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HomeMy WebLinkAbout6D(2) d SpUTZ(g� 04,11�rICr r o Community & Economic Development " �B S 1200 County-City Building, 227 West Jefferson, South Bend, Indiana 46601-1830. Phone 574/235-9371 Fax 574/235-9021 To: South Bend Redevelopment Commission From: Don Inks Subject: Memorandum Of Understanding with F Cubed Date: November 6, 2012 Attached for your review is Memorandum of Understanding (MOU) with F Cubed. F Cubed is one of the first companies to graduate from Innovation Park. They would like to locate their growing business in Ignition Park when a multi-tenant facility is available for them to lease space. In the interim they will be locating in the former St. Joseph High School. As part of our efforts to retain this company in South Bend, and eventually have them locate in Ignition Park, the MOU commits Redevelopment to acquiring certain scientific equipment and providing an opportunity for F Cubed to lease the equipment. The cost of the equipment is estimated to be $125,489. With a contingency of about 10%the total is expected to not exceed $138,000. F Cubed is an emerging company engaged in the development of a technology for the rapid and direct detection of DNA to be utilized for the identification of contaminated drinking water, medical diagnostics in retail medical clinics and homeland defense. The company currently is located at Innovation Park. They will be temporarily moving to the former St. Joseph High School, with the desire and intent to move to Ignition Park when a multi-tenant facility becomes available. As part of an incentive package to retain F Cubed in the community, the Redevelopment Commission is being asked to acquire and lease certain scientific equipment to F Cubed. Subject to the Redevelopment Commission completing the acquisition and subsequent disposition process as required by state law, the following are the proposed terms of a lease for this equipment. The initial Term of the lease is 7 years. Rental payments total $7 for the seven years. Upon F Cubed locating in Ignition Park, or another site within the Airport Economic Development Area (AEDA), F Cubed has the option to buy the equipment for $1. Should F Cubed not locate within the AEDA during the term of the lease, then F Cubed shall be required to purchase the equipment for 150% of cost. F Cubed expects the equipment will allow them to create approximately 13 jobs and result in new capital investment of$2,647,550. Staff recommends favorable approval of this MOU, and proceeding with the acquisition of equipment for not more than $138,000. What We Do Today Makes A Dtlfer+ence! RESOLUTION NO. 3105 RESOLUTION OF THE SOUTH BEND REDEVELOPMENT COMMISSION APPROVING OF THE FORM OF AN ECONOMIC DEVELOPMENT MEMORANDUM OF UNDERSTANDING, AUTHORIZING ITS EXECUTION AND ATTESTATION WITH RESPECT TO AN ECONOMIC DEVELOPMENT PROJECT TO BE UNDERTAKEN BY F CUBED, LLC, IN THE CITY AND AUTHORIZING THE COMMISSION TO INITIATE A DISPOSITION PROCESS IN CONNECTION THEREWITH WHEREAS, the South Bend Redevelopment Commission (the "Commission"), the governing body of the City of South Bend, Indiana (the "City"), Redevelopment District and the City of South Bend, Indiana, Department of Redevelopment, exists and operates under the provisions of Indiana Code Section 36-7-14, as amended from time to time (the "Act"); and WHEREAS, F Cubed, LLC ("F Cubed") is an emerging company engaged in the development of a technology created by the University of Notre Dame (the "University") for the rapid and direct detection of DNA to be utilized for identification of contaminated drinking water, medical diagnostics in retail medical clinics and homeland defense (the "Technology"); and WHEREAS, F Cubed has operations presently located at Innovation Park in the City (the "South Bend Operations"); and WHEREAS, in order to more fully develop the Technology and expand its applications, F Cubed requires certain equipment, more particularly described in the MOU (as defined below) (the "Equipment"), to be used in connection with the South Bend Operations; and WHEREAS, F Cubed anticipates being located for a period of time at Innovation Park or temporarily located elsewhere on University property but desires to Iocate at Ignition DMS_US 51©53184v I Park, a technology park under development in the City which is located in the Airport Economic Development Area; and WHEREAS, there has been prepared a form of Economic Development Memorandum of Understanding for execution by F Cubed and the Commission (the "MOU"), which MOU sets forth the understanding of the parties thereto regarding F Cubed relocating its South Bend Operations to Ignition Park upon completion of the same and upon lease terms reasonably acceptable to F Cubed, and the Commission undertaking certain actions necessary to provide certain economic incentives to F Cubed consisting of the acquisition of the Equipment as described in the MOU; and WHEREAS, the Commission desires to approve of the form of the MOU and authorize the President of the Commission to execute and the Secretary of the Commission to attest the MOU in its final form; NOW, THEREFORE, BE IT RESOLVED by the South Bend Redevelopment Commission as follows: Section 1. The Commission hereby approves of the form of MOU presented to the Commission at this meeting. The Commission further acknowledges those provisions of the MOU which contemplate certain actions being undertaken by the Commission to acquire and dispose of the Equipment, and the Commission is hereby authorized to initiate such disposition process in accordance with such procedures as may be required by the Act. Section 2. The President is hereby authorized to execute and the Secretary is hereby authorized to attest each the MOU in the�form presented to the Commission at this meeting with such changes as may be recommended by counsel to the Commission as it may - 2 - DMS US 510531841 deem necessary or appropriate, with such execution and attestation evidencing approval of any such changes. Section 3. This Resolution shall be in full force and effect from and after its adoption by the Commission. a , APPROVED AND ADOPTED at a meeting of the South Bend Redevelopment Commission held on the day of November, 2012. SOUTH BEND REDEVELOPMENT COMMISSION By: President ATTEST: