Document:

exv10w19

 

Exhibit 10.19

INDUSTRIAL NEW JOBS

TRAINING AGREEMENT

between

DES MOINES AREA COMMUNITY COLLEGE

Ankeny, Iowa

and

Central Iowa Energy

Project # 1

Dated as of March 12, 2007

Page 1 of 15 pages

 

INDUSTRIAL NEW JOBS TRAINING AGREEMENT

     This Industrial New Jobs Training Agreement (the “Agreement”) made and
entered into as of March 12, 2007 between Des Moines Area Community College
(the “Area School”), Ankeny, Iowa and Central Iowa Energy, LLC
(the “Employer”).

WITNESSETH:

     WHEREAS, pursuant to Chapter 260E of the Code of Iowa, as amended (the “Act”), the Area School
has determined to enter into this Agreement with Employer for the purpose of establishing a new
jobs training program to educate and train certain persons employed by Employer in new jobs; and

     WHEREAS, the Area School intends to fund the new jobs training program from the proceeds of
the issuance by the Area School of new jobs training certificates (the “Certificates”) in
accordance with the provisions of the Act; and

     WHEREAS, the Certificates will be issued pursuant to the terms of a resolution (the
“Resolution”) to be adopted by the Board of Directors of the Area School; and

     WHEREAS, the Area School and the Employer each have full right and lawful authority to enter
into this Agreement and to perform and observe the provisions hereof on their respective parts to
be performed and observed;

     NOW, THEREFORE, in consideration of the premises and the mutual representations and agreements
hereinafter contained, the parties hereto agree as follows:

ARTICLE I

REPRESENTATIONS

     Section 1.1. The Area School represents and warrants that:

     (a) It is duly organized and validly existing under the laws of the State of Iowa (the
“State”).

     (b) It is not in violation of any provisions of the laws of the State which would
impair its ability to carry out its obligations hereunder.

     (c) It is empowered to enter into the transactions contemplated by this Agreement.

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(d) It will do all things in its power required of it in order to maintain its existence
through the term of this Agreement or in order to assure the assumption of its obligations
hereunder by any successor public body.

Section 1.2. The Employer represents and warrants that:

     (a) It is duly and validly organized and is in good standing under
the laws of the state of Iowa and is qualified to do
business and is in good standing in the State.

     (b) It has full power and authority to execute, deliver and perform this Agreement and
all other instruments, if any, given by the Employer to secure its obligations hereunder and
to enter into and carry out the transaction contemplated herein. Such execution, delivery
and performance are not in contravention of law or Employer’s articles of incorporation,
by-laws or any indenture, agreement, mortgage, lease, undertaking or any other restriction,
obligation or instrument to which the Employer is a party or by which it is bound. This
Agreement has by proper action been duly authorized, executed and delivered by the Employer
and all steps necessary have been taken to constitute this Agreement a valid and binding
obligation of the Employer.

     (c) There is no litigation or proceeding pending, or to the knowledge of the Employer
threatened, against the Employer or any other person affecting in any manner whatsoever the
right of the Employer to execute this Agreement or to otherwise comply with its obligations
contained in this Agreement.

     (d) The employees to be covered by this Agreement had not commenced work for the
Employer as of the date of the execution of the Preliminary Industrial New Jobs Training
Agreement between the Area School and the Employer (the “Preliminary Agreement”), and those
employees are or will be employed in new jobs within the meaning of the Act in connection
with the expansion of the Employer’s business operations.

     (e) The Employer is engaged in interstate or intrastate commerce for the purpose of
manufacturing, processing or assembling products, conducting research and development, or
providing services in interstate commerce, but excluding retail, health or professional
services, all within the meaning of the Act.

     (f) The Employer will not use any of the funds disbursed to the Employer from the proceeds of
the Certificates directly or indirectly to provide any airplane, skybox or other private luxury
box, health club facility, facility primarily used for gambling or store the principal business of
which is the sale of alcoholic beverages for consumption off premises.

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     (g) The Employer will not use any of the funds disbursed to the Employer from the proceeds
of the Certificates directly or indirectly to finance the purchase of land, facilities or
other depreciable property of the Employer or any other person, except the Area School.

     (h) The Employer understands that this Agreement is entered into upon the expectation
that the new jobs credit from withholding and the incremental property taxes (as defined in
the Act), if any have been authorized by the local jurisdiction to fund training
certificates for this project, to be provided from the new jobs to be created by the
Employer as part of the Project and from the construction and/or remodeling of facilities
where the new jobs are created will be in an amount sufficient to fund the Project,
including the principal, premium, if any, and interest on the Certificates. These
expectations are based solely upon the Employer’s projections, which have not been verified
by the Area School and for which the Area School takes no responsibility. In the event that
the funds generated by the new jobs credit from withholding and the incremental property
taxes are insufficient to fund the Project, including the principal, premium, if any, and
interest on the Certificates, the Employer understands that it will be financially
responsible for any shortfall and that the Area School shall have no responsibility for such
shortfall.

     (i) Employer agrees that it shall provide all information requested by the College,
the Iowa Department of Economic Development or the Iowa Department of Education for purposes
of establishing a consistent and meaningful database to track aggregate wages of employees
over time and evaluate the effectiveness of job training programs. Such information shall
include the Social Security numbers of all individual employees for which withholding credit
is claimed as a part of the Project. Such information shall be provided directly to the
College or the Iowa Department of Education upon forms provided by the College or the
Department of Economic Development.

     (j) The Program Services are for the purpose of providing education and training
services to persons to be employed as a part of the Project. The new jobs to be created as
a result of the Project will be located at the site legally described on Exhibit “B”
attached hereto.

ARTICLE II

PROJECT; PROGRAM SERVICES

     Section 2.1. As used herein, references to the “Project” shall include the program
services (the “Program Services”) and the on-the-job training program for the Employer described on
Exhibit “A” attached hereto and incorporated herein by reference, as well as this Agreement and all
activities of the Area School in connection herewith. Exhibit “A” shows the number of employees,
areas of training, training period and other information

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with respect to the Project, including the estimated costs of the Project. References herein to
“Project Costs” include any costs incurred by the Area School in connection with
the Project or authorized by the Area School as a part of the Project. Included as a part of
Exhibit “A” and incorporated by reference is a copy of the proposed budget of the Area School and
the Employer with respect to the Project. References herein to the “new jobs credit from
withholding” shall mean the new jobs credit from withholding authorized in connection with the
Project by Section 5 of the Act, and references herein to “incremental property taxes” shall mean
the incremental property taxes authorized in connection with the Project by Section 4 of the Act.

     Section 2.2. The Area School agrees to provide the Program Services if and to the
extent that funds are available to pay the costs of the Program Services from the proceeds of the
issuance of the Certificates or from the Employer. The Employer and the Area School will cooperate
in the coordination and programming of the specific expenditures and operation of the Project
within the guidelines set out in Exhibit “A”.

     Section 2.3. The Employer agrees to pay or cause to be paid all necessary and
incidental costs of the Project, including principal and interest on the Certificates. Such costs
shall be paid from amounts in the Project Fund (as hereinafter defined) and from the new jobs
credit from withholding with respect to persons employed at the Project and the incremental
property taxes produced by the expansion by the Employer as a part of the Project, all as provided
in the Act, or from funds of the Employer to the extent that such sources of payment are
insufficient to pay all costs of the Project, including principal and interest on the Certificates.

     Section 2.4. The term of this Agreement shall not exceed ten (10) years and shall
coincide with the period of time over which the Certificates mature and the Project Costs are
deferred; provided, however, that this Agreement, and the repayment obligations of the employer
shall not terminate until the Certificates have been paid in full.

     Section 2.5. The Area School may revise the training curriculum from time to time
with the consent of the Employer: provided that no revision shall be made which would change the
Project to other than the purposes permitted by the Act.

     Section 2.6. The Certificates shall be issued pursuant to the Resolution. The
Resolution shall set forth the aggregate principal amount of the Certificates, the rate at which
the Certificates bear interest, the maturity of the Certificates, the provisions for redemption of
the Certificates, and such other matter, including the security for the Certificates, as the Board
of Directors of the Area School shall determine.

