EDA Segwick Services CEBA Loan
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MEMORANDUM
October 11, 2006
TO:
The Honorable Mayor and City Council Members
FROM:
Michael C. Van Milligen, City Manager
SUBJECT: Economic Development Loan Sedgwick Claims Management Services,
Inc.
Economic Development Director David Heiar is recommending approval of an
Economic Development Loan of $1 00,000 to Sedgwick Claims Management Services to
provide the local match for a State of Iowa Community Economic Betterment Loan
Agreement (CEBA) loan.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
N ~fiJi
Michael C. Van Milligen
MCVM/ksf
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David Heiar, Economic Development Director
CITY OF DUBUQUE, IOWA
MEMORANDUM
October 6, 2006
FROM:
Michael Van Milligen, City Manager
David J. Heiar, Economic Development Director ~01-( .
Economic Development Loan Sedgwick Claims Management
Services, Inc.
TO:
SUBJECT:
INTRODUCTION
This memorandum presents for City Council consideration a Resolution approving a
Economic Development Loan of $100,000 for Sedgwick Claims Management Services,
Inc. to offset the costs associated with the creation of a business located within the
Dubuque Technology Park
BACKGROUND I DISCUSSION
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 hiring 73 new full-time employees within the next three (3) years. The
average starting wage is $15.72 per hour plus benefits.
A Community Economic Betterment Account Loan Agreement (CEBA) for $150,000
was approved by the Council on August 7, 2006 and the agreement has a local match
component where the City has agreed to provide a $100,000 zero percent interest loan
for the project. The loan will be financed by available UDAG funds and repaid at the
rate of $20,000 per year for 5 years. The City currently has sufficient UDAG funds
budgeted and available for job creation economic development projects to make this
loan to Sedgwick Claims Management Services, Inc.
RECOMMENDATION
Staff has reviewed the loan agreement and found it to be in keeping with the
requirements of the Economic Development Loan Program. The project is substantially
complete and clearly meets the intent of the loan program.
I recommend that the City Council adopt the attached Resolution approving Sedgwick
Claims Management Services, Inc.'s request for the $100,000 loan. The Resolution
directs the City Manager to execute a UDAG Loan Agreement of $100,000 to support
Sedgwick Claims Management Services, Inc.'s expansion project in Dubuque.
ACTION STEP
The action step for the City Council is to adopt the attached Resolution.
attachments
F:\USERS\Adejong\ED Loan Program\061006 Cover memo.doc
RESOLUTION NO. 502-06
A RESOLUTION APPROVING AN ECONOMIC DEVELOPMENT LOAN OF ONE
HUNDRED THOUSAND DOLLARS ($100,000) TO SEDGWICK CLAIMS
MANAGEMENT SERVICES, INC.
Whereas, the City of Dubuque, Iowa has created an economic development loan
program to assist local job creation efforts and provide matching funds for State
financial assistance programs; and
Whereas, the City desires to assist Sedgwick Claims Management Services, Inc.
in its efforts to create operations in Dubuque and create new, permanent employment
opportunities for local citizens; and
Whereas, an Economic Development Loan for One Hundred Thousand Dollars
($100,000) has been requested by Sedgwick Claims Management Services, Inc. to
match its application for CEBA funds from the Iowa Department of Economic
Development.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA:
Section 1. That the Mayor and City Council of the City of Dubuque, Iowa,
approve the $100,000 Economic Development Loan to Sedgwick Claims Management
Services, Inc.
Section 2. That the City Manager be and he is hereby authorized to execute
an Economic Development Loan Agreement with Sedgwick Claims Management
Services, Inc.
Passed, approved and adopted this 16th day of October, 2006.
Roy D. Buol, Mayor
Attest:
Jeanne F. Schneider
City Clerk
F:\USERSlAdejong\ED Loan Program\061 006 memo.doc
CITY OF DUBUQUE, IOWA
ECONOMIC DEVELOPMENT LOAN PROGRAM
SEDGWICK CLAIMS MANAGEMENT SERVICES, INC
LOAN AGREEMENT
NUMBER: UDAG #1-06
This LOAN AGREEMENT (Agreement), dated for reference purposes the _ day of
, 2006, is entered into by and between the CITY OF DUBUQUE, IOWA, a
municipal corporation organized and existing under the laws of the State of Iowa
(hereinafter referred to as the "City") and SEDGWICK CLAIMS MANAGEMENT
SERVICES, INC, a Corporation which is creating a branch office in the City (hereinafter
referred to as the "Company").
