HomeMy WebLinkAboutMedisiss Loan ConversionDeschutes County Board of Commissioners
1300 NW Wall St., Suite 200, Bend, OR 97701-1960
(541) 388-6570 - Fax (541) 385-3202 - www.deschutes.org
AGENDA REQUEST & STAFF REPORT
For Board Business Meeting of September 3, 2014
DATE: August 27, 2014
FROM: Judith M. Ure Administrative Services 541-330-4627
TITLE OF AGENDA ITEM:
Consideration of converting $48,000 business loan made to Medline Renewal (formerly Medisiss) to a
grant.
PUBLIC HEARING ON THIS DATE? No.
BACKGROUND AND POLICY IMPLICATIONS:
The Deschutes County Business Development Forgivable Loan Program was initiated to encourage and
assist companies seeking to relocate and/or create new jobs within Deschutes County. To receive a
loan, companies must agree to create a specific number of jobs within a defined period, then maintain
this level of employment for an additional set period of time. Medline Renewal (doing business at the
time as Medisiss) received a business development loan in the amount of $48,000 on September 8,
2011 with terms that included adding twenty-four (24) full-time employees on or before July 18, 2013
and maintaining a level of one -hundred and fifteen (115) full-time employees through July 18, 2014.
Medisiss notified the County of a pending ownership change on October 11, 2012 (see attached letter
from Erik Kropp, Interim County Administrator) and was subsequently acquired by Medline Renewal.
Medisiss officially changed its name to Medline Renewal in May 2014. As certified by Economic
Development for Central Oregon (EDCO), Medline Renewal has met the terms of the loan agreement
and is therefore eligible to have the loan converted to a grant.
FISCAL IMPLICATIONS:
None.
RECOMMENDATION & ACTION REQUESTED:
Authorize County Administrator to convert $48,000 business loan made to Medline Renewal to a grant.
ATTENDANCE: Judith Ure, Management Analyst
DISTRIBUTION OF DOCUMENTS:
N/A
Loan Recipient:
DESCHUTES COUNTY
Business Development Forgivable Loan Program
Medline Renewal (formerly Medisiss)
2747 SW 6th Street
Redmond, OR 97756
541-923-3310
Agreement No.: DC -2011-572
Date of Agreement: September 8, 2011
On behalf of Economic Development for Central Oregon, I hereby certify that Medline Renewal
has met all conditions of the Deschutes County Business Development Forgivable Loan Program
as specified in Agreement DC -2011-572 (attached).
I further attest that a representative of Economic Development for Central Oregon has reviewed
employment and payroll records furnished by Medline Renewal and that such records confirm
that the company:
a) Employed a baseline of ninety-one (91) full-time employees on July 18, 2011, and
b) Increased the number of full-time employees by twenty-four (24) for a total of one
hundred fifteen (115) full-time employees on or before July 18, 2013, and
c) Maintained a total of one hundred fifteen (115) full-time employees over any 12 -month
period through July 18, 2014.
I therefore, request that the Deschutes County Board of Commissioners authorize that the
business development loan made to Medisiss and assumed by Medline Renewal be converted to
a grant in accordance with the terms of the attached agreement.
Economic Development for Central Oregon
By:
Title:
�J GLTW(Z.&cti
Date: S'2-6.11
October 11, 2012
Jon Stark
Manager
Redmond Economic Development, Inc. (REDI)
446 SW 7th Redmond, OR 97756
Jon:
Department of Administrative Services
Erik Kropp, Deputy County Administrator
1300 NW Wall St, Suite 200 • Bend, Oregon 97701
(541) 388-6584 • FAX (541) 385-3202
www. deschutes. or. us
You inquired about the status of the County's Economic Development loan to MEDISISS in light of the
company being acquired by Medline. MEDISISS received a $48,000 forgivable loan from the County in
August 2011.
Since the company will continue to be operating under the MEDISISS name, and as long as MEDISSIS
remains a legal entity, the loan can remain between Deschutes County and MEDISISS. Despite being
acquired by Medline, MEDISISS remains contractually obligated to the terms of the loan.
I wish MEDISISS continued success and look forward to continued job growth and the eventual close out
of the forgivable loan with Deschutes County.
Thank you for your inquiry.
