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HomeMy WebLinkAbout6B2 ECONOMIC DEVELOPMENT MEMORANDUM OF UNDERSTANDING THIS ECONOMIC DEVELOPMENT MEMORANDUM OF UNDERSTANDING (this "MOU") is made and entered into as of the 17th day of July, 2014, by and between the SOUTH BEND REDEVELOPMENT COMMISSION (the "Commission"), organized and existing under Indiana Code Section 36-7-14, and NOBLE AMERICAS SOUTH BEND ETHANOL LLC ("NASBE"), a wholly-owned subsidiary of Noble Americas Corp. of Stamford Connecticut. 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, NASBE owns an ethanol production facility located in South Bend, IN, capable of producing up to 100,000,000 gallons of ethanol per year; and WHEREAS, NASBE has begun a project that will involve restart, re-commissioning, significant upgrades and subsequent operations of this facility after being idle since November 2012 (the "South Bend Operations"); and WHEREAS, the upgrades proposed by NASBE would include substantial maintenance and capital expenditures activities, as well as installation of incremental on-site projects to improve and stabilize the operations of the facility(the"Project Upgrades"); and WHEREAS, NASBE has submitted a Petition for Incentives through 2017 pledging to create 50 new jobs with hourly wages averaging $27 ($28 per hour for laborers, $34 per hour for technical staff, $49 per hour for managerial staff and $16 per hour for administrative staff) and in addition, NASBE commits to investing $31,175,000 in South Bend for upgrades to the plant facilities; and WHEREAS, in order to more fully develop the Project upgrades and expand its applications, NASBE 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, NASBE 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 NASBE, the Commission has agreed to use its best efforts to take certain actions as described herein to pay J for a portion of the costs of the Equipment pursuant to the Act, and NASBE has agreed, in turn, to complete the Project Upgrades 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 Two Million and No/100 Dollars ($2,000,000.00) 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 MOU. The 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 II. MUTUAL ASSISTANCE 2.01 Mutual Assistance. The parties agree, subject to further proceedings required by law, to take such actions at their own individual expense, 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 NASBE 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 NASBE. In connection therewith, the Commission and NASBE 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 NASBE 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 NASBE from the Commission, at a rental payment amount that is discounted upon the condition that NASBE completes its Project Upgrade and commences operations, thereby creating the promised jobs during the tenor of the Equipment Lease Agreement. 3.02 NASBE Project Upgrade. NASBE shall promptly begin its Project Upgrade with an initial expenditure of$18,975,000 during 2013 and 2014. Any failure by NASBE to promptly begin its Project Upgrade or to expend the sum of$18,975,000 during 2013 and 2014, 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 NASBE 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 NASBE. NASBE acknowledges that the Commission is committing TIF Revenues from the Area for the purchase of the Equipment upon the representation of NASBE that it will complete its Project Upgrade, in the total amount of at least $31,175,000 by the end of 2017 and upon the representation of NASBE that the Equipment will directly result in the creation by NASBE of 50 new jobs with hourly wages averaging $27 ($28 per hour for laborers, $34 per hour for technical staff, $49 per hour for managerial staff and $16 per hour for administrative staff). Any failure by NASBE to create the number of jobs of the types and hourly wages or to make the investment in the Project Upgrade and pursuant to this Section 3.03 shall be deemed a default under this MOU and under the Equipment Lease Agreement, and in the event of such default NASBE 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. ARTICLE IV. AUTHORITY 4.01 Actions. The Commission represents and warrants that it has taken or will take(subject to NASBE'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 and lawful right, power and authority, under currently applicable law and under Indiana Code Section 36-7-14, 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 NASBE 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 NASBE by any officer of NASBE 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. Each Party covenants and agrees, at its own expense, to pay and to indemnify and save the other Party, and its officers and employees (the "Indemnitees") harmless of, from and against, any and all claims, damages, demands, expenses and liabilities resulting from the negligent acts of such Party and which are 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 Party, 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 NASBE. 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 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, and except with regard to the Equipment Lease Agreement, the terms of which are expressly incorporated herein, this MOU supersedes all prior agreements, negotiations and discussions relative to the subject matter hereof and together with the Equipment Lease Agreement 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 without regard to conflict of law principles. Each party expressly submits to the non- exclusive jurisdiction of the courts of the State of Indiana. Each Party agrees to waive trial by jury 5.08 Notices. All notices and requests required pursuant to this MOU shall be deemed sufficiently made if delivered, as follows: To NASBE: NASBE Americas South Bend Ethanol LLC Four Stamford Plaza 107 Elm Street, 7th Floor Stamford, CT 06902 Attn: General Counsel 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. 5.09 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. IN WITNESS WHEREOF, the Parties have each executed this MOU as of the date first written above. CITY OF SOUTH BEND, DEPARTMENT OF REDEVELOPMENT Signature Printed Name and Tide South Bend Redevelopment Commission ATTEST: Signature Printed Name and Title South Bend Redevelopment Commission NOBLE AMERICAS SOUTH BEND ETHANOL LLC, By: Title: r (Signature Page to ECONOMIC DEVELOPMENT MEMORANDUM OF UNDERSTANDING) Exhibit A Equipment List Exhibit B Equipment Lease Agreement