Orders 3. CONTRACT SUM TO DATE(Line 1 2) CONTRACT Orpelpt Construction a.,Inc. 4. TOTAL COMPLETED&STORED TO 510 706T2- 327,572.34 DATE (Column 0 on G703) By: te: 5. RETAMAGE: a._%of Completed Work State of., County of., (Column D+E on G703) Subscribed and swonkto before m this day of b. %of Balance of Contract Notary Public: (Column F on G703) My Cominission expires: Total Reminage(Lines 5a+51b or Total in Column I of G703) $ .0.00 ARCHITECTS CERTIFICATE FOR PAYMENT i. TOTAL EARNED LESS RETAINAGE $ 327.572.34 In accordance with the Contract Docmaents�based on on-site observations and the dam (Line 4 Less Line 5 Tomd) comprising the application,die Architect catifies to the Owner that to the bat of the LESS PREVIOUS CERTIFICATES FOR PAYMENT(Line 6 from prior Certificate) Architect's lmowledge�information and belief the Work has progressed as indicated, CURRENT PAYMENT DUE $ $25577900 the quality of the Wark is in accordance with the Conftai:t Documents,and the Contractor is entitled to payineat of the AMOUNT CERTIFEED. BALANCE TO FINISH,INCLUDING FLETAINAGE $ 193;134.18 (Line 3 less Line 6) AMOUNT CERTIFIED...........S CHANGE ORDER SUMKW ADDITIONS DEDUCTIONS- (Attach eaplanation emount c&Wfled dVmfrom the mount applied.Initial allfigures on this Total changes approved in previous months by Owner Application and onthe Coniiiituadon Shat that are changed to conforin with the amount certified.) ARCHITECr: Total approved this Month By: Date: TOTALS $0.00 $0.00 This Certificate is nofnegoidable. The AMOUNT CERTIFIED is payable only to the NET CHANGES by Change Order $0.00 Contractor named beran.ismance,payinad and acceptance at payment are without prejudim ED my righis of the Owner or Conmictor under this Contract. ADOCUKIENTG702 APKICAT*NMOCERTIFI�Tl��RPAWEW.IMEM�.�-Olm T14E Altifnkr�WFMUTE 0.F ARCIffrEGIM,1735��AVE..N.W.,WASHINGTON.DC 2�5292 Isere may obtain validation of this document by requesting a completed AIA Document D401-Certillcation of Documenra Authenticity from the Licensee. eage i or i Janet Doyle From: Peter Beaudoin [pbeaudoin@groomco.com] Sent: Wednesday, February 14, 2007 2:47 PM To: Robbie Doyle Cc: Janet Doyle Subject: Extra Work Items Robbie: The following are some of the most recent extra work items: 1) Sanding of manufacturer name off production floor. Estimated extra cost of$2,000. 2) New Office carpet and cove base including demo of existing. Extra cost of$8,200. 3) Suppty/Install port patch panels and terrytinate all voice and data cables in IT room. Extra cost of$3,500. 4) Upgrade to 100%solid epoxy and grinding/patching concrete floor. Extra cost of$1,800. 5) 100%white epoxy coat sail wash area and behind office area. Extra cost of$3,400. 6) Plumbing. Now utility sink and fix existing or new fixtures if required in bathrooms. If you have any questions or roncems, please feel free to call. Peter Beaudoin, Project Manager Groom Construction 617-548-0829 3/9/2007 ATTACHMENT G Construction Plans ATfACHMENT H City Council Resolution dated March 19, 1995 authorizing the City of Salem to use TIF in Salem EOA RESOLUTION AUTHORIZING THE USE OF TAX INCREMENT FINANCING IN THE SALEM ECONOMIC OPPORTUNITY AREA WHEREAS,-the City of Salem is part of the area designated the Beverly & Salem Regional Economic Target Area and the Salem Economic Opportunity Area; WHEREAS, there is strong support for economic development and the use of Tax Increment .Financing as an economic development tool to create jobs and encourage business expansion and relocation to the City of Salem; NOW THEREFORE BE IT RESOLVED by the City Council of the City of Salem that: (1) Tax Increment Financing may be used as a tool to encourage economic development within the Salem Economic Opportunity Area. (2) The Mayor is hereby authorized to execute and implement Tax Increment Financing agreements. Adopted this day of 19 by the Salem City Counci I at a regular City Council meeting with a quorum present. X- Neil J. Harrington, Mayor Date AT'TEST: Deborah E. Burkinshaw, City Clerk SEAL ATrACHMENT I TIF Plan Spreadsheet Estimated Value of EDIP Local Tax Incentives for Doyle Sailmakers .!pjeqt cu a 011aqte�4� mq� Z?W, led Tp mp ed Vl� �-1 r rl alue B I, T��Jeer! �- ,w - I ­ - P :Perty R ai�I I �Y UI: 0 Totaf ��E 1: r f I if B a ousAnd �Qk, I, axe as WW41111 7� 4 ied a I U, 4 c `tI eel I vw-i WN 2008 $21.33 $761,931.00 $16,251.99 1 $16,251.99 $0.00 $16,251.99 �i2l,216.uu $27,216.00 2009 $21.33 $780,979.28 $16,658.29 0.8 $13,326.63 $0.00 $13,326.63 $27,216.00 $30,547.66 2010 $21.33 $800,503.76 $17,074.75 0.6 $10,244.85 $0.00 $10,244.85 $27,216.00 $34,045.90 2011 $21.33 $820,516.35 $17,501.61 0.4 $7,000.65 $0.00 $7,000.65 $27,216.00 $37,716.9 2012 $21.33 $841,029.26 $17,939.15 0.2 $3,587.83 $0.00 $3,587.83 $27,216.00 $41,567.32 2013 $21.33 $862,054.99 $18,387.63 0 $0.00 $0.00 $0.00 $27,216.00 $45,603.63 *Assumes annual increase