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HomeMy WebLinkAboutAgenda - 02-19-2019 02-19-2019 8-e - New Three-Year Interlocal Agreement between Orange County and the Town of Chapel Hill to Continue Joint Funding for the “LAUNCH, Inc.” Small Business Incubator 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: February 19, 2019 Action Agenda Item No. 8-e SUBJECT: New Three-Year Interlocal Agreement between Orange County and the Town of Chapel Hill to Continue Joint Funding for the "LAUNCH, Inc." Small Business Incubator DEPARTMENT: Economic Development ATTACHMENT(S): INFORMATION CONTACT: (1) Proposed Three-Year Interlocal Steve Brantley, Director, Orange County Agreement between Orange Economic Development, (919) 245- County and the Town of Chapel Hill 2326 to Continue Joint Financial Support of the LAUNCH Small Business Incubator (2) June 25, 2018 Memorandum of Understanding between Orange County, the Town of Chapel Hill, the Chapel Hill Downtown Corporation and the University of North Carolina at Chapel Hill to Continue Supporting the LAUNCH Incubator (3) State of N.C. Articles of Incorporation for LAUNCH, Inc. (4) Bylaws of LAUNCH, Inc. PURPOSE: To: 1) approve and authorize the County Manager to sign a new three-year Interlocal Agreement that renews the County's contractual relationship and joint funding arrangement with the Town of Chapel Hill enabling the tech incubator LAUNCH to continue to provide entrepreneurial services that promote the growth and retention of small businesses; and 2) review and approve the Bylaws of the "LAUNCH, Inc." small business incubator in Chapel Hill that was formed on January 1, 2019 as a new nonprofit organization, which includes authorizing the Manager to serve as an executive board member of the new non-profit (or to designate another County representative to serve in that capacity), thereby joining representatives from the Town of Chapel Hill and the University of North Carolina at Chapel Hill as executive board members. BACKGROUND: The proposed Interlocal Agreement (Attachment 1) replaces the previous three-year Agreement that expired on December 31, 2018, and continues the joint economic development sponsorship that has been shared equally between Orange County and the Town 2 of Chapel Hill since 2012 to fund the lease cost of the "LAUNCH Chapel Hill" innovation center, located at 321 West Rosemary Street. Orange County's proposed $18,375 quarterly financial commitment (or $73,500 annually) under the Interlocal Agreement extends for 36 months from January 1, 2019 to December 31, 2022, and would continue to be paid from the County's Article 46 economic development category designated to nurture entrepreneurial development. This expenditure was included in the approved FY 2018-19 budget as one of the pre-existing economic development initiatives funded from Article 46. The proposed annual payment of $73,500 by the County is unchanged from the same annual payment level the County had been making in the previous Agreement. As outlined in the attached Memorandum of Understanding (Attachment 2), dated June 25, 2018, Orange County, the Town of Chapel Hill, the Chapel Hill Downtown Corporation and the University of North Carolina at Chapel Hill agreed in principal to continue all parties' mutual support of the LAUNCH incubator. In 2018, operational efficiencies were identified by the Town of Chapel Hill and UNC, being the other main financial contributors, if the LAUNCH structure among key stakeholders could be shifted into a non-profit agency. This organizational change has since been approved by both UNC and the Town, and now requires the Orange County Board of Commissioners to review and approve the new Bylaws (Attachment 4), which include authorizing the County Manager to serve as an executive board member of the new non-profit (or to designate another County representative to serve in that capacity). With respect to the three key board member positions for the Launch, Inc., the Town has nominated UNC Chapel Hill's Judith Cone (Special Assistant to the Chancellor for Innovation, Entrepreneurship & Economic Development) to serve as Chair, and nominated Chapel Hill Economic Developer Dwight Bassett to serve as Treasurer. Both have agreed to serve in that capacity. The Town and UNC have nominated Orange County Economic Development Director Steve Brantley (or another designated County representative) to serve as Vice-Chair/Secretary, which requires the Orange County Board of Commissioners' approval of the Bylaws and designation by the County Manager. Early History As part of the Board of County Commissioners' strategic planning in 2011 to utilize Article 46 funding to support key economic development priorities, the importance of growing and retaining entrepreneurial start-up talent in Orange County was included. The Board sought to reverse the historic trend where promising, growth-oriented tech start-up companies originating out of the University of North Carolina and County would eventually relocate to adjacent counties over time. Durham's "American Underground" incubator and co-working venture at the American Tobacco campus has been a significant draw of Orange County's local start-up talent. In response, Orange County contracted with UNC Chapel Hill's Department of City & Regional Planning department head, Dr. Emil Malizia, in 2011 & 2012, who conducted a regional real estate assessment of average lease costs, ideal space needs and working environments that start-up companies seek throughout their developmental life span. A key recommendation from that consultant report highlighted a severe shortage of competitively priced incubator facilities here in the County, and suggested the development of an innovation center to better retain entrepreneurial talent coming out of the University and from the local community. Following the successful referendum in November 2011 to approve Article 46, the County gained a new revenue source that enabled it to join with the Town of Chapel Hill in establishing the "LAUNCH Chapel Hill" incubator. 