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Iowa Economic Development-12/17/2012 (2)
va Please return this copy to: City Clerk & Finance Department 715 Mulberry Street Waterloo, IA 50703 Debi V. Durham, Director Iowa Economic Development Authority Business Financial Assistance Application Business Finance Business Development Division Iowa Economic Development Authority 200 East Grand Avenue Des Moines, Iowa 50309-1819 lowaeconomidevelopment.com Telephone: 515.725.3133 businessfinance aAiowa.gov v.04.20.2012 Application Instructions To Complete Electronic Form: Click on TEXT BOX to add text. Double click on YES/NO boxes and select "Checked". 1. All applicants must complete the Business Financial Assistance Application and attach onto those additional sections for the components to which the applicant is applying. Direct Financial Assistance — STATE of IOWA ❑ 130% Component (no supplement) E 100% Component (no supplement) ❑ Entrepreneurial Component (and Supplement) Supplemental information required Tax Credits — STATE of IOWA Enterprise Zone Program (EZ) Supplemental information required Direct Financial Assistance — FEDERAL ❑ Economic Development Set -Aside Program (EDSA) Program (PFSA) Supplemental information required ❑ Infrastructure Component (no supplement) D Value -Added Agriculture Component Supplemental information required ❑ Disaster Relief Component Supplemental information required ❑ High Quality Jobs Program (HQ) (no supplement) ❑ Public Faclities Set -Aside Supplemental information required 2. Please visit the IDED Web site at www.iowalifechanginq.com or contact IDED at 515.725.3133 to confirm that this is the most current application version. 3. Before filling out this application form, please read all applicable sections of the 2009 Iowa Code and Iowa Administrative Code (rules). www.legis.state.ia.us/lowaLaw.html 4. Only typed or computer-generated applications will be accepted and reviewed. Any material change to the format, questions, or wording of questions presented in this application will render the application invalid and it will not be accepted. 5. Complete the applicable sections of the application fully. If questions are left unanswered or required attachments are not submitted, an explanation must be included. 6. Use clear and concise language. Attachments should only be used when requested or as supporting documentation. 7. Any inaccurate information of a significant nature may disqualify the application from consideration. 8. The following must be submitted to Business Finance at IDED in order to initiate the review process: • One original, signed application form and all required attachments • One electronic copy of the application form and all required attachments Facsimile copies will not be accepted. Business Finance Iowa Department of Economic Development 200 East Grand Avenue Des Moines, IA 50309-1819 Telephone: 515.725.3133 businessfinance(a)_iowa.gov Applications are must be submitted to IDED Business Finance before 4:OOpm on the fourth Monday of the month. Applications will be reviewed by the IDED Board on the third Thursday of the following month. IDED — Business Financial Assistance Application 2 v.04.20.2012 Public Records Policies Information Submitted to IDED. The Iowa Department of Economic Development (IDED) is subject to the Open Records law (Iowa Code, Chapter 22). Treatment of information submitted to IDED in this application is govemed by the provisions of the Open Records law. All public records are available for public inspection. Some public records are considered confidential and will not be disclosed to the public unless ordered by a court, the lawful custodian of the record, or by another person duly authorized to release the information. Confidential Records. IDED automatically treats the following records as confidential and they are withheld from public disclosure: • Tax Records • Quarterly Iowa Employer's Contribution and Payroll Report prepared for the Iowa Workforce Development Department • Payroll Registers • Business Financial Statements and Projections • Personal Financial Statements Other information supplied to IDED as part of this application may be treated as confidential under Iowa Code section 22.7. Following are the classifications of records which are recognized as confidential under Iowa law and which are most frequently applicable to business information submitted to IDED: • Trade secrets [Iowa Code §22.7(3)] • Reports to governmental agencies which, if released, would give advantage to competitors and serve no public purpose. [Iowa Code §22.7(6)] • Information on an industrial prospect with which the IDED is currently negotiating. [Iowa Code §22.7(8)] • Communications not required by law, rule or regulation made to IDED by persons outside the govemment to the extent that IDED could reasonably believe that those persons would be discouraged from making them to the Department if they were made available for general public examination. [Iowa Code §22.7(18)] Information supplied to IDED as part of this application that is material to the application and/or the state program to which the applicant is applying including, but not limited to the number and type of jobs to be created or retained, wages for those jobs, employee benefit information, and project budget, are considered open records and will not be treated as confidential. Additional Information Available. Copies of Iowa's Open Record law and IDED's administrative rules relating to public records are available from the IDED upon request. IDED — Business Financial Assistance Application 3 v.04.20.2012 yn Applicant Information Name of Business: HYDRITE CHEMICAL COMPANY Address: 300 NORTH PATRICK BOULEVARD City, State & Zip Code: BROOKFIELD, WI 53045 Contact Person: BOB HINTZ Title: CORPORATE CONTROLLER Phone: 262-792-1450 Fax: 262-792-8721 Email: BOB.HINTZ@HYDRITE.COM Federal ID Number: 39-0364390 NAICS Code for primary business operations: 325100 US DOT Number: 100011 Does the Business file a consolidated tax retum under a different tax ID number? ❑Yes ®No If yes, please also provide that tax ID number: Is the contact person listed above authorized to obligate the Business? ® Yes ❑No If no, please provide the name and title of a company officer authorized to obligate