The URL can be used to link to this page

HQJP Contract for Progressive Packaging_HormelTHE CTTY OF Dubuque a DUB E 1 i Masterpiece on the Mississippi 2007 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: High Quality Jobs Program (HQJP) Contract for Progressive Packaging, LLC DATE: July 21, 2008 Economic Development Director Dave Heiar is recommending approval of the contract with the Iowa Department of Economic Development for High Quality Jobs Program benefits on behalf of Progressive Packaging, LLC. I concur with the recommendation and respectfully request Mayor and City Council approval. L/ Mich el C. Van Milligen MCVM/Iw Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager David Heiar, Economic Development Director THE CrrY OF Dubuque -•.. ~ DLTB E a~ 1 - Masterpiece on the Mississippi 2007 DATE: July 16, 2008 TO: Michael Van Milligen, City Manager FROM: David Heiar, Economic Development Directo SUBJECT: High Quality Jobs Program (HQJP) Contract for rogressive Packaging, LLC. INTRODUCTION This memorandum presents for City Council review and approval a resolution authorizing a contract with the Iowa Department of Economic Development for High Quality Jobs Program (HQJP) benefits on behalf of Progressive Packaging, LLC. The Master Contract is attached. BACKGROUND Progressive Packaging, LLC. plans to build an $89 million, state-of-the-art food processing facility on a 40 acre site in Dubuque's Industrial Center West. The Austin, Minnesota-based company began construction this summer and plans to have two lines producing packaged foods in 327,000 square feet of new space by the fall of 2009. This project will bring 196 new jobs to the area, with capacity for more, based on consumer demand for shelf stable microwave meals. Raw materials will be shipped to Dubuque from other locations. Various recipes will be used to make non-frozen, ready-to-eat products for the grocery shelf. The operation will not involve animal slaughter or meat processing. Hormel Foods Corp. is a multinational manufacturer and marketer of high-quality, brand-name food and meat products. In each of the past nine years, Hormel Foods Corp. has been named one of the "400 Best Big Companies in America" by Forbes. The HQJP benefits will provide financial assistance to enable the company's proposed development in Dubuque. As required by the HQJP program, the contract requires a commitment of City funds to the project. DISCUSSION Hormel Foods Corp. will commit to create 196 new jobs of which 21 will qualify for the HQJP, averaging over $59,000 per year plus benefits. The Company will be investing approximately $82 million in construction and equipment costs. Approximately $52 million of this value will be for the building. The HQJP benefits outlined in the contract consist of the following benefits: • 5% Investment Tax Credit (estimated value of $4,557,480) • 6.5% Research Activities Credit • Refund of Sales, Service, and Use Tax A local match is required for the HQJP benefits and the City has already committed support to the project, estimated at $12,000,000, consisting of a Land Acquisition Grant ($3,000,000) and a 10 year estimated TIF rebate ($9,000,000). RECOMMENDATION I recommend that the City Council approve the HQJP contract for Hormel Foods Corp. This project is consistent with the City's goals to help businesses expand in the community, increase the number of good paying jobs and further diversify our economic base. ACTION STEP T1~e action step for the City Council is to adopt the attached resolution. attachments F:\USERS\DHeiar\Hormel\Hormel HQJP contract approval memo.doc Prepared by: Aaron DeJong, Asst. ED Director, 50 West 13th Street, Dubuque IA 52001 563 589-4393 Return to: Jeanne Schneider, City Clerk, 50 West 13th Street, Dubuque IA 52001 563 589-4121 RESOLUTION NO. 251-08 RESOLUTION APPROVING AN HIGH QUALITY JOBS PROGRAM AGREEMENT BY AND AMONG THE IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT, THE CITY OF DUBUQUE AND PROGRESSIVE PACKAGING, LLC. Whereas, Progressive Packaging, LLC application was approved by the Iowa Department of Economic Development on March 20, 2008; and Whereas, the Iowa Department of Economic Development has prepared and submitted for City Council approval an agreement relating to High Quality Job Program benefits for Progressive Packaging, LLC a copy of which is attached hereto and by this reference made a part hereof; and Whereas, the City Council finds that the proposed agreement is acceptable and necessary to the growth and development of the city. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That the Iowa Department of Economic Development Enterprise Zone Program Agreement, Number 08-HQJC-045, is hereby approved. Section 2. That the Mayor is hereby authorized and directed to execute the Agreement on behalf of the City of Dubuque and forward the executed copy to the Iowa Department of Economic Development for their approval. Passed, approved and adopted this 4th day of August, 2008. Roy D. Buol, Mayor Attest: Jeanne F. Schneider, City Clerk MASTER CONTRACT BY AND BETWEEN Progressive Packaging, LLC AND TxE IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT CONTRACT NUMBER: P0709M01470 TABLE ®F CC}NTENTS ARTICLE I. MASTER.CONTRACT DURATION; FUNDING AGREEMENT DURATION ARTICLE 2. FUNDING Article 2.1 Funding Sources Article 2.2 Reduction, Discontinuance or Alteration of Funding ARTICLE 3. CONTRACT STRUCTURE AND DEFINITIONS; DOCUMENTS INCORPORATED BY REFERENCE; ORDER OF PRIORITY Article 3.1 Contract Structure and Definitions Article 3.2 Documents Incorporated by Reference Article 3.3 Business `s Financial Assistance Application on File Article 3.4 Order of Priority ARTICLE 4. AWARD Article 4.1 Description of the Project and Award Budget Article 4.2 Job D, bligations Article 4.3 Repayment Obligation ARTICLE 5. CONDITIONS TO DISBURSEMENT OF FUNDS; DISBURSEMENT TERMS Article S.1 Documents Submitted Article 5.2 Prior Costs Article 5.3 Cost Variation Article 5.4 Suspension of Disbursement Article 5. S Investment of Award Proceeds ARTICLE 6. SECURITY; CROSS-COLLATERALIZATION Article 6.1 Secured Property Article 6.2 Value of Collateral Article 6.3 Additional or Substitute Collateral ARTICLE 7. REPRE SENTATIONS AND WARRANTIES Article 7.1 Organization and Qualifications Article 7.2 Authority and Validity of Obligations Article 7.3 Use of Proceeds Article 7.4 Subsidiaries Article 7. S Financial Reports Article 7 6 No Material Adverse Change Article 7.7 Full Disclosure; Business's Financial Assistance Application Article 7.8 Trademarks, Franchises and Licenses Article 7.9 Governmental Authority and Licensing Article 7.1 D Litigation and Other Controversies Article 7.11 Good Title Article 7.12 Taxes Article 7.13 Other Contracts Article 7.14 No Default Article 7.15 Compliance with Laws Article 716 Effective Date of Representations and Warranties Contract # P0709M01470 - 2 - Maste.upaarea s~o~ ARTICLE 8. COVENANTS Article 8.1 Maintain Existence in Iowa Article 8.2 Job Obligations; Benefits Requirements Article 8.3 Performance Obligations Article 8.4 Maintenance of Properties Article 8. S Taxes and Assessments Article 8.6 Insurance Article 8.7 Required Reports Article $.8 Inspection and Audit Article 8.9 Compliance with Laws Article 8.10 Use ofAward Proceeds Article 8.11 Changes in Business Ownership, Structure or Control Article 8.12 Notice of Meetings Article 8.13 Notice of Proceedings Article 8.14 Accounting Records Article 8.1 S Restrictions Article 8.16 No Changes in Business Operations Article 8.17 Indemniftcation ARTICLE 9. EVENTS OF DEFAULT AND REMEDIES Article 9.1 Events of Default Article 9.2 Default Remedies Article 9.3 Default Interest Rate Article 9.4 Expenses Article 9.5 Notice of Default and Opportunity to Cure ARTICLE 10. MISCELLANEOUS Article 1 D.1 Timely Performance Article 10.2 State of Iowa Recognition Article 10.3 Choice of Law and Forum Article 10.4 Governing Law Article 10. S Master Contract/Funding Agreement Amendments Article 10.6 Notices Article 10.7 Headings Article 10.8 Final Authority Article 10.9 Waivers Article 10.10 Counterparts Article 10.11 Survival of Representations Article 10.12 Severability of Provisions Article 10.13 Successors and Assigns Article 10.14 Termination Article 10.15 Integration Contract # P0709M01470 - 3 - Master updated a~o7 MASTER CONTRACT BUSINESS: PROGRESSIVE PACKAGING, LLC MASTER CONTRACT NUMBER: P0709M01470 AWARD DATE: March 20, 2008 This FINANCIAL ASSISTANCE CONTRACT (the "Master Contract") is made as of the CONTRACT EFFECTIVE DATE by and between the Iowa Department of Economic Development ("IDED"), 200 East Grand Avenue, Des Moines, IA 50309 and Progressive Packaging, LLC a Delaware limited liability company ("Business"),1205 Chavenelle Court, Dubuque, IA 52001.. WHEREAS, the Business submitted an application to IDED requesting financial assistance in the financing of its Project as more fully described in Exhibit C, Description of the Project and Award Budget, (the "Project"); and WHEREAS, the IDED found the Project to meet the requirements established to receive financial assistance; and WHEREAS, the IDED and/ox the Iowa Department of Economic Development Board ("I.DED Board") have awarded the Business financial assistance from one or more IDED-administered programs for the Project, all of which axe subject to the terms and conditions set forth herein and collectively referred to as t11e "Award"; and NOW TI-IEREFORE, in consideration of the mutual promises contained herein and intending to be legally bound, the Business and IDED agree to the following terms: ARTICLE 1 MASTER CONTRACT DURATION; FUNDING AGREEMENTS DURATION This Master Contract shall be in effect until all of Business's obligations and liabilities under this Master Contract and all of the Funding Agreements executed in connection with this Master Contract have been satisfied. The duration of each Funding Agreement will be as described in the Funding Agreement. ARTICLE 2 FUNllING 2.1 Funding Sources. The sources of funding for this Award are appropriations to IDED for financial assistance programs administered by the IDED and tax credit programs that IDED is authorized to administer. 