Approval of Assignment Agreement, Medline Industries, Inc. Corporate ReorganizationCity of Dubuque
City Council Meeting
Consent Items # 8.
Copyrighted
September 7, 2021
ITEM TITLE: Approval of Assignment Agreement, Medline Industries, Inc. Corporate
Reorganization
SUMMARY: City Manager recommending approval of resolutions and First
Amendment and Assignment Agreement for Medline Industries, Inc. and
its subsidiaries.
RESOLUTION Approving an Assignment Agreement between MRE
DIA, LLC and MRE Propco, LP
RESOLUTION Approving the First Amendment to Amended and
Restated Development Agreement between the City of Dubuque, Iowa
and Medline Industries, Inc.
SUGGESTED Suggested Disposition: Receive and File; Adopt Resolution(s)
DISPOSITION:
FIN ik[91:ILyil21ZIII l+]
Description Type
MVM Memo City Manager Memo
CAO Medline Memo Staff Memo
Resolution Approving Assignment Agreement Resolutions
Resolution Approving 1st Amendment Resolutions
Assignment Agreement Supporting Documentation
1stAmendment Supporting Documentation
THE CITY OF
Dubuque
DUB TEE
All -America City
Masterpiece on the Mississippi
� pp
zoo�•*o 13
zoi720zoi9
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Approval of Assignment Agreement, Medline Industries, Inc. Corporate
Reorganization
DATE: September 1, 2021
On May 21, 2018, the City Council approved a Development Agreement between the
City of Dubuque and Medline Industries, Inc. (Medline) for the sale of property in
Dubuque Industrial Center North. Prior to final approval of the Development
Agreement, Medline requested City approval to allow a Medline subsidiary to acquire
title to the property for purposes of a Section 1031 exchange for tax purposes. On
June 4, 2018, the City Council approved an Amendment and Restated Development
Agreement which provided for the conveyance of the property to MRE DIA, LLC, a
wholly -owned subsidiary of Medline.
In connection with a corporate reorganization, Medline Industries Inc. will be converting
to Medline Industries, LP. This is a change in form only and not an assignment or
transfer, so no City consent is required. Medline Industries, LP will continue to be
responsible for all requirements of the Amendment and Restated Development
Agreement.
The property title holder, MIRE DIA, LLC has requested City approval to transfer
ownership of the property to another wholly -owned subsidiary, MIRE Propco, LP and
approval of an assignment of the property owner's responsibilities under the
Amendment and Restated Development Agreement pursuant to the attached
Assignment Agreement.
Senior Counsel Barry Lindahl recommends City Council approval of resolutions and
First Amendment and Assignment Agreement.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
k�4
Mic ael C. Van Milligen
MCVM:jh
Attachment
cc: Crenna Brumwell, City Attorney
Cori Burbach, Assistant City Manager
Barry Lindahl, Senior Counsel
THE CITY OF
DUB E
Masterpiece on the Miss '
BARRY A. LINDAHL, E
SENIOR COUNSEL
MEMO
To: Michael C. Van Milligen
City Manager
DATE: September 1, 2021
Dubuque
&America City
uvxsFLLrnr iraaa�
lII �el
I
2007-2012.2013
2017*2019
RE: Approval of Assignment Agreement, Medline Industries, Inc. Corporate
Reorganization
On May 21, 2018, the City Council approved a Development Agreement between the City
of Dubuque and Medline Industries, Inc. (Medline) for the sale of property in Dubuque
Industrial Center North. Prior to final approval of the Development Agreement, Medline
requested City approval to allow a Medline subsidiary to acquire title to the property for
purposes of a Section 1031 exchange for tax purposes. On June 4, 2018, the City Council
approved an Amendment and Restated Development Agreement which provided for the
conveyance of the property to MRE DIA, LLC, a wholly -owned subsidiary of Medline. At
the closing title to the property was conveyed by the City to MRE DIA, LLC. Medline
Industries, Inc. continued to be the Developer under the agreement.
The Amendment and Restated Development Agreement requires the construction of a
new office building of no less than 120,000 square feet of floor space and at an estimated
cost of $18,400,000. The Amendment and Restated Development Agreement also
requires expansion of the facility within 10 years of an additional 30,000 square feet of
floor space as an estimated cost of $4,500,000.
The Amendment and Restated Development Agreement provides that prior to the
completion of the improvements, Medline may not assign the Amendment and Restated
Development Agreement or transfer the property without City consent. The initial
improvements were constructed at a cost of $30,000. However, the expansion
improvements have not yet been constructed.