WITNESSETH:
WHEREAS, City has funded an economic development loan program to support the
growth and expansion of new and existing businesses; and
WHEREAS, Company has requested a loan to offset the costs associated with the
creation of a business located within the Dubuque Technology Park, Dubuque, Iowa; and
WHEREAS, City has considered said proposal and has determined that it will
contribute to the local economy through the creation of jobs for area residents.
NOW THEREFORE, in consideration of the promises and respective covenants,
agreements and representations hereinafter set forth, the parties agree as follows:
1. SOURCE OF LOAN FUNDS. City has sufficient Urban Development Action
Grant (UDAG) funds to carry out its obligations under this Agreement.
2. LOAN TERMS. City agrees to provide a loan to Company in the amount of one
hundred thousand dollars ($100,000.00). The term of the loan shall be five (5) years.
Yearly payments of twenty thousand dollars ($20,000) shall begin one (1) year after
disbursement of funds, and the entire amount of principal shall be due and payable on or
before November 1,2011. On or before the date of the first disbursement of loan funds to
Company, Company shall execute its Promissory Note in the form attached hereto as
Exhibit A payable to the order of City in the principal amount of one hundred thousand
dollars ($1 00,000.00).
Loan Agreement
Sedgwick Claims Management Services, Inc.
Page 2
3. DISBURSEMENT AND USE OF LOAN FUNDS. Loan funds shall be disbursed
for the benefit of Company by City for Qualifying Project Expenses up to one hundred
dollars ($100,000.00). Company shall furnish to City written request for disbursement of
loan funds. It is expressly understood that all funds advanced under this Agreement shall
be specifically earmarked and used by Company only for the purpose of paying the
Qualifying Project Expenses listed in the applicable written request and as defined in
Section 27(b) of this Agreement. Company shall complete the Project as defined in
Section 27(a) of this Agreement in accordance with the terms of this Agreement within
twelve (12) months of the date of this Agreement. City shall not be obligated to pay any
funds not drawn by Company as of said date and any undrawn funds shall be credited
against the balance due on the Promissory Note.
4. SECURITY. This loan shall be secured by a Promissory Note for the principal
of the loan (Exhibit A) and a security agreement and financing statement in the form
attached hereto, which will be subordinate only to the lead creditor, Bank of America.
5. STATUS OF COMPANY. Company represents that it is a corporation duly
organized and existing under the laws of the State of Illinois and qualified to do business in
Iowa; that it is authorized to borrow under this Agreement, to execute and deliver the Note
and otherwise perform the obligations of this Agreement; that is has corporate authority
and power to own its property and conduct its business as it is currently carried on; that the
performance of its obligations under this Agreement and the issuance of any note under it
will not conflict with any provision of law, the Articles of Incorporation or the Bylaws of
Company, or any agreement binding on it; and that, except as disclosed in writing to City, it
is not a party to any pending or threatened litigation or to any proceeding or action for the
assessment or collection of additional taxes that would materially affect the standing of the
Company, and that it knows of no known contingent liabilities not provided for or disclosed
in the financial statement provided City.
6. TITLE OF COMPANY. Except as otherwise disclosed in writing to City,
Company represents that it has good and marketable title, free of mortgage, pledge, lien,
security interest, encumbrance, or charge to all those assets reflected on the financial
statement and to assets since acquired. Taxes not due or payable or otherwise delinquent
are excepted, as are assets disposed of in the ordinary course of business or disclosed in
writing to City.
7. CONDITIONS OF BORROWING. On the date on which any sum is to be
borrowed, Company, in addition to the Note, shall deliver to City such other papers and
documents as may be reasonably required to comply with the conditions ofthis Agreement,
as counsel for City may reasonably request.
Company shall be required at the closing date to comply, or establish compliance, as
follows:
Loan Agreement
Sedgwick Claims Management Services, Inc.