2.2 Reduction Discontinuance or Alteration of Funding. Any termination, reduction, or delay of funds available due, in whole or in part, to (i) lack of, reduction in, or a deappropriation of revenues previously appropriated by the legislature for this Award, or (ii) any other reason beyond the IDED's control may, in the IDED's discretion, result in the termination, reduction or delay of funds to the Business. Contract # P0709M01470 - 4 - Masterupdatea s/or ARTICLE 3 CONTRACT STRUCTURE AND DEFINITIONS; DOCUMENTS INCORPORATED BY REFERENCE; AND ORDER OF PRIORITY 3.1. Contract Structure and Definitions. (a) This Award shall be governed by this Master Agreement and the individual funding agreements (the "Funding Agreements") for each source of program assistance for this Award. This Award has been provided to the Business to fund the Project described in Exhibit C, Description of the Project and Award Budget. The Articles of this Master Contract apply to each Funding Agreement unless a Funding Agreement specifically states otherwise. (b) The following terms apply to this Master Contract and each of the Funding Agreements, unless otherwise specified in a Funding Agreement: "Award Date" means the. date first stated in this Master Contract and is the date the R7ED and/or the IDED Board approved the awarding of financial assistance to the Business for the Project. "Benefits Requirements" means the benefits requirements established by the Department pursuant to statute or rule for each program that is providing financial assistance or tax credit benefits for this Project. "Business's Employment Base" means the number of jobs as stated in Exhibit D, Job Obligations that the Business and IDED have established as the job base for this Project. The number of jobs the Business has pledged to create shall be in addition to the Business's Employment Base. "Created Jabs" means the number of new FTE Jobs the Business will add over and above the Business's Employment Base. "Community" means City of Dubuque "Eligible Benefits" means all of the following: medical and dental insurance plans, pension and profit-sharing plans, child care services, life insura~ice coverage, vision insurance plan, and disability coverage. "Forgivable Loan" means a form of an award made by the IDED to the Business under a Funding Agreement(s) for which repayment is eliminated in part or entirely if the Business satisfies the terms of this Contract and the Funding Agreement(s). "Full-time Equivalent (FTE) Job" means the employment of one person: {a) For 8 hours per day fora 5-day, 40-hour workweek for 52 weeks per year, including paid holidays, vacations and other paid leave, or (b) For the number of haurs or days per week, including paid holidays, vacations and other paid leave, currently established by schedule, custom, or otherwise, as constituting a week of full-time work for the kind of service an individual performs for an employing unit. "Job Maintenance Period" means the date two {2) years from the Project Completion Date as stated in Exhibit D, Job Obligations. The Business shall maintain the Project, and the created/retained jobs through the Job Maintenance Period. Contract # Po709M01470 - 5 - Master updated aio7 "Job Obligations" means the Business's Employment $ase number and the new jobs to be created that pay the required wages and benefits, all as outlined in Exhibit D, Job Obligations. "Loan" means form of an award made by the IllED to the Business under a Funding Agreements} for which full repayment is expected. "Project" means the description of the work and activities to be completed by the Business as outlined in Exhibit C, Description of the Project and Award Budget, Exhibit D, Job Obligations, and Exhibit A, Business's Financial Assistance Application. "Protect Coh2pletion Date" means the date three (3}years from the Award Date as stated in Exhibit D, Job Obligations. The_ Project Completion Date is the dace by which all Project activities shall be satisfactorily completed. "Qualifying jobs" are those created or retained jobs that meet ar exceed the Qualifying Wage Threshold Requirement established for the programs providing assistance to this Project qualify far program funding. "Qualifying Wage Threshold Requirenreat"means the wage threshold requirement (e.g. 90%, 3 00%, 130% , 160% of the average county or regional wage rate) established by the Department pursuant to statute or rule for each program that is providing financial assistance or tax credit benefits for this Project. The Qualifying ~~Vage Threshold Requirement for each funding source providing assistance to this Project is outlined in Exhibit D, Job Obligations. "Retained Job" means an existing job that meefs the Qualifying Wage Threshold Requirements and. would be eliminated or moved to another state if the Project did Trot proceed in Iowa. 3.2 Documents Incorporated by Reference. The following documents are incorporated by reference and considered an integral part of this Master Contract: Exhibit A - Business's Financial Assistance Application, Application # 08-HOJC-045 Exhibit B - Funding Agreements: BS- HQJCP Funding Agreement Exhibit C - Description of the Project and Award Budget Exhibit D - Job Obligations Exhibit E - Tax Increment Development Agreement By and Behveen the City of Dubuque, Towa and Hormel Foods Corporation to be attached hereto when fully executed by the parties. 3.3 Business's Financial Assistar~c~,Application on File. Due to its size, Exhibit A will not be attached to this Master Contract, but wii[ be kept on file at the Iowa Department of Economic Development. It shall, nevertheless, be considered an incorporated element of this Master Contract and the Funding Agreements. 3.4 Order of Priority. Li the case of any inconsistency or conflict between the specific provisions of this document and the exhibits, the following order of priority shall control: (a} Master Contract, Articles 1-10 (b) Exhibit B -Funding Agreements (c) Exhibit C -Description of the Project and Award Budget (d} Exhibit D -- Job Obligations (e) Exhibit A -Business's Financial Assistance Application Contract # P0709M01470 • 6 - Maste~upaated sro~ Exhibit E - Tax Increment Development Agreement By and Between the City of Dubuque, Iowa and Progressive Packaging, LLC to be attached hereto when fully executed by the parties. ARTICLE 4 AWARD 4.1 Description of the Project and Award Budget. The IDED and/or the IDED Board have approved an Award to the Business from the programs and in the amounts identified in Exhibit C, Description of the Project and Award Budget. The Project Budget for this Award is as detailed in Exhibit C. 4.2 Sob Obligations. The IDED and/or the IDED Board have approved an Award to the Business and the Business' Job Obligations are outlined in Exhibit D, Job Obligations. 4.3 Re~ayment Obligation. The obligation to repay the direct Bnancial assistance components of this Award shall be evidenced by Promissory Notes executed in comiection with the Funding Agreements. ARTICLE 5 CONDITIONS TO DISBURSEMENT OF FUNDS; DISBURSEMENT TERMS The obligation of IDED to make, continue or disburse funds under this Master Contract and the Funding Agreements shall be subject to the following conditions precedent: 5.1 Documents Submitted. IDED shall have received each of the following documents, properly executed and completed, and approved by IDED as to form and substance: {a) Master Contract. Fully executed Master Contract. (b} Fundin~greements. Fully executed Funding Agreements. (c) Promissory Notes. The Promissory Notes required by the Funding Agreements. (d) Articles of Incorporation. Copies of the articles of incorporation of the Business, certified in each instance by its secretary or assistant secretary. (e) Certificate of Corporate Existence. A certificate of existence for the Business from the Office of the Secretary of State of Iowa. (f) Results ofLien and Tax Sea~ch._ Financing statemeirt, tax and judgment lien search results, in the Business's state of incorporation/organizatian, against the Business and Secured Property. (g) Security Documents. The fully executed Security Documents required in Article 6.0. (h) Other Required Documents. IDED shall have received such other contracts, instruments, documents, certificates and opinions as the IDED may reasonably request. (i) Hazardous Waste Audit. To comply with Iowa Code section 15A.1(3)"b," if the Business generates solid or hazardous waste, it must either: a) submit a copy of the Business's existing in-house plan to Contract # P0709M01470 - 7 - Masrerupdared ero7 reduce the amount of waste and safely dispose of the waste based on an ui-house audit conducted within the past 3 years; or b} submit an outline of a plan to be developed in-house, or 3) submit documentation that the Business has authorized the Iowa Department of Natural Resources or Iowa Waste Reduction Genter to conduct the audit. (j) Release Form -Confidential Tax In ormation. A signed Authorization for Release of Confidential State Tax Information form to permit IDED to receive the Business's state tax information directly from the Iowa Department of Revenue for purposes of annually updating the Iowa Public Return on Investment Analysis. (k} Satisfactoru Credit History. Documentation of satisfactory credit history of the Business and guarantors, as applicable, with no judgments or unsatisfied liens or similar adverse credit actions. {l) Proiect Financial Commitments. The Business shall have submitted documentation acceptable to IDED from the funding sources identified in Exhibit C committing to the specified financial involvement in the Project and received the IDED's approval of the documentation. The documentation shall include the amount, terms and conditions of the financial commitment, as well as any applicable schedules. {m) Reguests,~or Disbursement. AlI disbursements of Award proceeds shall be subject to receipt by the IDED of requests for disbursement, in form and content acceptable to IDED, submitted by the Business. All requests shall include documentation of costs that have been paid or costs to be paid immediately upon receipt of Award proceeds. (n) FundinQA~reements Disbursement Requirements. Satisfaction of all disbursement requirements outlined in the specific program Funding Agreements. 5.2 Prior Costs. No expenditures made prior to the Award Date may be included as Project costs. This restriction applies to the direct financial assistance portions of this Award, not the tax credit benefits included in this Award. 5.3 Cost Variation. In the event that the total Project cost is less than the amount specified in the Exhibit C, the Funding Agreements shall be reduced at the same ratio to the total Project cost reduction as the ratio of the Funding Agreement amount to the total amount of funds provided by the Business and all funding sources requiring a proportional reduction of their financial contribution to the Project. Any disbursed excess above the reduced IDED participation amount shall be returned immediately to IDED. S.4 Suspension of Disbursement. Upon the occurrence of aa~ Event of Default {as defined in this Master Contractor any of the Funding Agreements) by the Business, the IDED may suspend payments and tax credit program benefits to the Business until such time as the default has been cured to IDED's satisfaction. Notwithstanding anything to the contrary in this Master Contract or the Funding Agreements, upon a termination of this Master Contract on account of an Event of Default by the Business, Business will no longer have the right to receive any disbursements or any tax credit program, benefits after the effective date of default. All Award funds may also be suspended, in IDED's sole discretion, in the event the Business experiences a layoff within the state of Iowa or closes any of its Iowa facilities. 5.5 Investment of Award Proceeds. .. (a) In the event that the Award proceeds are not immediately utilized, temporarily idle Award proceeds held by the Business may be invested provided such investments shall be in accordance with State law, including but not limited to the provisions of Iowa Code chapter 12C concerning the deposit of Contract # P0709M01470 - 8 - Master updated aro~ public funds. Interest accrued on temporarily idle Award proceeds held by the Business shall be credited to and expended on the Project prior to the expenditure of other Award proceeds. (b) All proceeds remaining, including accrued interest, after all allowable Project costs have been paid or obligated shall be returned to the IDED within thirty (30) days after the Project Completion Date. Within ten (10) days of receipt of a written request from IDED, Business shall inform the IDED in writing of the amount of unexpended Award funds in the Business's possession or under the Business's control, whether in the form of cash on hand, investments, or otherwise. ARTICLE 6 SECURITY; CROSS-COLLATERALIZATION The Business shall execute in favor of the IDED all security agreements, financing statements, mortgages, personal and/or corporate guarantees (the "Security Documents") as required by the IDED. 6.I Securi .This Award. shall be secured by: None required for tax credit program (the "Secured Property ") 6.2 Value of Collateral. The value, as reasonably determined by IDED, of the Secured Property shall meet or exceed the amount of Award funds disbursed. 