Sedgwick CEBA Loan
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MEMORANDUM
August 1, 2006
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Community Economic Betterment Account (CEBA) Loan
Sedgwick CMS
CEBA Contract Number P1205RS5200751
Loan Agreement Number 06-CEBA-032
In February 2006, Sedgwick CMS announced plans to locate in Dubuque. As part of
this project, the company has committed to hiring 75 new full-time employees within the
next three years, with an average starting wage of $15.72 per hour, plus benefits.
Economic Development Director Dave Heiar recommends City Council approval of the
execution of a CEBA Loan Agreement by and among the Iowa Department of Economic
Development, Sedgwick CMS and the City of Dubuque. As previously approved by the
City Council, the City of Dubuque's financial commitment to this project is a $100,000
loan to Sedgwick CMS to provide the local financial commitment
I concur with the recommendation and respectfully request Mayor and City Council
approval.
/hIV! (~ I7t~
Micnael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
David J. Heiar, Economic Development Director
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CITY OF DUBUQUE, IOWA
MEMORANDUM
August 2, 2006
TO: Michael Van Milligen, City Manager
FROM: David J. Heiar, Economic Development Directoflj Ott-
SUBJECT: Community Economic Betterment Account (CEBA) Loan
Sedgwick CMS
CEBA Contract Number P1205RS5200751
Loan Agreement Number 06-CEBA-032
INTRODUCTION
This memorandum presents for City Council review and approval a Resolution relating to a
CEBA loan/forgivable loan for Sedgwick CMS. The Resolution authorizes the execution of a
CEBA Loan Agreement of $150,000 by and among the Iowa Department of Economic
Development, Sedgwick CMS and the City of Dubuque.
BACKGROUND
In February 2006, Sedgwick announced plans to locate in Dubuque. The company has
leased temporary space in the downtown NICC building, pending the construction of a new
facility in the Dubuque Technology Park. As part of this project, the company has committed
to hiring 75 new full-time employees within the next three (3) years. The average starting
wage is $15.72 per hour plus benefits.
DISCUSSION
This memorandum asks the City to assist Sedgwick CMS by executing the attached CEBA
Loan Agreement of $150,000 that has been approved by the State of Iowa Department of
Economic Development Board. This CEBA award is for a $75,000, 0%, 5 year loan and a
$75,000 forgivable loan.
The CEBA program requires a local financial commitment to the project. The City Council
previously approved the commitment of a $100,000 loan to Sedgwick to provide this local
financial commitment. The loan will be financed by available UDAG funds and repaid at the
rate of $20,000 per year for 5 years.
RECOMMENDATION
I recommend that the City Council adopt the attached Resolution authorizing the execution
of a CEBA Loan Agreement of $150,000 to support the Sedgwick CMS project in Dubuque.
ACTION STEP
The Action Step for the City Council is to adopt the attached Resolution.
F:\USERS\DHeiar\Sedgwlck\CEBA Memo.doc
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RESOLUTION NO. 345-06
A RESOLUTION AUTHORIZING THE EXECUTION OF A COMMUNITY ECONOMIC
BETTERMENT ACCOUNT LOAN AGREEMENT FOR ONE HUNDRED AND FIFTY
THOUSAND DOLLARS ($150,000) WITH SEDGWICK CMS.
Whereas, the Community Economic Betterment Account (CEBA) program has
been created by the Iowa Department of Economic Development to assist in the
economic development efforts of local jurisdictions; and
Whereas, in March 2006, the City of Dubuque, Iowa was awarded a one
hundred and fifty thousand dollar ($150,000) loan/forgivable loan from the CEBA
program by the Iowa Department of Economic Development; and
Whereas, the City of Dubuque, Iowa desires to assist Sedgwick CMS in its
efforts to locate its operations in Dubuque and create new, permanent employment
opportunities for local citizens; and
Whereas, a CEBA Loan Agreement, hereto attached and by this reference made
a part hereof, is to be executed between the Iowa Department of Economic
Development, Sedgwick CMS and the City of Dubuque, Iowa.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA:
Section 1. That the Mayor and Corporation Counsel be and they are hereby
authorized and directed to endorse, on behalf of the City Council of the City of
Dubuque, Iowa, the attached CEBA Loan Agreement.
Section 2. That the City Manager be and he is hereby authorized to disburse
loan funds to Sedgwick CMS from the CEBA program in accordance with the terms and
conditions of the executed Agreement.
Passed, approved and adopted this 7th day of August, 2006.
Roy D. Buol, Mayor
Attest: Jeanne F. Schneider
City Clerk
F:\USERS\DHeiarlSedgwick\ceba res.doc
MASTER CONTRACT
BY AND BETWEEN
Sedl!Wick Claims Manae:ement Services. Inc.