of 2.5%in assessed property values* TOTALS $50,411.94 $0.00 $50,411.94 $163,296.001 $216,697.48 Base Value FY06 $ 1,275,969 Purchase Price $ 1,882,000.00 Value After Building Renovation $ 2,037,900 Cost of Improvements $ 500,000.00 Increment in Value $ 761,931 Total Investment $ 2,382,000.00 *Value determined by taking 95%of purchase price(1,787,900) plus 50%of cost of RE improvements(250,000) Estimated State and Municipal Tax Benefits Estlmated�Value.of,g' f,!Estimiitiid�Valts"fz�Staite's-10%;�,� 44 lue,bf'LocaU' 41,� lotal:EstimartedYa ITC 'incentivis?W T'. $119,100.00 1 $0.00 $50,411.94 $169,511.94 ITC is calculated by Multiplying the Certi Project's Private Investment Number by .05(1,882,000+500,000=2,382,000) The value of the 10%ABTD, if applicable, should be determined by the Company's Tax Professionals- ATTACHMENTJ City Council Resolution 1 — Authorizing Certified Project Application RESOLUTION I AUTHORIZING CERTIFIED PROJECT APPLICATION OF DOYLE SAILMAKERS, INC. WHEREAS, Doyle Sailmakers, Inc. has applied for designation as a Certified Project under the Massachusetts Economic Development Incentive Program created by Chapter 23A of Massachusetts General Laws; WHEREAS, there is strong support for economic development and the use of Tax Increment Financing as an economic development tool to create jobs and encourage business expansion and relocation to the City of Salem; WHEREAS, Doyle Sailmakers, Inc. meets the minimum standards of the Economic Development Incentive Program and the local economic development goals and critetia established as part of the documents creating the Beverly& Salem Regional Economic Target Area and the Salem Econornic Opportunity Area; WHEREAS, the proposed certified project is located at 96 Swampscott Road, Unit 8. The legal description of this property is as follows and is within the boundaries of the Salem Economic Opportunity Area: That property situated in Salem in the County of Essex and Cornmonwealth of Massachusetts, described as follows: 96 Swampscott Road, Salem, Massachusetts, Unit 8, described in the UNIT DEED dated September 19, 2006 and filed on September 22, 2006 with the Essex South Registry District of the Land Court as Document Number 471783. The Unit is located in SALEM COMMERCE PARK CONDOMINIUM created by Master Deed dated April 24, 2006 and filed on April 27, 2006 with the Essex South Registry District of the Land Court as Document Number 466707, and noted on Certificate of Tide Number C-205000, as amended by the First Amendment to the Master Deed dated June 2, 2006 and filed on June 13, 2006 with said Registry District as Document Number.468416, and as ftirther----- amended by the Second Amendment to the Master Deed dated August 1, 2006, and filed on August 4, 2006 with said Registry District as Document Number 470286, and by the Third Amendment to the Master Deed dated September 12, 2006 and filed on September 22, 2006 with said Registry District as Document Number 471780, in accordance with the provisions of G.L. c. 183A. The UNIT contains the AREA listed in the UNIT DEED and is laid out as shown on the plans filed with the Master Deed and to which is affixed a verified statement in the form provided for in G.L. c. 183A, Section 9. WHEREAS, the City of Salem has agreed to offer Doyle Sailmakers, Inc. a Tax Increment Financing Agreement; Pendin,g 00 CoumilApproval WHEREAS, Doyle Sailmakers, Inc. will invest approximately $2,382,000 to construct a new manufacturing space and will retain 31 jobs and create 12 new permanent, full-time jobs for residents of the Beverly & Salem Regional Economic Target Area and the City in 5 years. NOW THEREFORE BE IT RESOLVED that the Salem City Council approves the Certified Project application of Doyle Sailmakers, Inc. and forwards said application for certification to the Massachusetts Economic Assistance Coordinating Council for approval and endorsement. Adopted this— day of March, 2007 by the Salem City Council at a regular City Council meeting with a quorum present. Date: Kimberly Driscoll, Mayor ATTEST: Cheryl LaPointe, City Clerk SEAL Pendin ,g GO CounalAppmval ATTACHMENT K City Council Resolution 2 — Authorizing a Tax Increment Financing Agreement RESOLUTION 2 AUTHORIZING A TAX INCREMENT FINANCING AGREEMENT FOR DOYLE SAILMAKERS WHEREAS, the City of Salem is part of the area designated the Beverly & Salem Regional Economic Target Area and the Salem Economic Opportunity Area; WHEREAS, the Mayor of the City of Salem has prepared a Tax Increment Financing Agreement in accordance of Chapter 40 and 751 CMR 11.00; WHEREAS, there is strong support for economic development and the use of Tax Increment Financing as an economic development tool to create jobs and encourage business expansion and relocation to the City of Salem; WHEREAS, there is strong support for using Tax Increment Financing to encourage the