In connection with a corporate reorganization, Medline will be converting from Medline
Industries, Inc. to Medline Industries, LP. Please see attached August 23, 2021 letter from
Medline's General Counsel to the City Manager. This is a change inform only and not an
assignment or transfer, so no City consent is required. Medline Industries, LP will continue
OFFICE OF THE CITY ATTORNEY DUBUQUE, IOWA
SUITE 330, HARBOR VIEW PLACE, 300 MAIN STREET DUBUQUE, IA 52001-6944
TELEPHONE (563) 583-4113 / FAx (563) 583-1040 / EMAIL balesq@cityofdubuque.org
to be responsible for all requirements of the Amendment and Restated Development
Agreement.
The property title holder, MRE DIA, LLC has requested City approval to transfer
ownership of the property to another wholly -owned subsidiary, MRE Propco, LP and
approval of an assignment of the property owner owner's responsibilities under the
Amendment and Restated Development Agreement pursuant to the attached
Assignment Agreement. Please see attached August 31, 2021 letter from Eric Gerstein
VP — Tax, Treasury, & Risk, Medline Industries, Inc.
Also attached is a resolution approving the First Amendment to Development Agreement
adding MRE Propco, LP as a party.
We have also reviewed the Assignment Agreement and recommend that it be approved.
A resolution approving the Assignment Agreement is attached.
I recommend that the resolutions and First Amendment and Assignment Agreement be
submitted to the City Council for consideration and approval.
BAL:JLM
Attachments
cc: Crenna Brumwell, City Attorney
Jill Connors, Economic Development Director
OFFICE OF THE CITY ATTORNEY DUBUQUE, IOWA
SUITE 330, HARBOR VIEW PLACE, 300 MAIN STREET DUBUQUE, IA 52001-6944
TELEPHONE (563) 583-4113 / FAx (563) 583-1040 / EMAIL tsteckle@cityofdubuque.org
August 23, 2021
VIA FEDEX TRACKING NO. 7745 9744 3192
City Manager
City of Dubuque, Iowa
50 West 13th Street
Dubuque, Iowa 52001
Phone: (563) 589-4110
VIA FEDEX TRACKING NO. 7745 9744 5699
City Attorney
City Hall
50 West 13th Street
Dubuque, Iowa 52001
Re: Majority Investment in Medline and Development Agreement, dated May 21, 2018, by and
between the City of Dubuque, Iowa and Medline Industries, Inc.
Ladies and Gentlemen:
On June 5, 2021, Medline Industries, Inc. ("Medline") entered into an agreement, pursuant to which, subject
to the satisfaction of certain conditions, a majority interest in Medline will be sold to a partnership including
affiliates of The Blackstone Group Inc., The Carlyle Group Inc. and Hellman & Friedman LLC (the
"Transaction"). We currently expect the Transaction to close in 2021.
As part of the Transaction, Medline will convert from an Illinois corporation ("the Converting Entity") to
an Illinois limited partnership, and change its name to Medline Industries, LP (the "Converted Entity")
pursuant to the Illinois Entity Omnibus Act (the "Act"). When the conversion becomes effective, the
conversion will have the effects specified in the Act, including, among other things, that the Converted
Entity will be the same entity without interruption as the Converting Entity, all property of the Converting
Entity will continue to be vested in the Converted Entity without assignment, reversion, or impairment, all
liabilities of the Converting Entity will continue as liabilities of the Converted Entity, all of the rights,
privileges, immunities, powers, and purposes of the Converting Entity will generally remain in the
Converted Entity, and the name of the Converted Entity may be substituted for the name of the Converting
Entity in any pending action or proceeding.
City of Dubuque, Iowa ("you") is party to that certain Development Agreement, dated May 21, 2018, by
and between the City of Dubuque, Iowa and Medline Industries, Inc. (together with any amendments,
exhibits, statements of work and addendums, collectively, the "Agreement'), with Medline and/or one or
more of its subsidiaries (collectively, the "Medline Party"). As a result of the Transaction, the Medline
Party will continue to remain a party to the Agreement. The Medline Party hereby requests that you (a)
consent to the Transaction to the extent such consent is required under the Agreement, and agree that the
Agreement will remain in full force and effect prior to and after the Transaction, (b) waive any and all rights
that arise under the Agreement as a result of the Transaction and (c) agree that you and the Medline Party
will take any further actions as may be reasonably necessary to effect the purposes hereof.