the Business: If the application was prepared by someone other than the contact person listed above, please complete the following: Name of Business: BAKER TILLY VIRCHOW KRAUSE, LLP BEFORE DECEMBER 7,2012: Address: 115 SOUTH 84TH STREET, SUITE 400 City, State & Zip Code: MILWAUKEE, WI 53214 AFTER DECEMBER 7, 2012: Address: 777 EAST WISCONSIN AVE, 32ND FLOOR City, State & Zip Code: MILWAUKEE, WI 53202 Contact Person: CHRISTINA BERGER Title: SENIOR MANAGER Phone: 414-777-5438 Fax: 414-777-5555 Email: CHRISTINA.BERGER(a�BAKERTILLY.COM Contact Person: ALYSSA SCHMITZ Title: ACCOUNTANT Phone: 414-777-5483 Fax: 414-777-5555 Email: ALYSSA.SCHMITZ a(�.BAKERTILLY.COM Contact Person: CHRISTINA CORBO-TRAVIS Title: SENIOR ACCOUNTANT Phone: 414-777-5365 Fax: 414-777-5555 Email: CHRISTINA.CORBO-TRAVIS(a.BAKERTILLY.COM IDED — Business Financial Assistance Application 4 v.04.20.2012 Sponsor Information Sponsor Organization: CITY OF WATERLOO Official Contact (e.g. Mayor, Chairperson, etc.): MAYOR BUCK CLARK Title: MAYOR Address: CITY HALL, 715 MULBERRY STREET City, State & Zip Code: WATERLOO, IA 50703 Phone: Fax: Email: If IDED needs to contact the sponsor organization with questions, should we contact the person listed above? ❑ Yes 11 No, please contact the following person: Name: LISA SKUBAL Title: CEcD Address: GREAT CEDAR VALLEY ALLIANCE & CHAMBER City, State & Zip Code: Phone: 319-232-1156 Fax: Email: LSKUBAL@CEDARVALLEYALLIANCE.COM If necessary, please list information on additional sponsors in an attachment. IDED — Business Financial Assistance Application 5 v.04.20.2012 Certification & Release of Information I hereby give permission to the lowa Department of Economic Development (IDED) to research the Business' history, make credit checks, contact the Business' financial institutions, insurance carriers, and perform other related activities necessary for reasonable evaluation of this application. I also hereby authorize the Iowa Department of Revenue to provide to IDED state tax information pertinent to the Business' state income tax, sales and use tax, and state tax credits claimed. I understand that all information submitted to IDED related to this application is subject to Iowa's Open Record Law (Iowa Code, Chapter 22). I understand this application is subject to final approval by IDED and the Project may not be initiated until final approval is secured. I understand that IDEA reserves the right to negotiate the financial assistance. Furthermore, 1 am aware that financial assistance is not available until an agreement is executed within a reasonable time period following approval. I hereby certify that all representations, warranties, or statements made or furnished to IDED in connection with this application are true and correct in all material respect. l understand that it is a criminal violation under Iowa law to engage in deception and knowingly make, or cause to be made, directly or indirectly, a false statement in writing for the purpose of procuring economic development assistance from a state agency or subdivision. For t B iness: Signature,.} �+ Ro J e.4 t ''.I fir 1,112" j (orrpr C. on:ha)) I, " ame and Title (typed or pri ted) For a Sponso Signature trv_L,,t C Name and Title (typed or printed) Date Date Please use the following if more than one sponsor is required. (For example, use this if a signature from the local Enterprise Zone Commission is required in addition to the signature from the Mayor of the sponsoring city.) Signature Date Name and Title (typed or printed) IDED will not provide assistance in situations where it is determined that any representation, warranty, or statement made in connection with this application is incorrect, false, misleading or erroneous in any material respect. If assistance has already been provided prior to discovery of the Incorrect, false, or misleading representation, IDED may initiate legal action to recover incentives and assistance awarded to the Business. IDED — Business Financia! Assistance Application 6 v.04.20.2012 Business Information Provide a brief description and history of the Business. Include information about the Business' products or services and its markets and/or customers. HYDRITE CHEMICAL COMPANY WAS ESTABLISHED IN 1929. THEY ARE ONE OF THE LARGEST MANUFACTURERS AND DISTRIBUTORS OF CHEMICAL PRODUCTS IN THE UNITED STATES. TO DATE THEY HAVE LOCATIONS IN CALIFORNIA, ILLINOIS, INDIANA, IOWA, AND WISCONSIN. THEY OFFER EXPERTISE IN CHEMICAL DISTRIBUTION, FOOD AND DAIRY SANITATION, FOOD INGREDIENTS, ORGANIC PROCESSING, LIQUID SULFUR SALTS, WATER TREATMENT, FOAM CONTROL, AND COMPLIANCE MANGEMENT. Business Structure: ❑ Cooperative ❑ Corporation El Partnership ® S -Corporation 0 Limited Liability Company 0 Not for Profit 0 Sole Proprietorship State of Incorporation: WISCONSIN Identify the Business' owners and percent ownership: SEE ATTACHMENT A Does a woman, minority, or person with a disability own the Business? ❑ Yes No If yes, is the Business certified as a Targeted Small Business? 0 Yes ❑ No List the Business' Iowa locations and the current number of employees at each location. 2815 WCF & N DRIVE WATERLOO, IA 50703 75 FULL TIME EMPLOYEES What is the Business' worldwide employment? Please include employees of parent company, subsidiaries, and other affiliated entities in this figure. 680 FULL TIME EMPLOYEES Project Information Project Street Address: 2815 WCF & N DRIVE Project City: WATERLOO Project County: BLACK HAWK COUNTY Type of Business Project: 0 Startup 0 New Location in Iowa /. Expansion of Iowa Company 0 Relocation from another State Briefly describe the proposed project for which assistance is being sought. (Include project timeline with dates, facility size, infrastructure improvements, proposed products/services, any new markets, etc.) THE PROJECT WILL ENCOMPASS AN EXPANSION OF OUR EXISTING WATERLOO FACILITY. HYDRITE WOULD LIKE ADDITIONAL PRODUCTION AT THE FACILITY TO BEGIN DURING 2013. Project Timeline (add additional rows as needed) Activity Completion Date PRODUCTION AT THE NEW FACILITY TO BEGIN IN 2013. Please identify the project management for the project location and experience. BOB HINTZ Has any part of the project started? If yes, please explain. Fees for preliminary engineering services related to the design of the project