relocation of Doyle Sailmakers, Inc. to the City of Salem and renovation of 96 Swampscott Road, Unit #8, the property owned by R&J Swampscott Road LLC and leased to Doyle Sailmakers, Inc.; WHEREAS, this property is located in the Salem Economic Opportunity Area; NOW THEREFORE BE IT RESOLVED by the Salem City Council that: (1) The Tax Increment Financing Agreement be adopted as it has been substantially submitted to the City Council. A copy of said Tax Increment Financing Agreement is attached as Exhibit A, and made a part of this Resolution. (2) The area to be designated as a Tax Increment Financing Zone is: That property situated in Salem in the County of Essex and Commonwealth of Massachusetts described as follows: 96 Swampscott Road, Salem, Massachusetts, Unit 8, described in the UNIT DEED dated September 19, 2006 and filed on September 22, 2006 with the Essex South Registry District of the Land Court as Document Number 471783. The Unit is located in SALEM COMMERCE PARK CONDOMINIUM created by Master Deed dated April 24, 2006 and filed on April 27, 2006 with the Essex South Registry District of the Land Court as Document Number 466707, and noted on Certificate of Title Number C-205000, as amended by the First Amendment to the Master Deed dated June 2, 2006 and filed on June 13, 2006 with said Registry District as Document Number 468416, and as further amended by the Second Amendment to the Master Deed dated August 1, 2006, and filed on August 4, 2006 with said Registry District as Document Number 470286, and by theThird Amendment to the Master Deed dated September 12, 2006 and filed on September 22, 2006 with said Registry District as Document Number 471780, in accordance with the provisions of G.L. c. 183A. PendinS Qy CoundlApproval The UNIT contains the AREA listed in the UNIT DEED and is laid out as shown on the plans filed with the Master Deed and to which is affixed a verified statement in the form provided for in G.L. c. 183A, Section 9. (3) A map of the Tax Increment Financing Zone is hereby attached as Exhibit B and made a part of this Ordinance. (4) The Tax Increment Financing Agreement shall be binding on all subsequent owners of the property in the Tax Increment Financing Zone. Tbe City of Salem reserves the right to review and renegotiate the Tax Increment Financing Agreement if the business activity ceases to be fully operational during the life of the Tax Increment Financing Agreement, as specified in the Tax Increment Financing Agreement. (5) A copy of the adopted Tax Increment Financing Agreement shall be forwarded to the Massachusetts Economic Assistance coordinating Council for its approval. (6) 'Me effective date of the Tax Increment Financing Agreement shall be July 1, 2007 or the date which the Tax Increment Financing Agreement is approved by the Massachusetts Economic Assistance Coordinating Council,whichever is later. (7) The Mayor is hereby authorized to execute and implement the Tax Increment Financing Agreement. Adopted this day of— day of March, 2007 by the Salem City Council at a regular City Council meeting with a quorum present. Date: Kimberly Driscoll, Mayor ATTEST: Cheryl LaPointe, City Clerk SEAL EXHIBIT A: Tax Increment Financing Agreement EXHIBIT B: Map of Tax Increment Financing Zone llentfii�g Ci�y Couitt-dAppPal EXHIBIT A TAX INCREMENT FINANCING AGREEMENT CITY OF SALEM,MASSACHUSETTS and DOYLE SAILMAKERS, INC. This agreement is made this_ day of March, 2007, by and between the CITY OF SALEM, a municipal corporation duly organized under the laws of the Commonwealth of Massachusetts, having a principal place of business at City Hall, 93 Washington Street, Salem, Massachusetts, 01970, acting through the Mayor, Kimberley Driscoll, (hereinafter called "the CITY"), and DOYLE SAILMAKERS, a Massachusetts corporation, with a principal place of business at 89 Front Street, Marblehead, MA 01945 (hereinafter called"the COMPANY"). This Agreement will take effect as of July 1, 2007 (Fiscal Year 2008). WHEREAS, the COMPANY wishes to locate a manufacturing business at 96 Swampscott Road in Salem; and WHEREAS, the CITY is willing to grant tax concessions in return for guarantee of the renovation of this distressed property and the creation of employment opportunities for local workers; and WHEREAS, the Salem City Council resolved on March 2007, to allow the use of Tax Increment Financing as a tool to encourage economic development within the Salem Economic Opportunity Area; and WHEREAS, the Salem City Council resolved on March 2007 to endorse the Tax Increment Financing Plan negotiated by the CITY and the COMPANY. NOW,THEREFORE, in consideration of the mutual promises contained herein, the parties do mutually agree as follows: A. THE COMPANY'S OBLIGATIONS 1. The COMPANY shall renovate Unit 8 at 96 Swampscott Road in Salem. "The FACILITY" as used herein means 96 Swampscott Road, Unit #8 containing 31,366 square feet to be renovated; that is improvements to the unimproved unit as of the date of this agreement. 