GRANT AGREEMENT. ‘This grant agreement (this “Agreement” is made effective on October 3, 2017 (the “Effective Date”) between Towa State University Foundation, en lowa nonprofit corporation (the “Foundation”), Lowa State University of Scionce and Technology (the “Universty”), on instrumentality of the stato of Towa, and the Charles Koch Foundation, a Kensas nonprofit corporation (the “Doncr”), forthe benefit ofthe Programa for the Study of Midwest Boonomics the “Program”), which will be imminently ereated et the University. ‘The term of this Agreement is from the Efective Date to the later of July 31, 2022, or until the Foundation and the University hhave spent all of the Contributed Amount, unless earlier terminated pursuant to this Agreoment. The Foundation, the University, and the Donor ate sometimes referred to inthis Agreement individually as a “Party” and collectively as the “Parties.” The Parties agree as follows: 1. Promoting Academic Freedom, Consisteit with the Donor’s principles of supporting a diversity of ideas in higher education, tho Donor’s grant is intended to help promote an environment atthe University where ideas can be exchanged fieely and useful knowledge will benefit the wel-being of individuals and society. ‘Thus, the Parties agree that the academic freedom of the University, the Program, and their faculty, students, and staff is importent to the success of the Program's research, scholarship, teaching, and service and will abide by the University’s policies with respect to acedemic freedom and academic responsibility as articulated inthe University’s Faculty Handbook, Section 5.2.1. The University and its faculty, staff, and students each have the ‘ight to release or publish scholarly information at their discretion in accordance with University polices. 2, ‘The Program, Tho University desires to support the Program to advance the Program’s and University’s educational missions as follows: a. ‘The Progsam’s Mission and Director, As stated in the Towa State University Proposal, which is hereby incorporated into and made part ofthis Agreement and attached as Attachment A (the Proposal), the University has informed the Donor, and the Donor is relying on such representation, that the Program’s missic accurately stated in the “Vision” and “Mission Statement” sections of the Proposal (the “Program's Mission”). Dr. Peter Orazem is the director of the Program (the “Program Director"), __The Grant Components. To support the Program’s Mission, the University desires to ereate the following positions and activities affiliated withthe Program, collectively referred to as the “Grant Components.” ‘The Grant Components are described more fully in the Proposal and inelude the following positions and support: ‘one or two “New Tenure-track Feculty;” “Existing Faculty Support” “Student Support;” “Research Suppor “Communications and Outreach Support;” “Program Support;” and “Postdoctoral Support.” The Foundation and the University shall each usc any fimds received under this Agreement solely to support the Grant Component accordance with the terms of this Agreement. According to the University’s normal policies and procedures, the Program Director is responsible for directing the Grant Components. Therefore, the Program Director has the authority (subject to and consistent with the University’s policies and procedures) to administer and allocate the Program’s badget, supervise Center staf, provide mentorship, fulfil other duties to advance the Program’s Mission as deemed! appropriate by the Program Director, orto delegate any of these responsibilities. ¢c, _Solection. In keeping with the University’s and the Donor’s shared commitment to academic freedom, the selection of all positions associated with the Grant Components must follow the University’s normal procedures and be consistent with the University’s commitment to non- tion in the hiring of employees and admission of students. As part of the University’s normal procedures, the Program Director and other appropriate members of the University’s faculty and administration will have an opportunity to provide feedback3 iversity’s Ce ent fo and for 1m, Generally, The University shall provide administrative, logistical, and other relevant support for the Grant Components to advance the Programn’s Mission and University’s mission during the Term. The University, in its sole discretion, may elect to continue to provide support for the Grant Components and the Program after the Term, . b. ‘The University’s Specific Support for the Program, Office Space, The University shall ensure thatthe Program has adequate space to achieve the Program’s Mission. ‘The University shall make available space for the Program, including office space forthe individuals holding the Program’s various positions as well as shared conference and meeting space for the Grent Components, i, ‘Studant Support, As part ofthe Student Support, the University shal provide graduate student fll tition scholarships fo three students and a graduate fellowship to one student, all of whom will be selected according to the University’s normal procedures. ‘New Tenure-track Faulty Support, The University shall provide for moving costs and startup funds for the New Tenure-track Faculty in accordance with University policies. 