Page 3
(a) That the representations and warranties of Company are correct on the
closing date, as well as on the date of execution of this Agreement;
(b) That Company has fully complied with the covenants and agreements to
the extent required before the closing date;
(c) That no default or event which might mature into a default has occurred or
continues to the closing date;
(d) That no litigation or proceeding is pending against Company which might
result in any change in the business or adversely affect the properties of Company,
taking into account the entire assets and overall business of Company;
(e) That since the date of execution of this Agreement and to the closing date
there has been no material adverse change in the financial condition of Company
from that shown by the financial statements delivered to City under Section 6;
(f) That since the date of execution of this Agreement no fire or casualty has
occurred in any building or to any inventories or property of Company that might
substantially, adversely affect the conduct of its business;
(g) That it will furnish to City on the closing date with the opinion of
Company's counsel, documentation that Company is a corporation duly organized,
existing and in good standing under the laws of the State of Iowa; that it has
corporate power to own its properties and conduct the business in which it is then
engaged; that Company is not in violation of any law, ordinance or regulation of any
governmental authority as to its business, premises or assets, to the Company's
knowledge; that Company has full power to execute and deliver this Agreement, to
execute and deliver the Note that evidences the sum borrowed, to borrow moneys
under this Agreement, and to perform its obligations under this Agreement and the
Note; that such actions have been duly authorized by all necessary corporate actions
and are not in conflict with any agreement binding on Company known to counsel;
and that this Agreement and the Note when executed and delivered by Company will
be a valid and binding obligation of Company in accordance with its terms.
9. COVENANTS OF COMPANY. Company covenants that until any sums
borrowed under this Agreement are paid in full, or forgiven, it will, unless City agrees in
writing to a modification or otherwise stated herein:
(a) Take all actions necessary and required to create a minimum of seventy-
three (73) new permanent full-time job equivalents with Company in Dubuque, Iowa
within three (3) years of the signing of this Agreement. Company shall use its best
efforts to hire local area residents whenever practicable and not otherwise in conflict
Loan Agreement
Sedgwick Claims Management Services, Inc.
Page 4
with nondiscrimination provisions herein stated. For purposes of determining the
extent of employment opportunities created under this Agreement, City and
Company agree that a total of zero (0) full-time job equivalents exist with Company in
Dubuque, Iowa as of May 1, 2006. If Company meets this requirement prior to the
date specified, City may acknowledge such compliance and thereafter Company
shall have no further obligation under this subparagraph (a). A listing by job title of
the new permanent employment opportunities to be created is attached hereto as
Exhibit B and entitled "Position Analysis";
(b) Submit "Annual Employment Performance Report" by July 31st of each
year during the job creation term required in subparagraph (a) of this Section above
summarizing the employment status of Company and status of new permanent jobs
to be created. Said report shall note the number of individuals employed within each
job classification, the wage ranges of each position and the average hours of work
per week of individuals engaged in each job activity. The form of such "Annual
Employment Performance Report" is attached hereto as Exhibit C. An Annual
Payroll Report will also be required;
(c) Furnish City within ninety (90) days after the end of each fiscal year with a
copy of its annual report, which shall be prepared in conformity with generally
accepted accounting principles consistently applied, and, within thirty (30) days after
the end of each quarter of its fiscal year, with a copy of its financial statement
similarly prepared and, from time to time, such other financial information as City may
reasonably request. City reserves the right to request audited annual reports,
certified by the accountants that supplied the statements, or such other accountants
satisfactory to City as may be retained by Company, which shall be prepared in
conformity with generally accepted accounting principles consistently applied.
Reports shall be supplied at the expense of Company;
(d) Pay when due all rent, taxes, assessments and other liabilities, except
those contested in good faith where notice of such contest has been given to City;
(e) Not purchase or redeem any of its shares, declare or pay any dividends
other than share dividends, or make any distribution to its shareholders in an
aggregate that exceeds ten (10) percent of its net profits, before deduction for the
payment of federal income taxes, earned after the date of this Agreement;
(f) Not create or permit to exist any mortgage, pledge, security interest, lien
or other encumbrance on the security for this Loan Agreement provided in Section 4
above and the Note provided pursuant to this Loan Agreement without written
consent of City. City approval of such written consent will not be unreasonably
withheld;
Loan Agreement
Sedgwick Claims Management Services, Inc.
Page 5
(g) Not cause, suffer or permit any of its subsidiaries to do any of the things
prohibited to Company in this Agreement;
(h) Not change the general character of its business as conducted at the date
hereof, engage in any type of business not reasonably related to its business as
normally conducted, or relocate Company's project operations outside the city limits
of the City of Dubuque;
(i) Give prompt notice in writing to City of any adverse development, financial
or otherwise, which would materially affect its business, properties or affairs, or the
ability of Company to perform its obligations under this Agreement or the Promissory
Note executed pursuant to the terms of this Agreement;
U) Use loan funds only for purposes authorized herein;
(k) Pay all fees, expenses and charges in respect to this Agreement or its
making in any way connected therewith including, but not limited to, legal fees,
abstract continuation, recording and filing fees, mortgage taxes, documentary
stamps, and any other taxes, fees and expenses payable in connection with this
transaction.