3 Recent Notable Achievements & Positive Economic Impact on the Local Economy: "LAUNCH" directly contributed to the University of North Carolina at Chapel Hill being recognized on November 4, 2015 as ranking among the top five best performing university business accelerators in North America, based on a 2015 benchmark study by UBI Global, which is a thought leader in performance analysis of business incubators around the world. Amy Linnane, who is a former LAUNCH cohort graduate and the current Acting Director of the agency, has provided the following new statistics to illustrate the incubator's notable economic contribution to the local community: 5 Year Statistics (2012 thru 12/2017) • 75 companies served in 9 cohorts, with 44+ completing the survey (59% of total) • At least 46 original companies still remain in business (61%) • 94% remain in business after 1 year; 64% remain in business after 2 years • 31 companies (41%) began with UNC students as primary founders, and 7 remain in business (23%) Calendar 2017 Results (by all LAUNCH companies) • $12.75 million in venture capital support was raised (by 19 companies) • $20.6 million in annual revenues earned • 1,124 employees (215 full-time and 909 part-time) • 202 jobs based in Orange County • 25 companies call Orange County home • 12,150 square feet of total leased office space • $184,500 paid in rent • $99,000 in annual spending in downtown Chapel Hill In recent developments, Cohort #11 took up residence at LAUNCH on January 22, 2019 with 10 new entrepreneurial teams (including four UNC student teams). Summary of previous co-funding agreements between Orange County and the Town of Chapel Hill to support the LAUNCH incubator: Orange County and Town of Chapel Hill have provided joint financial support of the LAUNCH small business innovation center for the past 6 '/2 years via previous Interlocal Agreements, as follows: (1) First Interlocal Agreement between the Town & County (3 '/2 year initial term of 50/50 co-sharing of lease payments for 4,000 square feet, for the period of 7/1/12 to 12/31115) • The initial 3 1/2 year (42 month) Interlocal Agreement between the County & Town to co-fund LAUNCH was split 50/50 in a mutual cost sharing. The County paid its portion from Article 46 funds ('/4 cent sales tax proceeds for economic benefit) dedicated to providing entrepreneurial support, at a level of $10,000 per quarter for 42 months, or, a total cost to the County of $140,000 over the full 3 1/2 year initial term. The Town of Chapel Hill provided an equal amount of financial support. This first Interlocal Agreement expired on December 31, 2015. 4 (2) Second Interlocal Agreement between the Town & County (a 3-year renewal of financial support, at the same annual cost that was established during the first Interlocal Agreement) • On November 17, 2015, the BOCC approved a new three-year (36-month) Interlocal Agreement starting on 1/1/16 and expiring on 12/31/18. The County's financial contribution remained the same at $10,000 per quarter, or a total cost to the County of $120,000 over the full 3-year term. The County's payment was funded from Article 46. The Town also provided an equal level of financial support. (3) Amendment made to the Second Interlocal Agreement to permit LAUNCH to add 3,700 square feet for additional co-working space in the incubator's existing facility. • The second Interlocal Agreement was amended in June 2016 to permit an on- site expansion of the LAUNCH office, which required Orange County and the Town to contribute an additional $8,375 per quarter (or $33,500 annually) for up to three (3) years. The Town also provided an equal level of financial support. The amended Interlocal Agreement expired on December 31, 2018. FINANCIAL IMPACT: The proposed new Interlocal Agreement requires Orange County to contribute $18,375 per quarter (or $73,500 annually) for up to three (3) years, or a total of up to $220,500 over the full 3 years. County funding is provided exclusively by Article 46's annual retail sales tax collections that fund a variety of economic development activities, to include the LAUNCH small business incubator. As the annual payment amount is included the current 2018-19 budget, and is unchanged from the County's previous annual contribution under the prior Interlocal Agreement that expired on December 31, 2018, there is no additional budget impact at this time. SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goal is applicable to this item: • GOAL: ENSURE ECONOMIC SELF-SUFFICIENCY The creation and preservation of infrastructure, policies, programs and funding necessary for residents to provide shelter, food, clothing and medical care for themselves and their dependents. RECOMMENDATION(S): The Manager recommends that the Board 1) approve and authorize the County Manager to sign a new three-year Interlocal Agreement (Attachment 1) that renews the County's contractual relationship and joint funding arrangement with the Town of Chapel Hill enabling the tech incubator LAUNCH to continue to provide entrepreneurial services that promote the growth and retention of small businesses; and 2) review and approve the Bylaws (Attachment 4) of the "LAUNCH, Inc." small business incubator in Chapel Hill that was formed on January 1, 2019 as a new nonprofit organization, which includes authorizing the Manager to serve as an executive board member of the new non-profit (or to designate another County representative to serve in that capacity), thereby joining representatives from the Town of Chapel Hill and the University of North Carolina at Chapel Hill as executive board members. 