6.3 Additional or Substitute Collateral. In case of a decline in the market value of the Secured Property, or any part thereof, IDED may require that additional or substitute collateral of quality and value satisfactory to IDED be pledged as Secured Property for this Award. The Business shall provide such additional or substitute collateral Secured Property within 20 days of the date of the request for additional or substitute collateral to secure this Award in an amount equal to or greater than the amount of outstanding Award funds. ARTICLE 7 REPRESENTATIONS AND WA,ItRANTIES The Business represents and warrants to IDED as follows: 7.1 Organization and Qualifications. The Business is duly organized, validly existing and in good standing as a corporation under the state of its incorporation. The Business has full and adequate power to own its property and conduct its business as now conducted, and is duly licensed or qualified and in good standing in each jurisdiction in which the nature of the business conducted by it or the nature of the property owned or leased by it requires such licensing or qualifying, except where the failure to so qualify would not have a material adverse effect on the Business's ability to perform its obligations hereunder. 7.2 Authority and Validity of Obligations. The Business has full right and authority to enter into this Master Contract and the Funding Agreements and to make the borrowings herein provided for. The person signing this Master Contract and the Funding Agreements has full authority to: a) sign this Master Contract and the Funding Agreements, and b) issue Promissory Notes on behalf of the Business, and c) secure Business's obligations under this Master Contract and the Funding Agreements, and d) perform each and all of the obligations under the Master Contract and its Funding Agreements. Contract # P0709M01470 - 9 - Master updated a~o~ The Master Contract and Funding Agreement documents delivered by the Business have been duly authorized, executed and delivered by the Business and constitute the valid and binding obligations of the Business and enforceable against it in accordance with their terms. This Master Contract, the Funding Agreements and related documents do not contravene any provision of law or any judgment, injunction, order or decree binding upon the Business or any provision of the articles of organization or operating agreement of the Business, contravene or constitute a default under any covenant, indenture or contract of or effecting the Business or any of its properties. 7.3 Use of Proceeds. The Business hereby agrees to use Award proceeds only for the Project and for the activities described in Exhibit C, Description of the Project and Award Budget, this Master Contract and the Funding Agreements. Use of Award proceeds shall conform to the Budget for the Project as detailed in Exhibit C. The Business represents that there are legally enforceable commitments in place from the funding sources identified for the Project in Exhibit C. 7.4 Subsidiaries. The Business has no Subsidiaries on the Contract Effective Date. 7.5 Financial Reports. The balance sheet of the Business furnished to IDED as of the Contract Effective Date, fairly presents its financial condition as at said date inconformity with GAAP applied on a consistent basis. The Business has no contingent liabilities which are material to it, other than as indicated on such financial statements or, with respect to future periods, on the financial statements furnished to IDED. 7.6 No Material Adverse Chance. Since the Award Date, there has been no change in the condition (financial or otherwise} or business prospects of the Business, except those occurring in the ordinary course of business, none of which individually or in the aggregate have been materially adverse. To the knowledge of the Business, there has been no material adverse change in the condition of the Business (financial or otherwise) or the business prospects of the Business 7.7 Full Disclosure; Business's Financial Assistance Application. The statements and other information furnished to the IDED by Business in its Financial Assistance Application and in connection with the negotiation of this Master Contract and the Funding Agreements do not contain any untrue statements of a material fact or omit a material fact necessary to make the material statements contained herein or therein not misieading. The IDED acknowledges that as to any projections furnished to the IDED, the Business only represents that the same were prepared on the basis of information and estimates it believed to be reasonable. 7.8 Trademarks, Franchises and Licenses. The Business owns, possesses, or has the right to use all necessary patents, licenses, franchises, trademarks, trade names, trade styles, copyrights, trade secrets, know how and confidential commercial and proprietary information to conduct its businesses as now conducted, without known conflict with any patent, license, franchise, trademark, trade name, trade style, copyright or other proprietary right of any other Person. As used in this Master Contract, "Person" means an individual, partnership, corporation, association, trust, unincorporated organization or any other entity or organization, including a government or agency or political subdivision thereof. 7.9 Governmental Authority and Licensing. The Business has received all licenses, permits, and approvals of all Federal, state, local, and foreign governmental authorities, if any, necessary to conduct its businesses, in each case where the failure to obtain or maintain the same could reasonably be expected to have ~a material adverse effect. No investigation or proceeding which, if adversely determined, could reasonably be expected to result in revocation or denial of any material license, permit, or approval is pending or, to the knowledge of the Business threatened. Contract # P0708M01470 - 10 - Masterupdated aror 7.10 Litigation and Other Controversies. There is no litigation or governmental proceeding pending, nor to the knowledge of the Business threatened, against the Business which if adversely determined would result in any material adverse change in the financial condition, Properties, business or operations of the Business, nor is the Business aware of any existing basis for any such litigation or governmental proceeding. 7.1 ] Good Title. The Business has good and defensible title (or valid leasehold interests) to all of its Property (including, without limitation, the Secured Property} reflected on the most recent balance sheets furnished to the IDED (except for sales of assets in the ordinary course business). 7.12 Taxes. All tax returns required to be filed by the Business in any jurisdiction have, in fact, been filed, and all taxes, assessments, fees and other governmental charges upon the Business or upon any of its property, income or franchises, which are shown to be due and payable in such returns, have been paid, except such taxes, assessments, fees and governmental charges, if any, as are being contested in good faith and by appropriate proceedings which prevent enforcement of the matter under contest and as to which adequate reserves established in accordance with GAAP have been provided. The Business knows of no proposed additional tax assessment against it for which adequate provisions in accordance with GAAP have not been made on its accounts. Adequate provisions in accordance with GAAP for taxes on the books of the Business have been made for all open years, and for their current fiscal period. 7.13 Other Contracts. The Business is not in default under the terms or any covenant, indenture or contract of or affecting either the Business or any of its properties, which default, if uncured, would have a material adverse effect on its financial condition, properties, business or operations. 7.14 No Default. No Default or Event of Default has occurred or is continuing. 7.15 Compliance with Laws. The Business is in compliance with the requirements of all federal, state acid local laws, rules and regulations applicable to or pertaining to the business operations of the Business and laws and regulations establishing quality criteria and standards for air, water, land and toxic or hazardous wastes or substances, non-compliance with which could have a material adverse effect on the financial condition, properties, business or operations of the Business. The Business has not received notice to the effect that its operations are not in compliance with any of the requirements of applicable federal, state or local environmental or health and safety statutes and regulations or are the subject of any governmental investigation evaluating whether any remedial action is needed to respond to a release of any toxic or hazardous waste or substance into the environment, which non-compliance or remedial action could have a material adverse effect on the financial condition, properties, business or operations of the Business. ?.16 Effective Date of Representations and Warranties. The warranties and representations of this Article are made as of the Contract Effective Date and shall be deemed to be renewed and restated by the Business at the time each request for disbursement of funds is submitted to the IDED. ARTICLE 8 COVENANTS 8. i Maintain Existence in Iowa. The Business shall at ail times preserve and maintain its existence as a corporation in good standing and maintain the Project in Iowa. The Business will preserve and keep in force and affect all licenses, permits, franchises, approvals, patents, trademarks, trade names, trade styles, copyrights and other proprietary rights necessary to the Contract # P0709M01470 - i 1 - Master updated aro~ proper conduct of its respective business. 8.2 Job Obligations; Benefits Requirements. (a) Jobs and Wages. By the Protect Completion Date, the Business shall create/retain the number of FTE Created Jobs and Retained Jobs above the Business's Employment Base and maintain the jobs through the Job Maintenance Period, all as detailed in Exhibit D. The Business shall pay the wage rates identified in Exhibit D. (b) Benefits. The Business shall provide and pay for the eligible benefits described in Exhibit A, Business's Financial Assistance Application, with an Average Benefit Value calculated by IDED and shown in Exhibit D. During the Contract period the Business may adjust the benefit package provided the Average Benefit Value does not fall below the minimum benefit threshold requirement (e.g., 80% of medical and dental insurance) for the funding source that is assisting the Project and provided the benefit package includes eligible benefits. 8.3 Performance Obligations. By the Project Completion Date, Business shall complete the Project, make the total investment pledged for the Project and in accordance with the Award Budget as detailed in Exhibit C and comply with all other performance requirements described in this Master Contract and the Funding Agreements. The Business shall promptly provide IDED with written notice of any major changes that would impact the success of the Project. 8.4 Maintenance of Pro ep rties. The Business shall maintain, preserve and keep its properties in good repair, working order and condition (ordinary wear and tear excepted} and will from time to time make all needful and proper repairs, renewals, replacements, additions and betterments thereto so that at all time the efficiency thereof shall be fully preserved and maintained in accordance with prudent business practices. 