1 O. DEFAULT. Company shall be in default if:
(a) It fails to pay any installment of principal or interest on any note (whether
to City or any other public or private lender) when due or within thirty (30) days
thereafter;
(b) It becomes insolvent or admits in writing its inability to pay its debts as
they mature; or applies for, consents to or acquiesces in the appointment of a trustee
or received for any of its property; or in the absence of an application for consent, or
acquiescence, a trustee or receiver is appointed for it or a substantial part of its
property and is not discharged within ten (10) days; or it otherwise commits an act of
bankruptcy; or any bankruptcy, reorganization, debt arrangement or other proceeding
under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding,
is instituted by or against it and if instituted is consented to or acquiesced in by it or
remains for ten (10) days undismissed;
(c) It fails, in the reasonable judgment of City, to meet its job creation
obligation;
(d) It fails in the performance of the terms and conditions of this Agreement
(other than the payment terms referred to in (a) above) and such non-performance
continues for twenty (20) days after notice thereof from City or from the holder of a
note;
Loan Agreement
Sedgwick Claims Management Services, Inc,
Page 6
(e) Any warranty made by Company is untrue in any material respect, or any
schedule, statement, report, notice or writing furnished by Company to City is untrue
in any material respect on the date as of which the facts set forth are stated or
certified;
(f) Any government board, agency, department, commission or public or
private lender takes possession or control of any substantial part of the property of
Company and such possession or control continues for ten (10) days,
11, ACCELERATION AT OPTION OF CITY. If any default occurs, City may
declare the Note immediately due and payable, at which time all unpaid principal and
interest shall immediately become due and payable, City shall promptly advise Company
in writing of any acceleration under this section, but the failure to do so shall not impair the
effect of such declaration,
12, FAILURE TO MEET JOB CREATION OBLIGATION. If Company is
determined by City to be in default under this Loan Agreement for failing to meet the job
creation requirements of paragraph 9(a), the entire principal balance will be due and
payable,
13, MAINTENANCE OF RECORDS AND RIGHT TO INSPECT. Company will
keep and maintain all normal business books and records and all other documents,
invoices and receipts relating directly to the receipt and disbursement of loan funds and job
creation; and any duly authorized independent accounting representative of City, or the
Comptroller General of the United States, shall at all reasonable times have access to and
the right to inspect, copy, audit and examine all such books and other documents of
Company pertaining to the project until the completion of all closeout procedures
respecting City's loan and the final settlement and conclusion of all issues arising out of
said loan,
14, ADDRESS. Company's principal business address is:
Sedgwick Clams Management Services, Inc
1100 Ridgeway Loop Road
Memphis, TN 38120
Company shall promptly give City written notice of any further change in its principal
office address, City's address is:
Economic Development Department
City Hall
50 West 13th Street
Loan Agreement
Sedgwick Claims Management Services, Inc.
Page 7
Dubuque, IA 52001
15. ACCESS TO PROJECT. Company agrees that any duly authorized
representative of City shall at all reasonable times have access to any portion of the
project, for monitoring purposes, until the completion of all closeout procedures respecting
this loan.
16. LIMITATION OF CITY'S LIABILITY FOR PROJECT ACTIVITIES. City shall
not be liable to Company, or to any party, for the completion of, or the failure to complete,
any activities that are part of the project, except as may be specifically provided in this
Agreement. Company agrees to indemnify, hold harmless and defend City from any such
claims against City for which liability is limited hereunder.
17. CONFLICT OF INTEREST. Company agrees that no member, officer or
employee of City, or its designees or agents, nor any consultant or member of the
governing body of City, and no other public official of City who exercises or has exercised
any functions or responsibilities with respect to the project during his or her tenure, or who
is in a position to participate in a decision making process or gain inside information with
regard to the project, shall have any interest, direct or indirect, in any contract or
subcontract, or the proceeds thereof, for work to be performed in connection with the
project, or in any activity, or benefit therefrom, which is part of this project at any time
during or after such person's tenure.