4, ‘The Donor’s Support for the Grant Components, 4, Contributed Amount, Subject to the terms of this Agreement, the Donor agrees to contribute funds tothe Foundation solely to support the Grant Components to advance the Ptogram’s Mission (all or part of such funds are referred to as the “Contributed Amount(s)"). The maximum aggregate Contributed Amount under this Agreement is $1,685,000 if no “Matching Amount” (defined in Section 5(c)() is provided, Subject to Section 5(o)(), the maximum aggregate Contributod Amount is $2,485,000 if the maximum Matching Amount is provided, The maximum aggregate Contributed Amount in each instance is as follows: ‘Grant Components Maximum Contributed | Maximum Contributed Amount Without ‘Amount With Matching Amount Matching Amount ‘Salary and fringe benefits for two New Tenure-Track Upto$ 866,000 Up to $1,282,000 Faculty Salary and fringe benefits for Existing Faculty Upto$ 279,000 Uptos 452,000 Support ‘Costs and expenses for Student Support Upto $ 405,000 | Upto $431,500 ‘Costs and expenses for Research Support Upto$ — 60,000 Upto $210,000 Costs and expenses for Communications and Upto 42,000 Upto$ 42,000 Outreach Support Cosis and expenses for the Program Support Uptos 33,000 Uptes 47,500 ‘Total Maximum Aggregate Contributed Amount: $1,685,000 $2,485,000 b, Ose Support Ifthe University and Donor matually agree, the Donor may also contribute in- kind services to the University to help promote the work of the University, the Program, or the University faculty, ‘students, and staff,S. Foundation Grant Request; Proposed Grant Award Process and Schedule, 4 ‘The Foundation Grant Request. The Foundation shall submit an annual writen request according to the schedule below to the Donor (the “Foundation Grant Request”) and an accounting of the expenditure of any Contributed Amount or “Matching Amount” (defined in Section 5(0)(i)) previously received. Ifthe Donor ‘approves the Foundation Grant Request, the Donor shall make a contribution up to the amount listed in the below schedule tothe Foundation, and the Foundation agrees to accept such Contributed Amount on bebalf ofthe University as stated inthe schedule in Section 5(d). Ifthe Donor declines to provide any Contributed Amount in response to the Foundation Grant Request, it shall notify the Foundation and the University and provide them an ‘opportunity to cure or address the circumstances underlying the decision as stated in Section 7(a) b. The Fund, The Foundation shall place all of the Contributed Amount in a sogregated énd restricted find on its Books and records called the “PSMB-CKF Fund” (the “Fund"), ‘The Fund shall be used solely to support the Grant Components and Program's Mission as stated in this Agreement, The Fund shall not be used directly or indirectly for any of the Foundation’s or the University’s overhead fees. The Foundation shall ‘ake the Fund available for contributions from other donors. Ifanother donor makes a contribution to the Fund, the Foundation shall promptly notify the Donor of the amount donated and, if permitted by the other donor, the name of the other donor, e latch nt i Matching Amount Provided, ‘The Foundation or the University may provide funds directly or the Foundation or the University may provide funds from a donor, ineluding the Donor, solely to support the Grant Components (the “Matching Amount(s)"). ‘The Foundation shall provide written notice of such Matching Amounts in the Foundation Grant Request. The maximum Contributed Amount available will increase by an amount equal to the Matching Amount up to the maximum Matching Amount as stated in Section S(@). By ‘way of example, if the Foundation notifies the Donor in the June 1, 2018, Foundation Grant Request that a Matching Amount was provided in the amount of $50,000, the maximum Contributed Amount in Section 5(@) corresponding to the Foundation Grant Request made on June 1, 2018, will increase by $50,000 up to $521,000. By way of further example, if the Donor provides a Matching Amount in connection with the June 1, 2018, Foundation Grant Request in the amount of $50,000, the maximum Contributed Amount in Section 5(4) ‘corresponding to the Foundation Grant Request made on June 1, 2018, will increase by $50,000 up to $521,000, 850,000 Matching Amount plus $521,000 and the Donor will have provided $571,000 to the Found: Contributed Amount). ii, Matohing Amount Not Provided. If there is no Matching Amount for a Foundation Grant Request, the Donor has no obligation to increase its Contributed Amount, Nothing in the foregoing requires tho Foundation or the University to provide a Matching Amount, and no breach shall be deemed to have occurred if ‘the Foundation and the University do not provide a Matching Amount. 4, Foundation Request and Proposed Grant Award Schedule Foundation Grant Request | Donor Response and | Maximum | Maximum Contributed Amount Date Proposed Contribution | Matching Date Amount ‘The Donor shall consider | Within sixty days (60) 30 Up to $524,000 Attachment A a request for | days of the Patties up to $524,000 for the Grant | signing this Agreement | Components Tune f, 2018 ‘On oF about August 1, ‘$102,000 | Up to $573,000 ifthe maximum 2018 ‘Matching Amount is providedUp to $471,000 ifrno Matching Amount is provided Tune 1, 2019 ‘On oF about August 1, ‘$216,000 | — Up to $537,000 if the maximom 2019 Matching Amount is provided Up to $321,000 if no Matching Be ‘Amount is provided June 1, 2020 ‘On of about August I, $221,000 | Up (0 $551,000 ifthe maximum 2020 Matching Amount is provided Up to $329,000 if no Matching Amount is provided une 1, 2021 ‘Gn oF about August 1, $260,000 | Up 6 $300,000 if the maximum 2021 Matching Amount it provided Up to $40,000 if no Matching ‘Amount is provided 6 yntributed Amount Used Solely for Educa Grant Components, 8. TaxStatus, According to IRS records, the Foundation is an