8:5 Taxes and Assessments. The Business shall duly pay and discharge ail taxes, rates,. assessments, fees and governmental charges upon or against it against its properties, in each case before the same become delinquent and before penalties accrue thereon, unless and to the extent that the same are being contested in good faith and by appropriate proceedings and adequate reserves are provided therefore. 8.6 Insurance. The Business shall insure and keep insured in good and responsible insurance companies, all insurable property owned by it which is of a character usually insured by Persons similarly situated and operating like properties against loss or damage from such hazards or risks as are insured by Persons similarly situated and operating like properties; and the Business shall insure such other hazards and risks (including employers' and public liability risks) in good and responsible insurance companies as and to the extent usually insured by Persons similarly situated and conducting similar businesses. The Business will upon request of the IDED furnish a certificate setting forth in summary form the nature and extent of the insurance maintained pursuant to this Article. IDED acknowledges that Business is self-insured with a $2 million retention, and that Business is insured for claims above that amount with an excess liability policy. 8.7 Required Reports. (a) Review of Disbursement Requests and Reports. The Business shall prepare, sign and submit disbursement requests and reports as specified in this Master Contract in the form and content required by IDED. The Business shall review all reimbursement requests and verify that claimed expenditures are allowable costs. The Business shall maintain documentation adequate to support the claimed costs. Contract # P0709M01470 - 12 - master updated sio~ (b) Reports. The Business shall prepare, sign and submit the following reports to the IDED throughout the Contract period: Reuort Due Date Annual Protect Status Report The Annual Project Status Report will collect July 3151 for the period ending June 30th information from the Business about the status of the project. This report will collect data such as current employment levels, number of jobs that meet or exceed the Qualifying Wage Threshold Requirements (with acid without benefits), project expenditures, including amount spent on research and development, any changes to the Business's benefits, ownership, structure, or control ofthe Business and any other information required by IDED. End of Project Report The End of Project Report will collect Within 30 days of Project Completion Date information from the Business about the completed project such as final employment levels, number of jobs that meet or exceed the Qualifying Wage Threshold Requirements (with and without benefits), project expenditures and changes to the Business's benefits, ownership, structure, or control of the Business and any other information required by IDED. End of Job Maintenance Period Reuort The End of lob Maintenance Period Report will Within 30 days of the end of the Job collect information from the Business's Maintenance Period continued maintenance of employment levels and Qualifying Wage Threshold Requirements (with and without benefits) that were verified at the Froject Completion Date, and changes to the Business's benefits, ownership, structure, or control of the Business and any other information required by IDED. (c) Additional Reports, Financials as Requested by IDED. The IDED reserves the right to require more frequent submission of any of the above reports if, in the opinion of the IDED, more frequent submissions would help improve the Business's Froject performance, or if necessary in order to meet requests from the Iowa General Assembly, the Department of Management or the Governor's office. At the request of IDED, Business shall submit its annual financial statements completed by an independent CPA, or other financial statements including, but not limited to, income, expense, and retained earnings statements. Contract # P0709M01470 -13 - Master updared aio~ 8.8 Inspection and Audit. The Business will permit the IDED and its duly authorized representatives to visit and inspect any of the Business's properties, corporate books and financial records of the Business related to the Project, to examine and make copies of the books of accounts v~d other financial records of the Business, and to discuss the affairs, finances and accounts of the Business with, and to be advised as to the same by, its officers, and independent public accountants (and by this provision the Business authorizes such accountants to discuss with the IDED and the IDED's duly authorized representatives the finances and affairs of the Business) at such reasonable time and reasonable intervals as the IDED may designate, but at least annually. 8.9 Com~-liance with Laws. (a) The Business will comply in all material respects with the requirements of all federal, state and local laws, rules, regulations and orders applicable to or pertaining to its properties or business operations including, but not limited to, all applicable environmental, hazardous waste or substance, toxic substance and underground storage laws and regulations, and the Business will obtain any permits, Licenses, buildings, improvements, fixtures, equipment or its property required by reason of any applicable environmental, hazardous waste or substance, toxic substance or underground storage laws or regulations. (b) The Business shall comply in all material respects with all applicable federal, state, and local laws, rules, ordinances, regulations and orders applicable to the prevention of discrimination in employment, including the administrative rules of the Iowa Department of Management and the Iowa Civil Rights Commission which pertain to equal employment opportunity and affirmative action. (c) The Business shall comply in all material respects with all applicable federal, state and local laws, rules, ordinances, regulations and orders applicable to worker rights and worker safety. {d} The Business shall comply with IDED's administrative rules for each program funding source, as identified in the Funding Agreements. 8.10 Use of Award Proceeds. The Business will use the Award proceeds extended under this Master Contract and the Funding Agreements solely for the purposes set forth in Exhibit C. 8.11 Changes in Business OwnershipLStructure and Control. The Business shall not materially change the ownership, structure, or control of the Business if it would adversely affect the Project. This includes, but is not limited to, entering into any merger or consolidation with any person, firm or corporation or permitting substantial distribution, liquidation or other disposal of Business assets directly associated with the Project. Business shall provide IDED with advance notice of any proposed changes in ownership, structure or control. The materiality of the change and whether or not the change affects the Project shall be as reasonably determined by IDED. 8.12 Notice of Meetines. The Business shall notify IDED at least two (2) working days in advance of all meetings of the board of directors at which the subject matter of this Master Contract, the Funding Agreements, or the Project is proposed to be discussed. The Business shall provide IDED with copies if the agenda and minutes of such meetings and expressly agrees that a representative of IDED has a right to attend those portions of any and all such meetings where the Project, this Master Contract or the Funding Agreements are discussed. 8.13 Notice of Proceedings. The Business shall promptly notify IDED of the initiation of any claims, lawsuits, bankruptcy proceedings or other proceedings brought against the Business which would adversely impact the Project. 8.14 Accounting Records. The Business is required to maintain its books, records and all other Contract # P0709M01470 - 14 - mtasterupdered e~o~ evidence pertaining to this Master Contract and its Funding Agreements in accordance with generally accepted accounting principles and such other procedures specified by IDED. These records shall be available to IDED, its internal or external auditors,'the Auditor of the State of Iowa, the Attorney General of the State of Iowa and the Iowa Division of Criminal Investigations at all times during the Master Contract's and the Funding Agreements' duration and any extensions thereof, and for three (3) full years from the Agreement Expiration Date. 8.15 Restrictions. The Business shall not, without prior written disclosure to IDED and prior written consent of IDED, which shall not be unreasonably withheld, directly or indirectly: (a) Assign, waive or ixansfer any of Business's rights, powers, duties or obligations under this Master Contract or the Funding Agreements. (b) Sell, transfer, convey, assign, encumber or otherwise dispose of any of the Secured Property or the Project. (c) Place or permit any restrictions, covenants or any similar limitations on the Secured Property or the Project. (d) Remove from the Project site or the State all or substantially all of the Secured Property. (e} Create, incur or permit to exist any Lien of any kind on the Secured Property. 8.16 No Changes in Business Operations. The Business shall not materially change the Project or the nature of the Business and activities being conducted, or proposed to be conducted by Business, as described in the Business's approved application for funding, Exhibit A of this Master Contract, unless approved in writing by IDED prior to the change. 8.i7 Indemnification. The Business shall indemnify, defend and hold harmless the IDED, the State of Iowa, its departments, divisions, agencies, sections, commissions, officers, employees and agents from and against all losses, liabilities, penalties, fines, damages and claims (including taxes}, and all related costs and expenses (including reasonable attorneys' fees and disbursements and costs of investigation, litigation, settlement, judgments, interest and penalties), arising from or in connection with any of the following: a) Any claim, demand, action, citation or legal proceeding arising out of or resulting from the Project; b) Any claim, demand, action, citation or legal proceeding arising out of or resulting from a breach 6y the Business of any representation or warranty made by the Business in this Master Contract or the Funding Agreements; c) Any claim, demand, action, citation or legal proceeding arising out of or related to occurrences that the Business is required to insure against as provided for in this Master Contract or the Funding Agreements; and d) Any claim, demand, action, citation or legal proceeding which results from an act or omission of the Business or any of their agents in its or their capacity as an employer of a person. ARTICLE 9 EVENTS OF DEFAULT AND REMEDIES 9.l Events of Default. Any one or more of the following shall constitute an "Event of Default" hereunder: Contract # P0709M09470 - 15 - Masrerupdared nor (a} Nonpayment. In the event of a missed payment under a Loan or in the event a Forgivable Loan is not forgiven and all or a portion of the Forgivable Loan must be repaid by the Business, a default in the payment when due {whether by lapse of time, acceleration or otherwise} of any principal on the Promissory Note(s), or default in payment for more than ten (10) Business Days of the due date thereof of any interest on the Promissory Notes} or any fee or other obligation payable by the Business shall be an Event of Default; or (b) Noncompliance with Covenants. Default in the observance or performance of any covenant set forth in Article 8, far' more