and a down -payment to secure procurement of a bumer have been paid. ® Yes ❑ No IDED — Business Financial Assistance Application 7 v.04.20.2012 b Identify the Business' competitors. If any of these competitors have Iowa locations, please explain the nature of the competition (e.g. competitive business segment, estimated market share, etc.) and explain what impact the proposed project may have on the Iowa competitor. BRENNTAG NORTH AMERICA, INC UNIVAR USA BARTON SOLVENTS ALL THREE COMPETITIORS ARE LOCATED IN IOWA. THE PROPOSED PROJECT IS NOT EXPECTED TO HAVE ANY MATERIAL OR SIGNIFICANT IMPACT ON THESE COMPANIES. Will any of the current Iowa employees lose their jobs if this project does not proceed in Iowa? ❑ Yes ►/ No If yes, please explain why and identify those jobs as "retained jobs" in the Project Jobs section. IDED — Business Financial Assistance Application 8 v.04.20.2012 Project Budget AMOUNT BUDGETED Use of Funds Cost Source A Source B Source C Source D Source E Source F Source G Land Acquisition $ Source B: Other State (Community College, IDOT, etc.) $ Site Preparation 1,085,000 Source C: Local Govemment $ 1,085,000 Building Acquisition $9,409,563 Cash/Equity committed Source E: Other Private Sources $ Building Construction 1,067,069 Source F: $ 1,067,069 Building Remodeling $ TOTAL $9,409,563 Mfg. Machinery & Equip. 6,683,494 6,683,494 Other Machinery & Equip. Racking, Shelving, etc.1 Computer Hardware Computer Software Fumiture & Fixtures Working Capital 524,000 524,000 Research& Development 50,000 50,000 Job Training TOTAL $9,409,563 $ $ $ $9,409,563 $ $ $ 1 Racking, shelving and conveyor equipment used in distribution center projects only Does the Business plan to lease the facility? ❑ Yes 15 No If yes, please provide the Annual Base Rent Payment (lease payment minus property taxes, insurance, and operating/maintenance expenses) and the length of the lease agreement. PROPOSED FINANCING Source of Funds Amount Form of Funds Rate and Temi CO entice Status Conditions/Additional Information (List tax benefits separately below, not as a source of direct financing) (Loan, Grant, In -Kind, Donation, etc.) Include when funds will be disbursed; If loan, whether payments are a level term, balloon, etc Source A: IDED* $ Source B: Other State (Community College, IDOT, etc.) $ Source C: Local Govemment $ Source D: Business $9,409,563 Cash/Equity committed Source E: Other Private Sources $ Source F: $ Source G: $ TOTAL $9,409,563 IDED — Business Financial Assistance Application 9 v.04.20.2012 * Identify the collateral used to secure IDED funds: N/A TAX CREDITS AND INDIRECT FINANCING Source of Funds Amount Description Investment Tax Credit $234,690 EZ Program Sales, Service & Use Tax Refund $64,560 EZ Program Research Activities Credit (3%/10%) $750 EZ Program Withholding Local Property Tax Exemption Tax Increment Financing 260E Job Training Funds In-kind Contribution Other TOTAL $300,000 What measures were analyzed to determine the amount and form of assistance needed? THE COMPANY LOOKED AT THE COST OF EXPANSION AT THE WATERLOO PLANT AND DETERMINED A GAP OF $300,000 NEEDED IN ORDER TO FULLY FINANCE THE PROJECT Is the Business actively considering locations outside of Iowa? CI Yes ❑ No If yes, where and what assistance is being offered? HYDRITE IS A NATIONAL COMPANY WITH LOCATIONS IN CALIFORNIA, ILLINOIS, INDIANA, IOWA, AND WISCONSIN. AS HYDRITE GROWS THEY WILL CONTINUE TO EXPAND THEIR CURRENT FACILITIES AND OPEN NEW WHERE DEMAND IS HIGH. IT HAS BECOME PRACTICE TO TAKE ADVANTAGE OF CREDITS AND INCENTIVES OFFERED BY STATES AND LOCALITIES. There are three general justifiable reasons for assistance. Check the box next to the reason why assistance is needed to complete this project. Financing Gap - The Business can only raise a portion of the debt and equity necessary to complete the project. A gap between sources and uses exists and state and/or federal funds are needed to fill the gap. ❑ Rate of Return Gap — The Business can raise sufficient debt and equity to complete the project, but the returns are inadequate to motivate an "economic person" to proceed with the project. Project risks outweigh the rewards. 0 Location Disadvantage (Incentive) — The Business is deciding between a site in Iowa (site A) and a site in another state (site B) for its project. The Business argues that the project will cost less at site B and will require a subsidy to equalize costs in order to locate at site A. The objective here is to quantify the cost differential between site A and site B. IDED — Business Financial Assistance Application 10 v.04.20.2012 ti Project Jobs List the jobs that will be created and/or retained as the result of this project. (A retained job is an existing job that would be eliminated or moved to another state if the project does not proceed in Iowa.) For jobs to be created, include the starting and final hourly wage rate. For retained jobs, include the current hourly wage rate. Is the hourly wage rate based on a 40 hour work week, 52 weeks per year? ►1 Yes ❑ No If no please explain: Full -Time CREATED Jobs (Add additional rows as needed) Job Title Number of CREATED Jobs Starting Hourly Wage Hourly Wage at End of Year Three Supervisor 1 $45,000/yr $45,000/yr Production 8 $38,480/yr $38,480/yr Total CREATED Jobs 9 Full -Time RETAINED Jobs (Add additional rows as needed) Job Title Number of RETAINED Jobs Current Hourly Wage Administrative 1 $31,824/yr Total RETAINED Jobs 1 TOTAL JOBS 10 IDED — Business Financial Assistance Application 11 v.0420.2012 Employee Benefits Please identify all employee benefits provided by and paid for (in full or in art by the Business. Employee Benefits Provided by Business Total Annual Cost (show on a per employee basis) Portion of Total Annual Cost Paid by the Business Plan Provisions Employee Family Employ e Family Deductible (Include coinsurance %, office visit co -payments, p ymerrts, annual out-of-pocket maximums, face amounts, etc.) MedicalEmploye Insurance $5340 $16,632 75% 75% e $500 15% coinsurance (In -network PPO)(Both Single & Family)OOP Max- S)51500, F)$4500 Family $1500 Dental Insurance $420 $1,320 75% 75% Employe e $0 Cleaning/simple restorative $0 co - pay. Major services -50% up to annual max $1250/per person Family $0 Vision Insurance Employe e $0 Voluntary