Secretary - 3 - DMS_US 51053184v! ECONOMIC DEVELOPMENT MEMORANDUM OF UNDERSTANDING THIS ECONOMIC DEVELOPMENT MEMORANDUM OF UNDERSTANDING (this "MOU") is made and entered into as of the day of , 2012, by and between the SOUTH BEND REDEVELOPMENT COMMISSION (the "Commission"), organized and existing under Indiana Code Section 36-7-14, and F CUBED, LLC, an Illinois limited liability company ("F Cubed"). WITNESSETH: WHEREAS, the Commission, the governing body of the City of South Bend, Indiana, Redevelopment District and the City of South Bend, Indiana, Department of Redevelopment, exists and operates under the provisions of Indiana Code Section 36-7-14, as amended from time to time (the "Act"); and WHEREAS, the Commission desires to foster redevelopment and economic development within the City of South Bend, Indiana (the "City"); and WHEREAS, F Cubed is an emerging company engaged in the development of a technology created by the University of Notre Dame (the "University") for the rapid and direct detection of DNA to be utilized for identification of contaminated drinking water, medical diagnostics in retail medical clinics and homeland defense (the "Technology"); and WHEREAS, F Cubed has operations presently located at Innovation Park in the City (the "South Bend Operations"); WHEREAS, in order to more fully develop the Technology and expand its applications, F Cubed requires certain equipment, more particularly described in the attached Exhibit A (the "Equipment"), to be used in connection with the South Bend Operations; and WHEREAS, F Cubed has requested that the Commission provide a financial incentive in order to assist with the funding of a portion of the cost of the Equipment; and WHEREAS, F Cubed anticipates being located at Innovation Park or temporarily located elsewhere on University property but desires to locate at Ignition Park, a technology park under development in the City which is located in the Airport Economic Development Area (the "Area"); and WHEREAS, in order to facilitate the acquisition of the Equipment by F Cubed, the Commission has agreed to use its best efforts to take certain actions as described herein to pay for a portion of the costs of the Equipment pursuant to the Act, and F Cubed has agreed, in turn, to relocate its South Bend Operations to Ignition Park, promptly after the first multi-tenant facility development at Ignition Park is completed, all upon the terms and subject to the conditions set forth herein; and WHEREAS, to provide moneys to pay for a portion of the costs of the Equipment, upon the authorization of the Commission and such other procedures as are required by law, the BDDBO1 9491835v4 Commission intends to cause to be appropriated approximately One Hundred Thirty Eight Thousand and No/100 Dollars ($138,000.00) of funds payable from existing tax increment finance revenue funds allocable to the Area and already collected and on deposit (the "TIF Revenues"); and WHEREAS, the Commission has adopted a resolution approving of the execution of this MOU by the Commission, a copy of which resolution is attached hereto as Exhibit B and incorporated herein. NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties do hereby agree as follows: ARTICLE I.. RECITALS 1.01 Recitals Part of MOU. The covenants and recitations set forth in the foregoing recitals are material to this MOU and are hereby incorporated into and made a part of this MOU as though they were fully set forth in this Section 1.01. ARTICLE I1. MUTUAL ASSISTANCE 2.01 Mutual Assistance. The parties agree, subject to further proceedings required by law, to take such actions, including the execution and delivery of such documents, instruments, petitions and certifications (and, in the case of the Commission, the adoption of such resolutions), as may be necessary or appropriate, from time to time, to carry out the terms, provisions and intent of this MOU and to aid and assist each other in carrying out said terms, provisions and intent. ARTICLE III. REPRESENTATIONS AND COVENANTS OF THE COMMISSION AND F CUBED 3.01 Equipment Lease Aree_ment. The Commission shall use its best commercial efforts to acquire the Equipment pursuant to the Act and the requirements of Indiana law with the assistance of F Cubed. In connecting therewith, the Commission and F Cubed shall cooperate together in good faith with regard to the selection and pricing of the Equipment. In conjunction with the Commission's acquisition of the Equipment, the Commission shall undertake a disposition process to permit the Commission and F Cubed to enter into an Equipment Lease Agreement in substantially the form attached hereto at Exhibit C. The Equipment Lease Agreement shall, among other things, provide for the lease of the Equipment by F Cubed from the Commission, at a rental payment amount that is substantially discounted upon the condition that F Cubed relocates its South Bend Operations to Ignition Park promptly upon completion of the first multi-tenant facility at Ignition Park. 3.02 F Cubed Relocation to Ignition Park. F Cubed shall promptly, within ninety (90) days of the completion date (the "Completion Date") of the first multi-tenant facility development (the "Development") at Ignition Park, enter into a lease agreement with the - 2 - BDDBOI 9491835N,4 appropriate parties (the "Ignition Park Lease") upon terms reasonably acceptable to F Cubed in its commercially reasonable discretion for space in the Development and relocate all of its South Bend Operations to Ignition Park. For purposes of this MOU, the Completion Date shall be such date as is provided or evidenced in a certificate of completion or similar document prepared, signed or filed by the developer of the Development; provided however, that under no circumstance shall the Completion Date be later than the date upon which the first tenant occupies space at or a portion of Ignition Park. The parties agree that if F Cubed determines that it is necessary to relocate its South Bend Operations to accommodate its corporate growth prior to the Completion Date or if F Cubed is unable to enter into the Ignition Park Lease upon terms reasonably acceptable to F Cubed in its commercially reasonable discretion, then F Cubed may alternatively fulfill its obligations under this Section 3.02 by relocating all of its South Bend Operations to a location that is (a) within the South Bend Renaissance District or within the Area generally (together, the "Alternate Location") and (b) reasonably acceptable to the Commission. Any failure by F Cubed to relocate its South Bend Operations to Ignition Park or, if applicable, the Alternate Location pursuant to this Section 3.02 shall be deemed a default under this MOU and under the Equipment Lease Agreement, and in the event of such default F Cubed shall be obligated to promptly, within fifteen (15) days, purchase the Equipment from the Commission pursuant to Section 10 of the Equipment Lease Agreement for a cash purchase price equal to one and one half(1.5) times the amount the Commission originally paid for the Equipment. 