than five (5} Business Days; or (c) Noncompliance with Security Documents. Default in the observance or performance of any term of any Security Documents beyond any applicable grace period set forth therein; or (d) Noncompliance with Master Contract. Default in the observance or performance of any other provision of this Master Contract; or (e) Noncompliance with Funding_greements; Cross-De cult. Default in the observance or performance of any other provision of any of the Funding Agreements, including Events of Default identified in any of the Funding Agreements; IDED may elect to declare the Business in default of this Master Contract and any or all of the Funding Agreements if there is a default under any one of the Funding Agreements; or {f) Material Misrepresentation. Any representation or warranty made by the Business in this Master Contract or the Funding Agreements or in any statement or certificate furnished by it pursuant fio this Master Contract or the Funding Agreements, or made in its Financial Assistance Application, or in connection with any of the above, proves untrue in any material respect as of the date of the issuance or making thereof; or (g}Lien Deficiencies. Any of the Security Documents shall for any reason fail to create a valid and perfected priority Lien in favor of the IDED in any Secured Property pledged by Business; or (h) Judgment Qver X100.000. Any judgment or judgments, writ or writs or warrant or warrants of attachment, or any similar process or processes in an aggregate amount in excess of $100,000 shall be entered or filed against the Business or against any of its property and remains unvacated, unbonded or unstayed for a period of 30 days; or (i) Adverse Change in Financial Condition. Any change shall occur in the financial condition of the Business which would have a material adverse effect on the ability of the Business to perform under this Master Contract or the Funding Agreements; or {j) Bankruptcy or,Similar Proceedings Initiated. Either the Business shall {1) have entered involuntarily against it an order for relief under the United States Bankruptcy Code, as amended, (2) not pay, or admit in writing its inability to pay, its debts generally as they become due, (3) make an assignment for the benefit of creditors, (4} apply for, seek, consent to, or acquiesce in, the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any substantial part of its Property, (5) institute any proceeding seeking to have entered against it an order for relief under the United States Bankruptcy Code as amended, to adjudicate it insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors ox fail to file an answer or other pleading denying the material allegations of any such proceeding filed against it, or {6) fail to contest in good faith any appointments or proceeding described in Article 9.l(k} below; or Contract # P0709M01470 -16 - Masrer updates sro~ (k) ~•pointment o~O~frcials. A custodian, receiver, trustee, examiner, liquidator or similar official shall be appointed for either the Business or any substantial part of any of its respective property, or a proceeding described in Article 9.1(j) shall be instituted against either the Business and such appointment continues undischarged or such proceeding continues undismissed or unstayed for a period of sixty (60} days; or (1) Insecurity. IDED shall in good faith deem itself insecure and reasonably believes, after consideration of all the facts and circumstances then existing, that the prospect of payment and satisfaction of the obligations under this Master Contract and/or the Funding Agreements, or the performance of or observance of the covenants in this Master Contract and/or the Funding Agreements, is or will be materially impaired. (m) Failure to Submit Required Reports. The Business fails to submit complete reports by the required due dates as outlined in Article 8.7. (n)1,avoffs. Relocation. or Closure. The Business experiences a layoff within the state or closes any of its facilities within the state during the term of this Contract. 9.2 Default Remedies. When an Event of Default has occurred and is continuing, the IDED may, by written notice to the Business: (a} terminate this Master Contract, the Funding Agreements and all of the obligations of IDED under this Master Contract and the Funding Agreements on the date stated in such notice, and (b) declare the principal and any accrued interest on the outstanding Promissory Notes to be forthwith due and payable, including both principal and interest and all fees, charges and other amounts payable under this Master Contract and the Funding Agreements, shall be and become immediately due and payable without further demand, presentment, protest or notice of any kind. 9.3 Default Interest Rate. If an Event of Default occurs and remains uncured, a default rate of G% shall apply to repayment of amounts due under this Master Contract and the Funding Agreements. The default interest rate shall accrue from the first date Award funds are disbursed. 9.4 Expenses. The Business agrees to pay to the IDED all expenses reasonably incurred or paid by IDED including reasonable attorneys' fees and court costs, in connection with any Default or Event of Default by the Business or in connection with the enforcement of any of the terms of this Master Contract and the Funding Agreements. 9.5 Notice of Default and On o~rlunitYto Cure. If IDED has reasonable cause to believe that an Event of Default has occurred under this Master Contract and/or the Funding Agreements, IDED shall issue a written Notice of Default to the Business, setting forth the nature of the alleged default in reasonable specificity, and providing therein a reasonable period time, which shall not be fewer than thirty (30) days from the date of the Notice of Default, in which the Business shall have an opportunity to cure, provided that cure is possible and feasible. ARTICLE 10 MrSCELLANEUUS. 10.1 Timely Performance. The parties agree that the dates and time periods specified in this Master Contract and the Funding Agreements, including the timelines established for the Project and more fully described in Exhibit C, are of the essence to the satisfactory performance of this Master Contract and the Funding Agreements. Contract # P0709M01470 - 17 - Masrerupdarad a/or t0.2 State of Iowa Reco ing tion. If the Project involves construction and there is signage recognizing the financial contributions made to the Project the Business agrees to include the Iowa Department of Economic Development on the list of entities providing assistance.. For example, a sign or plaque indicating that the Project was funded in part by an Award from the State of Iowa, Iowa Department of Economic Development. 10.3 Choice of Law and Forum. (a) In the event any proceeding of a quasi judicial or judicial nature is commenced in connection with this Master Contract or the Funding Agreements, the proceeding shall be brought in Des Moines, Iowa, in Polk County District Court for the State of Iowa, if such court has jurisdiction. If however, such court lacks jurisdiction and jurisdiction lies only in a United States District Court, the matter shall be commenced in the United States District Court for the Southern District of Iowa, Central Division. (b) This provision shall not be construed as waiving airy immunity to suitor liability, in state or federal court, which may be available to the IDED, the State of Iowa or its members, officers, employees or agents. 10.4 Governing Law. This Master Contract and the Funding Agreements and the rights and duties of the parties hereto shall he governed by, and construed in accordance with the internal laws of the State of Iowa without regard to principles of conflicts of laws. 14.5 Master ContractlFunding Agreement Amendments. Neither this Master Contract nor any documents incorporated by reference in connection with this Master Contract, including the Funding Agreements, may be changed, waived, discharged or terminated orally, but only as provided below: (a} Writing required. The Master Contract and the Funding Agreements may only be amended if done so in writing and signed by the Business and IDED; and for those Funding Agreements in which the Community is a signatory, by the Community, the Business and IDED. Examples of situations requiring an amendment include, but are not limited to, time extensions, budget revisions, and significant alterations of existing activities or beneficiaries. No amendment will be valid until approved in writing by IDED. (b} IDED review. IDED will consider whether an amendment request is so substantial as to necessitate reevaluating the IDED's or IDED Board's original funding decision. An amendment maybe denied by IDED if it substantially alters the circumstances under which the Project funding was originally approved. 10.6 Notices. Except as otherwise specified herein, all notices hereunder shall be in writing (including, without limitation by fax) and shall be given to the relevant party at its address, a-mail address, or fax number set forth below, or such other address, a-mail address, or fax number as such party may hereafiter specify by notice to the other given by United States mail, by fax or by other telecommunication device capable of creating a written record of such notice and its receipt. Notices hereunder shall be addressed: To the Business: Progressive Packaging, LLC Jana Haynes, Director of Tax 1 Hormel Place Austin, MN 55912 Contract # P0709M01470 -18 - Master updated 8/0~ E-mail: jlhaynes@hormel.com Telephone: 507/437-5233 Facsimile: 507/434-6731 With a copy via facsimile to Corporate Law Department at 507/437-5135 To the IDED at: Iowa Department of Economic Development Legal and Compliance 200 East Grand Avenue Des Moines, Iowa 50309 Attention: Julie Malone, Project Manager E-mail: Julie.malone@iowalifechanging.com Telephone: S 1 S/ 242-4872 Facsimile: 515/ 242-4832 Each such notice, request or other communication shall be effective (i) if given by facsimile, when such facsimile is transmitted to the facsimile number specified in this Article and a confirmation of such facsimile has been received by the sender, (ii) if given by a-mail, when such a-mail is transmitted to the e-mail address specified in this Article and a confirmation of such a-mail has been received by the sender, (iii) if given by mail, three (3) days after such communication is deposited in the mail, certified or registered with return receipt requested, addressed as aforesaid or {iv) if given by any other means, when delivered at the addresses speciEed in this Article. . 10.7 Headings. Article headings used in this Master Contract and the Funding Agreements are for convenience of reference oniy and are not a part of this Master Contract or the Funding Agreements for any other purpose. 10.8 Final Authority. The IDED shall have the authority to reasonably assess whether the Business has complied with the terms of this Master Contract and the Funding Agreements. Any IDED determinations with respect to compliance with the provisions of this Master Contract and the Funding Agreements shall be deemed to be final determinations pursuant to Section 17A of the Code of Iowa (2007). 10.9 Waivers. No waiver by IDED of any default hereunder shall operate as a waiver of any other default or of the same default on any future occasion. No delay on the part of the IDED in exercising any right or remedy hereunder or under the Funding Agreements shall operate as a waiver thereof No single or partial exercise of any right or remedy by IDED shall preclude future exercise thereof or the exercise of any other right or remedy. i 0.10 Counteraarts. This Master Contract may be executed in any nwnber of counterparts, each of which shalt be deemed to be an original, but all of which together shall constitute but one and the same instrument. 