5 Attachment 1 STATE OF NORTH CAROLINA INTERLOCAL AGREEMENT COUNTY OF ORANGE This INTERLOCAL AGREEMENT("Agreement")is hereby made and entered into this the day of ,2019,by and between ORANGE COUNTY,hereinafter referred to as("County"),and the TOWN OF CHAPEL HILL, hereinafter referred to as ("Town") pursuant to N.C. Gen. Statute 160A-460 et seq., 160A-17.1 and other applicable laws. WITNESSETH: WHEREAS, County and Town desire to continue with a partnership originally initiated through a 2012 interlocal agreement, and renewed in a new 2016 agreement between the Parties whereby local startup businesses in the"LAUNCH"incubator have more opportunities to remain in Orange County and Chapel Hill. NOW, THEREFORE, in consideration of the mutual covenants, promises and agreements contained herein, the parties hereto agree as follows: 1. Coup. Grant. County shall grant to the Town two hundred twenty thousand five hundred dollars ($220,500.00). This grant shall be payable quarterly in installments of eighteen thousand three hundred seventy five dollars ($18,375.00). Town acknowledges and agrees the full amount,which shall not exceed two hundred twenty thousand five hundred ($220,500.00), shall be expended by the Town for the sole purpose of establishing and maintaining a small business incubator/joint co-working space located at 321 West Rosemary Street, and a joint accelerator space located at 306 W. Franklin Street, Chapel Hill,North Carolina 27516 (the LAUNCH"Small Business Incubator"). County and Town agree this grant is the full extent of the County's contribution. Town shall be responsible for conducting any statutorily required public hearing prior to the expenditure of any grant funds. 2. Town Obligation. Town shall be responsible for payment of the rental obligation of the LAUNCH Small Business Incubator property using the County grant, together with Town resources, in order to maintain the property's availability for lease and sublease as a Small Business Incubator. 3. Term. The term of this Agreement shall commence the 1 st day of January 2019 and shall continue for a period of thirty-six(36)months,expiring on 12/31/21. Any such renewal, or any other modification, shall be accomplished through a mutually agreed upon written amendment to this Agreement and may be approved and executed by the managers of the County and Town. 4. Reporting. Town shall on or before July 1 annually during the term of this Agreement provide a report to the Orange County Manager detailing the expenditure of the grant funds described in Section 1 above. Upon request by County,Town shall provide County with any audit or underlying documents necessary to verify the contents of the annual report. In the event such report or documents are not provided County may suspend grant installments until such time as the report or documents are provided. 5. Force Majeure/Emergency Non-Appropriation. In the event Town or County should be delayed in, or prevented from,performing or carrying out any of the agreements, covenants, or obligations made by, and imposed upon, said Party by this Agreement, by reason of or through any cause reasonably beyond its control and not attributable to its neglect, including but not limited to condemnation, order of any court granted in any bona fide adverse legal proceeding or action, explosion, fire or other act of God or public enemies, and/or emergency non-appropriation,then, in each such case or cases,the affected Party shall be relieved of performance under this Agreement. 6. Termination. The County and Town may terminate this Agreement upon mutual written agreement approved by the County's and Town's managers. Either County or Town may terminate this Agreement 6 upon a material breach by the other. Material breach includes but is not limited to the failure by Town to expend grant funds as required by this Agreement. Effective the date of termination any termination of this Agreement relieves County of any further responsibilities or obligations established by this Agreement. IN WITNESS WHEREOF,the parties have caused this Interlocal Agreement to be executed as of the day and year first above recorded. FOR ORANGE COUNTY FOR CHAPEL HILL By: By: Bonnie Hammersley Maurice Jones Orange County Manager Chapel Hill Town Manager This instrument has been pre-audited in the manner required by the Local Government Budget and Fiscal Control Act. Orange County Chief Financial Officer This instrument has been pre-audited in the manner required by the Local Government Budget and Fiscal Control Act. Town of Chapel Hill Finance Director 2 7 Memorandum of Understanding Date: June 25, 2018 Parties: The Town of Chapel Hill, Orange County, Chapel Hill Downtown Partnership, and the University of North Carolina at Chapel Hill (Vice Chancellor's Office for Innovation, Entrepreneurship, and Economic Development-Innovate Carolina and the Kenan- Flagler Business School-Center for Entrepreneurial Studies) Re: Launch Chapel Hill Future Plans Background: Launch Chapel Hill was founded with the support of the Town of Chapel Hill (Roger Stancil), Orange County,the University of North Carolina at Chapel Hill (Judith Cone through the Vice Chancellor's Office for Innovation, Entrepreneurship, and Economic Development dba Innovate Carolina, and Ted Zoller through the Center for Entrepreneurial