18. NONDISCRIMINATION. In carrying out the project, Company shall not
discriminate against any employee or applicant for employment because of race, religion,
color, sex, national origin, age or disability. Such action shall include, but not be limited to,
the following: employment upgrading, demotion or transfer; recruitment or recruitment
advertising; layoff or termination; rate of payor other forms of compensation; and selection
for training, including apprenticeship. Company shall post in a conspicuous place,
available to employees and applicants for employment, notices to be provided by City
setting forth the provisions of this nondiscrimination clause. Company shall state that all
qualified applicants will receive consideration for employment without regard to race,
religion, color, sex, national origin, age or disability.
19. NO ASSIGNMENT OR SUCCESSION. Company acknowledges and agrees
that no transfer of loan funds by City to Company shall be deemed an assignment of grant
funds, and Company shall neither succeed to any rights, benefits or advantages of City
authorities or interests in or under the Grant Agreement.
20. DISCLAIMER OF RELATIONSHIPS. Nothing contained in this Agreement
between the parties, nor shall any act of City or Company be deemed or construed by any
of the parties, or by any third persons, to create any relationship of third party beneficiary,
principal or agent, limited or general partnership, or joint venture, or of any association or
relationship involving the United States.
Loan Agreement
Sedgwick Claims Management Services, Inc.
Page 8
21. NOTICE. Any notice, if mailed by United States certified mail, shall be deemed
given when mailed, postage prepaid, addressed to Company at its address shown above,
or at any other address subsequently designated to City by Company.
22. SUCCESSORS AND ASSIGNS. All covenants, representations, warranties
and agreements herein set forth shall be binding upon Company, and its legal
representatives, successors and assigns. This Agreement may not be assigned by City or
Company without the express written consent of the other party.
23. LEGALITY. If any provision of this Agreement shall, for any reason, be held to
be invalid or unenforceable, such invalidity or unenforceability shall not affect any other
provision hereof, but this Agreement shall be construed as if such invalid or unenforceable
provision had never been contained herein.
24. GOVERNING LAW. This Agreement and all rights and duties hereunder,
including but not limited to, all matters of construction, validity and performance shall be
governed by the laws of the State of Iowa.
25. SURVIVAL OF REPRESENTATIONS. All representations or warranties of
Company shall survive the execution and delivery of this Agreement and any notes
executed and delivered under it, and no investigation by City nor any closing shall affect
the representations or warranties or the right of City to rely on and enforce them.
26. DELAY. No delay on the part of City or the holder of any note in the exercise of
any right shall operate as a waiver, nor shall any single or partial exercise of any right
preclude other or additional exercise of any right.
27. DEFINITIONS.
(a) "Project" shall mean those activities to be carried out by Company for the
expansion of Company in Dubuque, Iowa.
(b) "Qualifying Project Expenses" shall mean those expenditures or expenses
incurred by Company during and for the Project for equipment or startup costs
associated with moving the business.
(c) "Full-Time Job Equivalent" shall equal a total of forty hours of labor per
work week. Such hours may be accrued by single individuals or divided among two
or more Company employees.
Loan Agreement
Sedgwick Claims Management Services, Inc.
Page 9
IN WITNESS WHEREOF, City has caused this Agreement to be executed by
the City Manager. The Company has executed this Agreement in its corporate name
by its duly authorized officer.
CITY OF DUBUQUE, IOWA
SEDGWICK CLAIMS MANAGEMENT
SERVICES, INC
Michael C. Van Milligen
City Manager
(Print Name)
Date:
Title
Date:
F:\USERS\Adejong\ED Loan Program\Sedgwick ED Loan.doc
EXHIBIT A
City of Dubuque, Iowa
PROMISSORY NOTE
Date:
,2006
Loan Number:
Fund Source:
UDAG # 1 - 06
Urban Development Action Grant
$100,000
FOR VALUE RECEIVED, the undersigned, Sedgwick Clams Management Services, Inc, 1100 Ridgeway Loop
Road, Memphis, Tennessee, promises to pay to the order of the City of Dubuque, Iowa, 50 W. 13th Street,
Dubuque, Iowa, 52001, or at such place as it may direct, the sum of ONE HUNDRED THOUSAND DOLLARS
($100,000), to be paid in five (5) annual payments of TWENTY THOUSAND DOLLARS ($20,000) each,
beginning on the _ day of , 20_, and on the _ day of of each year thereafter, and
the entire outstanding principal balance, if not sooner paid, shall be paid in full by not later than the 1 st day of
October, 2011.