3.03 Acknowledgement and Representations of F Cubed. F Cubed acknowledges that the Commission is committing TIF Revenues from the Area for the purchase of the Equipment upon the representation of F Cubed that it desires to relocate its South Bend Operations to, in order, Ignition Park or the Alternate Location. F Cubed represents to the Commission that, based upon economic data currently available, F Cubed anticipates that the Equipment will indirectly result in the creation by F Cubed of approximately 13 new jobs and will result in new capital investment of approximately $2,647,550. ARTICLE IV. AUTHORITY 4.01 Actions. The Commission represents and warrants that it has taken or will take (subject to F Cubed's performance of its agreements and obligations hereunder and applicable law) such action(s) as may be required and necessary to enable the Commission to execute this MOU and to carry out fully and perform the terms, covenants, duties and obligations on its part to be kept and performed as provided by the terms and provisions hereof. 4.02 Powers. The Commission represents and warrants that it has full constitutional and lawful right, power and authority, under currently applicable law, to execute and deliver and perform its obligations under this MOU, and that, subject to the conditions described herein, all of the foregoing have been or will be duly and validly authorized and approved by all necessary proceedings, findings and actions. 4.03 Authorized Parties. Whenever under the provisions of this MOU or any other related documents and instruments, any supplemental agreement, request, demand, approval, notice or consent of the Commission or F Cubed is required, or any of such parties is required to agree or to take some action at the request of another party, such approval or such consent or request shall be given (unless otherwise provided herein or prohibited by law) for the - 3 - BDDB01 9491835v4 Commission by the President of the Commission or his written designee, and for F Cubed by any officer of F Cubed so authorized; and any person shall be authorized to act on any such agreement, request, demand, approval, notice or consent or other action and none of the parties hereto shall have any complaint against the other as a result of any such action taken. ARTICLE V. GENERAL PROVISIONS 5.01 Indemnity; No Joint Venture or Partnership. F Cubed covenants and agrees, at the expense of F Cubed, to pay and to indemnify and save the Commission, and its officers and employees (the "Indemnitees") harmless of, from and against, any and all claims, damages, demands, expenses and liabilities resulting directly or indirectly from or related to this MOU or the Equipment, unless such claims, damages, demands, expenses or liabilities arise by reason of the negligent or other wrongful act or omission of the Commission, its agents or other Indemnitees. However, nothing contained in this MOU shall be construed as creating either a joint venture or partnership relationship between the Commission and F Cubed. 5.02 Time of Essence. Time is of the essence of this MOU. The parties shall make every reasonable effort to expedite the subject matters hereof (subject to any time limitations described herein) and acknowledge that the successful performance of this MOU requires their continued cooperation. 5.03 Breach. Before any failure of any party of this MOU to perform its obligations under this MOU shall be deemed to be a breach of this MOU, the party claiming such failure shall notify, in writing, the party alleged to have failed to perform such obligation and shall demand performance. No breach of this MOU may be found to have occurred if performance has commenced to the reasonable satisfaction of the complaining party within thirty (30) days of the receipt of such notice. If after said notice, the breaching party fails to cure the breach, the non-breaching party may seek any remedy available at law or equity, including the remedy of specific performance. 5.04 Amendment. This MOU, and any exhibits attached hereto, may be amended only by the mutual consent of the parties, by the adoption of a resolution of each of the Commission approving said amendment, as provided by law, and by the execution of said amendment by the parties or their successors in interest. 5.05 No Other MOU. Except as otherwise expressly provided herein, this MOU supersedes all prior agreements, negotiations and discussions relative to the subject matter hereof and is a full integration of the agreement of the parties. 5.06 Severability. If any provision, covenant, agreement or portion of this MOU or its application to any person, entity or property, is held invalid, such invalidity shall not affect the application or validity of any other provisions, covenants, agreements or portions of this MOU and, to that end, any provisions, covenants, agreements or portions of this MOU are declared to be severable. 5.07 Indiana Law. This MOU shall be construed in accordance with the laws of the State of Indiana. - 4 - BDD60 l 949]&35v4 5.08 Notices. All notices and requests required pursuant to this MOU shall be deemed sufficiently made if delivered, as follows: To F Cubed: F Cubed, LLC Attn: Leslie T. Ivie 1441 North Michigan Street South Bend, Indiana 46617 To the Commission: South Bend Redevelopment Commission Attn: President City-County Building 227 West Jefferson Boulevard, Room 1200 South Bend, Indiana 46601 or at such other addresses as the parties may indicate in writing to the other either by personal delivery, courier, or by registered mail, return receipt requested, with proof of delivery thereof. Mailed notices shall be deemed effective on the third day after mailing; all other notices shall be effective when delivered. 