Benefit —100% Ee paid Family $0 Life Insurance $120 Na 75% 75% N/a n/a Value = 1x annual salary up to $150,000 Short-term Disability $196 n/a 100% 100% n/a n/a Benefit based on length of service >5 years: 1st 4 weeks @ 000% salary, next 9 wks @ 60% salary Long-term Disability $168 Na 75% 75% Na n/a After 90 day wait period: 60% of salary to occupation; yrs in own Health Savings Account Na Na Na Na Na Na Does the Business offer a pension plan, 401(k) plan, and/or retirement -plan? Yes El No If yes, please indicate the amount contributed on a per employee basis by the Business to the plan for the last three years. For 401(k) plans, please provide information on the company match and indicate the average annual match per employee (show average as a percentage of salary). Year Ending 2011 Average Actual Match per Employee (%) 401(k) 1.5% (at 5% deferral) Money Purchase Pension 3% of gross salary Profit Sharing 5% of gross salary Three-year Average: 9.5% of salary - total of 3 retirement plans Does the Business offer a profit-sharing plan? ❑ Yes ►/ No If yes, please indicate total amount paid out each year for the past three years and then, determine the average annual bonus or contribution per employee for that three year period. Year Ending Average Actual Share per Employee ($) Three-year Average: IDED — Business Financial Assistance Application 12 v.04.20.2012 Business Taxes IDED is required to calculate the retum on state and local govemment investments in this project. Data from other parts of the application will be combined with the estimates requested below to calculate the required return on investment information. Please read the following directions carefully: • IDED is asking for a best estimate on the increase in taxes associated with this project. • Estimates should only include the expected increase in tax liability resulting from this project. • At minimum, IDED needs estimates for the first three years of the project. • Show data as if no tax abatements or tax credits awarded for this project were taken. • For partnership forms of ownership (e.g. limited partnerships, s -corporations, LLC, etc.), please estimate the partners' increase in Iowa tax liability due to this project. • Sales and use taxes refer to the taxes paid on materials, etc. that the Business purchases, not taxes you collect from sales to your customers. • Applicants will not be held to these numbers with respect to any award from or contract with IDED. • This page of the application will automatically be treated as confidential. Increase in Tax Collections Associated with this Project State Business Taxes Year 1 Year 2 Year 3 Year 4 Year 5 State Corporate Income Tax* 20,000 40,000 60,000 80,000 100,000 State Business Sales and Use Tax 31,000 31,000 0 0 0 nsurance Companies: Provide State Insurance Premium Tax Local Business Taxes Year 1 Year 2 Year 3 Year 4 Year 5 Local Real Estate Property Tax Local Option Sales Tax IDED — Business Financial Assistance Application 13 v.04.20.2012 Attachments Please attach the following documents: Al Business. Plan At a minimum, include: • Marketing study • Feasibility study • Projected profit and Toss statements for three years into the future • Project budget • Production operations • Management structure • Personnel needs • Descriptions of product or process • Status of product/process development • Patent status (if applicable) (Any information outlined above not included in the business plan should be submitted as supplemental information via a separate attachment.) A2 Copies of the Business' Quarterly Iowa Employer's Contribution and Payroll Report Summary Page (Page 1) for the past year and a copy of the most recent payroll report for one pay period. The copy of the most recent payroll report for one pay period must be in Excel format and include the following information: • Company name, date of payroll and source of payroll information • Employee name and/or employee identification number • Current hourly wage - do not include bonuses or other benefit values • Indicate if the employee is full time (40 hours per week, 52 weeks per year) or part time. A sample Excel spreadsheet can be found at http://www.iowalifechanging.com/applications/bus_dev/payroll template.xls A3 Affidavit that states the Business has not, within the last five years, violated state or federal statutes, rules, and regulations, including environmental and worker safety regulations, or, if such violations have occurred, that there were mitigating circumstances or such violations did not seriously affect public health or safety or the environment. A sample affidavit can be found at http://www. iowalifechanging.com/applications/bus_dev/sampleaffidavit. doc. A4 Financial Information (Existing Businesses Only) • Profit and loss statements and balance sheets for past three year -ends; • Current YTD profit and Toss statement and balance sheet; • Schedule of aged accounts receivable; • Schedule of aged accounts payable; and • Schedule of other debts. IDED — Business Financial Assistance Application 14 v.04.20.2012 Hydrite Chemical Co. List of Shareholders Effective ownership percentages as of 09.30.12 JOHN HONKAMP JOHN HONKAMP 2002 TRUST- ESBT KEVIN HONKAMP KEVIN HONKAMP TRUST CHRISTOPHER HONKAMP CHRISTOPHER HONKAMP TRUST ANDREW HONKAMP ANDREW HONKAMP TRUST KERRY HONKAMP KERRY HONKAMP TRUST KERRY HONKAMP TRUST 96 MICHAEL HONKAMP MICHAEL HONKAMP 2002 TRUST- ESBT DOUGLAS HONKAMP DOUGLAS HONKAMP TRUST MICHAEL HONKAMP II MICHAEL HONKAMP II TRUST JEFFREY HONKAMP JEFFREY HONKAMP TRUST PAUL HONKAMP PAUL HONKAMP 2002 TRUST- ESBT NICHOLAS HONKAMP NICHOLAS HONKAMP TRUST NICHOLAS HONKAMP TRUST 96 JOSEPH HONKAMP TRUST 96 JOSEPH HONKAMP JOSEPH HONKAMP TRUST SAMUEL HONKAMP TRUST MARGARET HONKAMP MARGARET HONKAMP 96 TRUST MOLLY HONKAMP MOLLY HONKAMP TRUST MOLLY HONKAMP TRUST ANN DEFRANCESCO ANN DEFRANCESCO 2002 TRUST- ESBT KATHERINE DEFRANCESCO TRT BETH DEFRANCESCO TRUST MARY MUSGROVE TRUST LYNN BYRNE LYNN BYRNE TRUST ALEXANDRA E. BYRNE MARGARET M. BYRNE ATTACHMENT 10.597% 9.757% 1.597% 1.317% 1.304% 1.317% 1.792% 1.317% 1.012% 1.317% 0.781% 10.724% 8.781% 0.022% 1.073% 0.159% 1.158% 0.217% 1.249% 10.108% 9.757% 1.012% 1.317% 0.120% 0.120% 1.012% 1.317% 2.449% 0.489% 1.960% 1.012% 1.317% 0.120% 1.565% 5.366% 1.317% 1.317% 1.317% 0.036% 1.244% 0.130% 0.109% 100.000% Please return this copy to: City Clerk & Finance Department 715 Mulberry Street Waterloo, IA 50703 Debi V. Durham, Director Iowa Economic Development Authority Business Financial Assistance Application Business Finance Business Development Division Iowa Economic Development Authority 200 East Grand Avenue Des Moines, Iowa 50309-1819 lowaeconomidevelopment.com Telephone: 515.725.3133 businessfinance(iowa.gov v.04.20.2012 Application Instructions To Complete Electronic Form: Click on TEXT BOX to add text. Double click on YES/NO boxes and select "Checked". 