     Section 2.7. The proceeds from the sale of the Certificates shall be paid to the Area
School and deposited in a separate fund established by the Area School (the “Project Fund”).
Pending disbursement, the proceeds deposited in the Project Fund, together with any investment
earnings thereon, shall be subject to a lien in favor of the holders of the Certificates as
provided in the Resolution and may be used for the payment of the principal, premium, if any, and
interest on the Certificates. Amounts in the Project

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Fund and interest earnings thereon shall be disbursed by the Area School for the payment of Project
Costs approved by the Area School to the extent not used for the
payment of the principal, premium, if any, and interest on the Certificates. The Employer shall
not commit any funds in the Project Fund without the prior written approval of the Area School and
shall have no right to receive any amounts in the Project Fund except as approved by the Area
School.

     Section 2.8. In the event that moneys in the Project Fund are not sufficient to pay
all costs of the Project, the Employer will, nonetheless, pay all costs of the Project in excess of
the moneys in the Project Fund in full from its own funds. If the Employer should pay any portion
of such costs, it shall not be entitled to any reimbursement therefore from the Area School; nor
shall it be entitled to any abatement, diminution or postponement of the payments required to
satisfy the debt service requirements on the Certificates. The Employer will, however, be
entitled, to the extent permitted by the Act, to reimbursement of any of its funds used for the
payment of Project Costs from the Project Fund when a surplus is attained in the Project Fund and
not needed to satisfy the debt service requirements on the Certificates.

     Section 2.9. In the event that Certificates are not issued by the Area School, the
Employer agrees to pay to the Area School an amount sufficient to reimburse the Area School for all
reasonable and necessary expenses incurred by the Area School in connection with the Project,
including but not limited to legal fees and any Project Costs incurred to provide training to
employees in new jobs as part of the Project.

     Section 2.10. Amounts received by the Area School from the new jobs credit from
withholding and incremental property taxes with respect to the Project shall be deposited in a
separate fund to be held by the Area School (the “Revenue Fund”). The Area School and the Employer
agree that amounts in the Revenue Fund shall be pledged by the Area School for the payment of the
principal, premium, if any, and interest on the Certificates in accordance with and subject to the
provisions of the resolution. Any interest earnings on the Revenue Fund may be used for the
payment of the principal, premium, if any, and interest on the Certificates or as otherwise
determined by the Area School.

ARTICLE III

PAYMENTS AND SECURITY

     Section 3.1. Upon issuance of the Certificates, the Area School shall provide the
Employer with a schedule showing the payments of the principal and interest on the Certificates,
provided that the failure to provide such schedule to the Employer shall in no way diminish the
liability of the Employer for the payments provided herein to be made by the Employer. In the
event that the new jobs credit from withholding with respect to persons employed at the Project and
the incremental property taxes produced by the expansion by the Employer as a part of the Project
are insufficient for the payment of each payment of principal and interest on the Certificates on
the date when due, the Employer shall make, or cause to be made, payments to the Area School in the
amount

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of any such deficiency not later than the date when such principal and interest are due on the
Certificates.

In any event, the sum of all payments under this Agreement shall be sufficient to pay the total
amount due with respect to such principal of and interest on the Certificates as and when due. The
Employer shall not be entitled to any reimbursement for any payments made by it for purposes of
paying principal and interest on the Certificates and shall not under any circumstances be entitled
to any right of set-off with respect to payments due hereunder.

     Section 3.2. The Employer shall make, or cause to be made, all payments required
hereunder directly to the Area School at its principal office for application to the payment of the
corresponding installments of principal, premium, if any, and interest on the Certificates.

     Section 3.3. The obligations of the Employer to make payments shall be absolute and
unconditional upon issuance of the Certificates, and the Employer shall make such payments without
abatement, diminution or deduction regardless of any cause or circumstances whatsoever including,
without limitation, any defense, set-off, recoupment or counterclaim which the Employer may have or
assert against the Area School or any other person.

     Section 3.4. To secure the payment by the Employer of the payments required hereunder
and compliance by the Employer with all the terms, provisions and conditions hereof, the Employer
agrees that the new jobs credit from withholding and the incremental property taxes shall be
pledged for payment of the principal, premium, if any, and interest on the Certificates as provided
by the resolution. The Employer further agrees that the payments required to be made by it
hereunder are a lien upon the Employer’s business property in the State of Iowa, including
specifically the property described on Exhibit “B” attached hereto, until paid and have equal
precedence with ordinary taxes and shall not be divested by a judicial sale. Property subject to
this lien may be sold for sums due and delinquent at a tax sale, with the same forfeitures,
penalties and consequences as for the nonpayment of ordinary taxes. The purchaser at any such tax
sale shall obtain the property subject to the remaining payments.

ARTICLE IV

EVENTS OF DEFAULT AND REMEDIES

     Section 4.1. Each of the following shall constitute an “event of default” hereunder:

     (a) The Employer shall fail to make any payment required to be made by the Employer on
or prior to the date on which such payment is due and payable and such failure continues for
a period of five (5) business days thereafter.

     (b) The Employer shall fail to observe and perform any other agreement, term or condition
contained in this Agreement, if such failure continues for a period of thirty (30)

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days after notice of such failure is given to the Employer by the Area School, or for such longer
period as the Area School may agree to in writing;

provided, that if the failure is of such nature that it cannot be corrected within the
applicable period, such failure shall not constitute an event of default so long as the
Employer institutes curative action within the applicable period and diligently pursues such
action to completion.

     (c) The Employer shall (i) admit in writing its inability to pay its debts generally
as they become due; (ii) have an order for relief entered in any case commenced by or
against it under the federal bankruptcy laws, as now or hereafter in effect; (iii) commence
a proceeding under any other federal or state bankruptcy, insolvency, reorganization or
other similar law, or have such a proceeding commenced against it and either have an order
of insolvency or reorganization entered against it or have the proceeding remain undismissed
and unstayed for 90 days; (iv) make an assignment for the benefit of creditors; or (v) have
a receiver or trustee appointed for it or for the whole or any substantial part of its
property.

     (d) Any representation or warranty made by the Employer herein or any statement in any
report, certificate, financial statement or other instrument furnished in connection with
this Agreement or in connection with the sale of the Certificates shall at any time prove to
have been false or misleading in any material respect when made or given.

     (e) The Employer shall cease operations at the Project Site.

     Upon the happening of an event of default specified in (c) above, all obligations of the
Employer hereunder shall be and become immediately due and payable, and upon the happening of any
other event of default the Area School may declare all obligations of the Employer hereunder to be
immediately due and payable by written notice to the Employer, and upon the giving of such notice
such obligations shall be and become immediately due and payable without any further action by the
Area School.

     The declaration of an event of default under Subsection (c) above, and the exercise of
remedies upon any such declaration shall be subject to any applicable limitations of federal
bankruptcy law affecting or precluding such declaration or exercise during the pendency of or
immediately following any bankruptcy, liquidation or reorganization proceedings.

     Section 4.2. Whenever an event of default shall have happened and be continuing, the
Area School may take whatever action at law or in equity may appear necessary or desirable to
collect the payments due and other amounts then due and thereafter to become due under this
Agreement, or to enforce performance and observance of any other obligation or agreement of the
Employer under this Agreement. Notwithstanding the foregoing, the Area School shall not be
obligated to take any step which in its opinion will or might cause it to expend time or money or
otherwise incur

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liability unless and until a satisfactory indemnity bond has been furnished to the Area School at
no cost or expense to the Area School. Any amounts collected as payments
or applicable to payments and any other amounts which would be applicable to payment of principal
and premium, if any, and interest on the Certificates collected pursuant to action taken under this
Section shall be paid to the holders of the Certificates for application to such payment.

     Section 4.3. No remedy conferred upon or reserved to the Area School by this
Agreement is intended to be exclusive of any other available remedy or remedies, but each and every
remedy shall be cumulative and shall be in addition to every other remedy now or hereafter existing
at law, in equity or by statute. No delay or omission to exercise any right or power accruing upon
any default shall impair any such right or power or shall be construed to be a waiver thereof, but
any such right and power may be exercised from time to time and as often as may be deemed
expedient. In order to entitle the Area School to exercise any remedy reserved to it in this
Article, it shall not be necessary to give any notice, other than such notice as may be expressly
required herein.

     Section 4.4. In the event any agreement contained in this Agreement should be
breached by either party and thereafter waived by the other party, such waiver shall be limited to
the particular breach so waived and shall not be deemed to waive any other breach hereunder.