10.11 Survival of Representations. All representations and warranties made herein or in any other Master Contract/Funding Agreement document or in certificates given pursuant hereto or thereto shall survive the execution and delivery of this Master Contract and the Funding Agreements and the other Master Contract/Funding Agreement documents and shall continue in full force and effect with respect to the date as of which they were made until ail of Business's obligations or liabilities under this Master Contract # P0709M01470 - 19 - Masre~ updated e/o~ Contract and the Funding Agreements have been satisfied. 10.12 Severabilitxof Provisions. Any provision of this Master Contract or the Funding Agreements, which is unenforceable in any jurisdiction, shall, as to such jurisdiction, be ineffective to the extent of such unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. All rights, remedies and powers provided in this Master Contract and or the Funding Agreements or any other Master Contract document may be exercised only to the extent that the exercise thereof does not violate any applicable mandatory provisions of law, and all the provisions of this Master Contract and the Funding Agreements and any other Master Contract document are intended to be subject to all applicable mandatory provisions of law which may be controlling and to be limited to the extent necessary so that they will not render this Master Contract or the Funding Agreements or any other Master Contract document invalid or unenforceable. 10.13 Successors and Assigns. This Master Contract and the Funding Agreements shall be binding upon the Business and its respective successors and assigns, and shall inure to the benefit of the IDED and the benefit of their respective successors and assigns. The Business may not assign its rights hereunder or under any of the Funding Agreements without the written consent of the IDED, which consent will not be unreasonabty withheld. 10.14 Termination. This Master Contract and any of the Funding Agreements can be terminated upon mutual, written agreement of the Business and IDED and, for Funding Agreements to which the Community is a signatory, upon mutual written agreement of the Business, IDED and the Community. 10.15 Irate rag tion• This Master Contract and the Funding Agreements contains the entire understanding between the Business and IDED relating to the Project and any representations that may have been made before or after the signing of this Master Contract and the Funding Agreements, which are not contained herein, are nonbinding, void and of no effect. None of the Parties have relied on any such prior representation in entering into this Master Contract and its Funding Agreemert. IN WITNESS WHEREOF in consideration of the mutual covenants set forth above and far other good and valuable consideration, the receipt, adequacy and legal sufficiency of which are hereby acknowledged, the parties have entered into this Master Contract and have caused their duly authorized representatives to execute this Master Contract, effective as of the latest date stated below (the "Cantrac# Effective Date"). FOR THE IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT: BY: Michael L. Tramontina, Director Date FOR THE BUSINESS: Si afore /~ vffJ~Lt. C~ Pa'Ti E2 V ~, fx Q 0~~~7b"~ yped Name a d Title ~11 ~ 0~ Date LD Contract # P0709M01470 - 20 - Masterupdared e~or LIST OF EXHIBITS Exhibit A - Business's Financial Assistance Application (on file with IDED}, Application # 08-HQJC-045 Exhibit B - Funding Agreements BS-HQJCP Funding Agreement Exhibit C - Description of the Project and Award Budget Exhibit D - Job Obligations Exhibit E - Tax Increment Development Agreement By and Between the City of Dubuque, Iowa and Progressive Packaging, LLC to be attached hereto when fully executed by the parties. Contract # P0709M01470 - 21 - Masterupdatea a/o7 EXHIBIT B - 5 HQJCP FUNDING AGREEMENT BUSINESS: Progressive Packaging, LLC COMMUNITY: City of Dubuque MASTER CONTRACT NUMBER: P0709M01470 FUNDING AGREEMENT NUMBER: 08-HQJC-045 THIS HIGH QUALITY JOB CREATION PROGRAM (HQJCP) FUNDING AGREEMENT is made by and among the IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT, 200 East Grand Avenue, Des Moines, Iowa 50309.("IDED"), the business identified above ("Business"), and the community identified above ("Community"), effective as of the Contract Effective Date stated in the Master Contract identified above. WHEREAS, the Department has found the Business' application to be consistent with the requirements of the Act and the administrative rules adopted by the Department for the HQJCP - 261 Iowa Administrative Code, Chapter 68; and WHEREAS, the Business has been approved by the Department to receive certain tax incentives and assistance; and WHEREAS, the Business has executed the Master Contract described above with the IDED pursuant to an Award on the Award Date stated in the Master Contract to the Business for the Project; and WHEREAS, the Master Contract specifies that for each program funding source the IDED and the Business shall enter into a Funding Agreement; and WHEREAS, this HQJCP Funding Agreement can#ains additional terms and conditions for the award of HQJCP benefits; and NOW, THEREFORE, the Business and Community accept the terms and conditions set forth in this HQJCP Funding Agreement and the Master Contract for the funding of the Project. In consideration of the mutual promises contained in the Master Contract and this HQJCP Funding Agreement and other good and valuable consideration, it is agreed as follows: 1.0 Master Contract. Unless otherwise specified in this HQJCP Funding Agreement, the definitions, terms, conditions, and provisions contained in the Master Contract are applicable to this HQJCP Funding Agreement. The following provisions in the Master Contract da not apply to this HQJCP Funding Agreement: Article 3.1(b) _ Definition of "Project Completion Date" and "Jab Maintenance Period." [The HQJC program has different time periods for these activities.] Article 4.3 - Repayment obligation. [No promissory note required for tax credits.] Article 5.9(c) -Promissory Notes. [Execution of note is not a condition precedent to receipt of tax credit benefits] Article 5.1(g) -- Security Documents. [Execution of Security Documents is not a condition precedent to receipt of tax credit benefits]. Article 5.9(m) -Requests for disbursement. [Not required for tax credit program benefits.] Article 5.2 - Prior costs. [Not applicable to tax credit program benefiits.] Article 5.3- Cost variation. [Not applicable to tax credit program benefits.] Article 5.5 - Investment of Award Proceeds. [No proceeds in tax credit programs.] Article 6 - Security, Cross-collateralization.. [Nat applicable to tax credit program benefits.] Article 9.9(a) -Nonpayment as an Event of Default. [Not applicable because there are no loan payments in fax credit programs]. Article 9.1(c) -Noncompliance, with Security Documents as an Event of Default. [Not applicable because there are na Security Documents required in tax credit programs]. Article 9.1(g) -Lien Deficiencies as an Event of Default. [Not applicable because there are no Security Documents required in #ax credit programs.] 2.0 Definitions. As used in this HQJCP Funding Agreement, the following terms shall apply: 2.1 Aareement Expiration Date. Expiration of this HQJCP Funding Agreement occurs upon the happening of one of the following events, whichever occurs first: (a) IDED's determination that the Business has fully met the requiremen#s of the HQJCP Funding Agreement, including meeting its job crea#ion and maintenance requirements, and IDED closes out this HQJCP Funding Agreement. (b) An Event of Default occurs that is not remedied within the time period allowed under the Master Contract. (c} This HQJCP Funding Agreement is terminated upon mu#ual, written agreement of the Business, the Community and IDED. 2.2 HQJCP. "HQJCP" means the High Quality Job Creation Program. The HQJCP is authorized by 2007 Iowa Code section 15.226 to 15.337. 2.3 HQJCP Award. "HQJCP Award" means IDED's approval of the Business's Financial Assistance Application for the Project. This HQJCP Award authorizes the Business to receive HQJCP Program benefits. 2.4 "Annual Base Rent". "Annual Base Rent" means the Business' annual tease payment minus taxes, insurance, and operating or maintenance expenses. 2.5 Proiect Completion Date. "Project Completion Date" means, for purposes of reporting to the Iowa Department of Revenue that the Project has been completed, (1 }for new manufacturing facilities, the first date upon which the average annualized production of finished Master Contract #P0709M01470 Funding Agreement # 0&HQJC-045 -2- Revfsea s/o~ product for the preceding ninety-day period at the manufacturing facility operated by the Business is at least fifty percent of the initial design capacity of the facility; or (2) for axis#ing or non-manufacturing facilities, the date of completion of all improvements necessary for the start- up, location, expansion or modernization of business. This definition of "Project Completion Date" is only used for purposes of claiming the refund of sales, service and use faxes or the corporate tax credit for certain sales taxes paid, if applicable. 3.0 High Quality Job Creation Program Benefits. 3.1 Benefits Available. The fallowing High Quality Job Creation Program benefits are available to the Business under this HQJCP Funding Agreement: (a) Investment Tax (i} The Business may claim an investment tax credit as provided in Iowa Code section 15.333. An investment tax credit may be claimed up to 5% (capped, percentage of jobs reduction waived) of the qua{ifying expenditures, as defined below in subparagraph (iv), directly related to new jobs created by the start-up, location, expansion, or modernization of the approved business under the program. The Business shall not claim an investment tax credit in excess of $4,557,480 or as reflected in the final award amount that is approved by the Department at the conclusion of the Project. The credit is to be taken in the year the qualifying asset is placed in service. Any credit in excess of the tax liability for the tax year may be credited to the tax liability for the following seven years or until depleted, whichever occurs first. (ii) The tax credit shall be amortized equally over alive-year period which the Department will, in consultation with the eligible business, define. The five-year amortization period is specified below. Amortization schedule for Investment Tax Credits deferred at request of business. Carry forward begins at first year of amortization. Amortization Schedule Jul 1 2009 -June 30, 2010 $911. 496 Jul 1 2010 -June 30, 2011 $911,496 Jul 1, 2011 -June 30, 2012 $911,496 Jul 1, 2012 -June 30, 2013 $911 496 Jul 1, 2013 -June 30 2014 $911 496 (iii) HQJCP Funding Agreement Exhibit A, "investment Tax Credit Amortization Schedule Examples," illustrates how the 5-year amortization requirement will be applied. (iv} The qualifying expenditures eligible for the investment tax credit are: 1. The purchase price of real property and any buildings and structures located on the real property. Master Contract #P0709M01470 Funding Agreement # 08-HQJC-045 -3- Reused a~o~ 2. The cost of improvements made to real property which is used in opera#ion of the Business. 3. The costs of machinery and equipment, as defined in Iowa Code section 427A.1(1) "e" and "j," purchased for use in the operation of the approved Business and which the purchase price have been depreciated in accordance with generally accepted accounting principles. 