Studies at the Kenan-Flagler Business School), Entrepreneur Jim Kitchen, and the Becker Family, which provided a major gift through the Kenan-Flagler Business School that helped fund Launch during its first four years of operation. The Chapel Hill Downtown Partnership served in a key operational role and donors and partners have helped Launch Chapel Hill (LCH) be the success it is today. Dwight Bassett, Economic Development Officer with the Town of Chapel Hill, became the point person for LCH, and Dina Rousset has led this work and brought in staff and external experts to develop the accelerator program, coach companies, design, permit and manage build-out of a co-working facility. Sheryl Waddell represents UNC-Chapel Hill's Innovate Carolina office, along with Judith Cone. Orange County local government participation includes members from the Board of Commissioners, Manager's Office, and Steve Brantley from the Orange County Economic Development Department. Core funding comes from the Town, County, and University with added funding from donors and in-kind partners. Town and County participation is administered via an Interlocal Agreement between the two local governments. We are especially grateful to the Becker Family for their foundational funding that enabled the success of Launch Chapel Hill from its inception. The Launch Chapel Hill accelerator has been a successful initiative which has led to opportunities for growth and expansion. In sum, LCH has achieved the following: Since 2013: 75 companies have graduated, with 46 remaining in business 94%of companies remain in business after one year 31 companies primarily founded by UNC students 1,150 jobs created, with 200+of those in Orange County In 2017: $12.975 million in funding raised by companies during 2017 $20.6 million in company revenue earned during 2017 1 8 The first new opportunity was to open co-working space, which was accomplished with very limited resources, including in-kind donations. When LCH was started, it was the only such offering in town promoting entrepreneurship as a tool for economic development through an accelerator model (LCH Phase 1-2013). After Launch opened co-working space (LCH Phase II-2017), the landscape changed. The Amsterdam-based co-working company, Spaces, will occupy 33,000 square feet at the Station at East 54,taking up the first three floors at the six-story building on Hamilton Road.The Town-County-University partnership for LCH has an opportunity to adapt to these changes and enhance the offerings of LCH to meet the current and future needs of our entrepreneurial community. The Parties to this MOU agree to the following: • A central connector group is needed in Chapel Hill and perhaps Orange County to serve as a virtual and physical one-stop shop for entrepreneurship (LCH Phase III). • The LCH board and personnel have the potential, if resourced appropriately, to take on that expanded role. • The name "Launch Chapel Hill" should be extended to cover that connector group—to be the major brand if this expansion is limited to the Town of Chapel Hill. If Launch is expanded to cover all of Orange County,then the name "Launch"would be used perhaps in combination with a town name—e.g. Launch Carrboro. "Sub-brand" variants could also be developed, such as (the following are only working titles/placeholders) Launch Accelerator, Launch Works (co-working), Launch Network (convening and programming for the community, and events), Launch Places (work with landlords on spaces for young companies), and other such central activities. • Launch needs a legal entity such as a 501(c)3 to facilitate Phase III—either one we create or one under another organization's 501(c)3 status. The entity would serve at a minimum as an entity to receive and expend money and hold the lease(s). • UNC's Office of the Vice Chancellor for Innovation, Entrepreneurship and Economic Development (also known as Innovate Carolina) and the UNC KFBS Center for Entrepreneurial Studies will be the point organizations and programmatic leaders in LCH Phase III-2018. Roles, responsibilities, and financial commitments will be defined during the strategic planning activities to begin in June 2018. The resources currently at hand and the current assignment of the staff are as follows: 1. UNC Innovate Carolina increased its contribution by$10K and has committed $150,000 for the UNC FY19 budget (July 1, 2018-June 30 2019) and $150,000 for FY20. Innovate Carolina sends its funds to the UNC KFBS Center for Entrepreneurial Studies and provides other periodic funding and in-kind services. 2. UNC KFBS Center for Entrepreneurial Studies employs all the current staff(Program Director, EIR team and Program Coordinator) and provides the programming for the accelerator and management of the accelerator and co-working space. 3. The Town and County are at a stable funding level for the upcoming new fiscal budget year and both agree to consider additional funds within future budget cycles for LCH Phase III. The Town and Chapel Hill Economic Development have provided periodic funding and in- z 9 kind services to Launch and Launch companies. In addition, Orange County provides periodic supplemental financial support to select LCH cohort tenants that occasionally apply for, and are approved for, small business grants and loans awarded by the Orange County Economic Development Department. 4. On 5/8/18 Meg McGurk, on behalf of the Chapel Hill Downtown Partnership (CHDP), agreed that the CHDP would continue for the period of the one-year lease extension to provide the same services for Launch as it did previously, such as paying the bills and holding the lease, with one exception. The CHDP will not cover cash flow shortages as they have done in the past through the period of the one-year extension. 