organization described within the ‘meaning of Internal Revenue Code (the “Code”) sections 501 (0X3) and 509(a)(1) and the University is an ‘organization described within the meaning of Code sections 115 and 170(0)(1), The Foundation and the University agree to immediately notify the Donor if their respective tax statuses change, b. Educational Purpose, ‘The Contributed Amount will be expended solely for the Grant Components, whioh is an educational purpose desctibed in seetion 170(c}(2)(B) of the Code. ‘The Contributed Amount will nt be used to influence legislation as described in section 4945(d}(1) of the Code, to inluence the ‘outcgme of any election, fora political campaign or intervention, to carry on any voter registration drive, or any ther purpose that would jeopardize the Donor’s tax-exempt stats or subject the Donor to penalties under Chaptee 42 of the Code, ©. Grant Components. The Foundation andl the University shall use all Contribtited Amounts solely {o support the Grant Components as stated in this Agreement and shall return to the Donor any Contributed Aout not expended for the Grant Components, a, The Donor haé the right to terminate this Agreement or decline to provide any Contributed Amount in response to « Foundation Grant Request if: (j) the Foundation or the University breaches any term of this Agreement; i) the Grant Components are not advancing the Program’s Mission; or (ii) sich action is necessity to comply with any law applicable to the Foundation, the University, or the Donor. The Donor’s decision not to provide any Contributed Amount in response to a Poundation Grant Request or to terminate this ‘Agreement is effective upon the expiration of thirty business days from the date notice was provided by the Donor {othe Foundation. During the pendency ofthe thirly business days, the Donor shall provide the Foundation and the University with the opportunity fo eure or otherwise address the circumstances underlying the Donar’'s decision. If the Agreement is terminated by the Donor, the Foundation and the University shall return all ‘unencumbsred Contributed Amounts to the Donor within titty days of the Donor’s request, and the Donor is under no obligation to provide any further Contributed Amounts to the Foundation or the Universityb. The Foundation and the University have the right to terminste this Agreement if; (i) the Donor breaches any term of this Agreement; (ii) the Donor does not provide any Contributed Amount in response to a Foundation Grant Request; or (if) such action is necessary to comply with any law applicable to the Foundation, University, or the Donor. Such termination is effective upon the expiration of thirty business days from the date notice was provided by the Foundation or the University to the Donor. Ifthe Agreement is terminated by the Foundation or the University, the Foundation and the University shall return all unencumbered Contributed Amounts to the Donor within thirty days of the Donor’s request, and the Donor is under-no obi to provide. any further Contributed Amounts to the Foundation or the University. ©. Neither Party shall use the name or trademarks of the other Party or the name of any ofits comployees in any publicity or advertising, including endorsements, without the prior written consent of the other Party. Notwithstanding the foregoing, each party may use the name of the other Party and its employees for fulfilling any reporting obligations, 4. Certain records of the Foundation and the University are subject tothe Jowa open records Jaw. Therefore, this Agreement and related information may be made available if required under Towa open records law. The Agreement may also be released if required under other applicable law. Otherwise, the Foundation and the University agree not to diaelose to any thitd party this Agreement or related information ‘without express written approval from the Donor, Before the Foundation or the University disclose this “Agrecinent or related information, the Foundation and the University agree to provide the Donor with a least 5 days’ advance written notice of such disclosure unless legally prohibited from providing such notice, 2. The forms contained in this Agreoment supersede all prior oral or written agreements and ‘understandings between the Parties related to the matters contained in this Agreement and shall constitute the ‘entie agreement between the Parties with respect to the matters contained in this Agreement, f. Inthe event of a conflict between the provisions stated in the body of this Agreement and those stated in the Proposal, this Agreement shall control. & This Agreement shall not be modified or amended except by a writing duly executed by the Parties to this Agreement. h. ‘The provisions of this Agreement are deemed soverablo and should any pat, term, or provision of this Agreement be construed by any court of competent jurisdiction to be illegal, invalid, or unenforceable, the legality, validity, and enforceability of the remaining perts, terms, and provisions will not be affected thereby. i. Nodelay or failure on any Party's part to enforce any right or claim which it may have hereunder shall constitute a waiver of such right or claim. Any waiver by any Patty of any term, provision, or condition of this Agreement, or of any subsequent defeult under this Agreement in any one or more instances shall not be deemed to be a further or continuing waiver of such term, provision, or condition or of any subsequent default hereunder. ‘This Agreement shall not confer any rights or remedies upon any third party other than the