4. The Annual Base Rent paid to a third-party developer by an approved Business for a period equal to the term of the lease agreement but not to exceed the maximum term of the agreement, provided the cumulative cast of the base rent payments for that period does not exceed the cost of the land the third-party developer's costs to build or renovate the building for the approved Business. Annual base rent shall only be considered when the project includes the construction of a new building or the major renovation of an existing building. The approved Business shall enter into a lease agreement with the third-party developer for a minimum of five years. (b) Additional Research Activities Credit. The Business is eligible to claim an additional research activities credit as provided in Iowa Code section 15.335. This benefit is a tax credit for increasing research activities in this state during the period the Business is participating in the program. The credit may equal up to six and one-half percent (6.5%) of the State's apportioned share of the qualifying expenditures for increasing research activities and is iri addition to the credit authorized in Iowa Code sections 422.10 and 422.33(5). Any tax credit in excess of the tax liability may be refunded to the Business with interest or, at its election, credited to its tax liability the following year. (c) Refund Of Sales Service And Use Taxes Paid To Contractors Or Subcontractors. The Business is eligible for a refund of sales, service and use taxes paid to contractors and subcontractors as authorized in Iowa Code section 15.331A. (i) The Business may apply for a refund of the sales and use taxes paid under Iowa Code chapters 422 and 423 for gas, electricity, water or sewer utility services, goods, wares, or merchandise, or on services rendered, furnished, or performed to or for a contractor or subcontractor and used in the fulfillment of a written contract relating to the construction or equipping of a facility of the approved business. (ii) Taxes attributable to intangible property and furniture and furnishings shall not be refunded. (iii) To receive a refund of the sales, service and use taxes paid to contractors or subcontractors, the Business must, within one year after Project Completion, make an application to the Department of Revenue. 3.2 Benefits Not Available. The following High Quality Jab Creation Program benefits are not available to the Business under this agreement: (a) Refund of Taxes Attributable to Racks. Shelving, and Conveyor Equipment. (b) Corporate tax credit for certain sales taxes paid by third party developer. (c) Value-Added Property Tax Exemption. Master Contract #P0709M01470 Funding Agreement # OS-HQJC-045 -4- Revised 8/0~ 4.0 Conditions to Receipt of High Quality Job Creation Program Benefits. The High Quality Job Creation Program Benefits authorized under this HQJCP Funding Agreement are available to the Business provided the Business, (and where applicable, the Community) satisfies each of the following conditions: 4.1 Job Obligations. The Business's Job Obligations are as detailed in Master Contract Exhibit D, "Job Obligations." The Business shall create the required number of jobs that pay the Qualifying Wage within 5 years (the "Job Creation Period') of the Award Date. The Business shall maintain the Created Jobs in addition to the Business's Base Employment for a period of at least two (2) years (the "Job Mainfenance Period ") beyond the Job Creation Period, for a total contract duration of 7 years. 4.2 Qualifying Investment. Within five (5) years of the Award Date (as defined in the Master Agreement), the Business shall make a qualifying investment of $91,149,600: A "qualifying investment" means an investment in real property including the purchase price of land and existing buildings and structures; site preparation; improvements to real property; building construction; long-term lease casts; andlor depreciable assets. 4.3 Required Elements. {a) Offer a pension or profit sharing plan to full-time employees. (b) Produce or manufacture high value-added goods or services or be in one of the state's targeted industries: value-added agricul#ural products. {c) Provide and pay 80% of the cost of a standard medical and dental insurance plan for all full-time employees at the facility in which the project will occur. {d} Have an active productivity and safety improvement program(s) involving management and worker participation and cooperation. The programs} shall include benchmarks for gauging compliance. 4.4 Business Retention. The Business shall have and maintain Project operations contemplated by this Agreement within the Community at least through the Agreement Expiration Date. 4.5 Local Commitment. The Community shall provide the local financial assistance for the Project as described in Exhibit C, Project Description and in the form and annual amounts described in Exhibit E Tax Increment Deve{opment Agreement By and Between the City of Dubuque, Iowa and Hormel Food Corporation to be attached hereto when fully executed by the parties. 5.0 Events of Default by the Business; Notice of Default; Repayment Provisions. 5.1 Events of Default. The terms of Article 9.0 (Events of Default and Remedies) of the Master Contract ,except as noted in Article 5.2 and 5.3 below. Master Contract #P0709M01470 Funding Agreement # 08-HQJC-045 -5- Revised 8/07 5.2 Notice of Default. The following Notice of Default provisions supersede the Notice of Default provisions specified in Article 9.5 (Notice of Default and Opportunity to Cure) of the Master Contract: . (a) From Department. If, through the Annual Project Status Report or other means, the IDED has reason to believe the Business is in default of the terms of this Agreement, the IDED will issue a written notice of default to the Business, setting forth the nature of the default in reasonable specificity, and providing therein a reasonable period of time, which shall not be less than 30 days from the date of the notice of default, in which the Business shah have an opportunity to cure, provided that cure is possible and feasible. A copy of any Notice of Default will also be provided to the Community and Department of Revenue. (b} From Community. If, through monitoring, auditing or o#her means, the Community has reason to believe the Business is in default of the terms of this Agreement, the Community will issue a written notice of default to the Business, setting forth the nature of the default in reasonable specificity, and providing therein a reasonable period of time, which shall not be Tess than 30 days from the date of the notice of default, in which the Business shall have an opportunity to cure, provided that cure is possible and feasible. A copy of any Notice of Default wilt also be provided to the IDED and Department of Revenue. 5.3 Repayment Provisions. The following provisions supersede the provisions of Article 9.2 (Default Remedies) of the Master Contract. If the Business has received incentives or assistance under the HQJCP Program and fails to meet and maintain any one of the requirements of the HQJCP Program, the HQJCP Program Administrative Rules or any term of this HQJCP Funding Agreement, the Business is subject to repayment of all or a portion of the incentives and assistance that it has received, as detailed below: {a} Job Obli atc~ions of Project Completion Date and End of Job Maintenance Period. If the approved Business faits to meet its Job Obligations by the Project Completion Date or faits to maintain its Job Obligations through the Job Maintenance Period, both as described in Master Contract Exhibit D ,the Business shall repay a percentage of the tax incentives and assistance that it has received. The repayment percentage will be equal to the percentage of jobs that the approved Business failed to create or maintain. {b} Required elements. If the approved Business fails to meet the four required elements stated in Article 4.3 in any one year, the Business must meet that requirement in the following year or repay al! the tax incentives and assistance that it has received. (c) Selling disposinc~or razing of property. (f, within five years of purchase, the approved Business sells, disposes of, razes, or otherwise renders unusable all or a part of the land, building, or other existing structures for which an investment tax credit or insurance premium tax credit was claimed, the income tax liability of the approved Business for the year in which all or part of the property is sold, disposed of, razed, or otherwise rendered unusable shall be increased by one of the following amounts: {1 } One hundred percent of the tax credit claimed if the property ceases to be approved for the tax credit within one full year after being placed in service. (2) Eighty percent of the tax credit claimed if the property ceases to be approved for the tax credit within two full years after being placed in service. Master Contract #P0709M01470 Funding Agreement # 08-HQJC-045 -6- Revised 8/07 (3} Sixty percent of the tax credit claimed if the property ceases to be approved for the tax credit within three full years after being placed in service. (4) Forty percent of the tax credit claimed if the property ceases to be approved for the tax credit within four full years after being placed in service. (5) Twenty percent of the tax credit claimed if the property ceases to be approved for the tax credit within five full years after being placed in service. (d) Qualifying Investment. If the Business does not meet its Qualifying Investment requirement described in 4.2, repayment shall be calculated as follows: (i) If the Business has met 50 percent or less of the requirement, the Business shall repay the same percentage in benefits as the Business failed to invest. (ii) If the Business has met more than 50 percent but not more than 75 percent of the requirement, the Business shall repay one-half of the percentage in benefits as the Business failed to invest. (iii} If the Business has met mare than 75 percent but not more than 90 percent of the requirement, the Business shah repay one-quarter of the percentage in benefits as the Business failed to invest. (e) Layoffs.or closures. If an approved Business experiences a Payoff within the state or closes any of its facilities within the state prior to receiving the tax incentives and assistance, the Department may reduce or eliminate all or a portion of the tax incentives and assistance. If an approved Business experiences a layoff within the state or closes any of its facilities within the state after receiving tax incentives and assistance, the Business may be subject to repayment of alt or a portion of the tax incentives and assistance that it has received. (f} Department of Revenue; Community Recovery. Once it has been established, through the Business's Annual Project Status Report, monitoring, audit or otherwise, that the Business is required to repay all or a portion of the incentives received, the Department of Revenue and the Community shall collect the amount owed. The Community has the authority, pursuant to the HQJCP Program, to take action to recover the value of taxes not collected as a result of the exemption provided by the Community to the Business. Department of Revenue has the authority, pursuant to the HQJCP Program, to recover the value of state taxes or incentives provided under the HQJCP Program. The value of state incentives provided under the HQJCP Program includes applicable interest and penalties. 