If a default occurs under this Promissory Note or any of the other agreements between the undersigned and
the holder and is not cured within THIRTY (30) DAYS after written notice to the undersigned, then the holder
may, as its right and option, declare immediately due and payable the principal balance of this Promissory
Note. The undersigned further agrees to pay all reasonable costs of collection, including reasonable
attorneys' fees. The City of Dubuque may at any time renew this Promissory Note or extend its maturity date
for any period and release any security for, or any party to this Promissory Note, all without notice to or
consent of and without releasing any maker, accommodation maker, endorser or guarantor from any liability
on the Promissory Note.
This Promissory Note is subject to the associated Loan Agreement by and between the undersigned and the
City of Dubuque and any default under said Loan Agreement is a default under this Promissory Note.
Signed,
Sedgwick Clams Management Services, Inc
Date
(Print Name)
Title
EXHIBIT B - 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 andlor created as a result 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 jf the Project did not proceed.
Clerical 6 e $10.26
Claims Anal st 2 e $16.41 2
Disabilit Specialist 19 e $13.85 19
o erations Mana er 1 e $47.18 1
DEP Schedulin 7 e $12.31 7
DEP Su ervisor 1 e $24.62
Intake CSR I 8 e $12.31 8
Intake CSR II 2 e $14.36 2
Intake Su ervisor 1 e $20.51 1
FMLA Assistant 1 e $10.26 1
FMLA Examiner 11 e $13.13 11
FMLA Su ervisor 1 e $24.62 1
Juirs/lT Coordinator 1 e $16.82 1
L TO Active 5 e $19.90 5
L TO Maintenance 2 e $14.36 2
Su ervisor 4 e $24.62 4
Performance Anal st 1 e $22.55 1
Total Jobs Created:
Total Jobs Retained:
Totals:
73
o
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-OS
THE IOWA STATE BAR ASSOCIA TlON I I FOR THE LEGAL EFFECT OF THE USE' OF
OfficlalForrn No.116 THIS FORM, CONSULT YOUR LAWYER
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'l;~()('r ,'';\'\(;" SECURITY AGREEMENT. GENERAL FORM
'1. GRANT OF SECURITY INTEREST. Forvalue received, as ('lCUrity for tile Obliga~?D5 (as defined below) the undersigned {"Debtor"}
hereby grants, creates, and provides to /.:r:;'~',,, ('1 ;~:. .ih f ; /, /'J f) f } _/" ~.1Its
("Secured Party") a security interest in the property described in the paragraphs ctu~cked' below:
o All of Debtor's inventory now owned or hereafter acquired:
o All of Debtor's accounts. Deposit Accounts, Investment Property, Letter of Credit Rights, Supporting Obligations now existing or
hereafter arising, together with all interest of Debtor in any goods, the sale or lease of which give rise to any of Debtor's accounts, and all
chattel paper, documents and instruments relating to accounts;
o All of Debtor's general intangibles, now owned or hereafter acquired;
o All of Debtor's equipment now owned or hereafter acquired,
o All of Debtor's farm products now owned or hereafter acquired;
D All of Debtor's fixtures on the real estate described in Paragraph 3 below;
D. Debtor's Commercial Tort Claims specifically identified as:
!2l Property described as <;a. A ..r
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together with the proceeds, products, increase, Issue, accessions, attachments, accessories, parts, additions, repairs, replacements and
substitutes of, to, and for all of the foregoing together with books and records pertaining to the foregoing and the equipment containing the
books and records. . Debtor will promptly deliver to Secured Party, duly endorsed when necessary, all such chattel paper, Letter of Credit
Rights, including electronic documents and instruments and related guaranties, now on hand or hereafter received or will sign a Control
Agreement pertaining to same.
All such property in which a security interest is granted is herein called the "CollateraL"
2. OBLIGATIONS. TAe aforesaid security jnt~rests secu~payment and performance of t~e foHowing obligations (the "ObligationS"):
yl1.,,',-H::;C,C,....,,1~,/ A}r.--.r 1-,{'C;/"xJ..J-.1T{:,t) il~' //"dh..J
together with all other obligations of Debtor to Secured Party now existing or hereafter arising, whether direct or indirect, contingent or
absolute and whether as maker or surety and including, but not limited to, future advances and amounts advanced and expenses and
attorneys' fees incurred pursuant to this Security Agreement.