ARTICLE V

MISCELLANEOUS

     Section 5.1. All notices, certificates, requests or other communications hereunder
shall be in writing and shall be deemed to be sufficiently given when mailed by registered or
certified mail, postage prepaid, addressed to the appropriate notice address as follows:

	 	 	 	 	 
	 

	 	If to the Area School:
	 	Robert Denson, President
	 

	 	 	 	Des Moines Area Community College
	 

	 	 	 	2006 S. Ankeny Blvd.
	 

	 	 	 	Ankeny, Iowa 50023

	 	 	 	 	 
	 

	 	If to the Employer:
	 	Derek Winkel, General Manager
	 

	 	 	 	Central Iowa Energy
	 

	 	 	 	3426 E 28th Street
	 

	 	 	 	Newton, IA 50208

     Employer and the Area School may, by notice given hereunder, designate any further or
different addresses to which subsequent notices, certificates, requests or other
communications shall be sent.

Page 9 of 15 pages

 

     Section 5.2. All covenants, stipulations, obligations and agreements of the Area School
contained in this Agreement shall be effective to the extent authorized and permitted by applicable
law. No such covenant, stipulation, obligation or agreement shall be deemed to be a covenant,
stipulation, obligation or agreement of any present or future member, officer, agent or employee of
the Area School or the Board of Directors of the Area School other than in his official capacity.
Neither the members of the Board of Directors of the Area School nor any official of the Area
School executing the Certificates shall be liable personally on the Certificates or be subject to
any personal liability or accountability by reason of the issuance thereof or by reason of the
covenants, stipulations, obligations or agreements of the Area School contained in this Agreement,
the Resolution or the Certificates.

     Section 5.3. This Agreement shall inure to the benefit of and shall be binding in
accordance with its terms upon the Area School, the Employer and their respective permitted
successors and assigns provided that this Agreement may not be assigned by the Employer and may not
be assigned by the Area School except as may be necessary to enforce or secure payment of the
principal, premium, if any, and interest on the Certificates.

     Section 5.4. This Agreement may be executed in any number of counterparts, each of
which shall be regarded as an original and all of which shall constitute but one and the same
instrument.

     Section 5.5. If any provision of this Agreement, or any covenant, stipulation,
obligation, agreement, act, or action, or part thereof made, assumed, entered into or taken
hereunder or any application hereof, is for any reason held to be illegal or invalid, such
illegality or invalidity shall not affect any other provision of this Agreement or any other
covenant, stipulation, obligation, agreement, act or action or part thereof, made, assumed, entered
into or taken hereunder, or any other application hereof, each of which shall be construed and
enforced as if such illegal or invalid portion were not contained herein. Nor shall such
illegality or invalidity or any application hereof affect any legal and valid application hereof,
and each such provision, covenant, stipulation, obligation, agreement, act or action, or part shall
be deemed to be effective, operative, made, entered into or taken in the manner and to the full
extent permitted by law.

     Section 5.6. This Agreement shall be governed exclusively by and construed in
accordance with the laws of the State of Iowa.

     Section 5.7. The Area School agrees to use its best efforts to sell and issue the
Certificates and the Employer agrees that it will cooperate with the Area School to provide any
necessary financial information in connection with the sale of the Certificates. It is understood
and agreed that if the Certificates are not marketed and, in the sole discretion of the Area
School, are not marketable within a reasonable time, this Agreement and the Project shall be
terminated. In such event, the Employer shall

Page 10 of 15 pages

 

continue to be liable for Project Costs previously incurred as provided in Section 2.9 hereof.

     Section 5.8. The Employer agrees to keep its business property where the Project will
be located continuously insured, in an amount at least equal to the total amount of the
Certificates outstanding, against loss or damage by fire, lightning, such other perils as are
covered by standard “extended coverage” endorsements, vandalism and malicious mischief and
containing customary loss deductible provisions. If loss or damage occurs and the Employer
determines not to rebuild or restore its business property to its former condition, the Employer
agrees to cause the insurance proceeds to be applied to the payment of principal and interest on
the Certificates.

     Section 5.9. Employer agrees to indemnify and hold harmless the Area School from and
against any and all claims, demands, liabilities, losses, costs and expenses asserted against the
Area School by any third party or any employee, agent or subcontractor of the Employer, including
reasonable costs, collection expenses, attorney’s fees, and court costs which may arise because of
any act of omission or commission, negligence, misconduct or other fault of Employer or Employer’s
employees, agents or subcontractors, associated directly or indirectly with this Agreement. This
provision shall survive termination of this Agreement.

     Section 5.10. This Agreement shall supplement the Preliminary Agreement which, except
as modified herein, is hereby ratified and confirmed and together this Agreement and the
Preliminary Agreement shall constitute one agreement between the Employer and the Area School with
respect to the Project. Except for the Preliminary Agreement, the entire agreement of the parties
is contained in this document and any certificates of the parties given in connection herewith.
Oral or written statements which are not contained herein or in such certificates are hereby
rendered null, void and of no effect.

ARTICLE VI

SUPPLEMENTAL NEW JOBS CREDIT FROM WITHHOLDING

þ Check here if this Article is to be a part of this Agreement; if the box is not checked, this
Article shall be disregarded.

     Section 6.1. The Employer and the Area School agree to a supplemental new jobs credit
from withholding (the “Supplemental New Jobs Credit from Withholding”) in accordance with Section
15A.7 of the Code of Iowa, as amended. The Supplemental New Jobs Credit from Withholding shall be
used to fund the additional project described on Exhibit “A” attached hereto (the “Additional
Project”). Exhibit A also sets forth the jobs to which the Supplemental New Jobs Credit from
Withholding shall apply. The Supplemental New Jobs Credit from Withholding shall be in an amount
equal to one and one-half percent of the gross wages paid for such jobs by the

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Employer pursuant to Section 422.16 of the Code of Iowa, as amended, and such amount is authorized
to fund the Program Services described on Exhibit “A” attached hereto for the Additional Project.

     Section 6.2. The Supplemental New Jobs Credit from Withholding shall be collected,
accounted for, and may be pledged by the Area School in the same manner as described in Section
260E.5 of the Code of Iowa, as amended.

     Section 6.3. The Additional Project to be funded from the Supplemental New Jobs Credit
from Withholding shall be administered in the same manner as a project under the Act.

     Section 6.4. The Employer agrees to pay wages for the jobs for which the Supplemental
New Jobs Credit from Withholding is taken of at least the average county wage or average regional
wage, whichever is lower, as compiled annually by the Iowa Department of Economic Development for
the community economic betterment program. The average regional wage shall be based on the service
delivery areas set forth in Section 84B.2 of the Code of Iowa, as amended. Eligibility for the
Supplemental New Jobs Credit from Withholding shall be based solely on a one-time determination of
starting wages by the Area School.

     Section 6.5. In order to provide funds for the payment of the costs of the Additional
Project, the Area School may borrow money, issue and sell certificates, and secure the payment of
the certificates in the same manner as described in Section 260E.6 of the Code of Iowa, as amended,
including, but not limited to, providing the assessment of an annual levy as described in Section
260E.6, subsection 4. The Additional Program and the Supplemental New Jobs Credit from Withholding
are in addition to, and not in lieu of, the program and credit authorized in the Act.

     Section 6.6. All other provisions of this Agreement, including specifically the
provisions of Article III hereof with respect to payments by the Employer and security for the
Employer’s obligations, shall apply to the Additional Program, the Supplemental New Jobs Credit
from Withholding, and the certificates to be issued to provide the funding for the Additional
Program.

     IN WITNESS WHEREOF, the Area School and the Employer have caused this Agreement to be duly
executed in their respective names by their duly authorized officers, all as of the date
hereinabove written.