1. All applicants must complete the Business Financial Assistance Application and attach gat those additional sections for the components to which the applicant is applying. Direct Financial Assistance STATE of IOWA ❑ 130% Component (no supplement) ❑ 100% Component (no supplement) ❑ Entrepreneurial Component (and Supplement) Supplemental information required Tax Credits — STATE of IOWA Enterprise Zone Program (EZ) Supplemental information required Direct Financial Assistance — FEDERAL ❑ Economic Development Set -Aside Program (EDSA) Program (PFSA) Supplemental information required ❑ Infrastructure Component (no supplement) ❑ Value -Added Agriculture Component Supplemental information required ❑ Disaster Relief Component Supplemental information required ❑ High Quality Jobs Program (HQ) (no supplement) ❑ Public Faclities Set -Aside Supplemental information required 2. Please visit the IDED Web site at www.iowalifechanging.com or contact IDED at 515.725.3133 to confirm that this is the most current application version. 3. Before filling out this application form, please read all applicable sections of the 2009 Iowa Code and Iowa Administrative Code (rules). www.legis.state.ia.us/IowaLaw.html 4. Only typed or computer-generated applications will be accepted and reviewed. Any material change to the format, questions, or wording of questions presented in this application will render the application invalid and it will not be accepted. 5. Complete the applicable sections of the application fully. If questions are left unanswered or required attachments are not submitted, an explanation must be included. 6. Use clear and concise language. Attachments should only be used when requested or as supporting documentation. 7. Any inaccurate information of a significant nature may disqualify the application from consideration. 8. The following must be submitted to Business Finance at IDED in order to initiate the review process: © One original, signed application form and all required attachments o One electronic copy of the application form and all required attachments Facsimile copies will not be accepted. Business Finance Iowa Department of Economic Development 200 East Grand Avenue Des Moines, IA 50309-1819 Telephone: 515.725.3133 businessfinanceniowa.gov Applications are must be submitted to IDED Business Finance before 4:OOpm on the fourth Monday of the month. Applications will be reviewed by the IDED Board on the third Thursday of the following month. IDED — Business Financial Assistance Application 2 v.04.20.2012 Public Records Policies information Submitted to IDED. The Iowa Department of Economic Development (IDED) is subject to the Open Records law (Iowa Code, Chapter 22). Treatment of information submitted to IDED in this application is governed by the provisions of the Open Records law. All public records are available for public inspection. Some public records are considered confidential and will not be disclosed to the public unless ordered by a court, the lawful custodian of the record, or by another person duly authorized to release the information. Confidential Records. IDED automatically treats the following records as confidential and they are withheld from public disclosure: o Tax Records a Quarterly Iowa Employer's Contribution and Payroll Report prepared for the Iowa Workforce Development Department ® Payroll Registers © Business Financial Statements and Projections o Personal Financial Statements Other information supplied to IDED as part of this application may be treated as confidential under Iowa Code section 22.7. Following are the classifications of records which are recognized as confidential under Iowa law and which are most frequently applicable to business information submitted to IDED: • Trade secrets [Iowa Code §22.7(3)] ▪ Reports to governmental agencies which, if released, would give advantage to competitors and serve no public purpose. [Iowa Code §22.7(6)] © Information on an industrial prospect with which the IDED is currently negotiating. [Iowa Code §22.7(8)] o Communications not required by law, rule or regulation made to IDED by persons outside the government to the extent that IDED could reasonably believe that those persons would be discouraged from making them to the Department if they were made available for general public examination. [Iowa Code §22.7(18)] Information supplied to IDED as part of this application that is material to the application and/or the state program to which the applicant is applying including, but not limited to the number and type of jobs to be created or retained, wages for those jobs, employee benefit information, and project budget, are considered open records and will not be treated as confidential. Additional Information Available. Copies of Iowa's Open Record law and IDED's administrative rules relating to public records are available from the IDED upon request. IDED — Business Financial Assistance Application 3 v.04.20.2012 Applicant Information Name of Business: HYDRITE CHEMICAL COMPANY Address: 300 NORTH PATRICK BOULEVARD City, State & Zip Code: BROOKFIELD, WI 53045 Contact Person: BOB HINTZ Title: CORPORATE CONTROLLER Phone: 262-792-1450 Fax: 262-792-8721 Email: BOB.HINTZ@HYDRITE.COM Federal ID Number: 39-0364390 NAICS Code for primary business operations: 325100 US DOT Number: 100011 Does the Business file a consolidated tax return under a different tax ID number? ❑ Yes ® No If yes, please also provide that tax ID number: Is the contact person listed above authorized to obligate the Business? ® Yes ❑No If no, please provide the name and title of a company officer authorized to obligate the Business: If the application was prepared by someone other than