3. REAL ESTATE. Any Collateral attached to, or grown upon, land (such as fixtures, crops, timber or minerals) will be grown upon or
attached to the following described real estate:
and the name of the record owner of such real estate (if other than Debtor) is:
4. COPY ~ FILING. A carbon, photocopy or other reproduction of this Security Agreement may be filed as a financing statement. IF FOR
FIXTURES, TIMBER, MINERALS OR GAS, SUCH A FILING SHALL BE FILED FOR RECORDING IN THE REAL ESTATE RECORDS.
5, DEBTORS. Each of the underSigned, if more than one, execute this Security Agreement as his, her, its, their joint and several
obligation and it shall be binding upon and fully enforceable against either or both, or any or all of them, and reference herein to "Debtor"
shall in such case be deemed to be plural, provided however that nothing contained herein shall extend personal liability under any of the
Obligations as to which such Debtor is not otherwise liable.
6. REPRESENTATIONS. Debtor represents, warrants and agrees:
s. All Collateral is bona fide and genuine and Debtor is authorized to grant a security interest in the Collateral, free and clear of all
liens and encumbrances. except the security interest created hereby and except
b. Debtor's principal place of business is the address shown herein, and Debtor shall promptly give Secured Party written notice of
any change thereof, unless prior written consent of Secured Party is obtained. All Collateral and all of the Debtor's business records are
now kept, and shall continue to be kept, at such address, or if not, at 50; D;.trA (,J."'.f.-e;r O"1EMd~€ .,ki;....,n 52
c. Debtor is an individual or, if not, is the following type of entity: organized in the state of
with an organization number of If an individual, Debtor resides in the state of Debtor's
exact legal name is
CThe Iowa Slate Ear Assodation 2005 116 SECURITY AGREEMENT. GENERAL FORM
IQWADOCSIlP Rovisad Januarj, 2D05
THIS AGREEMENT SPECIFICALLY INCl.UDES ALL OF THE ADDITIONAL PROVISIONS SET FORTH BELOW AND ON THE REVERSE
SIDE HEREOF. DEBTOR ACKNOWLEDGES RECEIPT OF A FULLY COMPLETED COPY OF THIS SECURITY AGREEMENT
DATED:
County
State
ADDRESS OF SECURED PARTY (FROM WHICH INFORMATION
CONCERNING THE SECURITY INTEREST MAY BE OBTAINED)
c' _) " ,,~7 r :-l (,,_
jr.. Vv', j _) ... i"'",
Number and Street
{} ~ ',.' 0!
! ".,.-I~ /''''',0.11
City
P
i.,f ,.j fi~!ji /:JJ> ~
County
'7~e
(Debtor)
(Debtor)
Number and Street
City
1. RePReSENTATIONS AND AGREEMENTS. Debtor represents and warrants to Secured Party, and agrees that:
a. If a corporation or other business entity, Debtor is duly organized, existing, and is qualified and in good standing in all states in
which it is doing business, and the execution, delivery and periormance of this Security Agreement are within Debtor's powers, have been duly authorized,
and are not in contravention of law or the terms of Debtor's charter, bylaws if any, or any indenture, agreement or undertaking to which Debtor is a party, or by
which it is bound. If an individual, Debtor is of legal age. Debtor will not change his, her or its name, or identity unless written notice is given in advance to
Secured Party.
b. Debtor shall maintain insurance upon the Collateral which is tangible property against all customarily insured risks for the full
insurable value thereof (and furnish Secured Party with duplicate policies if Secured Party so requests), loss to be payable to Debtor and
Secured Party as their respective interests may appear. The Secured Party's interest shall be protected in accordance with a standard or union-type loss
payable clause. ln the event of any loss or damage to any Collateral, Debtor will give Secured Party written notice thereof forthwith, promptly file proof of loss
wltnlhe appropriate insurer and take all other steps necessary or appropriate to collect such insurance. If Secured Party so elects, Secured Party shall have
full authority to collect all such insurance and to apply any amount collected to amounts owed hereunder, whether or not matured. Secured Party shall have
no liability for any loss which may occur by reason of the omission or the lack of coverage of any such insurance.
c. Debtor shall at all times maintain Collateral which is tangible property in good condition and repair, defend at Debtor's expense all Collateral from all
adverse claims and shall not use any of the Collateral for any illegal purpose.