2. During the life of this agreement, if the COMPANY decides to sell the FACILITY or the business or to otherwise transfer control of the FACILITY or business and/or operations thereof, the COMPANY shall give the CITY at least three months notice of said sale or transfer. Said notice shall be given by certified mad, return receipt requested, to the Mayor, City Hall, 93 Washington Street, Salem, Massachusetts, 01970. 3. THE CITY'S OBLIGATIONS I. 'I he Cl'I Y shall grant a tax increment financing exemption to the COiNIPANY in accordance with Massachusetts General Laws, Chapter A, Section 3E, Chapter 40, Peneliiig Cio CounalApproval Section 59, and Chapter 59, Section 5. Said exemption shall be granted on the improvements to the FACILITY. Said exemption shall be valid for a period of five (5) years,beginning with fiscal year 2008 Ouly 1, 2007) and ending with fiscal year 2012. During each year of this agreement, the COMPANY will pay taxes based on the apportioned value of the current value for 96 Swampscott Road, on the unimproved unit owned by the COMPANY, as of the date of this agreement (the base tax bill) and on that portion of the value of the FACILITY which is not exempt under the agreement. 2. The exemption schedule on the value of the FACILITY works as follows: for the first year, the COMPANY will pay only the base tax bill and will be granted an exemption of 100% of the full value of the FACILITY. The full value of improvements to the FACILITY is hereinafter called "die INCREMENT". In year two, the COMPANY will pay taxes on 20% of the full value of the INCREMENT, plus the base tax bill. In year three, the COMPANY will pay taxes on 40% of the full value of the INCREMENT, plus the base tax bill. In year four, the COMPANY will pay taxes on 60% of the INCREMENT, plus the base tax bill. In year five, the COMPANY will pay taxes on 80% of the INCREMENT,plus the base tax bill. In year six, the COMPANY will pay taxes on the filU value of the FACILITY. C. OTHER CONSIDERATIONS 1. This Tax Increment Financing Agreement shall be binding on all subsequent owners of the property. ne City of Salem reserves the right to review and renegotiate the Tax Increment Financing Agreement if the business activity ceases to be fully operational during the life of the Tax Increment Financing Agreement. 2. If the COMPANY decides to expand the facility at any time during the life of the Tax Increment Financing Agreement, the CITY and the COMPANY may renegotiate the Tax Increment Financing Agreement to exempt all or part of the value of the expansion from property taxes. The exact amount of that exemption will be deterniiiied at the time of expansion. Executed as a scaled instrument on the day and year first above written. CITY OF SALEM DOYLE SAILMAKERS, INC. Kimberley Driscoll, Mayor Robert Doyle Pendiii ,g GO CouncillIppivial �7'7.'M~' -7 7, TAX INCREMENT FINANCING ZONE DOYLE SAILMAKERS 96 SWAMPSCOTT ROAD UNIT #8 SALEM, MA �P-xk' 14 CITY OF S.—E.N. may. �n"&n 0 0 190 3W LN F..1 V WE V� Map ueated by Salapi and Applied Geographia,Fabma�2007 FOR P�NING PURPOSES ONLY DATASOURCIIS. �.W.cq 0 liele. Tn�W�nw arW Weer Imm MmoGiS da—iPeemacipsem 0 WWI,0.- F-1 ATTACHMENT L Tax Increment Financing Agreement TAX INCREMENT FINANCING AGREEMENT CITY OF SALEM, MASSACHUSETTS and DOYLE SAILMAKERS, INC. This agreement is made this—day of March, 2007,by and between the CITY OF SALEM, a municipal corporation duty organized under the laws of the Commonwealth of Massachusetts, having a principal place of business at City Hall, 93 Washington Street, Salem, Massachusetts, 01970, acting through the Mayor, Kimberley Driscoll, (hereinafter called"the CITY"), and DOYLE SAILIAAKERS, a Massachusetts corporation,with a principal place of business at 89 Front Street, Marblehead,MA 01945 (hereinafter called "die COMPANY"). This Agreement will take effect as of July 1, 2007 (Fiscal Year 2008). WHEREAS, the COMPANY wishes to locate a manufacturing business at 96 Swampscott Road in Salem; and WHEREAS, the CITY is willing to grant tax concessions in return for guarantee of the renovation of this distressed property and the creation of employment opportunities for local workers; and WHEREAS, the Salem City Council resolved on March_, 2007, to allow the use of Tax Increment Financing as a tool to encourage economic development within the Salem Economic Opportunity Area; and WHEREAS, the Salem City Council resolved on March_, 2007 to endorse the Tax Increment Financing Plan negotiated by the CITY and the COMPANY. NOW, THEREFORE, in consideration of the mutual promises contained herein, the parties do mutually agree as follows: A. THE COMPANYS OBLIGATIONS 1. The COMPANY shall renovate Unit 8 at 96 Swampscott Road in Salem. "The FACILITY" as used herein means 96 Swampscott Road, Unit #8 containing 31,366 square feet to be renovated; that is improvements to the unimproved unit as of the date of this agreement. 