the contact person listed above, please complete the following: Name of Business: BAKER TILLY VIRCHOW KRAUSE, LLP BEFORE DECEMBER 7 2012: Address: 115 SOUTH 84" STREET, SUITE 400 City, State & Zip Code: MILWAUKEE, WI 53214 AFTER DECEMBER 7, 2012: Address: 777 EAST WISCONSIN AVE, 32ND FLOOR City, State & Zip Code: MILWAUKEE, WI 53202 Contact Person: CHRISTINA BERGER Title: SENIOR MANAGER Phone: 414-777-5438 Fax: 414-777-5555 Email: CHRISTINA.BERGER@BAKERTILLY.COM Contact Person: ALYSSA SCHMITZ Title: ACCOUNTANT Phone: 414-777-5483 Fax: 414-777-5555 Email: ALYSSA.SCHMITZ(a�BAKERTILLY.COM Contact Person: CHRISTINA CORBO-TRAVIS Title: SENIOR ACCOUNTANT Phone: 414-777-5365 Fax: 414-777-5555 Email: CHRISTINA.CORBO-TRAVIS(a7BAKERTILLY.COM IDED — Business Financial Assistance Application 4 v.04.20.2012 Sponsor Information Sponsor Organization: CITY OF WATERLOO Official Contact (e.g. Mayor, Chairperson, etc.): MAYOR BUCK CLARK Title: MAYOR Address: CITY HALL, 715 MULBERRY STREET City, State & Zip Code: WATERLOO, IA 50703 Phone: Fax: Email: If IDED needs to contact the sponsor organization with questions, should we contact the person listed above? ❑ Yes 11 No, please contact the following person: Name: LISA SKUBAL Title: CEcD Address: GREAT CEDAR VALLEY ALLIANCE & CHAMBER City, State & Zip Code: Phone: 319-232-1156 Fax: Email: LSKUBAL@CEDARVALLEYALLIANCE.COM If necessary, please list information on additional sponsors in an attachment. IDED — Business Financial Assistance Application 5 v.04.20.2012 Certification & Release of Inform tion I hereby give permission to the Iowa Department of Economic Development (IDED) to research the Business' history, make credit checks, contact the Business' financial institutions, insurance carriers, and perform other related activities necessary for reasonable evaluation of this application. 1 also hereby authorize the Iowa Department of Revenue to provide. to IDED state tax information pertinent to the Business' state income tax,sales and use tax, and state tax credits claimed. I understand that all information submitted to IDED related to this application is subject to Iowa's Open Record Law (Iowa Code, Chapter 22). I understand this application is subject to final approval by IDED and the Project may not be initiated until final approval is secured. I understand that IDED reserves the right to negotiate the financial assistance. Furthermore, 1 am aware that financial assistance is not available until an agreement is executed within a reasonable time period following approval. I hereby certify that all representations, warranties, or statements made or furnished to IDED in connection with this application are true and correct in all material respect. I understand that it is a criminal violation under lowa law to engage in deception and knowingly make, or cause to be made, directly or indirectly, a false statement in writing for the purpose of procuring economic development assistance from a state agency or subdivision. For tits Business: Signature �+ 0�P.4- - /f l hjJ_ J L orppr C, om.+nfl e - am ee and Title (typed or prirfted) For Sponsors): Signature t\ir MCA- C (0,--)rk , AA (t urY Name and Title (typed or printed) J Please use the following if more than one sponsor is required. (For example, use this if a signature from the local Enterprise Zone Commission is required in addition to the signature from the Mayor of the sponsoring city.) 917-C2/ 2 --- Date i 1i ixdt Date Signature Date Name and Title (typed or printed) IDED will not provide assistance in situations where it is determined that any representation, warranty, or statement made in connection with this application is incorrect, false, misleading or erroneous in any material respect. If assistance has already been provided prior to discovery of the incorrect, false, or misleading representation, IDED may initiate legal action to recover incentives and assistance awarded to the Business. IDED — Business Financia! Assistance Application 6 v.04.20.2012 Business Information Provide a brief description and history of the Business. Include information about the Business' products or services and its markets and/or customers. HYDRITE CHEMICAL COMPANY WAS ESTABLISHED IN 1929. THEY ARE ONE OF THE LARGEST MANUFACTURERS AND DISTRIBUTORS OF CHEMICAL PRODUCTS IN THE UNITED STATES. TO DATE THEY HAVE LOCATIONS IN CALIFORNIA, ILLINOIS, INDIANA, IOWA, AND WISCONSIN. THEY OFFER EXPERTISE IN CHEMICAL DISTRIBUTION, FOOD AND DAIRY SANITATION, FOOD INGREDIENTS, ORGANIC PROCESSING, LIQUID SULFUR SALTS, WATER TREATMENT, FOAM CONTROL, AND COMPLIANCE MANGEMENT. Business Structure: ❑ Cooperative 0 Corporation ❑ Limited Liability Company ❑ Not for Profit ❑ Partnership ® S -Corporation ❑ Sole Proprietorship State of Incorporation: WISCONSIN Identify the Business' owners and percent ownership: SEE ATTACHMENT A Does a woman, minority, or person with a disability own the Business? ❑ Yes No If yes, is the Business certified as a Targeted Small Business? ❑ Yes List the Business' Iowa locations and the current number of employees at each location. 2815 WCF & N DRIVE WATERLOO, IA 50703 75 FULL TIME EMPLOYEES ❑ No What is the Business' worldwide employment? Please include employees of parent company, subsidiaries, and other affiliated entities in this figure. 680 FULL TIME EMPLOYEES Project Information Project Street Address: 2815 WCF & N DRIVE Project City: WATERLOO Project County: BLACK HAWK COUNTY Type of Business Project: ❑ Startup Expansion of Iowa Company 0 New Location in Iowa 0 Relocation from another State Briefly describe the proposed project for which assistance is being sought. (Include project timeline with dates, facility size, infrastructure improvements, proposed products/services, any new markets, etc.) THE PROJECT WILL ENCOMPASS AN EXPANSION OF OUR EXISTING WATERLOO FACILITY. HYDRITE WOULD LIKE ADDITIONAL PRODUCTION AT THE FACILITY TO BEGIN DURING 2013. Project Timeline (add additional rows as needed) Activity Completion Date PRODUCTION AT THE NEW FACILITY TO BEGIN IN 2013. Please identify the project management for the project location and experience. BOB HINTZ Has any part of the project started? If yes, please explain. Fees for preliminary engineering services related to the design of the project and a down -payment to secure