Parties to this Agreement and their respective successors and permitted assigns. k, ‘The Foundation and the University may not transfer or assign their respective interests inthe ‘Agreement or any amount to be contributed pursuant to this Agreement without the express written consent of the Donor.1. Allmotices, approvals, or requests in connection with this Agreement shall be in writing and shall be deemed given when delivered personally by hand or one business day after the day sent by overnight courier (in each case with written confirmation of receipt or transmission, as the case may be) atthe following address (or to such other address as a Party may have specified by notice to the other Party pursuant to this provision): Ifto the Foundation: If to the Universit Iowa State University Foundation Iowa State University 2505 University Boulevard 1550 Beardshear Hall ‘Ames, lova 30010 515 Mortll Road ‘Attn: Chief Financial and Administrative Officer ‘Ames, lowa 50011 ‘Attn: Senior Vice President and Provost ce; Office of University Counsel Ifto the Donor: Charles Koch Foundation 1320 N, Courthouse Road, Suite 500 Adlington, VA 22201 “Attn: Grant Administrator co: General Counsel's Office: m, This Agreement may be executed in soveral counterparts, each of which shall constitute an ‘original and all of which, when taken together, shall constitute one agreement or direction, Copies of signatures ic lr eee ep a te eet en ee relied upon to the same extent as the originals. [Signature Page Follows]‘The Patties have hereby executed this Agroement as dated below, but agree that this Agreement is effective as of the Bffective Date, IOWA STATE UNIVERSITY FOUNDATION —_ IOWA STATE UNIVERSITY OF SCIENCE AND TECHNOLOGY By: —clonwW Ag Name: Lisa M. Eslinger Name: Jonathan A. Wickert Title: Chiof Financial and Adminis Title: Senior Vice President and Provost Date: Setoulos~ \A aolTowa State University Proposal to the Charles Koch Koundation ‘fo Support the Program for the Study of Midwest Economies ATTACHMENT A so Midwest labor, product and capital markets are atypically thin compared to markets on the east and west coasts. i Agglomerations of customers, suppliers, and educated workers have been used to explain the century-long shift of | population from rural to urban areas, the increasing concentration of patenting and entrepreneurship in cities, and ‘he higher wages for urban workers compared to rural workers. As a result, studies of entrepreneurship, innovation, and economic arowth have focused most on the experiences in cities. ‘This also occurs because data to analyze these questions has been much more available for urban than rural markets. Nevertheless, 29% of the Midwest population lives in nonmetropolitan areas compared to 15% forthe nation asa whole, and soit is ‘important to understand how thin markets function in a world where agglomeration economies are increasingly important, end how policy choices can enhance ot diminish economie outcomes. Mission Statement ‘This Program will be focused on: ‘+ Entrepreneurship in thin Midwestom markets; ‘* Entrepreneurial finance, with an emphasis on the examination of the supply of and demand for venture capital in thin Midwestern markets; ‘+ Education policy, growth, and returns, with an emphasis on identifying how Midwest states can atiact and retain critical human capital in thin markets, and on how government policies enhance or restrict returns to human capital; ‘+ Analyzing the roles of government tax, expenditure, and regulatory polioies on entrepreneurship and ‘economic growth; and Developing and applying the “Border Index” (defined below). — Grant. Components. New Tenure-track Faculty | At least one and up to two individuals holding Now Tenure-Track Faculty will be hired, They will be affiliated with and actively advance the Prograin’s Mission, Existing Faculty Support Existing faculty who are afiiated with the Program will receive suppor for course release andlor stipends to | fecilitato their work to advance the Program’s Mission, ‘The Program’s activities and finances wil be under the | supervision of the Program Director, Dr. Peter Orazem. If Dr. Orazem leaves the emplay of the University or otherwise becomes unable to serve as the Program Director, the University shall appoint a new individnal to serve | as the Program Director and notify the Donor. Student Support ‘The Program will support up to 3 graduate student fellowships, up to six undergraduate scholarships, and an undergraduate program, Fellowship and scholarship students will be affiliated with and help advance the Program's Mission.Research Support ‘The Program will engage in research projects, including projects utilizing the Central Plains Research Data Center ‘and the construction and promotion of the Border Index. The Border Index will construct an index of the most and least competitive borders the United States, which will complement existing indexes that rate states on their business climates. Communications and Outreach Support ‘The Program will conduct conferences and other public events to help disseminate the Program's work. ‘Program Support ‘The Program will engage in travel and incur miscellaneous expenses to advance the Program’s Mission, Postdoc Support ‘The Program may select a postdoctoral fellow to engage in activities associated withthe Program. Reporting ‘The Program Director and the nev tenurectrack faculty member(s) will report to the Chair of the Department of Beoriomios at the University and shall be subject to the University’s Faculty Handbook and other applicable University policies.