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HomeMy WebLinkAbout6B(2) ECONOMIC DEVELOPMENT AGREEMENT THIS ECONOMIC DEVELOPMENT AGREEMENT (this "Agreement") is made and entered into as of the day of , 2014, by and between the SOUTH BEND REDEVELOPMENT COMMISSION (the "Commission"), organized and existing under Indiana Code Section 36-7-14, and LIPPERT COMPONENTS MANUFACTURING, INC., a Delaware corporation("LIPPERT"). 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, LIPPERT is a tier-1 supplier serving the Manufactured Housing, Recreational Vehicle and Cargo/Horse Trailer industries; and WHEREAS,LIPPERT is in need of a centralized warehouse and distribution space for its finished products which space is proximate to its production facilities, providing an efficient and effective means for storing, tracking and distributing its finished goods (the "South Bend Warehouse"); and WHEREAS, the South Bend Warehouse proposed by LIPPERT would include substantial capital expenditure activities, as well as employment opportunities associated with the South Bend Warehouse;and WHEREAS, LIPPERT has submitted a Petition for Incentives pledging to create, in the aggregate between LIPPERT and its sub-tenant, 180 new jobs during 2014 and a minimum total of 380 new jobs by 2024 with average hourly wages of $12.50 per hour for laborers and, in addition, LIPPERT commits to investing $1,492,500, in the aggregate between LIPPERT and its sub-tenant, for upgrades to the South Bend Warehouse; and WHEREAS, in order to fully develop the South Bend Warehouse, LIPPERT requires certain equipment,more particularly described in the attached Exhibit A(the "Equipment"),to be used in connection with the South Bend Warehouse; and WHEREAS, LIPPERT 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, in order to facilitate the acquisition of the Equipment by LIPPERT, 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 LIPPERT has agreed, in turn, to complete the South Bend Warehouse project and begin operations, thereby creating the promised jobs,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 Commission intends to cause to be appropriated approximately Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00) of funds payable from existing tax increment finance revenue funds allocable to the Area and already collected and on deposit(the "TIF Revenues"). 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 Agreement. The covenants and recitations set forth in the foregoing recitals are material to this Agreement and are hereby incorporated into and made a part of this Agreement as though they were fully set forth in this Section 1.01. ARTICLE II. 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 Agreement and to aid and assist each other in carrying out said terms, provisions and intent. ARTICLE III. REPRESENTATIONS AND COVENANTS OF THE COMMISSION AND LIPPERT 3.01 Equipment Lease Agreement. 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 LIPPERT. In connection therewith, the Commission and LIPPERT 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 LIPPERT to enter into an Equipment Lease Agreement in substantially the form attached hereto at Exhibit B. The Equipment Lease Agreement shall, among other things, provide for the lease of the Equipment by LIPPERT from the Commission,at a rental payment amount that is discounted upon the condition that LIPPERT completes its South Bend Warehouse project and commences operations, thereby creating the promised jobs. 3.02 South Bend Warehouse Project. LIPPERT shall promptly begin its South Bend Warehouse project with an initial expenditure of$725,000 during 2014 and a total of$1,492,500 by 2020. Any failure by LIPPERT to promptly begin its Project or to expend the sum of $725,000 during 2014 or the total sum of$1,492,500 by 2020,both directly and by its sub-tenant in the South Bend Warehouse,pursuant to this Section 3.02, shall be deemed a default under this Agreement and under the Equipment Lease Agreement, and in the event of such default LIPPERT 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 LIPPERT. LIPPERT acknowledges that the Commission is committing TIF Revenues from the Area for the purchase of the Equipment upon the representation of LIPPERT that it will complete its Project, in the total amount of at least $1,492,500 by the end of 2020,both directly and by its sub-tenant in the South Bend Warehouse, and upon the representation of LIPPERT that the Equipment will directly result in the creation by LIPPERT and its sub-tenant in the aggregate of 180 new jobs during 2014 and a minimum of 380 new jobs by 2024 with average hourly wages of$12.50 per hour for laborers. Any failure by LIPPERT' to create the number of jobs of the types and hourly wages or to make the investment in the Project and pursuant to this Section 3.03 shall be deemed a default under this Agreement and under the Equipment Lease Agreement, and in the event of such default LIPPERT shall be obligated to promptly, within fifteen (15) days, purchase the Equipment from the Commission pursuant to Section I 0 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. 