procurement of a bumer have been paid. 11 Yes ❑ No IDED — Business Financial Assistance Application 7 v.04.20.2012 Identify the Business' competitors. If any of these competitors have Iowa locations, please explain the nature of the competition (e.g. competitive business segment, estimated market share, etc.) and explain what impact the proposed project may have on the Iowa competitor. BRENNTAG NORTH AMERICA, INC UNIVAR USA BARTON SOLVENTS ALL THREE COMPETITIORS ARE LOCATED IN IOWA. THE PROPOSED PROJECT IS NOT EXPECTED TO HAVE ANY MATERIAL OR SIGNIFICANT IMPACT ON THESE COMPANIES. WII any of the current Iowa employees lose their jobs if this project does not proceed in Iowa? El Yes 1 No If yes, please explain why and identify those jobs as 'retained jobs° in the Project Jobs section. IDED — Business Financial Assistance Application 8 v.04.20.2012 Project Budget AMOUNT BUDGETED Use of Funds Cost Source A Source B Source C Source D Source E Source F Source G Land Acquisition $ Source B: Other State (Community College, IDOT, etc.) $ Site Preparation 1,085,000 Source C: Local Govemment $ 1,085,000 Building Acquisition $9,409,563 Cash/Equity committed Source E: Other Private Sources $ Building Construction 1,067,069 Source F: $ 1,067,069 Building Remodeling $ TOTAL $9,409,563 Mfg. Machinery & Equip. 6,683,494 = 6,683,494 Other Machinery & Equip. Racking, Shelving, etc.' Computer Hardware Computer Software Furniture & Fixtures Working Capital 524,000 524,000 Research & Development 50,000- 50, 000 Job Training TOTAL $9,409,563 $ $ $ $9,409,563 $ $ $ Racking, shelving and conveyor equipment used in distribution center projects only Does the Business plan to lease the facility? D Yes ►,1 No If yes, please provide the Annual Base Rent Payment (lease payment minus property taxes, insurance, and operating/maintenance expenses) and the length of the lease agreement. PROPOSED FINANCING Source of Funds Amount Form of Funds Rate and Commitm ent Conditions/Additional Information (List tax benefits separately below, not as a source of direct finnan 9)Status (Loan, Grant, In -fend, Donation, etc.)Term Include when funds will be disbursed; If loan, whether payments are a level term, balloon, etc Source A: IDED* $ Source B: Other State (Community College, IDOT, etc.) $ Source C: Local Govemment $ Source. D: Business $9,409,563 Cash/Equity committed Source E: Other Private Sources $ Source F: $ Source G: $ TOTAL $9,409,563 = IDED — Business Finandal Assistance Application 9 v.0420.2012 identify the collateral used to secure IDED funds: N/A . TAX CREDITS AND INDIRECT FINANCING Source of Funds Amount Description Investment Tax Credit $234,690 EZ Program Sales, Service & Use Tax Refund $64,560 EZ Program Research Activities Credit (3%/10%) $750 EZ Program Withholding Local Property Tax Exemption Tax Increment Financing 260E Job Training Funds In-kind Contribution Other TOTAL $300,000 What measures were analyzed to determine the amount and form of assistance needed? THE COMPANY LOOKED AT THE COST OF EXPANSION AT THE WATERLOO PLANT AND DETERMINED A GAP OF $300,000 NEEDED IN ORDER TO FULLY FINANCE THE PROJECT Is the Business actively considering locations outside of Iowa? ►1 Yes ❑ No If yes, where and what assistance is being offered? HYDRITE IS A NATIONAL COMPANY WITH LOCATIONS IN CALIFORNIA, ILLINOIS, INDIANA, IOWA, AND WISCONSIN. AS HYDRITE GROWS THEY 1MLL CONTINUE TO EXPAND THEIR CURRENT FACILITIES AND OPEN NEW WHERE DEMAND IS HIGH. IT HAS BECOME PRACTICE TO TAKE ADVANTAGE OF CREDITS AND INCENTIVES OFFERED BY STATES AND LOCALITIES. There are three general justifiable reasons for assistance. Check the box next to the reason why assistance is needed to complete this project. • Financing Gap - The Business can only raise a portion of the debt and equity necessary to complete the project. A gap between sources and uses exists and state and/or federal funds are needed to fill the gap. ❑ Rate of Return Gap — The Business can raise sufficient debt and equity to complete the project, but the retums are inadequate to motivate an "economic person" to proceed with the project. Project risks outweigh the rewards. ❑ Location Disadvantage (Incentive) — The Business is deciding between a site in Iowa (site A) and a site in another state (site B) for its project. The Business argues that the project will cost Tess at site B and will require a subsidy to equalize costs in order to locate at site A. The objective here is to quantify the cost differential between site A and site B. IDED — Business Finandal Assistance Application 10 v.04.20.2012 Project Jobs List the jobs that will be created and/or retained as the result of this project. (A retained job is an existing job that would be eliminated or moved to another state if the project does not proceed in Iowa.) For jobs to be created, include the starting and final hourly wage rate. For retained jobs, include the current hourly wage rate. Is the hourly wage rate based on a 40 hour work week, 52 weeks per year? If no please explain: 1t Yes ❑ No Full -Time CREATED Jobs (Add additional rows as needed) Job Trtle Number of CREATED Jobs Starting Hourly Wage Hourly Wage at End of Year Three Supervisor 1 $45,000/yr $45,000/yr Production 8 $38,480/yr $38,480/yr Total CREATED Jobs 9 Full -Time RETAINED Jobs (Add additional rows as needed) Job Title Number of RETAINED Jobs Current Hourly Wage Administrative 1 $31,824/yr Total RETAINED Jobs 1 TOTAL JOBS 10 IDED — Business Financial Assistance Application 11 v.04.20.2012 Employee Benefits Please identify all em lo Employee Benefits Provided by BUsine sS - Total Annual Cost (show on a per employee basis) -- -- - ---- -- --. ....._.. Portion of Total Annual Cost Paid by the Business _.... r_.. y _a .......�.............. Plan Provisions Employee Family elcye Family Deductible (Include coinsurance %, office visit co -payments, annual out-of-pocket maximums, face amounts, etc.) Medical Insurance $5340 $16,632 75% 75% Employe e $500 15% coinsurance (In -network PPO)(Both Single & Family)OOP Max- S)$1500, F)$4500 Family $1500 Dental Insurance $420 $1,320 75% 75% Employe e $0 Cleaning/simple restorative $0 co - pay. Major services -50% up to annual max $1250/per person Family $0 Vision Insurance Employe e $0 Voluntary Benefit —100% Ee paid Family $0 Life Insurance $120 Na 75% 75% Wa Na Value = 1x annual salary up to $150,000 Short-term Disability $196 n/a 100% 100% n/a Na Benefit based on length of service >5 years: 1E14 weeks @ 100% salary, next 9 wks @ 60% salary Long-term Disability $168 n/a 75% 75% n/a n/a After 90 day wait period: 60% of salary up to 2 yrs in own occupation; Health Savings Account n/a n/a n/a n/a n/a Na Does the Business offer a pension plan, 401(k) plan, and/or retirement -plan?