2. During the life of this agreement, if the COMPANY decides to sell the FACILITY or the business or to otherwise transfer control of the FACILITY or business and/or operations thereof, the COMPANY shall give the CITY at least three months notice of said sale or transfer. Said notice shall be given by certified mail, return receipt requested, to the Mayor, City Hall, 93 Washington Street, Salem, Massachusetts, 01970. 3. THE CITY'S OBLIGATIONS 1 The CITY shall grant a tax increment financing exemption to the COMPANY in accordance with Massachusetts General Laws, Chapter A, Section 3E, Chapter 40, Section 59, and Chapter 59, Section 5. Said exemption shall be granted on the improvements to the FACILITY. Said exemption shall be valid for a period of five (5) Pending 00 CountilApproval years, beginning with fiscal year 2008 Only 1, 2007) and ending with fiscal year 2012. During each year of this agreement, the COMPANY will pay taxes based on the apportioned value of the current value for 96 Swampscott Road, on the unimproved unit owned by the COMPANY, as of the date of this agreement (the base tax bill) and on that portion of the value of the FACILITY which is not exempt under the agreement. 2. The exemption schedule on the value of the FACILITY works as follows: for the first year, the COMPANY will pay only the base tax bill and will be granted an exemption of 100% of the full value of the FACILITY. The full value of improvements to the FACILITY is hereinafter called "the INCREMENT". In year two, the COMPANY will pay taxes on 20% of the full value of the INCREMENT,plus the base tax bill. In year three, the COMPANY will pay taxes on 40% of the full value of the INCREMENT, plus the base tax bill. In year four, the COMPANY will pay taxes on 60% of the INCREMENT, plus the base tax bill. In year five, the COMPANY will pay taxes on 80% of the INCREMENT,plus the base tax bill. In year six, the COMPANY win pay taxes on the full value of the FACILITY. C. OTHER CONSIDERATIONS 1. This Tax Increment Financing Agreement shall be binding on all subsequent owners of the property. The City of Salem reserves the right to review and renegotiate the Tax Increment Financing Agreement if the business activity ceases to be fully operational during the life of the Tax Increment Financing Agreement. 2, If the COMPANY decides to expand the facility at any time during the life of the Tax Increment Financing Agreement, the CITY and the COMPANY may renegotiate the Tax Increment Financing Agreement to exempt all or part of the value of the expansion from property taxes. The exact amount of that exemption will be determined at the time of expansion. Executed as a sealed instrument on the day and year first above written. CITY OF SALEM DOYLE SAILMAKERS, INC. Kimberley Driscoll, Mayor Robert Doyle Pending GO CouncilApproval �jo el Certified Project Application —Page I The Massachusetts Economic Development Incentive Program CERTIFIED PROJECT APPLICATION APPLICANT INFORMATION 1. Name and address of business(es)submitting this application (please list fiscal year end for each business): Doyle Sailmakers, Inc. Fiscal year end is August 31 89 Front Street Marblehead, MA 01945 R &J Swampscott Road LLC 96 Swampscott Road, Unit 8 Salem, MA 01970 2. Name and address of project(if different from above): R & J Swampscott Road LLC Fiscal year end is December 316' 96 Swampscott Road, Unit 8 Salem, MA 01970 3. Location of ETA: Beverly and Salem Regional ETA 4. Location of EOA: Salem 5. Authorization: INVe, (print) Po bex A- r)oN If— of the business(es) applying for Certified Project designation, hereby certify that the information within this application is true and accurate, and reflects the projecrs intentions for job creation and investment. I/We understand that the information provided within this application shall be binding for the duration of the project certification. cz� ';� � is (Sigrikure) (Date) (Signature) (Date) (Additional Signatures, if necessary) (Date) Certified Project Application —Page 2 6. Nature and Purpose of Project: Describe briefly the nature and history of the business as well as the specific expansion/growth/relocation plans: the level of new investment (with a breakdown of type of expense: construction, renovation, acquisition of equipment, etc.) and employment levels — both current and projected. Provide time frames for both the projected total investment and job creation. As part of this narrative, please explain why the business is seeking Certified Project designation. Doyle Sailmakers is a well-known international sailmaking business that was started by Robert Doyle in 1982 in Marblehead. Doyle makes sails for boats Vto 300' and