5. Dina Rousset serves as the primary contact with the property's owners (Todd Zapolski and Jeff Boak). Dina is herewith authorized to explore re-negotiating a reduced rental rate especially in light of frequent roof and rear wall leaks in the new space for a one-year extension. 6. CHDP will continue to provide the same services for Launch that it has to date, including financial management, paying all bills and rent, and collecting program fees through December 31, 2019. • CHDP's commitment is contingent upon the approval of the Town of Chapel Hill budget for FY July 1, 2018 to June 30, 2019 that includes a $150,000 commitment for Launch until June 30, 2019. In the event that this does not occur and the lease is signed, UNC Innovate Carolina's financial commitment of$150,000 per fiscal year until 2020 will be first used to cover facility costs (primarily rent and cam charges) incurred by CHDP for Launch. • If the Town of Chapel Hill and Orange County do ndt extend their financial commitment beyond June 30, 2019, UNC Innovate Carolina has agreed to a financial commitment of $150,000 for fiscal year 2019 to cover the lease for Launch. It is understood that Innovate Carolina funding alone would not fully support all operational costs of Launch and thus ongoing operations would cease. • The Party funders agree that the priority for these funds is to pay the lease and cam charges for Launch. CHDP will not cover cash flow shortages. • CHDP will be repaid $26,953.02 in full by December 31, 2018, or sooner if cash flow allows. • Some funds have come in from donations and there is the possibility of additional donations. In preparation for LCH Phase III (the one-stop shop for acceleration, co-working, and networking)that is co-sponsored by the Town, County, and UNC; as the anchor sponsors/founders, we agree to: a) Move forward with the efforts to establish LCH as a 501(c)3 stand-alone legal entity. The Launch Advisory Board and Executive Director have until December 31, 2019 to move all operations into the new legal entity from CHDP.The Town has agreed to establish the 501(c)3 on behalf of the Launch Advisory Board.The core fiduciary board for the 501(c)3 will be made up of representatives from the Town of Chapel Hill, Orange County, and UNC- Chapel Hill.This board is intentionally small in number to provide maximum flexibility. A larger advisory board will be established if needed. The current Launch Advisory Board will 3 10 govern Launch Chapel Hill until the new Launch entity is established and the current Launch Advisory Board formally moves operations to the new entity. b) Make sure we are executing on LCH Phase II without putting additional pressure on the team to engage in LCH Phase III activities without additional funding tied to a plan. c) Create a strategic plan for LCH Phase III that includes scope of work and resource requirements that can become the foundation of proposals to the Town and County for increased resources for LCH Phase III. The board, their extended teams, and staff agree to work together and convene starting in June 2018 to complete the strategic plan for LCH Phase III plan by August 31. 2018. d) At the working session(s) described above, develop a plan for how we can engage the Entrepreneur's Council Leadership group with Launch's plans for LCH Phase III. This MOU reflects the mutual understanding and expectation of the Parties with respect to the future development of LCH and the Parties' respective participation in and contribution to that effort. However,the parties acknowledge and agree that this MOU is non-binding. Si natures • Town of ill er nature: Printed Name: TWAtU t.. t- Date:jX'jJ ry Z').TAa Orange County M ager Signature: Printed Name: v/J Date: UNC-Chapel Hill Manager Signature: Printed Name: YZ 6 iTi-1 CAU67 Date: Chapel Hill Downtown Partnership Manager Signature: Printed Name: `,nor Date: 4 NORTH CAROLINA 11 Department of the Secretary of State To all whom these presents shall come, Greetings: I, Elaine F. Marshall, Secretary of State of the State of North Carolina, do hereby certify the following and hereto attached to be a true copy of ARTICLES OF INCORPORATION OF LAUNCH the original of which was filed in this office on the 16th day of November, 2018. oeenRTn� � 0 0 20.i))S IN WITNESS WHEREOF, I have hereunto set my MPY O T2 � hand and affixed my official seal at the City of ----- Raleigh, this 16th day of November, 2018. ❑ i�;��� 6� V1OE RQ 12. OUAM 00.^�+ Scan to verify online. SF� D Certification#C201831100055-1 Reference#C201831100055-1 Page: 1 of 4 Secretary Of State Verify this certificate online at http://www.sosnc.gov/verification SOSID: 1773V3 Date Filed: 11/16/2018 2:00 PM Elaine F.Marshall North Carolina Secretary of State C2018 311 00055 State of North Carolina Department of the Secretary of State ARTICLES OF INCORPORATION NONPROFIT CORPORATION Pursuant to §55A-2-02 of the General Statutes of North Carolina,the undersigned corporation does hereby submit these Articles of Incorporation for the purpose of forming a nonprofit corporation. 1. The name of the nonprofit corporation is: Launch 2.L (Check only if applicable.) The corporation is a charitable or religious corporation as defined in NCGS §55A-1-40(4). 