[END OF TEXT]

Page 12 of 15 pages

 

ê EMPLOYER ê

Central Iowa Energy

[Printed Name of Employer]

[Federal I.D. #] 79-0988301

	 	 	 	 	 
	By:

	 	/s/ Derek Winkel
 

	 	 
	[Printed Name]    Derek Winkel	 	 
	[Printed Title]      General Manager	 	 
	Email address      Derek@centraliowaenergy.com	 	 
	Date:    1-10-07	 	 

ATTEST:

	 	 	 	 	 
	By:

	 	/s/ Laura J. Madden
 

	 	 
	[Printed Name]    Laura J. Madden	 	 
	[Printed Title]      Notary	 	 

State of           Iowa

County of      Jasper    :ss

On this date: January 10, 2007
before me, a Notary Public in and for the above
specified County and State, personally appeared
[Name] Derek Winkel
to me personally known, who, being by me duly
sworn upon oath, did say that he or she is the
[Title] General Manager
of the above named Employer, a corporation
organized in the State of Iowa; that the foregoing instrument was signed on
behalf of said Employer by authority of its Board
of Directors; and acknowledged the execution of
said instrument to be the voluntary act and deed
of said Officer by him or her voluntarily executed.

Given under my hand and seal this date:

[Date]    January 10, 2007

[SEAL]

	 	 	 
	/s/ Laura J. Madden
 

	 	 
	Notary Public In and For Said County and State
	[Printed Name]      Laura J. Madden
	Commission Expires [Date]    5-16-08

ê DMACC ê

DES MOINES AREA COMMUNITY COLLEGE

	 	 	 	 	 
	By:

	 	/s/ Joe Pugel
 

	 	 
	[Printed Name]     Joe Pugel	 	 
	[Printed Title]       Board President	 	 
	Date:     3-12-07	 	 

ATTEST:

	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 	 	 	 	 
	[Printed Name]	 	 	 	 
	 

	 	 	 	 	 	 
	[Printed Title]	 	 	 	 
	 

	 	 	 	 	 	 

State of Iowa

County of Polk           :ss

On this date: 3-12-07
before me, a Notary Public in and for the above
specified County and State, personally appeared
[Name] /s/ Joe Pugel
to me personally known, who, being by me duly
sworn upon oath, did say that he or she is the
[Title] Board President
of Des Moines Area Community College, Ankeny
Iowa; that the foregoing instrument was signed
on behalf of Des Moines Area Community
College by authority of the Board of Directors;
and  acknowledged the execution of said
instrument to be the voluntary act and deed of
said Officer by him or her voluntarily executed.

Given under my hand and seal this date:

[Date]     3-12-07

[SEAL]

	 	 	 
	/s/ Carolyn D. Farlow
 

	 	 
	Notary Public In and For Said County and State
	[Printed Name]      Carolyn D. Farlow
	Commission Expires [Date]     4/23/09

q:\edg\shared\260e-fin 2/99

	 	 	 	 	 	 	 	 	 
	 

	 	SEAL LAURA J. MADDEN      

Commission Number 716558

My Commission Expires

May 16, 2008
	 	 	 	  SEAL CAROLYN D FARLOW      

Commission Number 189852

My Commission Expires

April 23, 2009

	 	 

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EXHIBIT “A”

DESCRIPTION OF THE PROJECT

(See attached training plan)

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EXHIBIT “B”

LEGAL DESCRIPTION OF PROJECT SITE

     3426 E 28th Street            Newton, IA 50208

DESCRIPTION OF PERSONAL PROPERTY

Page 15 of 15 pagesexv10w1

 

Exhibit 10.1

WESTRUP KLICK LLP

R. DUANE WESTRUP (STATE BAR NO. 58610)

PHILLIP R. POLINER (STATE BAR NO. 156145)

CHRISTINE CHOI (STATE BAR NO. 205656)

444 West Ocean Blvd., Suite 1614

Los Beach, California 90802

Telephone: (562) 432-2551

Facsimile: (562) 435-4856

THE LAW OFFICES OF MICHAEL L. CARVER

MICHAEL L. CARVER (STATE BAR NO. 173633)

1550 Humboldt Road, Suite 1

Chico, California 95928

Attorneys for Plaintiff

NICOLE ATKINS

JAMS RESOLUTION EXPERTS

	 	 	 	 	 	 	 
	NICOLE ATKINS, individually, on behalf of

	 	 	)	 	 	JAMS Reference Number: 1100049545
	others similarly situated, and as a private

	 	 	)	 	 	 
	attorney general on behalf of the general
public,

	 	 	)	 	 	Los Angeles County Superior Court Case
	 

	 	 	)	 	 	No.: BC346922
	 

	 	 	)	 	 	 
	Plaintiff

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	      vs.

	 	 	)	 	 	JOINT STIPULATION OF
	 

	 	 	)	 	 	SETTLEMENT AND RELEASE
	PC MALL, INC., a Delaware corporation, and

	 	 	)	 	 	BETWEEN PLAINTIFF AND
	DOES 1 through 200, inclusive,

	 	 	)	 	 	DEFENDANT
	 

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	Defendants

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	/  /  /	 	 	 	 	 	 
	 
	/  /  /	 	 	 	 	 	 
	 
	/  /  /	 	 	 	 	 	 
	 
	/  /  /	 	 	 	 	 	 
	 
	/  /  /	 	 	 	 	 	 
	 
	/  /  /	 	 	 	 	 	 
	 

 

JOINT STIPULATION OF SETTLEMENT AND RELEASE BETWEEN PLAINTIFFS AND DEFENDANT

 

 

     This Joint Stipulation of Settlement and Release (“Stipulation of Settlement”) is made and
entered into by and between Plaintiff NICOLE ATKINS (“Plaintiff” or “Class Representative”) and
Defendants PC MALL, INC. and PC Mall Sales, Inc. (collectively, “Defendants” or “PC MALL”), and is
subject to the terms and conditions hereof and the approval of the Arbitrator and confirmation of
the Arbitrator’s award by the California Superior Court (the “Court”). Plaintiff and Defendants
are referenced collectively as “the Parties.”

     1. On February 3, 2005, Plaintiff Nicole Atkins filed a proposed class action complaint in the
County of Los Angeles Superior Court, case number BC346922 (“the Action”), captioned NICOLE ATKINS,
individually and on behalf of all others similarly situated, v. PC MALL, INC, and DOES 1 — 200
inclusive. In the Action, Plaintiff alleged that she and other employees who worked as “account
executives” in California within PC MALL during the preceding four years, were inappropriately
classified as exempt employees, denied overtime compensation and meal and rest breaks, were not
paid appropriately or on regularly scheduled paydays, did not receive itemized wage statements and
therefore, were entitled to recover compensation and/or penalties under the California Labor Code.
Plaintiff asserted claims in the Action under California law, including claims under California
Labor Code §§ 1194, 226.7, 226, 204 and 203, and Business & Professions Code § 17200. The Action
sought California Labor Code penalties, unpaid wages, prejudgment interest, restitution,
declaratory relief and attorneys’ fees and costs.

     2. In July 2006, the Parties stipulated to have the Action proceed by way of binding
arbitration before Judge Richard Silver (the “Arbitrator”) at JAMS.

     3. On January 18, 2006, the Parties participated in a mediation before Judge Edward Infante
(Ret.) of JAMS. The parties reached an agreement that resulted in a tentative settlement of the
Action, subject to the Arbitrator’s approval and the other conditions specified below. The Parties
wish to enter into a formalized settlement agreement to submit to the Arbitrator for approval and
for that reason, enter into this Stipulation of Settlement.

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JOINT STIPULATION OF SETTLEMENT AND RELEASE BETWEEN PLAINTIFFS AND DEFENDANT

 

 

     4. For purposes of this Stipulation of Settlement, “Class Members” or “Settlement Class” shall be
defined as follows:

     “All individuals employed as outbound business account executives, in California, by
or on behalf of PC Mall Sales, Inc., during the period from February 3, 2002 through
January 31, 2007.”

     5. For purposes of this Stipulation of Settlement, the “Class Period” shall be February 3,
2002 through January 31, 2007.

     6. For purposes of this Stipulation of Settlement only, the Parties conditionally stipulate
and agree that the requisites for establishing class certification with respect to the Settlement
Class have been met and are met, and therefore, stipulate to class certification. More
specifically, the Parties conditionally stipulate and agree that:

	 	a.	 	The Settlement Class is so numerous as to make it impracticable to join
all Class Members.
	 
	 	b.	 	There is an ascertainable class.
	 
	 	c.	 	Plaintiff’s claims are typical of the claims of the members of the
Settlement Class.
	 
	 	d.	 	Westrup Klick, LLP and the Law Offices of Michael L. Carver shall be
deemed “Class Counsel” and will fairly and adequately protect the interests of
the Settlement Class.
	 
	 	e.	 	The prosecution of separate actions by individual members of the
Settlement Class would create the risk of inconsistent or varying
adjudications, which would establish incompatible standards of conduct.
	 
	 	f.	 	Questions of law and fact common to the members of the Settlement Class
predominate over questions affecting individual members in the Settlement Class
and a class action is superior to other available means for the fair and
efficient adjudication of the controversy.