AND THE
IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT
CONTRACT NUMBER: P1205RS5200751
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TABLE OF CONTENTS
ARTICLE 1. 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 DEFINlTlONS; 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
Article 4.2
Article 4.3
Description of the Project and Award Budget
Job Obligations
Repayment Obligation
ARTICLE 5. CONDITIONS TO DISBURSEMENT OF FUNDS; DISBURSEMENT TERMS
Article 5.1 Documents Submitted
Article 5.2 Prior Costs
Article 5.3 Cost Variation
Article 5.4 Suspension of Disbursement
Article 5.5 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. REPRESENTATIONS AND WARRANTIES
Article 7.1
Article 7.2
Article 7. 3
Article 7.4
Article 7.5
Article 7. 6
Article 7.7
Article 7.8
Article 7.9
Article 7.10
Article 7.11
Article 7.12
Article 7.13
Article 7.14
Article 7.15
Article 7.16
Contract # P1205RS5200751
Organization and Qualifications
Authority and Validity of Obligations
Use of Proceeds
Subsidiaries
Financial Reports
No Material Adverse Change
Full Disclosure; Business's Financial Assistance Application
Trademarks, Franchises and Licenses
Governmental Authority and Licensing
Litigation and Other Controversies
Good Title
Taxes
Other Contracts
No Default
Compliance with Laws
Effective Date of Representations and Warranties
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ARTICLE 8. COVENANTS
Article 8.1
Article 8.2
Article 8.3
Article 8.4
Article 8.5
Article 8.6
Article 8.7
Article 8.8
Article 8.9
Article 8.10
Article 8.11
Article 8.12
Article 8.13
Article 8.14
Article 8.15
Article 8.16
Article 8.17
Article 8.18
Article 8.19
Maintain Existence in Iowa
Job Obligations
Performance Obligations
Maintenance of Properties
Taxes and Assessments
Insurance
Required Reports
Inspection and Audit
Mergers, Consolidations and Sales
Formation and Maintenance of Subsidiaries
Compliance with Laws
Use of Award Proceeds
Changes in Business Ownership, Structure or Control
Notice of Meetings
Notice of Proceedings
Accounting Records
Restrictions
No Changes in Business Operations
Indemnification
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 10.1
Article 10.2
Article 10.3
Article 10.4
Article 10.5
Article 10.6
Article 10. 7
Article 10.8
Article 10.9
Article 10.10
Article 10.11
Article 10.12
Article 10.13
Article 10.14
Article 10.15
Contract # P1205RS5200751
Timely Performance
State of Iowa Recognition
Choice of Law and Forum
Governing Law
Master Contract/Funding Agreement Amendments
Notices
Headings
Final Authority
Waivers
Counterparts
Survival of Representations
Severability of Provisions
Successors and Assigns
Termination
Integration
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MASTER CONTRACT
BUSINESS:
MASTER CONTRACT NUMBER:
AWARD DATE:
Sedgwick Claims Management Services, Inc.
P1205RS5200751
March 16, 2006
This FINANCIAL ASSISTANCE CONTRACT (the "Master Contract") is made as of the
CONTRACT EFFECTIVE DATE by and between the Iowa Department of Economic Development
("mED"), 200 East Grand Avenue, Des Moines, IA 50309 and Sedgwick Claims Management
Services, Inc. an Illinois Corporation ("Business"), 1100 Ridgeway Loop Road, Memphis, Tennessee
38120.
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/or the Iowa Department of Economic Development Board ("IDED
Board") have awarded the Business financial assistance from one or more IDED-administered programs
for the Project, all of which are subject to the terms and conditions set forth herein and collectively
referred to as the "Award"; and
NOW THEREFORE, in consideration ofthe 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
FUNDING
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.
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ARTICLE 3
CONTRACT STRUCTURE AND DEFINITIONS;
DOCUMENTS INCORPORATED BY REFERENCE; AND ORDER OF PRIORITY
3. I 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
A ward has been provided to the Business to fund the Project described in Exhibit C, Description of the
Project and A ward Budget. The Articles ofthis 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 IDED and/or
the IDED Board approved the awarding of financial assistance to the Business for the Project.
"Business' 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/retain shall be in addition to the Business's Employment Base.
"Created Jobs" means the number of new FTE Jobs the Business will add over and above the
Business's Employment Base and, if applicable, Statewide Employment Base.
"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 for a 5-day, 40-hour workweek for 52 weeks per year, including paid holidays,
vacations and other paid leave, or
(b) For the number of hours 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 C, Description of the Project and A ward Budget. The Business shall maintain the
Project, and the created/retained jobs through the Job Maintenance Period.
"Job Obligations" means the Created Jobs, Retained Jobs, QualifYing Jobs and Non-qualifYing
Jobs associated with the Project that pay the wages and benefits, all as outlined in Exhibit D, Job
Obligations.
"Loan" means a form of an award made by the IDED to the Business under a Funding
Agreement(s) for which full repayment is expected.
"Non-qualifying jobs " are those jobs created or retained by the project that do not qualifY for
funding, but would not be created or retained if the Project did not proceed.
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"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, and Exhibit A, Business's Financial
Assistance Application.
"Project Completion Date" means the date three (3) years from the Award Date as stated in
Exhibit C, Description of the Project and Award Budget. The Project Completion Date is the date by
which all Project activities shall be satisfactorily completed.
"Statewide Employment Base" means the number of jobs as stated in Exhibit D, Job Obligations
that the Business and IDED have determined as those jobs that will be retained at other facilities in the
state. The number of jobs the Business has pledged to create/retain shall be in addition to the Statewide
Employment Base.
"QualifYing jobs" are those created or retained jobs that qualify for program funding.
3.2 Documents Incorporated bv 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 # 06-CEBA-032
Exhibit B - Funding Agreements:
Bl- CEBA Funding Agreement
Description of the Project and Award Budget
Job Obligations
Exhibit C -
Exhibit D -
"Retained Job" means an existingjob that would be eliminated or moved to another state ifthe
project did not proceed in Iowa.
3.3 Business's Financial Assistance Application on File. Due to its size, Exhibit A will not be
attached to this Master Contract, but will 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. In 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 A ward Budget
(d) Exhibit D - Job Obligations
(e) Exhibit A - Business's Financial Assistance Application
ARTICLE 4
AWARD
4.1 Description of the Proiect and Award Bud~et. The IDED and/or the IDED Board have
approved an A ward 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 Job Obligations. The IDED and/or the IDED Board have approved an Award to the
Business and the Business' obligations for FTE Created Jobs, Retained Jobs, Qualifying Jobs and Non-
qualifying Jobs are outlined in Exhibit D, Job Obligations.