6.0 Final Award Amount 6.1 Submit Final Numbers Within 12 Months. The approved Business shall, upon satisfaction of the requirements stated in Article 4.0, submit to the Department information on the final Job Obligations, including wages and benefit values, and the final qualifying investment. This submission must be in writing on the form provided by the Department and must be received by the Department within 12 months of completion of the project and the creation of the jobs. Upon receipt of the completed form, the Department shall review and Master Contract #P0709M01470 Funding Agreement # 08-HQJC-045 -7- Revised 8/0~ confirm the information and shall prepare the final award amounts based on the final results. Final award amounts may still be subject to certain limitations put in place when the initial award was made. 6.2 Repayment If Claimed Credits Exceed Final Award Amount. If, upon receipt of the final award amount from the Department, the Department of revenue determines that the approved Business has claimed tax incentives and assistance in amounts that exceed the amounts s#ipulated in the final award, the approved Business shall be required to repay any tax credits and refunds i# received in excess of the final award amounts. The Department of Revenue shall have the authority to collect the amount #o be repaid to the state including interest and penalties. 7.0 Event of ©efault by Community. 7.1 Event of Default. The Community's failure to provide the annual local financial assistance pledged for the Project as described in Exhibit C, Project Description and Award Budget and in the form and. annual amounts described in Exhibit E -Tax Increment Development Agreement By and Between the City of Dubuque, Iowa and Hormel Foods Corporation to be attached hereto when fully executed by the parties, shat! be considered an Event of Default by the Community 7.2 Notice of Default and Opportunity to Cure. If the IDED has reason to believe the Community is in default of the terms of this Agreement, the IDED will issue a wriften notice of default to the Community setting forth the nature of the default in reasonable specificity, and providing therein a reasonable period of time, which shall not be less than 30 days from the date of the Notice of Default, in which the Community shall have an opportunity to cure, provided that cure is possible and feasible. A copy of any Notice of Default will also be provided to the Business and Department of Revenue. 7.3. Repayment by Community. If an Event of Default is not cured within the time allowed, IDED's remedies include but are not limited to {egal action against the Community for payment of the amount of local financial assistance pledged but not provided by the Community plus 6% default interest calculated from the Award Date. 8.0 Incorporated documents. The following documents are hereby incorporated by this reference: 1. The Master Contract and its Exhibits. 2. HQJCP Funding Agreement Exhibit A, "Investment Tax Credit Amortization Schedule Examples." Master Contract #P0709M01470 Funding Agreement # 08-HQJC-045 -8- Revised aio~ IN WITNESS WHEREOF, the parties have executed this HQJCP Funding Agreement: BUSINESS: PRnOGRESSIVE PACDKAGING, LLC BY: y (,l ~/ ~~ 1 Signature Print Name and Title 7/~~/0~ Date LD tOWA DEPARTMENT OF ECONOMIC DEVELOPMENT: 13Y: Michael L. Tramontina, Director Date COMMUNITY: BY: Signature Print Name and Title Date _` ~~ n+j Master Contract #P0709M01470 Funding Agreement # 08-MQJC-045 -g- Revised sm~ HQJC Funding Agreement Exhibit A Investment Tax Credit Amortization Schedule Examples HQJC Funding Agreement Exhibit A Investment Tax Credit Amortization Schedule Examptes Background Information: Effective July 1, 2005, Investment Tax Credits (or Insurance Premium Tax Credits) awarded to a Business by the Iowa Department of Economic Development must be amortized equally over a 5-year period. The Department will determine the amortization schedule and include it in the Business' funding agreement. Please note Investmeut Tax Credits (or Insurance Premium Tax Credits) are earned when the corresponding asset (e.g. the building, a piece of machinery & equipment, etc.) is placed in service. "Placed in service" typically corresponds with the point in time when the Business can start depreciating the asset for tax purposes. Earned Investment Tax Credits (or Insurance Premium Tax Credits) which cannot be used because of the amortization schedule or because the credits exceed the Business' tax liability for that tax year may be carried forward fpr up to seven additional tax years. Example #1 In this example, the Business is eligible to receive an Investment Tax Credit (ITC) in the amount of $100,000. The ITC is earned on December I5, 2005 and may be carried forward until the tax year in which December I5, 2012 falls. The Business' ITC amortization schedule follows: Fiscal Year 2007 -July I, 2006 -June 30, 2007 $20,000 Fiscal Year 2008 -July 1, 2007 -June 30, 2008 $20,000 Fiscal Year 2009 -July 1, 2008 -June 30, 2009 $20,000 Fiscal Year 2010 -July 1, 2009 -June 30, 2010 $20,OOD Fiscal Year 2011 -July 1, 2010 -June 30, 2011 ~ $20,000 As the ITC was earned in the first year, the Business may claim up to $20,000 on its tax return for that tax year. The Business' tax liability for that tax year is $15,000 therefore; the Business will carry forward $5,000 of unused credits. ITC Warned -Total $100,000 ITC Available to be Taken based on the Amortization Schedule $20,000 (FY 2006) Less ITC Claimed on Current Year's Tax Return $15.000 FTC to be Carried Forward into Future Tax Year $ 5,000 The following year the Business may claim up to $25,000 in 1TCs on its tax return; $5,000 being carried forward from last year plus another $20,000 based on the amortization schedule. The Business' tax liability for the current tax year is $25,000. ITC Earned -Total $100,000 Less ITC Claimed to Date $ 15.000 ITC Remaining -Total $ 85,000 ITC Available to be Taken based on the Amortization Schedule $20,000 (FY 2007) Plus ITC Carried Forward from Previous Year $ 5,000 Less ITC Claimed on Current Year's Tax Return $25,000 ITC to be Carried Forward into Future Tax Year $ 0 The Business would be able to continue to take tax credits based on the amortization schedule and its tax [iability each year. if this example were to continue, the tax credits could continue to be claimed until they are exhausted or unfit the carry forward period expires in the tax year in which December 15, 2012 falls. Example #2 In this example, the Business is eligible to receive an Investment•Tax Credit (ITC) in the amount of $500,000. The ITC is earned on February 15, 2008 and may be can7ed forward until the tax year in which February I5, 2015 falls. The Business' ITC amortization schedule follows: Fiscal Year 2007 - Juiy 1, 200G -June 30, 2007 $100,000 Fiscal Year 2008 -July 1, 2007 -June 30, 2008 $100,000 Fiscal Year 2009 - 3uly 1, 2008 -June 30, 2009 $ ] 00,000 Fiscal Year 2010 -July 1, 2009 -June 30, 2010 $100,000 Fiscal Year 2011 -July 1, 2010 -June 30, 2011 $100,000 As the ITC was earned in the third year of the amortization schedule, the Business may claim up to $300,000 on its tax return for that tax year ($ i 00,000 per year for 3 years). The Business' tax liability for that tax year is $50,000 therefore; the Business will carry forward $250,000 of unused credits. ITC Earned -Total $500,000 ITC Available to be Taken based on the Amortization Schedule $300,000 (FY 2006 - FY 2008) Less ITC Claimed on Current Year's Tax Return $ 50,000 ITC to be Carried Forward into Future Tax Year $250,000 The following year the Business may claim up to $350,000 in ITCs on its tax return; $250,000 being carried forward from last year plus another $100,000 based on the amortization schedule. The Business' tax liability for the current tax year is $G0,000. ITC Eamed -Total $500,000 Less ITC Claimed to Date $ 50 000 ITC Remaining -Total $450,000 ITC Available to be Taken based on the Amortization Schedule $100,000 (FY 2009) Plus ITC Carried Forward from Previous Year $250,000 Less ITC Claimed on Current Year's Tax Return $ 60,000 ITC to be Carried Forward into Future Tax Year $290,000 The following year the Business may claim up to $390,000 in ITCs on its tax rehu~n; $290,000 being carried forward from last year plus another $100,000 based on the amortization schedule. The Business' tax liability for the current tax year is $50,000. ITC Earned -Total $500,000 Less ITC Claimed to Date $110,000 ITC Remaining -Total $390,000 ITC Available to be Taken based on the Amortization Schedule $100,000 (FY 2010) Plus TTC Carried Forward from Previous Year $290,000 Less ITC Claimed on Current Year's Tax Return $ 50,000 ITC to be Carried Forward into Future Tax Year $340,000 After FY 2010, the Business is no longer subject to the amortization schedule and therefore, it would be able to continue to take tax credits based on its tax liability each year. If this example were to continue, the tax credits could continue to be claimed until they are exhausted or until the cant' forward period expires in the tax year in which February 15, 2015 falls. DESCRIPTION OF THE PROJECT AND AWARD BUDGET (EXHIBIT C) Name of Business: Progressive Packaging, LLC Contract Number: P0709M01470 PROJECT DESCRIPTION ,slue Packaging, LLC will build a 327,000 s.f. manufacturing facility to meet increased market for t0-ouce microwaveable meals. The project involves land acquisition, site preparation, construction, acquisition of machinery and equipment, furniture and fixture purchases, and capital. uWetca rvo~ BXHIBIT D -JOB OBLIGATIONS Progressive Packaging, LLC 013-HQJC-045 This Project has been awarded benefits from the High Quality Job Creation (HQJC) program. The charts below outline the contractual job obligations related to this Project. Data in the "Employment Base" column has been verified by the Department and reflects the employment characteristics of the facility receiving funding before this award was made. Jobs to be retained as a part of this Project must be included in these calculations. Data in the "Jobs To Be Created" column outlines the new full-time jobs (including their wage characteristics} that must be added to the employment base and, if applicable, statewide employment base as a result of this award. At the Project Completion Date and through the Project Maintenance Date, the Business must achieve (at a minimum) the numbers found in the "Total Job Obligations" column. ~- JOSS p ~ D1`jQ~ - ~ ~ ~ ark y,~ z=P ~~~~~~~hc ~ ~, - -,~. ?; x 1.~.. s .'~„~ ,~ ,~ o ~ ~ . ~ , ar ~~03 ° ~ a nt < a ~ `, ~P o = ~- s . ~ d : `~O~i irgati~o ..~ ;. . ~ : -- - Total employment at project location _ _ _ - _ 0 196 196 Average Wage of total employment at project Location N/A ~ _~~~~ ~ ~; :T:'` 'fir "': r ~~~..-: ~T .3~1":'rte,. "x'.. _ - ~ ,,.. - . _ ; e threshold requirement (per hr) wa in Quatif $25.65 (160%) - y g g Benefit value (per hr) $4.83 A ~4~ a d ~ . ~. ..- m ..y ~ y ~, ... _ .. ~... - ..-..~C cam' ..~ ~ ~ .....ire: .. 5~~~- ~.K._ ,.~ =' " _ `.. -- ~r `* z+ ~ ^~ ~ ~, p~.~. ..~^Y4 cm ••--_: ~. .'*. --~ . . ' Number of jobs at or above qualifying wage NIA NIA N/A Average Wage of jobs at or above qualifying wage NIA ~- ~,~- ~ ,~ ` ~ ~.~k~ -`~~ ~ ~~= Number of jobs at or above qualifying wage wlbenef~ts 0 21 21 Average wage of jobs at or above qualify[ng wage N/A ~ r ~ `'~ ~' ` "~~- Notes re: Oualifyin~ Wales 1. If the Benefit Value was added to the base wage to meet program wage threshold eligibility requirements, then any reduction in the Benefit Value during the life of the Contract must be compensated for with salary to ensure that the Qualifying Wage rates are met. 2. Bonus or commission payments are not included when calculating the Qualifying Wage rate. Revised 8/07