Sincerely,
aa4/6 I
Erik Kropp
Interim County Administrator
c: Jason Wandersee, MEDISISS CEO
Enhancing the Lives of Citizens by Delivering Quality Services in a Cost -Effective Manner
DESCHUTES COUNTY
Business Development Forgivable Loan Fund
AGREEMENT FOR MEDISISS
This Development Agreement ("Agreement") is entered into:
BETWEEN: Deschutes County hereinafter referred to as `County')
1300 NW Wall Street, Suite 200
Bend, OR 97701
Facsimile number: (541) 385-3202
Phone: (541) 388-6570
AND: MEDISISS (hereinafter referred to as "Company')
2747 SW 6th St.
Redmond, OR 97756
Phone: 541-923-3310
RECITALS
WHEREAS, the County finds that the program set forth in this Agreement will promote state and
local economic activity by creating new jobs and investment; and
WHEREAS, the Company wishes to expand its existing equipment and business operations within
Bend by increasing employment and investing in equipment; and
WHEREAS, the said expansion will create at least 24 new jobs by July 18, 2013, over and above the
Company's current employment of 91 employees as of July 18, 2011 and
WHEREAS, the County desires to promote the expansion of the Company's facility by loaning funds
to the Company for equipment purchase and personnel expenses and such loan will later be converted
to a grant upon the condition that the Company satisfy certain requirements; and
WHEREAS, the County has engaged Economic Development for.. Central Oregon ("EDCO") to
assist in administering and implementing the loan;
NOW, THEREFORE, in consideration of the mutual benefits and promises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties agree to as follows:
SECTION 1
DEFINITIONS
MEDISISS
Page 1 of 5
REM •D
LEGAL _COUNSEL
DC -2011.57
Section 1.1 :Dollars and $ shall mean lawful money of the United States of America.
Section 1.2 Loan shall mean the funds loaned by County to Company as provided under Section 3
Section 1.3 Project shall mean expansion of Company employment in Redmond, Oregon by hiring
at least 24 new employees by July 18, 2013, over and above the Company's current
employment of 91 employees as of July 18, 2011.
Section 1.4 Full Time Employee shall mean any employee who has been hired with the
expectation that the job will last for at least one (1) year and who will work at least
forty (40) hours per week or the equivalent of 2080 hours per year.
SECTION 2
TERM
This agreement shall be effective as of the date of execution by all parties and continue until the Loan
is paid in full or the Loan is converted to a grant as provided in Section 3.2 below.
SECTION 3
LOAN
Section 3.1 Loan
The County agrees to loan the Company the sum of $48, 000 no later than 30 days following the
signing of this agreement.
Section 3.2 Loan Purpose and Representations of the Company
The purpose of the Loan is to carry out the Project, and for no other purposes. The Company
represents and warrants that it will diligently pursue and complete the following:
3.2.1 Company will employ a minimum of 24 additional Full Time Employees and maintain
this level over any 12 month period through July 18, 2014. Company baseline FTE
employment as of July 18, 2011 is 91. Total Company employment to be reached and
maintained by July 18, 2013 is determined to be 115 Full Time Ernployees or the equivalent.
3.2.3 Company will submit quarterly progress reports to EDCO with documentation for job
creation, capital investment relating to new facilities and equipment associated with the
Project.
3.2.4 Company shall comply with all applicable federal, state, regional and local laws,
regulations and ordinances.
3.2.5 Company shall timely pay all Deschutes County real and personal property tax when
due and shall satisfy all delinquent property tax accounts in full.
Section 3.3 Loan Repayment or Conversion to Grant
3.3.1 Unless the Loan is converted to a grant as provided below, the Company agrees to pay
to the order of the County the full amount of the Loan, plus interest at the rate of 8% per annum
starting with the date County releases funds to Company, upon the earlier of: (a) the occurrence of an
Event of Default, as defined below, or (b) July 18, 2013.
3.3.2 The County agrees to convert the Loan to a grant that does not need to be repaid, if
and when the County determines in its sole discretion that the Company has satisfied all of the
MEDISISS
Page 2 of 5
obligations in Section 3.3 and its other obligations under. this Agreement. Such conversion shall only
be effective upon written verification by the County Administrator that the loan has been converted to
a grant.
3.3.3 The County may in its sole discretion convert a portion of the Loan to a grant if all of
the obligations under Section 3.3 and this Agreement have been satisfied to the reasonable satisfaction
of the County, except the obligation under Section 3.2.1 to employ 24 Full Time Employees. In the
event of such partial conversion of the Loan, the Loan shall continue to be payable in an amount
determined by multiplying $2,00() by the difference between 24 and the lesser of (a) number of Full
Time Employees employed by the Company as of July 18, 2013, or the number of Full Time
Employees employed by the Company as of July 18, 2013. For example, if the Company employs 21
Full Time Employees as of July 18, 2014 and 23 Full Time Employees on July 18, 2013, the amount of
the Loan payable by the Company would be $2,000 x (23 - 21)=$4,000.
Section 4.1
The following
Events of Default
shall be Events of Default:
SECTION 4
DEFAULT
4.1.1 Company fails to complete, or the County reasonably determines that the Company
will not be able complete, the obligations described in Section 3.3 and its other
obligations under this Agreement; provided, however, that upon such failure or
determination, the County shall first provide to the Company written notice of such
failure or determination, and the Company shall have thirty (30) days to correct the
matter. If the matter has not been corrected by the Company within such thirty (30)
day period, to the reasonable satisfaction of the County, the County shall be entitled to
declare the Company in default of its obligations under this Agreement and the Loan,
plus accrued interest shall be payable in full.