3. The name of the initial registered agent is: Dwight Bassett 4. The street address and county of the initial registered agent's office of the corporation is: Number and Street: 405 Martin Luther King, Jr. Blvd City: Chapel Hill State: NC Zip Code: 27514 County: ORANGE The mailing address if different from the street address of the initial registered agent's office is: Number and Street or PO Box: Same City: State: NC Zip Code: County: 5. The name and address of each incorporator is as follows: Name Address Margaret S. Davis 1526 E. Franklin St., Ste. 202 Chapel Hill, NC 27514 6. (Check either"a"or"b"below.) allhe corporation will have members. b.✓Q he corporation will not have members. { 7. Attached are provisions regarding the distribution of the corporation's assets upon its(.dissolution. 8. Any other provisions which the corporation elects to include are attached. BUSINESS REGISTRATION DIVISION P.O.BOX 29622 RALEIGH,NC 27626-0622 (Revised August, 2017) Form N-01 i Certification# C201831100055-1 Reference#C201831100055-Page: 2 of 4 13 i 9. The street address and county of the principal office of the corporation is: Principal Office Telephone Number: (919) 969-5010 Number and Street: 405 Martin Luther King, Jr. Blvd City: Chapel Hill State: NC Zip Code: 27514 County: ORANGE The mailing address if different from the street address of the principal office is: Number and Street or PO Box: Same City: State: Zip Code: County: 10. (O tional : Listing of Officers See instructions for why this is important) Name Address Title i i Privacy_ Redaction 11. (Optional):Please provide a business e-mail add The Secretary of State's Office will e-mail the business automatically at the address provided at no charge when a document is filed. The e-mail provided will not be viewable on the website. ,For more information on why this service is being offered,please see the instructions for this document. 12. These articles will be effective upon filing,unless a future time and/or date is specified: This is the day of November ,20 18 4 I ora r Business Entity a n an Voratr isori at i Marga I p orator Type or print Incorporator's name and title, if any NOTES: 1. Filing fee is$60. This document must be filed with the Secretary of State. BUSINESS REGISTRATION DIVISION P.O.BOX 29622 RALEIGH,NC 27626-0622 (Revised August,2017) Form N-01 l Certification# C201831100055-1 Reference#C201831100055-Page: 3 of 4 14 1. Dissolution: Upon the liquidation, dissolution,termination, or winding up of the Corporation,whether voluntary, involuntary or by operation of law,the property or assets of the Corporation remaining after providing for the payment of its debts sand obligations shall be conveyed,transferred, distributed, and set over outright to one or more charitable, educational or scientific institutions or organizations selected by the Board of Directors and in such proportions and such manner as may be determined by such vote. Such one or more institutions or organizations shall at the time qualify as exempt organizations under section 501(c)(3) of the Internal Revenue Code as the same now exists or as it may hereafter be amended. LAUCH,Excerpt of Bylaws J Certification# C201831100055-1 Reference#C201831100055-Page: 4 of 4 15 Bylaws of Launch A Nonprofit Corporation Article I—Name, Offices, Purposes 1. The name of the corporation shall be Launch(the "Corporation"). 2. The principal office of Launch shall be located in Chapel Hill, NC, or such other place as may be determined by the Board of Directors. 3. The Corporation has been formed to foster new business opportunities and educate entrepreneurs in local communities to further their potential. 4. Purpose: The Corporation is organized exclusively for charitable and educational purposes within the meaning of Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, or the corresponding provision of the United States Internal Revenue law. The primary purposes of this Corporation shall be as follows: a. To act as an educational center for entrepreneurial businesses; b. To create synergy among entrepreneurs and promote small business development; c. To develop and create physical and virtual space for entrepreneurs in Orange County and surrounding communities; d. To carry on any other activities permitted by organizations exempt from Federal income tax under Section 501(c)(3) of the Internal Revenue Code, as the same now exists or as it may hereafter be amended. Article IT—Membership This corporation has no membership. Article III—Board of Directors 1. Duties and Authority a. The Board of Directors shall have all of the legal and professional duties required under the laws of the State of North Carolina. b. The Board of Directors shall appoint the officers of the Corporation as set forth in Article VII. c. The Board of Directors may make such rules and regulations covering its meetings as it may in its discretion determine necessary. d. The Board of Directors shall conduct a formal review of the performance of the primary Launch staff, including Program Coordinator, Operations Coordinator, and Program Coordinator at least once per year. 2. Structure a. The Board of Directors shall consist of at least 3, but no more than 15, persons. 