5.09 Counterparts. This MOU may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same agreement. 5.10 Consent or Approval. Except as otherwise provided herein, whenever consent or approval of any party is required, such consent or approval shall not be unreasonably withheld or delayed. [signature page follows] - 5 - BDDBO 1 9491835x4 TN WITNESS WHEREOF, the parties have duly executed this MOU pursuant to all requisite authorizations as of the date first above written. SOUTH BEND REDEVELOPMENT COMMISSION By: President ATTEST: Secretary F CUBED, LLC By: Leslie T. Ivie Its: President & CEO (Signature Page to Economic Development Memorandum of Understanding) BDDB41 9491835v4 EXHIBIT A EQUIPMENT See Attached BDDBO 1 94918350 z O � 2 > 6S 2 s d ? n T m Q '° a ^ o m _ A � C A m R n n 3 Q ? A b to o A � ° s m m M v m N Iv A 1 � 3 m N p 2 � m O Q Vs ti N N y yCp Ro u0 o °o oo o oo °o o PO N o J lNi� O u�i N m b po 8 W D W o o O a O o O O O m o m d m m iG c n ^ m O n C Q m V O a OO a '" 3. s .'zo m s 3 n ro s o Ti 2 c S o S C m 2 u ~ ro K y ¢ 2 O : -°! rt d f1 ro T 3 �• y O m n F n a N a u m s `6 C a C o n w ° ' n m 'b on = 'm m a m 'Z- o ° A 3 c N a a n a m A m C vi, V ry _ VI F N A 2 n 3 e C AEF , kE � ) � � ^ ) 2 � L -f, ( ƒ- { 3 ) ) \ z \ r » f � y2 37} # $ \ ( 3 \ )3a3 t [ / \ m \ \ � EXHIBIT B APPROVING RESOLUTION See Attached BDDBO 19441835v4 EXHIBIT C EQUIPMENT LEASE AGREEMENT See Attached BDDBOI 9491835v4 EQUIPMENT LEASE AGREEMENT THIS EQUIPMENT LEASE AGREEMENT (this "Lease") is made as of the day of , 2012, by and between the SOUTH BEND REDEVELOPMENT COMMISSION ("Lessor"), organized and existing under Indiana Code 36-7-14, and F CUBED, LLC, an Illinois limited liability company ("Lessee"), having an office located in South Bend, Indiana. RECITALS A. Lessor, the governing body of the City of South Bend, Indiana, Redevelopment District and the City of South Bend, Indiana, Department of Redevelopment, exists and operates under the provisions of Indiana Code Section 36-7-14, as amended from time to time(the "Act"). B. Lessor desires to foster redevelopment and economic development within the City of South Bend, Indiana (the "City"). C. Lessee is an emerging company engaged in the development of a technology created by the University of Notre Dame (the "University") for the rapid and direct detection of DNA to be utilized for identification of contaminated drinking water, medical diagnostics in retail medical clinics and homeland defense (the "Technology"). D. Lessee has operations presently located at Innovation Park in the City (the "South Bend Operations"). E. In order to more fully develop the Technology and expand its applications, Lessee requires the Equipment (as defined below), to be used in connection with the South Bend Operations. F. Lessee anticipates being located at Innovation Park or temporarily located elsewhere on University property but desires to locate at Ignition Park, a technology park under development in the City which is located in the Airport Economic Development Area. G. Lessor owns the Equipment (as defined below) described on the attached Schedule A. H. As a material inducement for Lessor to enter into this Lease upon the terms provided herein, and in connection with that certain Economic Development Memorandum of Understanding dated , 2012, by and between Lessor and Lessee (the "MOU"), Lessee has agreed to relocate its South Bend Operations to Ignition Park, promptly after the first multi-tenant facility development at Ignition Park is completed, upon the terms and subject to the conditions set forth herein and in the MOU. 1. In connection with the foregoing, Lessee now desires to lease the Equipment from Lessor, and Lessor now desires to lease the Equipment to Lessee, upon the terms and subject to the conditions set forth in this Lease. S DDB01 9491441v5 AGREEMENT NOW THEREFORE, in consideration of the foregoing, the mutual covenants and agreements set forth in this Lease and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lessor and Lessee agree as follows: 1. Lease of Equipment. Subject to the terms and conditions of this Lease, Lessor agrees to lease to Lessee, and Lessee agrees to lease from Lessor, the equipment described on the attached Schedule A (collectively, the "Equipment"). As used in this Lease, the term "Equipment" refers to all items and/or units of Equipment collectively and to each item or unit of Equipment individually, as the context requires, and includes any and all Additions (as defined below) and any amendments, modifications and additions to Schedule A to which the parties may agree from time to time. 2. Term. The term of this Lease (the "Initial Term") shall commence on the date on which the Equipment is delivered to Lessee (the "Commencement Date"). The Initial Term shall end on the date that is seven (7) years after the Commencement Date. The parties may, but are not obligated to, renew this Lease beyond the Initial Term (each a "Renewal Term"). Any such renewal shall be evidenced in a writing signed by both parties at least one hundred eighty (180) days before the expiration of the Initial Term. The Initial Term together with any Renewal Term(s) shall hereinafter be referred to as the "Term". 3. Inspection and Acceptance. Lessee shall have a period of seven (7) calendar days from the date of delivery of the Equipment (the ""Inspection Period'") to (i) inspect the Equipment to ensure it is in good condition and repair and (ii)notify Lessor, in writing, that the Equipment is not in good condition and repair, in which case Lessor shall have a period of twenty-one (21) days from the date of such notice to cure the same or otherwise provide (or cause the manufacturer to provide) Lessee with Equipment that is in good condition and repair. If Lessee does not notify Lessor in writing during the Inspection Period that any of the Equipment is not in good condition and repair, then Lessee shall be deemed to have inspected, be satisfied with and accepted the Equipment in such good condition and repair. 