     7. PC MALL denies any liability or wrongdoing of any kind associated with the claims alleged
by Plaintiff or the class she purports to represent in the Action, and further denies

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that, for any purpose other than settling the Action, this action is appropriate for class
treatment. In the event the Arbitrator does not preliminarily or finally approve this Stipulation
of Settlement, or in the event that all of the conditions in this Stipulation of Settlement are not
completely and fully satisfied, the Parties will not stipulate to class certification and PC MALL
will contest class certification.

     8. Defendants contend, among other things, that they have complied at all times with the
California Labor Code, and that Class Members were always properly paid for the time they worked,
were paid wages and commissions in accordance with California law and on designated pay days, were
provided with appropriate itemized wage statements and proper meal and rest breaks, and were
required by company policy to take proper meal breaks each work day.

     9. Plaintiff believes that she has filed a meritorious action and that class certification is
appropriate. Plaintiff contends that Defendants violated California’s wage and hour laws and that
this case is appropriate for class certification as the requisites for class certification can be
satisfied in this case and that the case is appropriate to certify as a class action under
California law.

     10. It is the desire of the Parties to fully, finally, and forever settle, compromise, and
discharge all disputes and claims which exist between them arising from or related to the Action.
In order to achieve a full and complete release of Defendants (and the Releasees as defined in
Paragraph 11) of such disputes and claims, each Class Member (which includes any legal heirs and/or
successors-in-interest of each Class Member), through execution of the Stipulation of Settlement by
the Class Representative, acknowledges that this Stipulation of Settlement is intended to include
in its effect all claims arising from or related to the Action against Defendants during the Class
Period, including claims based upon or related to alleged failure to pay wages, the improper
withholding of wages or commissions, failure to timely pay wages, overtime violations, waiting time
penalties, meal and rest break penalties under California Labor Code § 226.7, penalties associated
with insufficient itemized pay statements under California Labor Code § 226, prejudgment interest
in connection with such claims, as well as all claims under state or federal law, waiting time
penalties pursuant to California Labor Code § 203, unfair

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business practices pursuant to California Business & Professions Code § 17200 et seq.,
conversion, interest and costs, statutory or common law rights to attorneys’ fees and costs,
including those pursuant to California Labor Code § 1194 et seq., and violation or breach of any
other state or federal statute, rule and/or regulation, and similar causes of action, including but
not limited to any claim for punitive and exemplary damages in connection with any of the
foregoing. Plaintiff further releases any and all claims against Defendants outside the scope of
the Action that arise out of or related to her employment with Defendants, the termination of her
employment with Defendants, or any acts or omission by Defendants or any of the Releasees occurring
prior to the date on which this Stipulation of Settlement is signed by all Parties. Plaintiff, the
Settlement Class, and each Class Member, waive all rights and benefits afforded by Section 1542 of
the Civil Code of the State of California with respect to all claims that arise from or relate to
the Action, and do so understanding the significance of that waiver. Section 1542 provides:

A general release does not extend to claims which the creditor does
not know or suspect to exist in his or her favor at the time of
executing the release, which if known by him or her must have
materially affected his or her settlement with the debtor.

     11. It is the intention of the Parties that this Stipulation of Settlement shall constitute a
full and complete settlement and release of all claims arising from, or relating to, the Action,
including any and all claims under state and federal law for unpaid compensation, penalties and
attorney’s fees as further detailed above, which release shall include in its effect PC MALL, PC
Mall Sales, Inc. and their respective present and former affiliates, parent companies,
subsidiaries, shareholders, officers, partners, directors, employees, agents, attorneys, insurers,
predecessors, successors and assigns and all persons acting under, by, through, or in concert with
any of them (collectively, the “Releasees”).

     12. This Stipulation of Settlement provides for a claims process requiring Defendants to make
a maximum payment of ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000) that shall be referred
to herein as a Gross Fund Value (“GFV”) and which shall represent the maximum of all payments
Defendants shall make toward the settlement of this

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JOINT STIPULATION OF SETTLEMENT AND RELEASE BETWEEN PLAINTIFFS AND DEFENDANT

 

 

action. This GFV shall be used to cover payments to Plaintiff, class members who submit valid
claims, administration costs, attorney’s fees and costs, and enhancement awards.

     13. The Net Fund Value (“NFV”) will constitute the total sum from which Class Members who
submit valid claims will be paid after Arbitrator-approved attorneys’ fees and costs,
administration costs, payment to PLAINTIFF of the amounts described in Section 14(d)(3), which
include the enhancement award, are subtracted from the GFV.

TERMS OF SETTLEMENT

     14. NOW, THEREFORE, in consideration of the mutual covenants, promises, and warranties set
forth herein, the Parties agree, subject to the Arbitrator’s approval, as follows:

	 	a.	 	It is agreed by and among the Parties that this action and any claims,
damages, or causes of action arising out of the dispute that is the subject of
the Action, be settled and compromised as between the Settlement Class and
Defendants, subject to the terms and conditions set forth in this Stipulation
of Settlement and the approval by the Arbitrator.
	 
	 	b.	 	Settlement Date: The settlement embodied in this Stipulation
of Settlement is expressly conditioned upon and shall go into effect only after
preliminary and final approval by the Arbitrator of this Stipulation of
Settlement, entry of a judgment by the Court confirming the Arbitrator’s order
and award and dismissing the Action with prejudice, and the expiration of the
time for appeal pursuant to California Rules of Court 8.104 and 8.108 from the
orders and judgment described in this Stipulation of Settlement.
	 
	 	c.	 	Calculation of Time Worked: Settlement dollars will be
allocated among the Class Members on a “Qualifying Workweek” basis. For
purposes of this calculation, a “Qualifying Workweek” shall be calculated as a
whole number, and shall include only those weekly periods, beginning on a
Sunday and ending on a Saturday in which the Class Member was present at work
and actually performed services for which remuneration was paid

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	 		 	on four or more days as determined in the sole discretion of PC MALL. PC
MALL’s records shall be determinative with respect to the number of
Qualifying Workweeks that were actually worked by Class Members.
	 
	 	d.	 	Settlement Payments and Costs of Administration:

	 	1)	 	Payments to Class Members: In consideration for
settlement and a release of all claims of the Settlement Class against
Defendants, and subject to final settlement approval and entry of the
orders and judgment described in Section 14(b), Defendants agree to pay
to each member of the Settlement Class who timely submits a claim form
pursuant to Section 17, a share of the NFV, as calculated hereunder.
Each Class Member’s share of the NFV shall be determined by: (i)
dividing the NFV by the total number of workweeks worked by all members
of the Settlement Class to determine the payment-per-workweek; and then
(ii) multiplying the payment-per-workweek by the number of Qualifying
Workweeks worked by the particular member of the Settlement Class
during the Class Period. To the extent a Class Member fails to submit
a valid claim form for his or her share of the NFV, his or her share
shall be redistributed on a proportional basis to the Class Members who
submitted valid claim forms. The settlement payment made to Qualified
Claimants (defined below as Class Members who submit a valid claim
form) shall consist of the following: (i) 50% of the gross payments
shall be considered California Labor Code Penalties; (ii) 50% of the
gross payments shall be considered wages for past services. Because
50% of the gross amounts of the payments made to Qualified Claimants
constitutes wages, Defendants will review the most recent W-4 and other
withholding documents available for each Qualified

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JOINT STIPULATION OF SETTLEMENT AND RELEASE BETWEEN PLAINTIFFS AND DEFENDANT

 

 

	 	 	 	Claimant, withhold from the application portion of the settlement
payment the Qualified Claimant’s share of all appropriate payroll
taxes and issue to each Qualified Claimant a Form W-2 statement or
its equivalent. Defendants shall issue a 1099 or other appropriate
tax form for that portion of the settlement payment that does not
represent wages.
	 