currently has sails on the two most visible yachts in the world, Mirabefla V and the Maltese Falcon. We also produce most of the sails worldwide for the women's keelboat used in the Olympics. Doyle is a very healthy business that needs more space to manuf-acture.This move will allow the company to consolidate two existing locations to increase efficiency, expand into a new product line (construction of airships), and increase manufacturing capacity to meet a growing market demand for its products. Currently Doyle has 31 employees in Marblehead in two locations. With the move to Salem, there will be an immediate and ongoing need for growth in employment that will benefit the ETA. We will train entry-level employees as there is no preparation in any school system or work experience for sailmaking. As we are all aware manufacturing in many fields is moving offshore. With it go jobs previously available to the residents of our state and region. We are seeking Certified Project designation to help Doyle Sailmakers manufacture in the City of Salem and have the ability to provide job opportunities to the ETA. The cost of the new building location at the Salem Commerce Park is $1,882.000. The projected improvements to the location are in the range of$510,000. The additional piece of equipment required for the airships cost $101,000. The loans Doyle has for this project in the amount of$2,276,400. are projected over 20 years. The build out of the space began in November and is scheduled to be finished for Doyle to move in February I 9'h. Certified Project ApplicatIon —Page 3 7. Is this business new to Massachusetts? 0 Yes XD No If no: • Where are the existing Massachusetts facilities? 0 89 Front Street, Marblehead, MA 01945 0 16 Lincoln Avenue, Marblehead, MA 01945 • Will this project requirettrigger the closing or consolidation of any Massachusetts facilities? If yes, please explain. • The two leased facilities above will be consolidated into the • new owned facility in Salem. 8. Is this project an expansion of an existing business? OX Yes 0 No If yes, check the appropriate box: 0 at existing location 0 at new location in same municipality X 0 at new location in different municipality 9. Job Creation In order to qualify for Certified Project Status, the governing statute and regulations require the creation of new, new, permanent full-time employees in Massachusetts. On the chart provided (see next page), please fill in the blanks provided. WORK FORCE ANALYSIS AND JOB CREATION PLAN New Jobs: CURRENT JOBS, if any to be TOTAL, New Jobs: New Jobs: New Jobs: New Jobs: New Jobs: Years 6-10 EMPLOYMENT relocated from Projected New Year One Year Two Year Three Year Four Year Five (20__) LEVEL another MA facility Permanent Jobs (2005) (2006) (2007) (2008) (2009) If Applicable Total Employees at Certified Project Facility in Mass. 0 31 12 4 2 2 2 2 Total Employees in Massachusetts at other sites. 6 #of Employees at Certified Project Location who live in the ETA of the Certified Project 3 #of Permanent Full- Time Employees 30 #of Permanent Part- Time Employees 7 #of Temporary Full- Time Employees #of Temporary Part- Time Employees JOBS BY CLASSIFICATION (11-11 #of Jobs, and verage Wage/S larv. Please feel free to u a your company's classification syste #of Management Positions 3 $100,000 #of Professional Positions 4 $56,000 #of Technical Positions 3 $67,000 #of Skilled Positions 27 $17 per hou #of Unskilled Positions I Certified Project Application —Page 4 Cerfified Project Application —Page 6 10. Certification for Abandoned Buildings — Does the proposed project involve the renovation and reuse of an abandoned building? 0 Yes OX No 0 Unsure if yes or unused, please answer the following questions: (a) How long has the building been vacant? (If know, state date) (b) During this period of time, what percentage of the building was vacant and unused? If the percentage varied during this time period, provide information for each change in the percent of vacant space and the applicable time period. 11.Local Employment—What actions will you take to recruit employees from among residents of the ETA? Provide any information, documentation, or studies which demonstrate that: (a) the business has the intention and capacity to achieve the anticipated level of new permanent full-time jobs for residents of the municipality/Economic Target Area; and Doyle Sailmakers is committed to providing jobs to the ErA. To do this we will work with local agencies, organizations and the Salem High School and Salem State College career offices. We generally advertise in the local newspapers including but not limited to the Salem News, Beverly Citizen, Danvers Herald, Peabody weekly newspaper. Due to space and labor limitations in 2006 Doyle Sailmakers had to contract out $650,000 worth of sails. This represents 6 sailmakers worth of labor. The