4. Rental Payments and Other Lease Charges. (a) Rental Payments. Lessee agrees to pay to Lessor, during the Initial Term, as rent for the Equipment, the total sum of Seven Dollars ($7), payable on the Commencement Date (the "Rental Payment"). The Rental Payment and any other amounts due under this Lease by Lessee to Lessor shall be paid without relief from valuation and appraisement laws. (b) Late Payments. If the Rental Payment or any other amount owed under this Lease is not paid to and received by Lessor within three (3) business days after the date such payment is due, then in addition to all amounts payable by Lessee as a result of Lessor's exercise of any remedies provides in this Lease, Lessee shall immediately pay to Lessor a late payment charge equal to the greater of one and one-half percent (1.5%) of all outstanding amounts due or the maximum amount allowed by applicable law ("Late Payment Charge"). The - 2 - BDDB©1 9491441v5 Late Payment Charge shall accumulate and be reapplied each month that any amount due under this Lease remains due, outstanding and unpaid by Lessee. 5. Delivery and Installation. Lessee at its expense will pay for transportation, packing, taxes, duties, insurance, installation, testing and other charges in connection with the delivery,,installation, use and return of the Equipment. Shipping terms shall be free on board shipping point and, as such, risk of loss shall pass from Lessor to Lessee when the Equipment is delivered to the shipment courier for delivery to Lessee. 6. Title and Identification. This Lease is a true lease and does not convey to Lessee any right, title, or interest in the Equipment, except as a lessee. Title to the Equipment shall remain with Lessor at all times. All replacement parts and nonseverable additions, attachments, accessories, modifications and repairs of or to the Equipment (collectively, "Additions") shall be deemed part of the Equipment and shall thereupon belong to Lessor. All of the Equipment shall remain personal property (even if any or all of the Equipment is hereafter attached or affixed to realty). At any time during the Term, upon the written request of Lessor, Lessee will promptly affix to any item or unit of Equipment, in a prominent place, or as directed by Lessor, labels or other markings supplied by Lessor indicating Lessor's ownership of the Equipment. To the extent that under the provisions of the Indiana Uniform Commercial Code, as amended, this Lease shall be considered to be a secured transaction, Lessee hereby grants to Lessor a purchase money security interest in the Equipment and all Additions. Lessor, in the exercise of its sole discretion and at Lessee's expense, may file any Uniform Commercial Code financing statements with respect to the Equipment and the lease transaction(s) evidenced by this Lease. Lessee hereby authorizes Lessor to file, at Lessee's expense, such financing and continuation statements, amendments and supplements thereto, and other documents which Lessor may from time to time deem necessary to perfect, preserve and protect its right, title and interests in or to the Equipment and all Additions. Lessee agrees, at Lessee's expense, to execute promptly and deliver any statement or instrument reasonably requested by Lessor for the purpose of showing or protecting Lessor's interest in the Equipment, including, without limitation, security agreements and waivers with respect to rights in the Equipment from any owners or mortgagees of any real estate wherein the Equipment and all Additions may be located. In the event Lessee fails or refuses to execute any such document, Lessee hereby irrevocably authorizes Lessor and any officer of Lessor as its attorney-in-fact, to prepare and execute any such document in the name of and on behalf of Lessee, at Lessee's expense. 7. Disclaimer of Warranties and Limitation on Damages. LESSOR MAKES NO WARRANTIES OTHER THAN THOSE SET OUT IN THIS LEASE. NO WARRANTIES (OTHER THAN WARRANTY OF TITLE AS PROVIDED BY THE UNIFORM COMMERCIAL CODE) SHALL BE IMPLIED OR OTHERWISE CREATED AT LAW OR IN EQUITY, INCLUDING, BUT NOT LIMITED TO, WARRANTY OF MERCHANTABILITY AND WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, AUTHORIZATION FROM LESSOR IS REQUIRED PRIOR TO THE PERFORMANCE OF ANY MANUFACTURER WARRANTY WORK PERFORMED ON THE EQUIPMENT. LESSOR RESERVES THE RIGHT TO MODIFY, ALTER AND IMPROVE ANY PART OR PARTS OF THE EQUIPMENT WITHOUT INCURRING ANY OBLIGATION TO REPLACE ANY PARTS OR PARTS PREVIOUSLY SUPPLIED. NO DEFECT, REGARDLESS THE CAUSE OR CONSEQUENCE, SHALL RELIEVE LESSEE FROM PERFORMANCE UNDER THIS - 3 - 13DDB01 9491441 v5 LEASE, INCLUDING, WITHOUT LIMITATION, ITS OBLIGATION TO MAKE THE RENTAL PAYMENT, LESSOR, OR THE PRODUCT MANUFACTURER, AS THE CASE MAY BE UNDER ANY EXISTING WARRANTY, IN ITS OR THEIR REASONABLE DISCRETION, WILL DETERMINE WHETHER A PART NEEDS TO BE REPAIRED OR REPLACED. LESSOR SHALL NOT BE LIABLE TO LESSEE HEREUNDER UNDER ANY CIRCUMSTANCE FOR ANY CONSEQUENTIAL, SPECIAL, PUNITIVE, OR INDIRECT DAMAGES OF ANY KIND, INCLUDING BUT NOT LIMITED TO LOST PROFITS OR OPPORTUNITIES. 8. Care, Maintenance, and Use of the Equipment. Lessee shall not permit the Equipment to be used or operated in violation of any applicable law, rule or regulation. Lessee, at its sole cost and expense, shall keep the Equipment in good operating order, repair and condition and shall perform or cause to be performed all maintenance and repairs to the Equipment, as and when required, all in strict accordance with the written specifications for such Equipment. Lessee agrees that any service, maintenance or repairs which Lessee causes to be undertaken or performed with respect to the Equipment shall be performed only by competent persons approved by Lessor to service or repair the Equipment. Lessee shall keep the Equipment only at the locations identified in the attached Schedule A (the "Equipment Locations"), and shall not remove items of the Equipment from the Equipment Locations to which it is designated in Schedule A (or any other place as may subsequently be permitted by the written consent of Lessor) without the express written consent of Lessor, which consent shall not be unreasonably withheld. Under no circumstance shall any item of the Equipment be relocated outside of city limits of South Bend, Indiana, or on the campus of the University. Lessor shall have the right during Lessee's normal business hours and upon no less than twenty-four (24) hours prior notice and subject to applicable laws and regulations, to enter Lessee's premises where the Equipment is located in order to inspect, observe, affix labels or other markings, to confirm that the Equipment's use and condition are in compliance with the terms of this Lease, and to otherwise protect Lessor's interest therein. 