	 	2)	 	Attorneys’ Fees and Costs: In consideration for
settling this matter and in exchange for the release of all claims by
the Settlement Class, and subject to final settlement approval and
entry of the orders and judgment described in Section 14(b), Defendants
agree that Class Counsel should be awarded a sum of up to one-third
(33 1/3 %) of the GFV to compensate and reimburse Class Counsel for all
of the work already performed by Class Counsel in this case and all of
the work remaining to be performed by Class Counsel in documenting the
Settlement, securing the Arbitrator’s and the Court’s approval of the
Settlement, administering the Settlement, making sure that the
Settlement is fairly administered and implemented, and obtaining
dismissal of the action. Should the Arbitrator approve a lesser
percentage or amount of fees and/or costs, the unapproved portion or
portions shall be attributed to the NFV and thereby be distributed on a
pro rata basis among the Class Members who submit qualified claims in
the same proportion as the NFV was originally distributed to the
claiming Class Members.
	 
	 	3)	 	Class Representative Enhancement and Settlement of
Plaintiff’s Individual Claims: Subject to approval by the
Arbitrator and entry of the orders and judgment described in Section
14(a), Defendants agree to pay the Plaintiff from the GFV, Twenty
Thousand Dollars

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JOINT STIPULATION OF SETTLEMENT AND RELEASE BETWEEN PLAINTIFFS AND DEFENDANT

 

 

	 	 	 	($20,000), $5,000 of which shall be for serving as the Class
Representative and $15,000 to settle any and all claims outside the
scope of the Action. Plaintiff shall also be entitled to share in
the NFV to the same extent and pursuant to the same requirements as
other Class Members. Should the Arbitrator approve an award to
Plaintiff in an amount less than that set forth herein, the
unapproved portion or portions shall be attributed to the NFV and
thereby be distributed on a pro rata basis among the Class Members
who submit valid claim forms.
	 
	 	4)	 	Costs of Claims Administrator: The parties have
selected Class Action Administration, Inc. to act as Claims
Administrator in this action. Class Action Administration, Inc. has
agreed to perform all necessary class administration duties for a fee
not to exceed $20,000. This payment for the Administrator shall come
from the GFV. The administration duties shall include without
limitation, mailing Notices and Claim Forms, and the calculation,
processing, and mailing of all Class Member settlement checks.
	 
	 	5)	 	Settlement Funding Deadline: Five business days after
entry of the judgment by the Court confirming the Arbitrator’s award
and dismissing the Action with prejudice, expiration of the time for an
appeal pursuant to California Rules of Court 8.104 and 8.108 from the
orders and judgments described in this Stipulation of Settlement, and
on the condition that no appeal, motion for new trial or motion to
vacate the orders or judgments described herein have been filed, and on
the further condition that all of the conditions in Section 14(f) have
been satisfied, Defendants shall deliver to the Claims
Administrator: (i) checks drawn on the GFV to pay Qualified Claimants
the gross amounts calculated by the

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	 	 	 	Claims Administrator, minus appropriate taxes; (ii) a check drawn on
the GFV to pay the attorneys’ fees awarded by the Arbitrator; (iii) a
check drawn on the GFV to pay the enhancement award and other
settlement payment to Plaintiff; and (iv) a check to compensation the
Claims Administrator for settlement services. In the event that an
appeal or other motion described in California Rule of Court 8.108 is
filed, Defendants shall deliver the checks described above to the
Claims Administrator ten (10) days after the appeal is withdrawn, an
appellate decision affirming the trial court’s judgment is final, or
the other motions pursuant to California Rule of Court 8.108 result
in a final, non-appealable judgment.
	 
	 	6)	 	Settlement Payout Timetable: Within ten (10) days of
receiving the checks from the Defendants as described above, the Claims
Administrator will pay all valid and timely claims submitted by
Qualifying Claimants, and Arbitrator-approved attorney’s fees, costs,
enhancement payments, and the payment to Plaintiff described in Section
14(d)(3). No money will be distributed unless and until the orders and
judgment described in this Stipulation of Settlement are final (meaning
that the right to appeal those orders and the judgment described in
Section 14(b) has expired) and on the condition that no appeal from the
orders and judgment described herein have been filed.

	 	e.	 	Resolution of Disputes Relating To Number of Qualifying Workweeks
Worked by Class Members: A “Qualified Claimant” will be defined as an
individual in the Settlement Class who timely submitted a Claim Form. If a
Qualified Claimant timely disputes the number of Qualifying Workweeks he or she
worked as a Class Member, or as to the proper size

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	 		 	of his or her share in the NFV, the Class Member must attach documentary
evidence supporting his or her alternative calculation of Qualifying
Workweeks and a written statement explaining the Class Member’s calculation
of Qualifying Workweeks. After receiving such documentation, the Parties’
counsel will make a good faith effort to resolve the dispute informally once
this documentation is received. If the Parties cannot agree, the dispute
shall be submitted to Judge Edward Infante (Ret.), who shall resolve the
dispute. Failure by the Class Member to provide the documentary evidence
and written statement described above by the Claims Deadline established in
Section 17 will result in the Qualifying Workweek calculation being based
solely on Defendants’ records. In any event, such disputes must be resolved
prior to final approval of this Stipulation of Settlement. If a Class
Member submits both a valid Claim Form and a Request for Exclusion, the
Request for Exclusion shall be deemed invalid and the claim will be treated
as a proper claim.
	 
	 	f.	 	Invalidation of Stipulation of Settlement For Failure To Satisfy
Conditions:

	 	1)	 	The Stipulation of Settlement is expressly conditioned upon
approval and entry of the orders and the judgment described in
Stipulation of Settlement, including the Arbitrator’s preliminary and
final approval of this Stipulation of Settlement, the Arbitrator’s
certification of a class for settlement purposes only, entry of the
orders described in Section 14(b), the Court’s order confirming the
Arbitrator’s order and award, and entry of the judgment by the Court
dismissing this Action with prejudice against all Class Members who do
not timely submit a Request for Exclusion Form. This Stipulation of
Settlement is also expressly conditioned upon

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	 	 	 	no appeal or other motion under California Rule of Court 8.108 being
taken or filed from the orders and the judgment described herein.
	 
	 	2)	 	Notwithstanding any other provision in this Stipulation of
Settlement, the Parties agree, covenant and represent that Defendants
shall not in any event be obligated to pay any amount that exceeds the
GFV and that, if prior to the hearing to finally approve this
Stipulation of Settlement, the number of Class Members who submit
timely and complete Request for Exclusion Forms, in the aggregate,
exceed 5% of the total number of conditionally-certified Class Members,
then Defendants shall have the sole and absolute discretion to withdraw
from this Stipulation of Settlement.
	 
	 	3)	 	Further notwithstanding any other provision in this Stipulation
of Settlement, if this Stipulation of Settlement is terminated for
failure to satisfy any of the terms and conditions outlined above,
Defendants shall not be obligated to create or maintain any type of
settlement fund and shall not be obligated to make any settlement
payment to Plaintiff, any Class Member, Class Counsel, or the Claims
Administrator.

NOTICE TO THE SETTLEMENT CLASS

     15. The Parties agree that within five (5) business days after preliminary approval of this
Stipulation of Settlement, Defendants will provide to the Claims Administrator all of the following
information about each Class Member in a format requested by the Claims Administrator: (1) name,
(2) last known home address, (3) Social Security number, (4) dates of employment during the class
period; and (5) Qualifying Workweeks worked during the Class Period. The Claims Administrator will
perform address updates and verifications as necessary prior to the first mailing, including a
National Change of Address (NCOA) search. Within

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fifteen (15) days after preliminary approval, and subject to the approval of the Arbitrator,
the Claims Administrator will mail a Notice of Pendency of Class Action and Proposed Settlement
(“Notice”) in the form attached hereto as Exhibit “A” to each Class Member, by first class mail.
Attached to the Notice will be a Claim Form, in the forms attached hereto as Exhibit “B”.
Likewise, attached is a Reminder Postcard as Exhibit “C,” which the Claims Administrator will mail
to Class Members two weeks in advance of the Claims Deadline described in Section 17, below.

     16. It shall be conclusively presumed that each and every Class Member whose Notice is not
returned to the Claims Administrator as undeliverable within thirty calendar days after mailing
actually received the Notice. The Claims Administrator shall promptly re-mail any Notice returned
by the post office with a forwarding address and shall take reasonable and necessary steps to
re-mail Notices returned by the post office as undeliverable without a forwarding address. The
Claims Administrator will perform one skip-trace on returned mail and re-mail Notices to the
updated addresses (if any) within fifteen (15) days of receipt of the returned mail. It is the
intent of the parties that reasonable means be used to locate Class Members.