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4.3 Reoavment Obligation. The obligation to repay the direct financial assistance components
of this Award shall be evidenced by Promissory Notes executed in connection 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) Fundinf! Aweements. Fully executed Funding Agreements.
(c) Promissorv Notes. The Promissory Notes required by the Funding Agreements.
(d) Articles of Incorvoration. Copies of the articles of incorporation of the Business, certified in each
instance by its secretary or assistant secretary.
(e) Certificate of Corvo rate Existence. A certificate of existence for the Business from the Office of the
Secretary of State ofIowa.
(f) Results of Lien and Tax Search. Financing statement, tax and judgment lien search results, in the
Business's state of incorporation/organization, against the Business and Secured Property.
(g) Securitv Documents. The fully executed Security Documents required in Article 6.0.
(h) Other Reauired 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.l (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
reduce the amount of waste and safely dispose of the waste based on an in-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 Center to conduct the audit.
U) Release Form - Confidential Tax Information. 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) Satisfactorv Credit Historv. Documentation of satisfactory credit history of the Business and
guarantors, as applicable, with no judgments or unsatisfied liens or similar adverse credit actions.
(I) Proiect Financial Commitments. The Business shall have submitted a letter 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 letters of commitment. Each letter shall include the amount, terms and
Contract # P1205RS5200751
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conditions of the financial commitment, as well as any applicable schedules.
(m)Reauests for Disbursement. All 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) Fundinl! Al!reements Disbursement Reauirements. 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 ofthe Funding Agreement amount to the total amount offunds 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.
5.4 Susoension of Disbursement. Upon the occurrence of an Event of Default (as defined in
this Master Contract or 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 reasonable 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 ofIowa Code chapter 12C concerning the deposit of
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 A ward 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 security documents as set forth in this Article 6
(the "Security Documents").
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6.1 Security. This Award shall be secured by: Blanket UCC-I. Subordinate to lead creditor
(the "Secured Property ")
6.2 Value of Collateral. The value, as reasonably determined by IDEO, of the Secured Property
shall meet or exceed the amount of Award funds disbursed.
6.3 Additional or Substitute Collateral. In case ofa decline in the market value of the Secured
Property, or any part thereof, IDEO may require that additional or substitute collateral of quality and
value satisfactory to IDEO 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 WARRANTIES
The Business represents and warrants to IDEO as follows:
7.1 Organization and Oualifications. 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 qualitying, except where the failure to so
quality would not have a material adverse effect on the Business's ability to perform its obligations
hereunder.
7.2 Authoritv and Validitv 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
Agreement.
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 A ward 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. On the Contract Effective Date, the Business has two subsidiaries, Sedgwick
CMS Canada, Inc. and SCMS Administrative Services, Inc.
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7.5 Financial Reports. The balance sheet of the Business furnished to IDEO as of the Contract
Effective Date, fairly presents its financial condition as at said date in conformity 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 ID ED.
7.6 No Material Adverse Chan€,e. 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 ofthe
Business (financial or otherwise) or the business prospects of the Business
7.7 Full Disclosure; Business's Financial Assistance Aoplication. The statements and other
information furnished to the IDEO 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 misleading. The IDEO acknowledges that as to any projections furnished to the
IDEO, 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 contlict 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.
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.
7.11 Good Title. The Business has good and defensible title (or valid leasehold interests) to all
of its Property (including, without limitation, the Secured Property) retlected on the most recent balance
sheets furnished to the IDEO (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 ofthe matter under contest and as
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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 Comoliance with Laws. The Business is in compliance with the requirements of all
federal, state and 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.
7.16 Effective Date of Reoresentations 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
The Business agrees that, for the duration of this Master Contract and the Funding Agreements:
8.1 Maintain Existence in Iowa. The Business shall at all 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 proper conduct of its respective
business.
8.2 Job Obligations.
(a) Jobs and Wages. By the Project Completion Date, the Business shall create/retain the
number ofFTE Created Jobs, Retained Jobs, Qualifying Jobs and Non-qualifying Jobs above the
Business' Employment Base and, if applicable, the Statewide 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 is not decreased and provided the benefit package includes eligible benefits. For
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purposes of this Contract, "Eligible benefits" means, medical and dental insurance plans, pension and
profit-sharing plans, child care services, life insurance coverage, vision insurance plan, and disability
coverage.
8.3 Performance Obligations. By the Project Completion Date, Business shall complete the
Project, make the total investment pledged for the Project, and comply with all other performance
requirements described in this Master Contract and the Funding Agreements. The Business shall promptly
provide IDEO with written notice of any major changes that, in the reasonable determination of the
Business, would have a material adverse impact on the success of the Project.
8.4 Maintenance ofProDerties. 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 all 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 IDEO furnish a certificate setting forth in summary form the nature and
extent of the insurance maintained pursuant to this Article.
8.7 Required ReDorts.
(a) Review of Disbursement Requests and ReDorts. The Business shall prepare, sign and submit
disbursement requests and reports as specified in this Master Contract in the form and content required by
IDEO. 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.
(b) ReDorts. The Business shall prepare, sign and submit the following reports to the IDEO
throughout the Contract period:
Report
Due Date
Mid-Year Status ReDort
July 31st for the period ending June 30th
End-of-Year Status Report Includes:................... January 31" for the period ending Dec. 31 "
- Public Return on Investment (ROI) Update
- Payroll Register with all created and/or
retained jobs highlighted and indicate
the Project Jobs paying the required wage
- "Employer's Contribution and Payroll Report"
- For Enterprise Zone awards, annual certification of compliance
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with the requirements ofIowa Code 15E.193, as required by
15E.195(6).