16 b. The composition of the Board of Directors shall be as follows: i. At least one Director shall be a member of the faculty or staff at the University of North Carolina at Chapel Hill preferably the Vice-Chancellor of Innovation, Entrepreneurship and Economic Development. ii. At least one Director shall represent the Town Manager of the Town of Chapel Hill. iii. At least one member shall represent the Orange County Manager of Orange County. iv. Other officio and ex-officio members may be added by majority vote of the Board at the corporation's annual meeting. c. Elections: The initial Directors shall be named by the incorporator of the Corporation. Thereafter, Directors shall be elected by the Board of Directors at any meeting of the Board of Directors, or, in case of a vacancy, as soon as practicable thereafter. i. Regular Officer and Director elections shall be held at the Annual Meeting described in Article IV, and at any other meeting of the Board of Directors at which there are vacancies. d. Terms: i. Each Director shall serve for a term of up to three years after initial appointment; provided, however, that the initial terms shall be so fixed or upon any increase or decrease in the number of Directors so that approximately an equal number of regular terms shall expire at each annual meeting. ii. No Director may serve more than three (3) consecutive terms. e. Remo Val: i. A Director may be removed at any time with cause by a two-thirds (2/3) vote of the other Directors. f. Vacancies: i. Any vacancy on the Board of Directors may be filled by appointment Board of Directors, which shall be made by a majority vote of the remaining Directors. Article IV— Meetings 1. Annual Meeting: a. The Annual Meeting of the Board of Directors shall be held in July of each year, or during such other month as approved by the Board.of Directors. b. The Board Chair shall send, or cause to be sent, notice of the time and place of the Annual Meeting to all Directors. i. Notice must be sent at least ten(10) days in advance of the meeting. c. The purpose of the Annual Meeting shall be to elect Directors and Officers of the Board; to receive a report on the prior year from staff, including a 2 17 financial statement of income and expenses; and to conduct such other business as may be properly brought before the meeting. 2. Regular Meetings: a. The Board of Directors shall meet at least four times a year (including the Annual Meeting) at a date and time chosen by the Directors. b. The Board Chair shall send, or cause to be sent, notice of the time and place of the meetings to all Directors. i. Notice must be sent at least ten (10) days in advance of the meeting. 3. Special Meetings: a. The Chair or any Director may call a special meeting when she/he deems it to be in the best interest of the Corporation. b. Notices of such meetings shall be sent at least thirty-six (36) hours before the scheduled time. Such notice shall state the reason for the meeting, the business to be transacted at the meeting, the time and place of the meeting, and who called the meeting. c. No other business but that specified in the notice may be conducted at the special meeting unless by unanimous consent of all those present at the meeting. 4. Alternatives: a. Participation in meetings may be by teleconference, or any other means by which each Director may hear other participating Directors. 5. Action without a meeting: a. Additionally, resolutions of the Board of Directors can be passed without a meeting, provided that all members of the Board of Directors consent to the resolution in writing. Article V—Quorum 1. Forty percent (40%) of the Directors shall constitute a quorum and be necessary to conduct the business of the Corporation. Article VI—Voting 1. Voting Methods: a. At all meetings, all votes shall be by voice. The Secretary shall make a record of all votes. b. At any annual, regular, or special meeting, if a majority so requires, any question may be voted on by anonymous ballot, subject to procedures to be approved by a majority of the Directors. 2. Special Voting a. The following matters shall require a two-thirds (2/3) majority vote: i. Dissolution of the Corporation ii. Changes to the Bylaws iii. Removal of a Board Director or Officer 3. Each Director shall have one vote and such voting may not be done by proxy. 3 18 Article VII—Officers I. The Officers of the Board of Directors maybe as follows: a. Chair b. Vice-Chair c. Secretary d. Treasurer 2. The Chair a. Presides over meetings of the Board of Directors. b. Participates in the performance review of the Officers of the Corporation. 3. The Vice-Chair a. Works closely with the Chair, understands the Chair's duties, and is able to perform these duties in the Chair's absence. b. Performs other responsibilities as assigned by the Chair. 4. The Secretary a. Keeps minutes of Board meetings and records all Board resolutions, votes, and elections. b. In conjunction with the Program Coordinator may give notice of meetings and agendas to the Board of Directors. c. Is the official custodian of the records and seal of the Corporation. d. Performs all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him or her by the Board of Directors. 5. The Treasurer a. In conjunction with the Program Coordinator reviews and presents financial reports for the Board of Directors. b. In conjunction with the Program Coordinator provides the Corporation's financial reports to the Board of Directors at regularly scheduled meetings. Such reports shall be attached to the meeting minutes. c. Follows the required duties set out in the Corporation's Financial Procedure Manual, including the review of financial statements on a quarterly basis. d. Exercises all duties incident to the office of the Treasurer and such other duties as from time to time may be assigned to him or her by the Board of Directors. b. The executive functions of the Corporation shall be shared by the Officers of the Board of Directors. 7. The Officers of the Board of Directors: a. Present reports of the work of the Corporation at each regularly scheduled Board of Directors meeting. b. See that all books, reports, and certificates required by law are properly kept and/or filed. c. Keep the minutes and records of the Corporation in appropriate books. d. File any certificates required by any federal, state or local law. e. Have the authority to sign checks or drafts of the Corporation. 