9. Return of Equipment to Lessor/Option to Purchase. Subject to the provisions of Section 10 below and Section 3.02 of the MOU, upon the expiration of the Term or earlier termination of this Lease, Lessee shall immediately return the Equipment to Lessor at the address identified in Section 21 below, or such other address as Lessor shall direct by sending written notice to Lessee. The Equipment, as returned, shall be free and clear of all liens, charges or encumbrances (except any such liens, charges or encumbrances that existed as of the date of delivery of the Equipment) and in good operating order, repair and condition, ordinary wear and tear excepted ("Returnable Condition"). When returning the Equipment, Lessee shall use its best efforts and care to pack and insulate the Equipment to protect the Equipment from damage during transit. Lessee shall cause the Equipment to be returned by personal delivery, and Lessee shall insure such delivery in an amount not less than the fair market value of the Equipment. Lessee shall pay all costs and expenses, including costs and expenses necessary to return the Equipment to Lessor in Returnable Condition. Lessee agrees to reimburse Lessor for all costs and expenses incurred by Lessor to place the Equipment in Returnable Condition, and to retake possession of or effect the return of the Equipment (including, without limitation, reasonable attorneys' fees). Notwithstanding the foregoing, upon Lessee's relocation of its South Bend Operations to Ignition Park pursuant to a rental, lease or occupancy agreement with a term of not less than five (5) years, Lessee shall have the option, but not the obligation, to purchase the -4- BDDBO 1 4491441 v5 Equipment outright for the sum of One Dollar ($1) (the "Option Purchase Price '), Upon Lessee's payment in full of the Option Purchase Price to Lessor, title to the Equipment shall pass to Lessee, and Lessor shall execute such bills of sale, assignments and other instruments and documents necessary to transfer title to the Equipment to Lessee. 10. Obligation to.Purchase Equipment. Notwithstanding the provisions contained in Section 9, in the event that (i) Lessee breaches its obligations under Section 3.02 of the MOU (regarding Lessee's obligations with respect to relocating its South Bend operations) and fails to cure such breach in accordance with Section 5.03 of the MOU or (ii) an Event of Default occurs hereunder, Lessee shall be obligated to promptly, within fifteen (15) days, purchase the Equipment for a cash purchase price equal to one and one half (1.5) times the amount Lessor originally paid for the Equipment (the "Equipment Purchase Price"). Upon Lessee's payment in full of the Equipment Purchase Price to Lessor, title to the Equipment shall pass to Lessee, and Lessor shall execute such bills of sale, assignments and other instruments and documents necessary to transfer title to the Equipment to Lessee. Lessee acknowledges and agrees that Lessee's conditional obligation to the purchase the Equipment for the Equipment Purchase Price, as set forth in this Section 10, is a material inducement for Lessor to enter into this Lease upon the terms provided herein, including, without limitation, the heavily discounted amount of the Rental Payment. 11. Taxes and Other Charges. All taxes, assessments, license fees, and other charges (including, without limitation, personal property taxes and sales, use and leasing taxes) imposed, levied or assessed on or with respect to the ownership, possession, rental, operation or use of the Equipment during the Term shall be paid by Lessee before the same shall become delinquent, whether such taxes would ordinarily be assessed against Lessor or Lessee. If Lessee fails to make such payments, then Lessor may, in its discretion, and in addition to all other remedies available to it under this Agreement or by law, pay the same and seek full reimbursement from Lessee plus costs and interest at the Default Rate. 12. Indemnification; Limitation of Liability. (a) Indemnification by Lessee. Lessee agrees to indemnify, defend and hold harmless Lessor from and against any claims, damages, losses or expenses (including reasonable attorney's fees) ("Losses") by third parties arising out of, connected with, occurring by virtue of or relating in any way to the installation, possession, operation or use of the Equipment; provided however, that Lessee shall not be obligated to indemnify Lessor for Losses caused by Lessor's grossly negligent or willful misconduct in servicing or maintaining the Equipment. This indemnity shall not be affected or terminated by, and shall survive, termination of this Lease, for any reason, with respect to all or any part of the Equipment. (b) Indemnification by Lessor. Lessor agrees to assign to Lessee any indemnification rights it has provided by the manufacturer of any item of the Equipment related to any claims, losses or expenses arising out of or relating to: (1) any claim that the Equipment infringes, violates, or misappropriates the intellectual property rights of any third party; and/or (2) any claim for personal - 5 - BDDBQ 1 9491441 v5 injury or property damage for Equipment that has been negligently designed or manufactured. (c) Indemnification Procedures. A party seeking indemnification hereunder (the "Indemnified Party") shall promptly notify the other party (the "Indemnifying Party") in writing of any claim and shall provide the Indemnifying Party any related documents constituting the basis for such claim. The failure by an Indemnified Party to timely furnish the Indemnifying Party any notice or documentation under this Section 12(c) shall not relieve the Indemnifying Party from any responsibility for the matters relating to such notice or documentation, except to the extent such failure materially and adversely prejudices the ability of the Indemnifying Party to defend such claim. (d) Limitation of Liability. Except for liability for third party claims, in no event shall either party be liable for any indirect, incidental, special, exemplary, punitive or consequential damages of any kind whatsoever (including lost profits or loss of goodwill) even if the party has been advised of the possibility of such damages. 