End ofProiect Report .........................................
Report content: same items as End-of- Y ear Report
Within 30 days of Project Completion Oate
End of Job Maintenance Period Report ..............
Report Content: same items as
End-of- Y ear Report
Within 30 days of the end ofthe Job
Maintenance Period
(c) Additional Reports, Financials as Requested bv IDEO. The IDEO reserves therightto
require more frequent submission of any of the above reports if, in the opinion of the IDEO, more
frequent submissions would help improve the Business's Project 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 IDEO, 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.
8.8 Inspection and Audit. Upon reasonable advance notice the Business will permit the IOEO
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 and 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 IOEO and
the IDEO's duly authorized representatives the finances and affairs of the Business) at such reasonable
time and reasonable intervals as the IDEO may designate, but at least annually.
8.9 Mergers. Consolidations and Sales. Without the written consent of the IDEO, which shall
not be unreasonably withheld, the Business shall not sell, transfer, lease or otherwise dispose of all or any
part of the Secured Property.
8.10 Formation and Maintenance of Subsidiaries. The Business will not transfer assets pledged
as security for this Master Contract to any subsidiary or affiliate without the written consent ofthe IDEO,
which shall not be unreasonably withheld.
8.11 Compliance 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 Oepartment 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
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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.
8.12 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.
8.13 Changes in Business Ownership. Structure 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 change in
ownership, structure or control if the change, in Business's reasonable judgment, would have a material
adverse effect on the Project. The materiality of the change and whether or not the change affects the
Project shall be as reasonably determined by IDED.
8.14 Notice of Meetings. 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, within ten (10) business days, of that portion of the agenda and minutes of such meetings related
to the Master Contract, Funding Agreements, or the Project 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.
8.15 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, in the
reasonable determination of the Business, would have a material adverse impact on the Project.
8.16 Accounting Records. The Business is required to maintain its books, records and all other
evidence pertaining to this Master Contract and it 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 oflowa, the Attorney General
of the State oflowa 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.
8.17 Restrictions. The Business shall not, without prior written disclosure to IDED and prior
written consent oflDED, which shall not be unreasonably withheld, directly or indirectly:
(a) Assign, waive or transfer 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.
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(e) Create, incur or permit to exist any Lien of any kind on the Secured Property.
8.18 No Changes in Business Ooerations. The Business shall not materially change the Project
or the nature ofthe 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.
8.19 Indemnification. The Business shall indemnity, defend and hold harmless the IDED, the
State oflowa, 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
by 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
9.1 Events of Default. Anyone or more of the following shall constitute an "Event of Default"
hereunder:
(a) Nonpavment. In the event ofa 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 Note(s) 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, for more than ten (10) Business Days; or
(c) Noncompliance with Securitv 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 Fundinl! Allreements: Cross-Default. 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 ofthis
Master Contract and any or all of the Funding Agreements ifthere is a default under anyone of the
Funding Agreements; or
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(1) 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 to
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 ofthe IDEO in any Secured Property pledged by Business; or
(h) Judf!ment Over $500.000. 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 $500,000 shall be
entered or filed against the Business or against any of its property and remains unpaid, unvacated,
unbonded or unstayed for a period of 30 days; or
(i) Adverse Chanf!e 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
OJ Bankruptcv or Similar Proceedinf!s Initiated. Either the Business shall (I) 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 or 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
(k) Appointment of Officials. 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 G) 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
(I) Insecurity. IDEO 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 ofthe 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) Lavoffs. Relocation. or Closure. The Business experiences a substantial layoff, relocates a
substantial portion of its business or its offices outside of Iowa, or closes its operations during the term of
this Contract.
9.2 Default Remedies. When an Event of Default has occurred and is continuing, the IDEO
may, by written notice to the Business:
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(a) terminate this Master Contract, the Funding Agreements and all of the obligations ofIDED
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
6% 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 Exoenses. 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 Oooortunity to Cure. IfIDED has reasonable cause to believe that
and 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
MISCELLANEOUS.
10.1 Timelv 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.
10.2 State of Iowa Recognition. The Project shall permanently recognize, in a manner
acceptable to IDED, the fmancial contribution to the Project made by the State of Iowa. For example, a
sign or plaque acknowledging 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 ofa 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 any immunity to suit or liability, in state or
federal court, which may be available to the IDED, the State ofIowa 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 be governed by, and construed in accordance with the internal laws of the
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State of Iowa without regard to principles of conflicts of laws.
10.5 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 may be
denied by IDED if it substantially alters tbe 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, witbout limitation by fax) and shall be given to the relevant party at its address, e-mail
address, or fax number set forth below, or such other address, e-mail address, or fax number as such party
may hereafter specif'y 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:
Sedgwick Claims Management Services, Inc.
Rhynette Hurd, Corporate Counsel
I 100 Ridgeway Loop Road
Memphis, Tennessee 38120
E-mail: rhurd(a)sedgwickcms.com
Telephone: 901.415.7761
Facsimile: 901.415.7409
To the IDED at:
Iowa Department of Economic Development
Business Services
200 East Grand Avenue
Des Moines, Iowa 50309
Attention: Peggy Russell, Business Services Project Manager
E-mail: Peggy.Russell@iowalifechanging.com
Telephone: 515.242.4848
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 tbe facsimile number specified in this Article and a confirmation of such
facsimile has been received by the sender, (ii) if given bye-mail, when such e-mail is transmitted to the e-
mail address specified in this Article and a confirmation of such e-mail has been received by the sender,
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(iii) if given by mail, five (5) 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 specified in this Article.