Except as specifically provided herein, this letter shall not constitute an amendment, modification or waiver
of any provision of the Agreement, which shall continue and remain in full force and effect in accordance
with its terms.
medline.com
City of Dubuque, Iowa
August 23, 2021
Page 2
Please contact me if you have any questions regarding the foregoing. If we do not receive any response
from you with respect to this letter within 10 business days, you shall be deemed to accept clauses (a), (b)
and (c) in the paragraph above without any further actions of any party to the Agreement.
We greatly appreciate and value our relationship with you and we look forward to a continued productive
and mutually beneficial relationship.
Sincerely,
Medline Industries, Inc.
107-W—
Alex Liberman (Aug 23, 2021 07:45 COT)
Alex Liberman, General Counsel
aliberman@medline.com
AML:pm
w/o encl.
medline.com
August 31, 2021
Attn: Barry Lindahl, City Attorney
City of Dubuque
Dubuque City Hall
50 W 131h St.
Dubuque, IA 52001
Re: Amended and Restated, Development Agreement By and Between The City of Dubuque, Iowa
and Medline Industries, Inc.
Dear Mr. Lindahl:
On June 5, 2021, Medline Industries, Inc. ("Medlin") entered into an agreement, pursuant to which, subject
to the satisfaction of certain conditions, a majority interest in Medline will be sold to a partnership including
affiliates of The Blackstone Group Inc., The Carlyle Group Inc. and Hellman & Friedman LLC (the
"Transaction"). We currently expect the Transaction to close in 2021.
As part of the Transaction, Medline will convert from an Illinois corporation ("the Converting Entity") to
an Illinois limited partnership, and change its name to Medline Industries, LP (the "Converted Entity")
pursuant to the Illinois Entity Omnibus Act (the "Act'). Medline Industries, LP will retain the tax ID
number of Medline Industries, Inc. When the conversion becomes effective, the conversion will have the
effects specified in the Act, including, among other things, that the Converted Entity will be the same entity
without interruption as the Converting Entity.
Currently, Medline Industries, Inc. operates the Dubuque facility and employs the Dubuque workforce,
while MRE DIA, LLC, a wholly owned disregarded entity of Medlin Industries, Inc., holds title to the
Dubuque property.
As a part of the Transaction, legal ownership of the Dubuque facility will transfer from MRE DIA, LLC
to MRE Propco, LP, a related entity that will ultimately be owned by the same holding company that will
own Medline Industries, LP. Medline Industries, LP will enter into a lease of the facility with MRE
Propco, LP so that it may use/operate in the Dubuque facility.
Please let us know if you have any questions regarding this reorganization. We greatly appreciate and value
our relationship with the City of Dubuque and we look forward to a continued productive and mutually
beneficial relationship.
Sincerely,
ZG�j
Eric Gerstein
VP — Tax, Treasury, & Risk
Medline Industries, Inc.
medline.com
Prepared by Barry A. Lindahl 300 Main Street Suite 330 Dubuque IA 52001 563 583-4113
RESOLUTION NO. 295-21
APPROVING AN ASSIGNMENT AGREEMENT BETWEEN MRE DIA, LLC AND MRE
PROPCO,LP
WHEREAS, Medline Industries, Inc. entered into an Amended and Restated
Development Agreement dated June 4, 2018, with the City of Dubuque, Iowa, providing
certain rights and obligations with respect to the property legally described as Lot 1 of
Dubuque Industrial Center North Third Addition (the Property); and
WHEREAS, Medline Industries, Inc. assigned its right to take title to the Property
to MRE DIA, LLC pursuant to an Assignment, Acceptance and Notice; and
WHEREAS, MRE DIA, LLC in the Assignment, Acceptance and Notice agreed to
be bound by all of the terms and conditions of the Amended and Restated Development
Agreement; and
WHEREAS, MRE DIA, LLC now desires to transfer the Property and assign its
rights to the Property to MRE Propco, LP pursuant to the attached Assignment
Agreement, subject to the consent of the City of Dubuque.
WHEREAS, the City Council of the City of Dubuque finds that consent to the
Assignment Agreement is in the best interests of the City of Dubuque.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA AS FOLLOWS:
Section 1. The Assignment Agreement is hereby approved.
Section 2. The Mayor is hereby authorized and directed to sign the Consent to
Assignment Agreement on behalf of the City of Dubuque.
Passed, approved and adopted this 7th day of Septerlber, 2021.