/ Yes ❑ No If yes, please indicate the amount contributed on a per employee basis by the Business to the plan for the last three years. For 401(k) plans, please provide information on the company match and indicate the average annual match per employee (show averacte as a Dercentaae of salary). Year Ending 2011 Average Actual Match per Employee (%) 401(k) 1.5% (at 5% deferral) Money Purchase Pension 3% of gross salary Profit Sharing 5% of gross salary Three-year Average: 9.5% of salary - total of 3 retirement plans Does the Business offer a profit-sharing plan? ❑ Yes ►/ No If yes, please indicate total amount paid out each year for the past three years and then, determine the average annual bonus or contribution per employee for that three year period. Year Ending Average Actual Share per Employee ($) Three-year Average: - IDED — Business Financial Assistance Application 12 v.04.20.2012 Business Taxes IDED is required to calculate the retum on state and local govemment investments in this project. Data from other parts of the application will be combined with the estimates requested below to calculate the required return on investment information. Please read the following directions carefully: O IDED is asking for a best estimate on the increase in taxes associated with this project. o Estimates should only include the expected increase in tax liability resulting from this project. ® At minimum, IDED needs estimates for the first three years of the project. o Show data as if no tax abatements or tax credits awarded for this project were taken. O For partnership forms of ownership (e.g. limited partnerships, s -corporations, LLC, etc.), please estimate the partners' increase in Iowa tax liability due to this project. O Sales and use taxes refer to the taxes paid on materials, etc. that the Business purchases, not taxes you collect from sales to your customers. O Applicants will not be held to these numbers with respect to any award from or contract with IDED. O This page of the application will automatically be treated as confidential. Increase in Tax Collections Associated with this Project State Business Taxes Year 1 Year 2 Year 3 Year 4 Year 5 State Corporate Income Tax* 20,000 40,000 60,000 80,000 100,000 State Business Sales and Use Tax 31,000 31,000 0 0 0 nsurance Companies: Provide State Insurance Premium Tax Local Business Taxes Year 1 Year 2 Year 3 Year 4 Year 5 Local Real Estate Property Tax Local Option Sales Tax IDED — Business Financial Assistance Application 13 v.04.20.2012 Attachments Please attach the following documents: Al Business. Plan At a minimum, include: ® Marketing study • Feasibility study ® Projected profit and Toss statements for three years into the future • Project budget • Production operations • Management structure • Personnel needs • Descriptions of product or process o Status of product/process development o Patent status (if applicable) (Any information outlined above not included in the business plan should be submitted as supplemental information via a separate attachment.) A2 Copies of the Business' Quarterly Iowa Employer's Contribution and Payroll Report Summary Page (Page 1) for the past year and a copy of the most recent payroll report for one pay period. The copy of the most recent payroll report for one pay period must be in Excel format and include the following information: o Compahy name, date of payroll and source of payroll information o Employee name and/or employee identification number • Current hourly wage - do not include bonuses or other benefit values ® Indicate if the employee is full time (40 hours per week, 52 weeks per year) or part time. A sample Excel spreadsheet can be found at http://www.iowalifechanging.com/applications/bus dev/payroll tempiate.xis A3 Affidavit that states the Business has not, within the last five years, violated state•or federal statutes, rules, and regulations, including environmental and worker safety regulations, or, if such violations have occurred, that there were mitigating circumstances or such violations did not seriously affect public health or safety or the environment. A sample affidavit can be found at http://www. iowalifechanging.com/applications/bus_dev/sampieaffidavit.doc. A4 Financial Information (Existing Businesses Only) • Profit and loss statements and balance sheets for past three year -ends; ® Current YTD profit and loss statement and balance sheet; o Schedule of aged accounts receivable; • Schedule of aged accounts payable; and • Schedule of other debts. IDED — Business Financial Assistance Application 14 v.04.20.2012 Hydrite Chemical Co. List of Shareholders Effective ownership percentages as of 09.30.12 JOHN HONKAMP JOHN HONKAMP 2002 TRUST- ESBT KEVIN HONKAMP KEVIN HONKAMP TRUST CHRISTOPHER HONKAMP CHRISTOPHER HONKAMP TRUST ANDREW HONKAMP ANDREW HONKAMP TRUST KERRY HONKAMP KERRY HONKAMP TRUST KERRY HONKAMP TRUST 96 MICHAEL HONKAMP MICHAEL HONKAMP 2002 TRUST- ESBT DOUGLAS HONKAMP DOUGLAS HONKAMP TRUST MICHAEL HONKAMP II MICHAEL HONKAMP 1I TRUST JEFFREY HONKAMP JEFFREY HONKAMP TRUST PAUL HONKAMP PAUL HONKAMP 2002 TRUST- ESBT NICHOLAS HONKAMP NICHOLAS HONKAMP TRUST NICHOLAS HONKAMP TRUST 96 JOSEPH HONKAMP TRUST 96 JOSEPH HONKAMP JOSEPH HONKAMP TRUST SAMUEL HONKAMP TRUST MARGARET HONKAMP MARGARET HONKAMP 96 TRUST MOLLY HONKAMP MOLLY HONKAMP TRUST MOLLY HONKAMP TRUST ANN DEFRANCESCO ANN DEFRANCESCO 2002 TRUST- ESBT KATHERINE DEFRANCESCO TRT BETH DEFRANCESCO TRUST MARY M USGROVE TRUST LYNN BYRNE LYNN BYRNE TRUST ALEXANDRA E. BYRNE MARGARET M. BYRNE ATTACHMENT 10.597% 9.757% 1.597% 1.317% 1.304% 1.317% 1.792% 1.317% 1.012% 1.317% 0.781% 10.724% 8.781% 0.022% 1.073% 0.159% 1.158% 0.217% 1.249% 10.108% 9.757% 1.012% 1.317% 0.120% 0.120% 1.012% 1.317% 2.449% 0.489% 1.960% 1.012% 1.317% 0.120% 1.565% 5.366% 1.317% 1.317% 1.317% 0.036% 1.244% 0.130% 0.109% 100.000%