10.7 Headings. Article headings used in this Master Contract and the Funding Agreements are
for convenience of reference only and are not a part of this Master Contract or the Funding Agreements
for any other purpose.
10.8 Final Authoritv. The IDEO shall have the authority to reasonably assess whether the
Business has complied with the terms ofthis Master Contract and the Funding Agreements. Any IDEO
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 17 A of the Code of Iowa
(2005).
10.9 Waivers. No waiver by IDEO 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 either party 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 either party shall preclude future exercise
thereof or the exercise of any other right or remedy.
10.10 CounteJllarts. This Master Contract may be executed in any number of counterparts, each
of which shall 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 all of Business's obligations or liabilities under this Master
Contract and the Funding Agreements have been satisfied.
10.12 Severability of Provisions. Any provision ofthis 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 oflaw, 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
IDEO 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 IDEO, which
consent will not be unreasonably withheld.
10.14 Termination. This Master Contract and any of the Funding Agreements can be terminated
upon mutual, written agreement of the Business and IDEO and, for amendments to Funding Agreements
to which the Community is a signatory, the Community.
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10.15 Integration. 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 Agreement.
IN WITNESS WHEREOF in consideration of the mutual covenants set forth above and for 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 "Contract
Effective Date").
FOR THE IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT:
BY:
Mary Lawyer, Director
Date
Paul J. Posey, General Counsel
Date
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Exhibit A -
Exhibit B -
Exhibit C -
Exhibit D -
Contract # P1205RS5200751
LIST OF EXHIBITS
Business's Financial Assistance Application (on file with IDED),
Application # 06-CEBA-032
Funding Agreements
B l-CEBA Funding Agreement
Description of the Project and A ward Budget
Job Obligations
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EXHIBIT B-1
I CEBA FUNDING AGREEMENT I
BUSINESS:
COMMUNITY:
SedQwick Claims ManaQement Services, Inc,
City of Dubuque
MASTER CONTRACT NUMBER:
FUNDING AGREEMENT NUMBER:
# P1205RS5200751
# 06-CEBA-032
AWARD TYPE:
AMOUNT:
Loan/ForQivable Loan
$150,000
THIS CEBA 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 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, the Iowa Code provisions applicable to the CEBA Program require the
Community to submit an application on behalf of the Business in order to apply for and receive
CEBA funds; and
WHEREAS, this CEBA Funding Agreement contains additional terms and conditions for
the award of CEBA funds and
NOW, THEREFORE, the Business and Community accept the terms and conditions set
forth in this 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 CEBA Funding
Agreement and other good and valuable consideration, it is agreed as follows:
1.0 Master Contract. Unless otherwise specified in this CEBA Funding Agreement, the
definitions, terms, conditions, and provisions contained in the Master Contract are applicable to
this CEBA Funding Agreement.
2.0 Definitions. As used in this CEBA Funding Agreement, the following terms shall apply:
2.1 Aareement Expiration Date. Expiration of this CEBA Funding Agreement occurs
upon the happening of one of the following events, whichever occurs first:
(a) IDED's determination that the Business and Community have fully met the
requirements of this CEBA Funding Agreement, including repayment of all amounts
due hereunder, and IDED closes out this CEBA Funding Agreement.
(b) An Event of Default occurs that is not remedied within the time period allowed
under the Master Contract.
(c) If no disbursement of CEBA funds has occurred within twenty-four (24) months
of the Award Date (as defined in the Master Contract).
(d) This CEBA Funding Agreement is terminated upon mutual, written agreement of
the Business, the Community and IDED.
2.2 CEBA. "CEBA" means the Community Economic Betterment Program (established
in Iowa Code sections 15.315-15.325). The source of funding for this CEBA Funding Agreement
is an appropriation by the State legislature to IDED.
2.3 CEBA Award. "CEBA Award" means the financial assistance provided to the
Business in the form of a Loan and/or Forgivable Loan, as more fully defined in Articles 3 and 4
of this CEBA Funding Agreement.
3.0 Terms of CEBA Award - Loan. CEBA funds have been awarded to the Community on
behalf of the Business to assist the Business with the Project. The terms of the Loan are as
follows:
3.1 $75,000
3.2 60 months
3.3 0% interest rate
3.4 Promissorv notes. The obligation of the Business and Community to repay the Loan
shall be evidenced by Promissory Notes executed by the Business and the Community.
3.5 No other conditions to disbursement
4.0 Terms of CEBA Award - Forgivable Loan. CEBA funds have been awarded to the
Community on behalf of the Business to assist the Business with the Project. The terms of the
Forgivable Loan are as follows:
4.1 $75,000
4.2 36 months
4.3 Terms of Foraiveness. IDED will, in its sole discretion, determine if the Business
has satisfied the terms of this CEBA Funding Agreement, including fulfillment of the Job
Obligations by the Project Completion Date as shown in Master Contract Exhibit D. If IDED
determines that the Business has satisfied said terms and has continued to satisfy said terms
through the Job Maintenance Period, then barring any other default, repayment of principal and
interest which would otherwise have accrued for the time period beginning with the Award Date
and ending with the Project Completion Date shall be permanently waived. If IDED does not
waive repayment, the Forgivable Loan shall be repaid as described in Article 11.2(b) of this
CEBA Funding Agreement.
4.4 Promissorv notes. The obligation of the Business and Community to repay the
Forgivable Loan shall be evidenced by a Promissory Notes executed by the Business and
Community.