Roy D. ,Vuol, Mayor
Attest:
//,,,, � 77
Adrienne N. Breitfelder, 6ity Clerk
Prepared by Barry A. Lindahl 300 Main Street Suite 330 Dubuque IA 52001 563 583-4113
RESOLUTION NO. 296-21
APPROVING THE FIRST AMENDMENT TO AMENDED AND RESTATED
DEVELOPMENT AGREEMENT BETWEEN THE CITY OF DUBUQUE, IOWA AND
MEDLINE INDUSTRIS, INC.
WHEREAS, Medline Industries, Inc. entered into an Amended and Restated
Development Agreement dated June 4, 2018, with the City of Dubuque, Iowa, providing
certain rights and obligations with respect to the property legally described as Lot 1 of
Dubuque Industrial Center North Third Addition (the Property); and
WHEREAS, Medline Industries, Inc. assigned its right to take title to the Property
to MIRE DIA, LLC pursuant to an Assignment, Acceptance and Notice; and
WHEREAS, MIRE DIA, LLC in the Assignment, Acceptance and Notice agreed to
be bound by all of the terms and conditions of the Amended and Restated Development
Agreement; and
WHEREAS, MIRE DIA, LLC, has transferred the Property and assigned its rights
to the Property to MIRE Propco, LP; and
WHEREAS, Medline Industries, Inc., pursuant to a Section K reorganization, is
now Medline Industries, LP; and
WHEREAS, the City of Dubuque, Medline Industries, LP and MIRE Propco, LP now
desire to amend the Amended and Restated Development Agreement as set forth in the
attached First Amendment to Amended and Restated Development Agreement.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA AS FOLLOWS:
Section 1. The First Amendment to Amended and Restated Development
Agreement is hereby approved.
Section 2. The Mayor is hereby authorized and directed to sign the First
Amendment to Amended and Restated Development Agreement on behalf of the City of
Dubuque.
Passed, approved and adopted this 7th day of September, 2021.
u&�/
Roy D. ol, Mayor
Attest:
o 1,
Adrienne N. Breitfelder, City Clerk
ASSIGNMENT AGREEMENT
BETWEEN
MIRE DIA, LLC
AND
MIRE PROPCO, LP
This Assignment Agreement, dated for reference purposes the 31 st day of August,
2021, is made and entered into by and between MRE DIA, LLC and MRE PROPCO, LP.
WHEREAS, Medline Industries, Inc. entered into an Amended and Restated
Development Agreement dated June 4, 2018, with the City of Dubuque, Iowa, providing
certain rights and obligations with respect to the property legally described as Lot 1 of
Dubuque Industrial Center North Third Addition (the Property); and
WHEREAS, Medline Industries, Inc. assigned its right to take title to the Property
to MRE DIA, LLC pursuant to an Assignment, Acceptance and Notice; and
WHEREAS, MRE DIA, LLC in the Assignment, Acceptance and Notice agreed to
be bound by all of the terms and conditions of the Amended and Restated Development
Agreement; and
WHEREAS, MRE DIA, LLC, as Assignor, now desires to transfer the Property and
assign its rights to the Property to MRE Propco, LP, as Assignee, subject to the consent
of the City of Dubuque.
NOW, THEREFORE, IT IS AGREED BY AND BETWEEN THE PARTIES AS
FOLLOWS:
1. Assignment. Assignor hereby assigns to Assignee, and Assignee hereby
accepts from Assignor, this assignment of the Amended and Restated Development
Agreement, which assignment includes all rights and obligations of any sort whatsoever
of Assignor thereunder such that, upon acceptance hereof by Assignee, Assignor shall
have no right or interest whatsoever in and to the Amended and Restated Development
Agreement as of the date hereof and Assignee agrees to be fully bound by the Amended
and Restated Development Agreement and shall carry out all obligations of, and be
entitled to all rights of, Assignor thereunder.
2. Law; Binding Effect. This Assignment shall be governed by and construed
in accordance with the laws of the State of Iowa. This Assignment shall be binding upon
the parties hereto and their respective successors in interest and assigns. In the event of
a breach of this Assignment, the non -breaching party shall be entitled to all rights and
remedies at law or equity and shall be entitled to recover reasonable attorneys' fees
incurred due to the breach.
08262021bal
3. Affirmation. The parties hereby affirm the Amended and Restated
Development Agreement in all respects and that the Amended and Restated
Development Agreement shall remain in full force and effect according to its terms.
4. Timing. Notwithstanding anything to the contrary in this Assignment
Agreement, the parties hereto acknowledge and agree that the terms of this Assignment
Agreement will not take effect until each of the events set forth in the revised recitals set
forth upon the effective date of the deed transferring the Property from MIRE DIA, LLC to
MIRE Propco, LP.