3.04 Jobs Created by Sub-Tenant. LIPPERT and the Commission agree that jobs created by a sub-tenant of LIPPERT may be counted toward fulfilling the job commitments made by LIPPERT herein, however, the failure of a sub-tenant of LIPPERT to create any specified number of jobs shall not excuse LIPPERT from its job commitments made herein. 3.05 Capital Investment by Sub-Tenant. LIPPERT and the Commission agree that capital investment made by a sub-tenant of LIPPERT may be counted toward fulfilling the capital investment commitments made by LIPPERT herein, however, the failure of a sub-tenant of LIPPERT to make capital investment in any specified amount shall not excuse LIPPERT from its capital investment commitments made herein. ARTICLE IV. AUTHORITY 4.01 Actions.The Commission represents and warrants that it has taken or will take(subject to LIPPERT'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 Agreement 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 and lawful right, power and authority, under currently applicable law, to execute and deliver and perform its obligations under this Agreement, 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 Agreement or any other related documents and instruments, any supplemental agreement, request, demand, approval, notice or consent of the Commission or LIPPERT 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 Commission by the President of the Commission or his written designee, and for LIPPERT by any officer of LIPPERT 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. LIPPERT covenants and agrees, at the expense of LIPPERT, 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 Agreement 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 Agreement shall be construed as creating either a joint venture or partnership relationship between the Commission and LIPPERT. 5.02 Time of Essence. Time is of the essence of this Agreement. 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 Agreement requires their continued cooperation. 5.03 Breach. Before any failure of any party of this Agreement to perform its obligations under this Agreement shall be deemed to be a breach of this Agreement,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 Agreement 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 Agreement, and any exhibits attached hereto, may be amended only by the mutual consent of the parties, by the adoption of a resolution 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 Agreement. Except as otherwise expressly provided herein, this Agreement 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 Agreement 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 Agreement and,to that end,any provisions,covenants, agreements or portions of this Agreement are declared to be severable. 5.07 Governing Law; Venue. This Agreement shall be construed in accordance with the laws of the State of Indiana, without giving effect to the principles of conflicts of laws, including but not limited to matters of construction, validity and performance. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the United States District Court, located in South Bend, Indiana over any suit, action or proceeding arising out of or relating to this Agreement or, in the absence of the minimum jurisdictional amount, the highest court of general jurisdiction of the State of Indiana located in St. Joseph County, Indiana. Each party hereby irrevocably waives to the fullest extent permitted by law, (i) any objection that they may now or hereafter have to the venue of any such suit, action or proceeding brought in any such court, or (ii) any claim that any such suit, action or proceeding has been brought in an inconvenient forum. Final judgment in any such suit, action or proceeding brought in any such court shall be conclusive and binding upon each party duly served with process therein and may be enforced in the courts of the jurisdiction of which either party or any of their property is subject, by a suit upon such judgment. 5.08 Notices. All notices and requests required pursuant to this Agreement shall be deemed sufficiently made if delivered,as follows: To LIPPERT: Shawn Lewis General Counsel Lippert Components Manufacturing,Inc. 3501 County Road 6 East Elkhart, IN 46514 To the Commission: South Bend Redevelopment Commission 1400 S City-County Building 227 West Jefferson Boulevard 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. 5.9 Counterparts. This Agreement 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. Signatures hereto may be evidenced by facsimile transmission or electronic mail in portable document format(PDF),the same of which shall be treated as originals. 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, delayed or conditioned. IN WITNESS WHEREOF, the Parties have each executed this Agreement as of the date first written above. CITY OF SOUTH BEND, DEPARTMENT OF REDEVELOPMENT Signature Printed Name and Title South Bend Redevelopment Commission ATTEST: Signature Printed Name and Title South Bend Redevelopment Commission LIPPERT COMPONENTS MANUFACTURING,INC. a Delawa e corporation By: 4i— Title: r e s: -t- (Signature Page to ECONOMIC DEVELOPMENT AGREEMENT) • Exhibit A Equipment List Exhibit B Equipment Lease Agreement