4.5 No other conditions to disbursement
Master Contract # P1205RS5200751
Funding Agreement # 06-CEBA-032
- 2-
Master FA updated 09/30/05
5.0 Maximum CEBA funds available for Project. It is expressly understood and agreed that
the maximum amounts to be paid to the Business by IDEO for this CEBA Funding Agreement
shall not exceed the amount stated on page one of this CEBA Funding Agreement.
6.0 Business' Job Obligations. The Business's Job Obligations are as described in Master
Contract Exhibit D.
7.0 Conditions to Disbursement. In addition to the conditions to disbursement described in
the Master Contract, the Business shall meet the following conditions before IDEO will release
CEBA funds:
7.1 Consultation with Iowa Workforce Development. The Business shall have provided
documentation to the IDEO that it has consulted with the area Iowa Workforce Development
(IWD) office to discuss employment services available. In addition, the Business must provide
to IWD agencies a list of positions to be created including job descriptions and qualifications.
8.0 Affirmative Covenants of Community. The Community covenants with IDEO that:
8.1 Proiect Work and Services. The Community shall perform work and services
detailed in the Business's CEBA application by the Project Completion Date.
8.2 Filina. Unless otherwise agreed, IDEO shall file the Security Documents required
under this CEBA Funding Agreement. The Community shall, if requested by IDEO, file in a
proper and timely manner any and all Security Documents required in connection with the
CEBA Award, naming the IDEO as co-security holder and promptly providing the IDEO with
date-stamped copies of said Security Documents. The Community shall, at the IDEO's request,
obtain and provide to the IDEO lien searches or attorney's title opinions.
8.3 Indemnification. The Community shall indemnify and hold harmless the IDEO, its
officers and employees to the extent allowed under the Iowa Constitution and Iowa Code on the
same basis as the Business is obligated to indemnify the IDEO under the Master Contract.
8.4 Reauests for CEBA Award Funds. The Community shall review the Business'
requests for CEBA Award funds to ensure that the requests are in compliance with the IDEO's
requisition procedures and shall execute and forward the requests to the IDEO for processing.
8.5 Unused CEBA Award Proceeds. The Community shall return all unused CEBA
Award proceeds, including accrued interest, to the IDEO within thirty (30) days after the Project
Completion Date.
8.6 Notice of Meetinas. The Community shall notify the IDEO at least two (2) days in
advance of all public or closed meetings at which the subject matter of this CEBA Award and/or
the Project is proposed to be discussed. The Community shall provide the IDEO with copies of
the agenda and minutes of such meetings and expressly agrees that a representative of the
IDEO has the right to attend any such meetings for the purposes of the discussion of the Project
and/or the CEBA Award.
8.7 Notice to IDEO. In the event the Community becomes aware of any material
alteration in the Project, initiation of any investigation or proceeding involving the Project or
Master Contract # P1205RS5200751
Funding Agreement # 06-CEBA-032
-3 -
Master FA updated 09/30105
CEBA Award, change in the Business' ownership, structure or operation, or any other similar
occurrence, the Community shall promptly notify the IDEO.
8.8 Responsibility Upon Default. If the Business fails to perform under the terms of the
Master Contract and/or this CEBA Funding Agreement and the IDEO declares the Business in
default, the IDEO shall take the lead on recovery of CEBA Award proceeds, as well as
penalties, interest, costs and foreclosure on collateral, provided the Community assigns its
security interest and CEBA contract documents to IDEO for collection purposes.
9.0 Negative Covenants of Community. The Community shall not, without written consent
of IDEO:
(a) Acceptance of CEBA Award Repayments. Accept any CEBA Award repayments
and/or settlements on Community funds considered local effort for this CEBA Funding
Agreement.
(b) Assiqnment. Assign its rights and responsibilities under this CEBA Funding
Agreement.
(c) Alter Financial Commitments. Alter, accelerate or otherwise change the terms of the
Community's financial commitment to the Business for this CEBA Funding Agreement.
(d) Administration. Discontinue administration or loan servicing activities under this
CEBA Funding Agreement.
10.0 Community Liability.
10.1 Good Faith Enforcement. The Community's liability under this CEBA Funding
Agreement is limited to those amounts which the Community recovers from the Business in
unused CEBA Award proceeds, enforcement of judgments against the Business and through its
good faith enforcement of the Security Documents executed by the Business. Nothing in this
paragraph shall limit the recovery of principal and interest by IDEO in the event of Community's
fraud, negligence, or gross mismanagement in the application for, or use of, sums provided
under this CEBA Funding Agreement.
11.0 Default; Remedies upon Default.
11.1 The terms of the Master Contract regarding Events of Default and Remedies
govern this CEBA Funding Agreement. The following are additional Events of Default for this
CEBA Funding Agreement:
No other specific default events
11.2 The following are Default Remedies available to IDEO in addition to those specified
in the Master Contract:
(a) Repayment of Loan - Failure to Meet Job Obliqations. If the Business meets less
than 100% of its Job Obligations, the IDEO may require full repayment of the Loan, as permitted
under the Master Contract. IDEO may also elect to allow repayment on a pro rata basis as
described below:
If the Business received a Loan at a rate below 6% (the annual interest rate for default
set by the IDEO Board), the unpaid principal amount of the Loan may be prorated
between the percentage of FTE Jobs created/retained and the percentage of the
Master Contract # P1205RS5200751
Funding Agreement # 06-CEBA-032
-4-
Master FA updated 09/30105
shortfall.