4 19 f. Have the care and the custody of all monies belonging to the Corporation and shall be responsible for the proper accounting for such monies or securities of the Corporation. g. Have the ability to contract for such services, goods, and property, real or personal, as is deemed necessary for the operation of the Corporation. h. Perform all duties incident to the office of each Coordinator and such other duties as from time to time may be assigned to him or her by the Board of Directors. 8. Other Officers. Additional Officers of the Board may be appointed by resolution of the Board of Directors. 9. Officer Elections: a. Officers of the Board of Directors shall be elected by the Board of Directors at the Annual Meeting, or, in case of a vacancy, as soon as practicable thereafter. b. Terms: i. Each Officer of the Board of Directors shall serve for a one (1) year term. ii. No Officer of the Board of Directors may serve more than four (4) consecutive terms. iii. After four (4) consecutive terms, Officer members must not serve as an Officer for one year before a term cycle may begin anew. c. Removal: i. An Officer may be removed for cause by a two-thirds (2/3) vote of the Board of Directors. d. Vacancies: i. Vacancies in an Officer position may be filled by a majority vote of the members of the Board of Directors. 10. Officers Serving in Multiple Capacities: a. The same individual may simultaneously hold more than one office in the Corporation, but the same person shall not serve as both Chair and Treasurer. No individual may act in more than one capacity where action of two or more Officers is required. Article VIII—Compensation for Officers and Directors 1. Directors and Officers shall serve without compensation with the exception that expenses incurred in the furtherance of the Corporation's business may be reimbursed with documentation and prior approval. Directors and Officers serving the Corporation in any other capacity, such as staff, are allowed to receive compensation in that capacity. Article IX— Committees 1. Appointment: a. The Board of Directors may establish one or more committees or advisory boards of the Corporation. 5 20 b. Committee members are not required to be Directors of the Corporation. 2. Duration and Duties: a. The duration of the committee and the term of the committee members may be determined upon the committee's creation by a majority vote of the Board of Directors. Article X— Indemnification To the extent reasonable, practicable and required by law, every Director, Officer and employee of the Corporation may be indemnified by the Corporation against all expenses and liabilities, including counsel fees, reasonably incurred or imposed upon such Director, Officer or employee in connection with any threatened, pending, or completed action, suit or proceeding to which she/he may become involved by reason of her/his being or having been a Director, Officer, or employee of the Corporation, or any settlement thereof, unless the Director, Officer or employee is adjudged therein to be liable for negligence or misconduct in the performance of her/his duties. Provided, however, that in the event of a settlement the indemnification herein shall apply only when the Board of Directors approves such settlement and reimbursement as being in the best interest of the Corporation. The foregoing right of indemnification shall be in addition to and not exclusive of all other rights that such Director, Officer or employee is entitled. Article XI—Amendments These Bylaws may be altered, amended, repealed, or added to by an affirmative vote of not less than two-thirds (2/3) of the members of the Board of Directors, provided prior notice is given of the proposed amendment in the notice of the meeting at which such action is taken. Article XII-- Limitations The Corporation shall not carry on any activities not permitted to be carried on by a corporation exempt from Federal income tax under section 501(c)(3) of the Internal Revenue Code as the same now exists or as it may hereafter be amended. In particular, the Corporation shall abide by the following limitations: I. Non-Distribution: No part of the net earnings of the Corporation shall inure to the benefit of, or be distributed to, its directors, officers, or other private persons, except that the Corporation shall be authorized to pay reasonable compensation for services rendered and make payments and distributions in furtherance of the purposes previously set forth; 2. Limitation on Lobbying: No substantial part of the activities of the Corporation shall be the carrying on of propaganda, or otherwise attempting to influence legislation, and the Corporation shall not participate in, or intervene in (including 6 21 I the publishing of or distribution of statements) any political campaign on behalf of any candidate for public office. 3. Dissolution: Upon the Iiquidation, dissolution, termination, or winding up of the Corporation, whether voluntary, involuntary or by operation of law, the property or assets of the Corporation remaining after providing for the payment of its debts and obligations shall be conveyed, transferred, distributed, and set over outright to one or more charitable, educational or scientific institutions or organizations selected by the Board of Directors and in such proportions and such manner as may be determined by such vote. Such one or more institutions or organizations shall at the time qualify as exempt organizations under section 501(c)(3) of the Internal Revenue Code as the same now exists or as it may hereafter be amended. ADOPTED this the 20`h of September, 2018: Juofjh Cone D fight Elassett i Steve Brantley 7