CLAIM PROCESS

     17. Class Members will be permitted no more than forty-five (45) days from the date the
Notices are mailed by the Claims Administrator to postmark Claim Forms. Class Members will also
have forty-five (45) days from the date the Notices are mailed by the Claims Administrator to
postmark Objections and/or Requests For Exclusion (the date by which Class Members must submit a
Claim Form, Objections or Requests for Exclusion shall be defined as the “Claims Deadline”). A
Reminder Postcard will be sent to all Class Members who have not submitted a Claim Form, Objection
or Request For Exclusion fifteen (15) days before the Claim Deadline.

     18. Within five (5) business days of receipt by the Claims Administrator of each timely
submitted Claim Form that is deficient, the Claims Administrator will send a deficiency notice to
the Class Members for any irregularities in the completed Claim Form. The deficiency

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notice will provide the Class Members no more than fifteen (15) days from the mailing of the
deficiency notice to postmark the response to any deficiencies in writing.

     19. It shall be conclusively presumed that, if a Claim Form, Objection or Request for
Exclusion is not returned by the Claims Deadline, that the Class Member did not return the Claims
Form, Objection, or Request for Exclusion. A declaration submitted by any Class Member attesting
to the mailing or delivery of a Claim Form, Objection, or Request for Exclusion before the
expiration of the Claims Deadline shall be insufficient to overcome the conclusive presumption
described above. To rebut the presumption stated above, the Class Member must present documentary
evidence establishing that the Claim Form, Objection or Request for Exclusion was timely mailed or
delivered before the Claims Deadline. Any dispute regarding the failure of a Class Member to
execute a Claim Form, timely submit a Claim Form, Objection or Request for Exclusion, or timely
submit a response to any deficiency notice shall be submitted to Judge Edward Infante (Ret.) for
final determination.

     20. All original Claim Forms shall be sent directly to the Claims Administrator at the address
indicated on the Claim Form. The Defendants are providing the Claims Administrator an Excel
spreadsheet that the Claims Administrator will be able to calculate each Class Member’s pro rata
share of the NFV. The Claims Administrator will certify jointly to Class Counsel and Defendants’
counsel which claims were timely filed. The Claims Administrator shall be responsible for issuing
the settlement payments. Upon completion of its calculation of payments, the Claims Administrator
shall provide Class Counsel and Defendants’ counsel with a report listing the amount of all
payments to be made to each Qualified Claimant. Proof of payment will be filed with the Arbitrator
and provided to the Parties’ counsel.

RELEASE BY THE CLASS

     21. Upon preliminary and final approval by the Arbitrator of this Stipulation of Settlement,
entry of a final order by the Arbitrator certifying the class, entry of a judgment by the Court
confirming the Arbitrator’s order and award and dismissing the Action with prejudice, and the
effective and final date of the Settlement as defined in Section 14(b) (meaning a final judgment
with no further right to appeal and no appeal having been filed), each Class Member

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who has not submitted a timely and valid Request for Exclusion form, will release PC MALL, PC
Mall Sales, Inc. and the “Releasees” from any and all claims, debts, liabilities, demands,
obligations, guarantees, costs, expenses, attorney’s fees, damages, action or causes of action
contingent or accrued for, or which relate to: (1) the causes of action asserted in the Action; or
(2) any other claim under federal, state or local law premised on the same underlying factual
allegations as those asserted in the Action, including claims based upon or related to any alleged
failure to pay wages or commission, the improper withholding of wages or commissions, failure to
timely pay wages, overtime violations, waiting time penalties, meal and rest break penalties under
California Labor Code § 226.7, penalties associated with insufficient itemized pay statements under
California Labor Code § 226, prejudgment interest in connection with such claims, as well as all
claims under state or federal law, waiting time penalties pursuant to California Labor Code § 203,
unfair business practices pursuant to California Business & Professions Code § 17200 et seq.,
conversion, interest and costs, statutory or common law rights to attorneys’ fees and costs,
including those pursuant to California Labor Code § 1194 et seq. and violation or breach of any
other state or federal statute, rule and/or regulation, and similar causes of action, including but
not limited to any claim for punitive and exemplary damages in connection with any of the
foregoing.

     22. Upon preliminary approval of this Stipulation of Settlement, the Class Members shall be
enjoined from filing any actions, claims, complaints, or proceedings with the Department of Labor
Standards Enforcement (DLSE), or from initiating other proceedings, regarding the Claims asserted
in the Action.

     23. In addition to the release by the Class Members, Atkins shall additionally release any and
all claims she may have against PC Mall, PC Mall Sales, Inc. or any of the Releasees that arise out
of or in any way relate to her employment with any of the Releasees, the termination of her
employment with any of the Releaseees, or any acts or omission by any of the Releasees occurring
prior to the date on which this Stipulation of Settlement is signed by all Parties.

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     24. Plaintiff, the Settlement Class, and each Class Member, waive all rights and benefits
afforded by Section 1542 of the Civil Code of the State of California with respect to all claims
that arise from or relate to the Action, and do so understanding the significance of that waiver.
Section 1542 provides:

A general release does not extend to claims which the creditor does
not know or suspect to exist in his or her favor at the time of
executing the release, which if known by him or her must have
materially affected his or her settlement with the debtor.

     25. Plaintiff, the Settlement Class and each Class Member understand that the facts with
respect to which this Stipulation of Settlement is entered into may be materially different from
those the Parties now believe to be true. Plaintiff, the Settlement Class and each Class Member
accept and assume that risk and agree that this Stipulation of Settlement shall remain in full
force and effect, and legally binding, notwithstanding the discovery or existence of any additional
or different facts, or claims with respect to those facts.

DUTIES OF THE PARTIES PRIOR TO ARBITRATOR APPROVAL

     26. The Parties shall promptly submit this Stipulation of Settlement to the Arbitrator in
support of a request for preliminary approval and determination by the Arbitrator as to its
fairness, adequacy, and reasonableness. Promptly upon execution of this Stipulation of Settlement,
the Parties shall apply to the Arbitrator for the entry of a preliminary order substantially in the
following form:

	 	a.	 	Scheduling a preliminary fairness hearing on the question of whether
the proposed settlement, including payment of attorneys’ fees and costs, and
the Class Representatives’ enhancement awards, should be finally approved as
fair, reasonable and adequate as to the members of the Class;
	 
	 	b.	 	Preliminarily certifying for settlement purposes only a settlement
class for all claims;
	 
	 	c.	 	Preliminarily certifying this action under California Code of Civil
Procedure, Section 382 and California Rules of Court, Rules 1850, et seq., as a
class action for purposes of settlement;

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	 	d.	 	Approving as to form and content the proposed Notice;

	 
	 	e.	 	Approving as to form and content the proposed Claim Form;
	 
	 	f.	 	Directing the mailing of the Notice with the accompanying Claim Form by
first class mail to the Class Members;
	 
	 	i.	 	Preliminarily approving the settlement subject only to the
objections of Class Members and final review by the Arbitrator;
	 
	 	j.	 	Preliminarily approving Class Action Administration, Inc. to
act as Claims Administrator and costs of administration payable to the Claims
Administrator,
	 
	 	k.	 	Preliminarily approving Class Counsel’s request for attorneys’
fees subject to final review of the Arbitrator;
	 
	 	l.	 	Preliminarily approving Class Counsel’s request that Plaintiffs
receive an enhancement award; and
	 
	 	m.	 	Preliminarily approving Class Counsel’s request for costs.

     27. In advance of the final approval hearing, Class Counsel shall ensure that at least the
following documents are filed with the Arbitrator:

	 	a.	 	A report by the Claims Administrator identifying Class Members who
timely submitted Claims Forms, Requests for Exclusions and Objections and the
gross amount of settlement payments to which each Qualified Claimant will be
entitled;
	 
	 	b.	 	A duly noticed motion and accompanying memorandum of points and
authorities and other necessary documents for the Arbitrator to determine that
this Stipulation of Settlement is fair, reasonable, and adequate; and
	 
	 	c.	 	The orders and judgment described in Section 14(b) above.