The shortfall principal portion may be amortized over the remaining term of the Loan,
beginning at the Project Completion Date, at a default rate of 6% (the annual interest
rate set by the IDED Board). Interest will be charged beginning from the date Loan
proceeds were disbursed to the Community for the Business; interest accrued from this
date will be due immediately. The pro rata portion of the Loan associated with the
percentage of FTE Jobs created will be amortized at the original Loan rate and term.
(b) Repavment of Foraivable Loan - Failure to Meet Job Obliaations. If the Business
has fulfilled 50% or more of its Job Obligations, a pro rata percentage will be forgiven for each
new FTE job created/retained at the time the repayment amount is calculated (e.g. at the
Project Completion Date or the date an Event of Default occurred) Any balance (shortfall) will
be amortized over a two (2) year period (beginning at the at the time the repayment amount is
calculated (e.g. at the Project Completion Date or the date an Event of Default occurred) at six
(6%) percent interest per annum with equal monthly payments, and, interest will be charged at
six (6%) percent per annum from the date of the first CEBA disbursement on the shortfall
amount with that amount accrued as of the Project Completion Date being due and payable
immediately.
(c) Repavment Time Allowed. If the IDED has allowed repayment of the
Forgivable Loan on a pro rata basis as described in paragraph "b" above, that amount is
immediately due and payable. If the Business has a current Loan balance, the amount owed on
the Forgivable Loan may be combined with the amount owed on the Loan to reflect a single
monthly payment. This combined loan shall be repaid over the time period remaining
(d) Example. CEBA Funding Agreement Exhibit B is an example of how these
repayment calculations will be applied.
12.0 Incorporated documents. The following documents are hereby incorporated by this
reference:
1. The Master Contract and its Exhibits.
2. CEBA Promissory Notes: CEBA Funding Agreement Exhibit A1 - Community, and
CEBA Funding Agreement Exhibit A2 - Business.
3. CEBA Funding Agreement Exhibit B - Example: Business Job Shortfall Calculation.
Master Contract # P1205RS5200751
Funding Agreement # 06-CEBA-032
- 5-
Master FA updated 09/30/05
IN WITNESS WHEREOF, the parties have executed this CEBA Funding Agreement:
BUSINESS:
rr :jJ
S,om"~ ~ ~ A
BY:
Paul J. Posey, General Counsel
Date
IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT:
BY:
Mary Lawyer, Director
Date
COMMUNITY:
BY:
Signature
Typed Name and Title
Date
Master Contract # P1205RS5200751
Funding Agreement # 06-CEBA-032
-6-
Master FA updated 09/30105
EXAMPLE:
Business Job
Shortfall Calculation
(CEBAl FundinQ
AQreement Exhibit B
CEBA
City of Dubuque! Sedgwick Claims Management Services. Inc.
FUNDING AGREEMENT #: 06-CEBA-032
$150,000 LIFL! March 16, 2006
($75,000 0% Loan, $75,000 Forgivable Loan)
A. FORGIVABLE LOAN - JOB SHORTFALL CALCULA nON
50 jobs pledged, 42 jobs attained; 84% of pledged jobs attained, 16 % shortfall
$75,000 (forgivable loan amount) x 16% = $12,000
Forgivable Loan Job Shortfall Balance due = $12,000
B. FORGIVABLE LOAN - INTEREST PENALTY CALCULA nON
CEBA funds disbursed on 11-1-00. Project Completion Date was 6-30-03.
Interest penalty ~ job shortfall balance x 6% x number of years from disbursement offunds to Project Completion Date
($12,000 x 6% x 2.67 years) = $1,922.40
Forgivable Loan Net Interest Penalty due = $1,922.40
C. LOAN BALANCE - INTEREST PENALTY CALCULATIONS
Loan balance as of7-21-05 = $15,797.58
84% of remaining loan balance stays at 0% interest = ($15,797.58 x .84) ~ $13,269.97
16% of remaining loan balance changes to 6% interest = ($15,797.58 x .16) = $2.527.61
Interest penalty = 16% of remaining loan balance x 6% x 2.67 years
($2.527.61 x 6% x 2.67 years) = $404.92
Loan Net Interest Penalty due = $404.92
D. REPAYMENT TERMS & SCHEDULE
I. Total Net Interest Penalty due is $2.327.32 ($1,922.40 + $404.92).
2. Total Forgivable Loan amount due is $12,000.
3. Remaining Loan Balance as of7-21-05 will be $15,797.58 and will be re-amortized to convert 16% afthat balance
to 60/0 interest over remaining term of loan.
Master f>1 Exhihit B updated 1]-30-05
DESCRIPTION OF THE PROJECT AND AWARD BUDGET
(EXHIBIT C)
Name of Business:
Sedgwick Claims Management Services, Inc.
Contract Number:
P1205RS5200751
PROJECT DESCRIPTION
Sedgwick Claims Management Services will expand its employment to manage disability claims for prospective new
clients, at the DUbuque location. The project involves furniture and fixture purchases, computer hardware/software
purchases, jOb training, and working capital. The Business will create 73 full time equivalent positions as a result of this
project.
Project Completion Date:
Job Maintenance Period:
March 31, 2009
March 31, 2011
AWARD BUDGET
SOURCE OF FUNDS
USE OF FUNDS
Amount
IDEO Programs
CEBA
$150,000 Loan/Forgivable loan
*Computer Hardware
Computer Software
Furniture and Fixtures
Working Capital
Job Training
~
$420,000 .
$775,OOQ.
$42~,OOQ:
$240,OQo
$350,000 .