4.1.2 Company effects a change of ownership, a change of control of its business, or
relocates its business conducted in Redmond, Oregon on or before August 10, 2014
(the end of the contract) without prior written consent of the County.
4.1.3 The occurrence of any event that has or may reasonably he expected to have a material
adverse effect on Company's financial condition or Company's ability to make any
payment required by this Agreement.
4.1.4 Company fails to pay, becomes insolvent or unable to pay, or admits in writing an
inability to pay Company's debts as they become due, or makes a general assignment
for the benefit of creditors.
4.1.5 A proceeding with respect to Company is commenced under any applicable law for the
benefit of creditors, including but not limited to any bankruptcy or insolvency law, or
an order for the appointment of a receiver, liquidator, trustee, custodian, or other
officer having similar powers over Company is entered.
MEDISISS
Page 3of5
SECTION 5
MISCELLANEOUS
Section 5.1 Right to Inspect
The Company agrees that the County, their agents and employees, shall be entitled, upon reasonable
prior notice to the Company, to access and inspect the property and employment records of the
Company and its affiliates in order to insure that the Company is complying with the terms of this
Agreement and all applicable federal, state and local laws and regulations. The right to inspection shall
also include any property or employment records that are in the possession of any affiliate of the
Company. 'The right of inspection shall continue until all of the obligations of the Company under
this Agreement have been satisfied.
Section 5.2 Attorney's Fee Provision
In the event suit or action is instituted to enforce any of the terms or conditions of this Agreement,
the losing party shall pay to the prevailing party, in addition to the costs and disbursements allowed by
statute, such sum as the court may adjudge reasonable as attorney fees in such suit or action, in both
trial court and appellate courts.
Section 5.3 Indemnification
Company shall defend, indemnify and hold harmless County and EDCO, their officers, agents
employees and members from all claims, suits, and causes of action including attorney's fees, of any
nature whatsoever relating to claims by third parties resulting from or arising out of the Loan, this
Agreement, or funds provided to the Company under this Agreement.
Except as otherwise provided in this Section 5.3, County and EDCO shall defend, indemnify and
hold harmless Company, their officers, agents, employees and members from all claims, suits, and
causes of action including attorney's fees, relating to claims by third parties as to the validity under
public finance law of this Agreement or funds provided to the Company under this Agreement.
Section 5.4 Entire Agreement
This Agreement constitutes the entire agreement between the parties regarding the matters herein.
Section 5.6 Titles and Subtitles
The titles in this Agreement are for convenience only and in no way define, limit, or describe the
scope or intent of any provision of this Agreement.
Section 5.7 Notice
All notices, requests demands, and other connnuni.cations to or upon the patties hereto shall he in
writing and shall be deemed to have been duly given or made upon actual receipt if delivered
personally or by fax or an overnight delivery service; and at the end of the third business day after the
date of deposit in the United States mail, postage pre -paid, certified, return receipt requested; and to
the addresses set forth on page 1 of this Agreement or at such other address of which such party shall
have notified in writing the other parties hereto.
Section 5.8 Time is of the Essence
All parties agree that time is of the essence under this Agreement.
VmDISISS
Page 4 of 5
Section 5.9 Applicable Law
This agreement is made, and shall be construed and interpreted under the laws of the State of Oregon
without regard to the principles of conflicts of law. Venue shall lie in state courts located in Deschutes
County, Oregon, provided, however, if the Claim must be brought in a federal forum, then it shall be
brought and conducted solely and exclusively within the United States District Court for the District
of Oregon.
Section 5.10 Disclosure
Under Oregon law, most agreements, promises and commitments made by a lender after October 3,
1989 concerning loans and other credit extensions which are not for personal, family or household
purposes or secured solely by borrower's residence must be in writing, express consideration and be
signed by the lender to be enforceable.
Section 5.11 No Waiver.
No failure or delay of County in exercising any right, power or remedy under this Agreement shall
operate as a waiver of such right, power or remedy of County or of any other right. A waiver of any
provision of this Agreement shall not constitute a waiver of or prejudice County's right otherwise to
dernand strict compliance with that provision or any other provision. Any waiver, permit, consent or
approval of any kind or character on the part of County must be in writing and shall be effective only
to the extent specifically set forth in such writing.
Section 5.12 No Assignment by Company
No obligation or right under this Agreement may be assigned by the Company without the prior
consent of the County, which consent may be withheld, conditioned, or delayed in the sole discretion
of the County.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly executed as of
the dates set forth below their respective signatures.
Deschutes County
By:
Date:
1k0A
Erik Kropp, Interim County Administrator
MEDISISS
By:
Date:
CEO
Jas Warrdersee
MEDISISS
Page 5 of 5