MIRE DIA, LLC
By: Medline Industries, Inc.
Its: Manager
By:D an (Aug 31, 202117:37 CDT)
Name: Dmitry Dukhan
Its: Vice President of Real Estate Operations
MRE PROPCO, LP
By: MIRE GP, LLC
Its: General Partner
By: Medline Industries, Inc.
Its: Managing Member
By.D - „an(Aug31, 202117:37 CDT)
Name: Dmitry Dukhan
Its: Vice President of Real Estate Operations
CONSENT
The City of Dubuque, Iowa, hereby consents to this Assignment Agreement.
CITY OF DUBUQUE, IOWA
By: ( IL-1
Roy Q.Buol, Mayor
08262021bal
FIRST AMENDMENT
TO
AMENDED AND RESTATED DEVELOPMENT
BETWEEN
THE CITY OF DUBUQUE, IOWA
AND
MEDLINE INDUSTRIES, INC.
This First Amendment to Amended and Restated Development Agreement, dated
for reference purposes the 31st day of August, 2021 (this Amendment), is made and
entered into by and between the City of Dubuque, Iowa and Medline Industries, Inc.
WHEREAS, Medline Industries, Inc. entered into an Amended and Restated
Development Agreement dated June 4, 2018, with the City of Dubuque, Iowa, providing
certain rights and obligations with respect to the property legally described as Lot 1 of
Dubuque Industrial Center North Third Addition (the Property); and
WHEREAS, Medline Industries, Inc. assigned its right to take title to the Property
to MRE DIA, LLC pursuant to an Assignment, Acceptance and Notice; and
WHEREAS, MRE DIA, LLC in the Assignment, Acceptance and Notice agreed to
be bound by all of the terms and conditions of the Amended and Restated Development
Agreement; and
WHEREAS, MRE DIA, LLC, has transferred the Property and assigned its rights
to the Property to MRE Propco, LP; and
WHEREAS, Medline Industries, Inc., pursuant to a conversion under state law to
a limited partnership, is now Medline Industries, LP; and
WHEREAS, the City of Dubuque, Medline Industries, LP and MRE Propco, LP now
desire to amend the Amended and Restated Development Agreement as set forth herein.
NOW, THEREFORE, IT IS AGREED BY AND BETWEEN THE PARTIES AS
FOLLOWS:
1. The Amended and Restated Development Agreement is hereby amended
by adding after the eighth Whereas clause the following:
WHEREAS, Medline Industries, Inc. assigned its right to take title to the Property
to MRE DIA, LLC pursuant to an Assignment, Acceptance and Notice; and
08312021bal
WHEREAS, MRE DIA, LLC in the Assignment, Acceptance and Notice agreed to
be bound by all of the terms and conditions of the Amended and Restated Development
Agreement; and
WHEREAS, MIRE DIA, LLC, has transferred the Property and assigned its rights
to the Property to MIRE Propco, LP; and
WHEREAS, Medline Industries, Inc., pursuant to a conversion under state law to
a limited partnership, is now Medline Industries, LP; and
2. The Amended and Restated Development Agreement is hereby amended
by deleting the NOW THEREFORE clause and substituting in lieu thereof the following:
NOW THEREFORE, in consideration of the premises and mutual obligations of
the parties hereto, the City of Dubuque, Medline Industries, LP and MIRE Propco, LP do
hereby covenant and agree with each other as follows:
3. The parties hereby affirm the Amended and Restated Development
Agreement in all respects and that the Amended and Restated Development Agreement
shall remain in full force and effect according to its terms.
4. Notwithstanding anything to the contrary in this First Amendment, the
parties hereto acknowledge and agree that the terms of this First Amendment will not take
effect until each of the events set forth in the revised recitals set forth in Section 1 of this
Amendment have occurred.
CITY OF DUBUQUE, IOWA
By: 0 -4/
Roy D uol, Mayor
Attest:
Adrienne N. Breitfelder, City Clerk
08312021bal
MEDLINE INDUSTRIES, INC.
By.D Aug 31,202117:37 CDT)
Name: Dmitry Dukhan
Its: Vice President of Real Estate Operations
MIRE PROPCO, LP
By: MIRE GP, LLC
Its: General Partner
By: Medline Industries, Inc.
Its: Managing Member
By: Drt (Aug31,202117:37CDT)
Name: Dmitry Dukhan
Its: Vice President of Real Estate Operations
08312021bal