Community College
local government
Business
$350,000 Grant
$100,000: Loan
$1,610,000 Cas.h/Equity
SUB TOTAL
$2,210,000
SUBTOTAL
$2,210,000
'jncludedascaprtaljnIle8ImenIWawarded\aXcred~p(ogram
Sl.lBTOTAl
"
$2,210,000
SUBTOTAL
"
$2,210,000
TOTAL ALL FUNDS
Apr.Q6
EXHIBIT 0 - JOB OBLIGATIONS
Jobs Created or Retained through this Project
Sedgwick Claims Management Services, Inc.
Contract # P1205RS5200751
Below is a list of the jobs that must be retained and/or created as a resuit of this Project. A "retained job" is an existing job that would be
eliminated or moved to another state if the project did not proceed in Iowa. A "created job" means the number of new FTE Jobs the Business
will add over and above the Business's Employment Base and. if applicable. Statewide Employment Base. "Qualifying jobs" are those
created or retained jobs that qualify for program funding. "Non-qualifying jobs" are those jobs created or retained by the project that do not
qualify for funding, but would not be created or retained if the Project did not proceed.
.
PROJECT JOBS CEBA
". $13.44
Starting or . .
Type of Job: Avg. Benefit
Job Title # of Jobs Created (C) or Current Hourty Qualifying Non-Qualifying
Retained (R) Wage Vaiue
Clerical 6 C $10.26 6
Claims Analyst 2 C $16.41 2
Disabilitv Soecialist 19 C $13.85 19
o erations Manager 1 C $47.18 1
DEP Schedulino 7 C $12.31 7
DEP Suoervisor 1 C $24.62 1
Intake CSR I 8 C $12.31 8
Intake CSR II 2 C $14.36 2
Intake Suoervisor 1 C $20.51 1
FMlA Assistant 1 C $10.26 1
FMLA Examiner 11 C $13.13 11
FMlA Suoervisor 1 C $24.62 1
JulrsllT Coordinator 1 C $16.82 1
l TO Active 5 C $19.90 5
l TD Maintenance 2 C $14.36 2
Supervisor 4 C $24.62 4
Performance Analvst 1 C $22.56 1
Total Jobs Created: 73
Total Jobs Retained: 0
Totals: 73 40 33
Business Employment Base:
o
Statewide Employment Base:
14
Job Performance Obliaations
As a result of this project, Sedgwick Claims Management Services will create 73 full-time equivalent (FTE) jobs at the Dubuque location. 40 of
the created project jobs will have starting wages that meet or exceed $13.44 per hour. The average wage, not including benefits, of the 40
qualifying project jobs will be at least $16.59 per hour.
Mar-06
CEBA Funding Agreement Exhibit A1- Community's Promissory Note (Forqivable Loan)
PROMISSORY NOTE
FOR VALUE RECEIVED, the undersigned promises, in the event
this Forgivable Loan is not forgiven, to pay to the order of the IOWA DEPARTMENT
OF ECONOMIC DEVELOPMENT, at its office at 200 East Grand, Des Moines, Iowa
50309, the sum of SEVENTY FIVE THOUSAND DOLLARS ($75,000) with interest
at a rate of 0% unless an Event of Default occurs, in which case interest shall be at the
default rate set forth in Contract number P1205RS5200751 ("Contract"). The terms and
conditions by which forgiveness of this Loan may occur are as specified in the Contract.
Interest shall first be deducted from the payment and any balance shall be applied on
principal. Upon default in payment of any interest, or any installment of principal, the
whole amount then unpaid shall become immediately due and payable at the option of the
holder.
The undersigned, in case of suit on this note, agrees to pay on demand all costs of
collection, maintenance of collateral, legal expenses, and attorneys' fees incurred or paid
by the holder in collecting and/or enforcing this Note on default.
This note shall be secured by the Security specified in the Contract.
Makers, endorsers and sureties waive demand of payment, notice of non-payment, protest
and notice. Sureties, endorsers and guarantors agree to all of the provisions of this note,
and consent that the time or times of payment of all or any part hereof may be extended
after maturity, from time to time, without notice.
ADDRESS:
50 W 13th Street
Dubuque, IA 52001-4864
City of Dubuque
BY:
Mayor Roy Buol
ATTEST:
(Signature)
Date
CEBA Funding Agreement Exhibit A1- Community's Promissory Note (Loan)
PROMISSORY NOTE
FOR VALUE RECEIVED, the undersigned promises to pay to the order
of the IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT, at its office at
200 East Grand, Des Moines, Iowa 50309, the sum of SEVENTY FIVE THOUSAND
DOLLARS ($ 75,000) with interest thereon at ZERO PERCENT (0%) to be paid as
follows:
60 monthly payments of $1,250.00 beginning on the first day ofthe fourth month
from the date Award funds are disbursed. Final payment may vary depending upon dates
payments are received.
Interest shall first be deducted from the payment and any balance shall be applied on
principal.
Upon default in payment of any interest, or any installment of principal, the whole
amount then unpaid shall become immediately due and payable at the option of the
holder.
The undersigned, in case of suit on this note, agrees to pay on demand all costs of
collection, maintenance of collateral, legal expenses, and attorneys' fees incurred or paid
by the holder in collecting and/or enforcing this Note on default.
This note shall be secured by the Security specified in the Contract.
Makers, endorsers and sureties waive demand of payment, notice of non-payment, protest
and notice. Sureties, endorsers and guarantors agree to all of the provisions of this note,
and consent that the time or times of payment of all or any part hereof may be extended
after maturity, from time to time, without notice.
ADDRESS:
50 W 13th Street
Dubuque, IA 52001-4864
City of Dubuque
BY:
Mayor Roy Buol
ATTEST:
(Signature)
Date