airships that Doyle has a contract to build will require 4 full time people. Doyle is currently contracting out $75,000 service work and not pursuing more due to space and labor limitations. Plan is to increase service by $250,000 and do all the service in house. This represents an additional 2.5 people. The preceding does not reflect speculative ventures but known work that we have been unable to accept due to existing space and labor limitations. The labor that is required for all of the above is entry-level labor that is not likely to commute any distance. The economic condition of the luxury sailing industry is quite healthy at the moment. The average age of the sailor is increasing. This has the positive effect that the certified Project Application —Page 6 clientele requires and is willing to pay for more services. The economic condition of the airship industry is that the supply is not keeping up with the demand. Doyle Sailmakers has made the commitment of a larger manufacturing space in Salem in order to create full time jobs that we feel will benefit the people of the ETA. (b) taking into consideration existing economic conditions, the proposed project is likely to succeed in creating and retaining the anticipated level of new permanent full-time jobs for residents of the municipality/Economic Target Area. 12. Affirmative Action — Does the business have an Affirmative Action/Equal Employment Opportunity Plan or Statement? 0 X Yes 0 No If yes, please attach a copy- —Doyle Sailmaker's s Code of Conduct is attached, it includes our Equal Opportunity Statement. If no, describe the business' hiring policies and practices. 13. Agreement Between the Business and Area Banks —Describe briefly the business! local banking relationship(s), if any. Does the institution with which the business banks participate in the Massachusetts Capital Access Program, which is designed to commit a portion of the business! deposits to fund loans to local businesses? Doyle Sailmakers, Inc. and R&J Swampscott LLC bank with Danversbank who participates in the Massachusetts Capital Access Program. 14. Economic Benefits of Project Certification — Provide a description of the economic benefits that are anticipated for the business and the project, if the project is certified. For example, describe the anticipated state and local tax benefits, municipal road or infrastructure improvements, assistance for local job training programs, the impact of local permit streamlining and other benefits anticipated if the project is certified. Also, provide any information, documentation or studies demonstrating any additional benefits (i.e., reduction of blight, reuse of abandoned buildings, clean up of contaminated property,job training, provision of day care, any contributions to the community etc.) likely to accrue to the area as a result of Certified Project designation. Doyle Sailmakers' plan for the newly acquired space on 96 Swampscott Rd. is to increase our production of sails and sail repair and to enter the production of large Certified Pn)ject Application —Page 7 lighter than air ships. We will be increasing our workforce to achieve this end. Our current problem is that we have a very experienced work force, and thus a very expensive work force. We need to balance this work force with entry-level workers that we will train. We have already invested in two key employees being trained to train others in the very exacting and demanding airship assembly process. Doyle Sailmakers has considered space in Salem in the past but the high commercial tax rate in Salem has always been the back breaker. However, this time Ken Goode and Ben Wong were very helpful in pointing out the economic incentives available to business. With this, coupled with our partial MA Development Finance Agency Revenue bond, we made the decision to go forward with new space in Salem. We did not get the 85%financing for which we had hoped, but only 65%. This reduced amount of financing and costs of the build out is making the move much more financially challenging than originally planned. It should be important for the state of Massachusetts as well as the municipality of Salem to retain manufacturing. The cost to manufacture in Massachusetts continues to escalate and as a result companies are reducing manufacturing jobs by sending work offshore. Doyle Sailmakers has made a commitment to expand our manufacturing business and provide more jobs for the people of Massachusetts. We are expanding into the airship field because we believe that is one business that will not go offshore and is a source for entry-level jobs with training. We would appreciate any help that the Mass Economic Development Incentive Program can provide. As a historical note of interest to the City of Salem, the first sail loft in America was located on Derby Wharf. Doyle Sailmakers