DUTIES OF THE PARTIES FOLLOWING FINAL APPROVAL

     28. With in seven (7) days following final approval of the settlement provided for in this
Stipulation of Settlement, Class Counsel will submit to Court a petition to confirm the

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Arbitrator’s order and award pursuant to California Code of Civil Procedure Sections 1285, et.
seq. and a proposed judgment:

	 	a.	 	Approving and confirming the Arbitrator’s award and order; and
	 
	 	b.	 	Dismissing this action on the merits and with prejudice and permanently
barring all members of the Settlement Class who did not timely submit a Request
for Exclusion from prosecuting against Releasees, any individual or class
claims that were or could have been asserted in this Action, including without
limitation any claims released by this Stipulation of Settlement or any claims
arising out of the acts, facts, transactions, occurrences, representations, or
omissions set forth in this Action, through the date of the final approval of
this Settlement upon satisfaction of all payments and obligations hereunder.

PARTIES’ AUTHORITY

     29. The signatories hereto hereby represent that they are fully authorized to enter into this
Stipulation of Settlement and bind the Parties hereto to the terms and conditions hereof.

MUTUAL FULL COOPERATION

     30. The Parties agree to fully cooperate with each other to accomplish the terms of this
Stipulation of Settlement, including but not limited to, execution of such documents and to take
such other action as may reasonably be necessary to implement the terms of this Stipulation of
Settlement. The Parties to this Stipulation of Settlement shall use their best efforts, including
all efforts contemplated by this Stipulation of Settlement and any other efforts that may become
necessary by order of the Arbitrator or the Court, or otherwise, to effectuate this Stipulation of
Settlement and the terms set forth herein. As soon as practicable after execution of this
Stipulation of Settlement, Class Counsel shall, with the assistance and cooperation of Defendants
and their counsel, take all necessary steps to secure the Arbitrator’s final approval of this
Stipulation of Settlement.

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NO PRIOR ASSIGNMENTS

     31. The Parties hereto represent, covenant, and warrant that they have not directly or
indirectly, assigned, transferred, encumbered, or purported to assign, transfer, or encumber to any
person or entity any portion of any liability, claim, demand, action, cause of action or rights
herein released and discharged except as set forth herein.

NO ADMISSION

     32. Nothing contained herein, nor the consummation of this Stipulation of Settlement, is to be
construed or deemed an admission of liability, culpability, negligence, or wrongdoing on the part
of Defendants. Each of the Parties hereto has entered into this Stipulation of Settlement with the
intention to avoid further disputes and litigation with the attendant inconvenience and expenses.

CONSTRUCTION

     33. The Parties hereto agree that the terms and conditions of this Stipulation of Settlement
are the result of lengthy, intensive arms-length negotiations between the Parties, and that this
Stipulation of Settlement shall not be construed in favor of or against any party by reason of the
extent to which any party or his, her or its counsel participated in the drafting of this
Stipulation of Settlement.

CAPTIONS AND INTERPRETATIONS

     34. Paragraph titles or captions contained herein are inserted as a matter of convenience and
for reference, and in no way define, limit, extend, or describe the scope of this Stipulation of
Settlement or any provision hereof. Each term of this Stipulation of Settlement is contractual and
not merely a recital.

MODIFICATION

     35. This Stipulation of Settlement may not be changed, altered, or modified, except in writing
and signed by the Parties hereto, and approved by the Arbitrator. This Stipulation of Settlement
may not be discharged except by performance in accordance with its terms or by a writing signed by
the Parties hereto.

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INTEGRATION CLAUSE

     36. This Stipulation of Settlement contains the entire agreement between the Parties relating
to the settlement and transaction contemplated hereby, and all prior or contemporaneous agreements,
understandings, representations, and statements, whether oral or written and whether by a party or
such party’s legal counsel, are merged herein. The Parties acknowledge that no representations,
statements or promises made by the other party, or by their respective agents or attorneys have
been relied upon in entering into this Stipulation of Settlement. The Parties explicitly recognize
California Civil Code Section 1625 and California Code of Civil Procedure Section 1856(a), which
provide that a written agreement is to be construed according to its terms, and may not be varied
or contradicted by extrinsic evidence, and agree that no such extrinsic oral or written
representations or terms shall modify, vary or contradict the terms of this Stipulation of
Settlement. No rights hereunder may be waived except in writing.

BINDING ON ASSIGNS

     37. This Stipulation of Settlement shall be binding upon and inure to the benefit of the
Parties hereto and their respective heirs, trustees, executors, administrators, successors and
assigns.

CLASS COUNSEL SIGNATORIES

     38. It is agreed that because the large number of Class Members, it is impossible or
impractical to have each Class Member execute this Stipulation of Settlement. The Notice, Exhibit
“A” hereto, will advise all Class Members of the binding nature of the release and such shall have
the same force and effect as if this Stipulation of Settlement were executed by each member of the
Class.

PUBLIC COMMENT

     39. All of the Parties and their counsel agree that, until the first Notice is mailed pursuant
to paragraph 15 of this Stipulation of Settlement, they shall not share or have any communications
with any member of the media other than to say that “the matter has been resolved to the mutual
satisfaction of the Parties.” Plaintiffs, Class Counsel, Defendants and their Counsel agree that
at no time will Plaintiffs or Class Counsel affirmatively contact the

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media or press to discuss any aspect of the settlement. Notwithstanding the terms of this
paragraph, Defendants shall be free to make whatever disclosures it deems necessary and appropriate
to comply with its reporting obligations as a public company and shall be free to make whatever
disclosures it deems necessary and appropriate to its officers, managers, or employees, provided
those disclosures are truthful. After the Notice is sent, Plaintiffs and Class Counsel may only
refer others to the public record for information about this case and/or make comments to others
provided those comments reflect information contained in the public record.

COUNTERPARTS

     40. This Stipulation of Settlement may be executed in counterparts, and when each party has
signed and delivered at least one such counterpart, each counterpart shall be deemed an original,
and, when taken together with other signed counterparts, shall constitute one Stipulation of
Settlement, which shall be binding upon and effective as to all Parties.

	 	 	 	 	 	 	 	 	 
	DATED: March 21, 2007
	 	 	 	 	 	 	 	 
	 	 	By 	/s/ Robert Newton	 	 
	 	 	 	 	 	 
	 	 	 	 	     PC MALL, INC.

     Robert Newton, General Counsel	 	 
	 
	 	 	 	 	 	 	 	 
	DATED: March 21, 2007
	 	 	 	 	 	 	 	 
	 	 	By 	/s/ Pete Freix	 	 
	 	 	 	 	 	 
	 	 	 	 	     PC MALL SALES, INC.

     Pete Freix, President	 	 
	 
	 	 	 	 	 	 	 	 
	DATED: March 21, 2007
	 	 	 	 	 	 	 	 
	 	 	By: 	/s/ Nicole Atkins	 	 
	 	 	 	 	 	 
	 	 	 	 	     NICOLE ATKINS	 	 
	 
	DATED: March 21, 2007	 	FOR THE SETTLEMENT CLASS	 	 
	 
	 	 	By: 	/s/ Nicole Atkins	 	 
	 	 	 	 	 	 
	 
	 	 	Print Name:	 	Nicole Atkins	 	 
	 

	 	 	 	 	 	 

	 	 

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	Approved As To Form And
	 	 	 	 	 	 
	Content:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	DATED: March 21, 2007
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Philip Poliner
 

     Philip Poliner
	 	 
	 

	 	 	 	      Westrup Klick, LLP	 	 
	 

	 	 	 	      Attorneys for Plaintiff Nicole Atkins and the	 	 
	 

	 	 	 	      Settlement Class	 	 
	 
	 	 	 	 	 	 
	DATED: March 21, 2007
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael L. Carver
 

      Michael L. Carver
	 	 
	 

	 	 	 	      Law Offices of Michael L. Carver	 	 
	 

	 	 	 	     Attorneys for Plaintiff Nicole Atkins and the	 	 
	 

	 	 	 	      Settlement Class	 	 
	 
	 	 	 	 	 	 
	DATED: March 21, 2007
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Steven M. Zadravecz
 

      Steven M. Zadravecz
	 	 
	 

	 	 	 	     Morrison & Foerster LLP	 	 
	 

	 	 	 	      Attorneys for Defendants	 	 

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