13. Insurance. Lessee shall obtain and maintain in full force and effect during the Term and until the Equipment is returned to Lessor, at Lessee's expense, a policy or policies of insurance insuring against all risks of loss or damage from every and any cause whatsoever, including, without limitation, damage to or loss of the Equipment by extended casualty, fire, theft, vandalism and malicious mischief, and with such other coverages as Lessor may reasonably require from time to time, all such insurance to be issued by financially secure and reputable insurers acceptable to Lessor and in amounts not less than One Hundred Percent (100%) of the full replacement value of the Equipment naming Lessor as loss payee, and providing by the policy terms that Lessor shall be given not less than thirty (30) days' prior notice of any cancellation or decrease in coverage ("Required Insurance"). Lessee shall also, at its own expense, carry public liability insurance, in such amounts with such companies and in such form as is reasonably satisfactory to Lessor, and which name Lessor as an additional insured, with respect to injury to person or property resulting from or based in any way upon or in any way connected with or relating to the installation, use, or alleged use, or operation of any or all of the Equipment, or its location or condition. Lessee shall, upon request by Lessor, provide Lessor with a certificate of insurance or other certified evidence that Lessee is in compliance with the terms of this Section 13. All policies of insurance required under this Section 13 shall clearly indicate that Lessor is the owner of the insured Equipment and that Lessee holds only a leasehold interest in the Equipment. 14. Risk of Loss. From and after the time the Equipment is delivered to the shipment courier for delivery to Lessee or directly to Lessee, and until such time as the Equipment is returned to Lessor in Returnable Condition, Lessee hereby assumes and shall bear the entire risk of loss, damage, malfunction, accident, theft and destruction of and to the Equipment, or any portion thereof, from any cause whatsoever. Lessee shall promptly notify Lessor and provide Lessor with detailed information regarding any such occurrence within two (2) business days of any such occurrence. - 6 - BDDB01 9491441v5 15. Events of Default by Lessee. Each of the following events shall constitute an "Event of Default" for purposes of this Lease: (i) Lessee defaults in the payment when due of the Rental Payment or any other amounts owed by Lessee to Lessor under the terms of this Lease, (ii) Lessee fails to perform any obligation or observe any covenant or condition to be performed or observed by Lessee, or breaches any representation or provision contained herein and such failure shall continue un-remedied for thirty (30) consecutive calendar days; (iii) Lessee ceases its South Bend Operations during the term of the Lease; (iv) Lessee: (a) makes an assignment for the benefit of creditors; (b) becomes insolvent; (c) admits in writing an inability to pay its debts as they become due; (d) becomes the subject of a voluntary or involuntary case commenced under the United States Bankruptcy Code, as now constituted or hereafter amended, or any other applicable Federal or state bankruptcy, insolvency or similar law; (e) is dissolved or liquidated, or any action is taken which could result in the dissolution or liquidation of Lessee; (f) a receiver, trustee or liquidator is appointed with respect to Lessee's assets; (v) any lien is created with respect to the Equipment (other than a lien created by Lessor); or(vi) the occurrence of any sale, transfer, conveyance or other disposition of all or any part of the Equipment or any attempt to sell, transfer, convey or otherwise dispose of all or any part of the Equipment. 16. Remedies, Upon the occurrence of an Event of Default by Lessee under this Lease, Lessor may, at its option, take any one or more of the following courses of action: (i) terminate this Lease; (ii) proceed by appropriate judicial action to enforce this Lease and recover damages caused by the breach, including, without limitation, attorneys' fees, court costs and other collection costs; (iii) demand that Lessee return the Equipment to Lessor in Returnable Condition within thirty (30) days; (iv) require Lessee to purchase the Equipment pursuant to Section 10 hereof and/or (v) accelerate all sums due under this Lease plus interest at the Default Rate. In addition, Lessee shall be liable for all reasonable attorneys' fees and other costs and expenses resulting from the occurrence of any Event of Default or the exercise by Lessor of any of the remedies available to it. 17. Representations of Lessee. Lessee represents and warrants to Lessor that: (a) The execution, delivery and performance of this Lease have all been duly authorized by all necessary action on the part of Lessee; and (b) This Lease constitutes a legal, valid and binding agreement of Lessee and is enforceable in accordance with its terms. 18. Representations of Lessor. Lessor represents and warrants to Lessee that: (a) The execution, delivery and performance of this Lease have all been duly authorized by all necessary action on the part of Lessor; and (b) This Lease constitutes a legal, valid and binding agreement of Lessor and is enforceable in accordance with its terms. 19. Assignment and Subletting. Without Lessor's prior written consent (which it may withhold in its sole discretion), Lessee shall not (i) assign, transfer, pledge, hypothecate, or otherwise dispose of the Equipment or any interest therein; or (ii) sublet or lend the Equipment or permit it to be used by anyone, other than Lessee or Lessee's employees, parent company, - 7 - BDDBO] 9491441v5 affiliates or subsidiaries. If Lessor's consent to such assignment or subletting is given pursuant to this Section 19, Lessee shall remain primarily liable to perform all of the covenants and obligations contained in this Lease, including, without limitation, the payment of rent. LESSEE AGREES THAT LESSOR MAY ASSIGN OR TRANSFER THIS LEASE OR LESSOR'S INTEREST IN THE EQUIPMENT WITHOUT NOTICE TO LESSEE. Lessee acknowledges that any assignment or transfer by Lessor will not materially change Lessee's duties or obligations under this Lease nor materially increase the burdens or risks imposed on Lessee. Lessee shall cooperate with Lessor in executing any documentation reasonably required by Lessor or any assignee of Lessor to effectuate any such assignment. 