is seeking to restore a tradition of sailmaking to the city. Doyle is an internationally respected company that will bring visibility to the City of Salem. Hotels, restaurants and other retail businesses will be enhanced by Doyle being located in Salem as our high-end cAientele will find the charm of Salem irresistible. Certified Project Application —Page 8 SPECIAL REQUIREMENTS FOR REAL ESTATE PROJECTS I Will the business own or leaselrent the facility? X0 Own 0 Lease/Rent If leasing/renting, please identify the developer/landlord, and state who will be the taxpayer of record for the purpose of paying local real estate taxes. If owning, will the business fully occupy the space? XD Yes 0 No If no, does the business intend to lease/rent the remaining space? 2. Describe how the various tax benefits and other economic Incentives that will result from Certified Project designation will be allocated among the business(es) developing the project (i.e., a developer or landlord) and the business(es) intending to purchase, lease or rent space at the facility (Le., tenant or tenants). The 5% Economic Opportunity Credit will be applied to the cost of qualified property as follows: R&J Swampscott Road LLC—Building & Improvements estimated @ $2,382,000 Doyle Sailmaker, Inc.—Cost of new equipment estimated @ $101,000 The savings generated from the tax exemption schedule on future incremental real property taxes will benefit R & J Swampscott Road LLC, the entity holding the property. SUPPLEMENTAL INFORMATION 1. Narne(s)of the business(es) intending to take advantage of the state tax incentives: Business Name: Doyle Sailmakers, Inc. Federal Employer Identification 04-2765012 Address: 89 Front Street, Marblehead, MA 01945 Phone: 781-639-1490 Fax: 781-639-1497 Contact Person: Robbie Doyle Type of Organization (check all which applies): 0 X Corporation 0 For-Profit DS-Corp 0 Non-profit r) Business Trust 0 Partnership 0 General Partnership D Limited Partnership D Individual Level of Interest: X 0 5% Investment Tax Credit D 10%Abandoned Building Tax Deduction (if applicable) Certified Project Application —Page 9 0 Local real estate tax incentive beneficiary 2nd Business Name (if applicable): R &J Swampscott Road LLC Federal Employer Identification#: 51-0600068 Address: 96 Swampscott Road LLC, Unit 8 Salem, MA 01970 Phone: 781-639-1490 Fax: 781-639-1497 Contact Person: Robert Doyle Type of Organization (check all which applies): 0 Corporation 0 For-Profit OS-Gorp 0 Non-profit 0 Business Trust 0 X Partnership 0 General Partnership 0 Limited Partnership 0 Individual Level of Interest: X0 5% Investment Tax Credit 0 10%Abandoned Building Tax Deduction (if applicable) X0 Local real estate tax incentive beneficiary ***If there are more than two businesses intending to take advantage of these state tax incentives associated with this project, please provide the above information for all such businesses. 2. A— If a corporation, please list the names and addresses of the officers and directors— of said corporation, and any person and/or corporation with a financial interest of five percent or greater in said corporation. B — If a partnership, please list the names and addresses of all partners, and include the proportionate share owned by each partner. C — If a business trust, please name all members and beneficiaries of said trust. Corporation = Doyle Sailmakers, Inc. Name and Address of officers and directors: • Robert Doyle, 43 Norman Street, Marblehead, MA • Janet Doyle, 43 Norman Street, Marblehead, MA 0 Sam Byme, Bridge Street, Manchester, MA • Gary Gregory, Millpond Road, Marblehead, MA Person or corporation with greater than five percent interest • Robert Doyle • Gary Gregory Partnership = RU Swampscott Road LLC Name and Addresses of Members • Robert Doyle, 43 Norman Street, Marblehead, MA —50% interest • Janet Doyle, 43 Norman Street, Marblehead, MA —50% interest Certified Project Application —Page 10 3. Please provide the name, address, phone number and contact person for any organizations Which may own or control the applicant organization, or who are affiliated with the applicant business organization. Please see above relationship between Doyle Sailmakers, Inc. and R&J Swampscott Road, LLC 4. Certificate of Good Standing — Please provide proof of good tax standing in the Commonwealth of Massachusetts via a Certificate of Good Standing, which is a letter issued by the Massachusetts Department of Revenue. To obtain a Certificate of Good Standing, please see Attachment I of this application. Copy of Certificate is attached. ? lill. X. e� �7 er, "Au T 0_... Z I. ob �7 .......... Ain -Mirriib T,,5- Z w, N; oo� F 5, sq..Fis. drying tomma 60 shin� Y11 din WASIUNC MACHINI 0 AIRSHIP CLEAN AREA General Pr cluction E A W4� 2.9 EN E3 77 L---J 91 2.0 4e IOL SAIM 77, I-=:- Win&"0 transmit figin og'1 .66 10,41 1 27-0" 27-V 27'wO