d. Debtor shall (i) keep such books and records pertaining to the Collateral and to Debtor's business operations as shall be satisfactory to Secured Party;
(ii) permit representatives of Secured Party at any time to inspect the Collateral and Inspect and make abstracts from Debtor's books and records: and (ill)
fumish to Secured Party such information and reports regarding the Collateral and Debtor's business operations and its financial status, as Secured Party
may from time to time reasonably require. SECURED PARTY IS HEREBY AUTHORIZED TO REQUEST CONFIRMATION OF SUCH INFORMATION OR
ADDITIONAL INFORMATION OF ANY KIND WHATSOEVER DIRECTLY FROM ANY THIRD PARTY HAVING DEALINGS WITH DEBTOR. SECURED
PARTY IS FURTHER IRREVOCABLY AUTHORiZED TO ENTER DEBTOR'S PREMISES TO INSPECT THE COLLATERAL.
e. Debtor shall give such notice in writing (including but not limited to notice of assignment or notice to pay Secured Party directly) as Secured Party may
require at any time to any or all account debtors, with respect to accounts which are Collateral, and, if Secured Party shall so request, deliver to Secured
Party copies of any and all such notices.
f. Debtor shall promptly transmit to Secured Party all information that it may have Of receive with respect to Collateral or with respect to any account debtor
which might in any way affect the value of the Collateral or Secured Party's rights or remedies with respect there1o.
g. Unless in default under this Security Agreement, Debtor may sell inventory in the ordinary course of business ane! consume any raw materials or
supplies, the LIse and consumption of which are necessary to carry on Debtors business. Debtor shall not otherwise consume, assign or transfer any
Collateral without prior written consent of Secured Party. The provision of this Security Agreement granting a security interest in proceeds shall not be
construed to mean thaI Secured Party consents to any saie or disposition of any Collateral.
h. Debtor shall pay when due all taxes, assessments, and any other governmental levy which is, or may be, levied against any Collateral, and shall
othelWise maintain the Collateral free of aU liens, charges, and encumbrances (except liens set forth herein and the security interest created hereby).
i. Debtor stlalf not store any Collateral with any warehouseman without Secured Party's consent.
j. Debtor shall promptly, unless Secured Party shall waive such requirement in writing, deliver to Secured Party all certificates of titie, if any, (or any olf1er
documents evidencing title) to all Collateral with such proper notations, assignments or endorsements as may be necessary or appropriate to ere ale, protect
or preserve Secured Party's security interest in the Collateral.
k. Debtor shall, at its cost and expense, execute, deliver, fiie or record (in such manner and form as Secured Party may require) any assignment,
financing statement or other paper that may be necessary or desirable, or that Secured Party may request in order to crt~ate, preserve or perfect any security
interest granted hereby or to enable Secured Party to exercise and enforce its rights hereunder or under any Collateral. Secured Party is further granted the
power, coupled with an interest, to sign on behalf of Debtor as attorney-in-fact and to file one or more financing statements under the Uniform Commercial
Code naming Debtor as debtor and Secured Party as secured party and describing the Collateral herein specified.
2 EXPENSES. Debtor upon demand shall pay to Secured Party forthwith the amounts of all expenses, including reasonable attorneys' fees and legal
expenses, incurred by Secured Party in seeking to collect any sums secured hereunder or to enforce any rights In the Collateral. Such amounts shall be
secured hereby, and if not paid on demand shall bear interest at the highest rate payable on any of the Obligations.
3. COLLECTION AUTHORITY ON ACCOUNTS. Debtor hereby irrevocably appoints Secured Party its true and lawful attorney, wittl full power of
substitution, in Secured Party's name, Debtor's name or otherwise, for Secured Party's sole use and benefit. but at Debtor's cost and expense, to exercise. if
Secured Party shaH elect after an event of default has occurred (whether or not Secured Party then elects to exercise any other of its rights arising upon
default) all or any of the Debtor's powers with respect to all or any Accounts which are Collateral including, but not limited to:
a. To execute on Debtor's behalf assignments of any or all accounts which are Collateral to Secured Party, and to notify account debtors thereunder to
make payments directly to Secured Party;
b. To demand, sue for, collect, receive and give acquittance for any and all moneys due or to become due upon or by virtue thereof;
c. To receive, tak.e, endorse, assign and deliver any and aU checks, notes, drafts, documents and other negotiable and non-negotiable instruments and
chattel paper taken or received by Secured Party in connection therewith;
d. To settle, compromise, compound, prosecute or defend any action or proceeding with respect thereto;
e. To sell, transfer, assign or otherwise deal in or with the same or the proceeds thereof or the relative goods. as fully and effectually as if Secured Party
were the absolute owner thereof; and
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