20. Further Assurances. Lessee shall execute and deliver such documents and take such other actions as Lessor may from time to time reasonably request as necessary or appropriate to carry out the intent and purpose of this Lease or to establish or protect the rights and remedies intended to be created in favor of Lessor hereunder. 21. Notices. Except as expressly provided otherwise in this Lease, any notice, request, claim or other communication required to be given pursuant to this Lease shall be in writing and shall be either: (i) delivered personally to the party to be notified, (ii) sent by registered or certified United States Mail, first-class postage prepaid,return receipt requested,to the party to be notified at such party's address specified below, or(iii)delivered by an overnight delivery courier service to the party to be notified at such party's address specified below: If to Lessor: South Bend Redevelopment Commission Attn: President City-County Building 227 West Jefferson Boulevard, Room 1200 South Bend, Indiana 46601 If to Lessee: F Cubed, LLC Attn: Leslie T. Ivie 1441 North Michigan Street South Bend, Indiana 46617 Notices or other communications given or required to be given under this Lease shall be effective only if rendered or given in writing, sent by certified mail with a return receipt requested, or delivered in person or by reputable overnight courier (e.g., Federal Express, DHL, etc.) or by telecopier or facsimile (with confirmation by one of the other methods specified herein): (a) to Lessee at the address specified in this Section, or (b) to Lessor at Lessor's address set forth in this Section or (c) to such other address as either Lessor or Lessee may designate as its new address for such purpose by notice given to the other in accordance with the provisions of this Section. Any such notice or other communication shall be deemed to have been rendered E3 DDB01 9491441v5 or given five (5) days after the date mailed, if sent by certified mail, or upon the date of delivery if delivered in person or by courier, or when delivery is attempted but refused. 22. Entire Agreement. This Lease, together with the attached Schedule A, as may be modified from time to time in the future, and the MOU, together constitute the entire agreement between the parties hereto with respect to the subject matter hereof and supersede all prior agreements, representations, and understandings of the parties, written or oral. 23. Amendments and Waivers. No modification, amendment, extension or allegcd waiver of this Lease or any provision hereof will be binding on either party unless in writing and signed by the party sought to be bound. 24. Severability. If any provision of this Lease is held or declared to be unenforceable, invalid or void, then such provision shall be deemed to be severable from the remaining provisions of this Lease, and such declaration or holding shall in no way impair or affect the validity or enforceability of the remaining provisions of this Lease, which shall then be construed as if such invalid or unenforceable provision were omitted. 25. Controlling Law. This Lease and the rights and obligations of the parties hereto shall be governed and construed in accordance with the laws of the State of Indiana without giving effect to any choice or conflict of law provision or rule (whether of the State of Indiana or any other jurisdiction) that would cause the application of laws of any jurisdiction other than the State of Indiana. The parties hereto agree that the exclusive forum for any litigation or dispute related to, arising under or in connection with this Lease shall be in a court of competent jurisdiction located in South Bend, Indiana, and the parties hereby waive any claim to lack of personal jurisdiction thereof. 26. Successors and Assigns. Subject to Section 19 of this Lease shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and permitted assigns. 27. Construction of this Lease. The parties have participated jointly in the negotiation and drafting of this Lease. If an ambiguity or question of intent or interpretation arises, this Lease shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Lease. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated hereunder, unless the context requires otherwise. The headings of Sections and paragraphs in this Lease are for descriptive purposes only and shall not control, alter or otherwise affect the meaning, scope or intent of any provisions of this Lease. Except as expressly provided otherwise in this Lease, any reference to a. Section or Schedule shall mean and refer to a Section or Schedule of this Lease. Except where the context of their use clearly requires a different interpretation, wherever they appear in this Lease: (i) singular terms shall include the plural, and masculine terms shall include the feminine or neuter, and vice versa, to the extent necessary to give the defined terns or other terms used in this Lease their proper meanings; (ii) the terms "herein," "hereof," "hereunder," "hereto," "hereinafter," "hereinbefore," and similar words shall mean and refer to this Lease in its entirety and not to any specific Section, Subsection, or paragraph of this Lease; - 9 - BDDBOI 9491441 v5 -[Signature page to Equipment Lease Agreement] IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease to be executed as of the date first written above. "LESSOR" SOUTH BEND REDEVELOPMENT COMMISSION President ATTEST: Secretary "LESSEE" F CUBED, LLC By: Leslie T. Ivie Its: President & CEO - ll - BDDSOI 9491441 v5 a Q m m A a m o - N � ➢ � , m d m r m � 0 A 3 ro m 0 w - 3 a w a 3 l A C w O © O O v s () A a m N 0 0 0 0 o g r m c G p m n A O m s - 1° n m O p O ry R N 0 u N p n u � o E EMU § Q m § ) � ` ( ( c § � ^ } ; f e ; ƒ \ \ 0 \ ` - \ 91 ; \« g }2 � \ / / ) \ �