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HomeMy WebLinkAbout6B(1) 6gC,_) ECONOMIC DEVELOPMENT AGREEMENT THIS ECONOMIC DEVELOPMENT AGREEMENT (this "Agreement") is made and entered into as of the a8 day of J U'4 , 2014, by and between the SOUTH BEND REDEVELOPMENT COMMISSI (the "Commission"), organized and existing under Indiana Code Section 36-7-14, and NORRES NORTH AMERICA INC., a Delaware corporation with permission to operate in Indiana("NORRES"). 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, NORRES is a leading German producer of technical hoses, hose systems and system accessories and wishes to expand its market to North America; and WHEREAS, NORRES is in need of a production facility and centralized warehouse to furnish the North American market (the "South Bend Production Facility and Warehouse"); and WHEREAS, the South Bend Production Facility and Warehouse proposed by NORRES would include substantial capital expenditures activities, as well as employment opportunities associated with the South Bend Production Facility and Warehouse; and WHEREAS, NORRES has submitted a Petition for Incentives pledging to create 6 new jobs during 2014 and a minimum of 25 new jobs by 2018 with hourly wages averaging $14.86 per hour for laborers, $37.05 per hour for technical staff, $34.35 per hour for Managerial staff and $15.83 for administrative staff and in addition, NORRES commits to investing $1,866,000.00 in South Bend for capital improvements to the production and warehouse facility; and WHEREAS, in order to fully develop the South Bend Production Facility and Warehouse, NORRES requires certain equipment, more particularly described in the attached Exhibit A (the "Equipment"), to be used in connection with the South Bend Production Facility and Warehouse; and WHEREAS, NORRES 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 NORRES, the Commission has agreed to take certain actions as described herein to pay for a portion of the 'IF costs of the Equipment pursuant to the Act, and NORRES has agreed, in turn, to complete the South Bend Production Facility and 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 Thousand and No/100 Dollars ($200,000.00) 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 NORRES 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 NORRES. In connection therewith, the Commission and NORRES 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 NORRES 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 NORRES from the Commission, at a rental payment amount that is discounted upon the condition that NORRES completes its South Bend Production Facility and Warehouse project and commences operations, thereby creating the promised jobs. 3.02 South Bend Production Facility and Warehouse Project. NORRES shall promptly begin its South Bend Production Facility and Warehouse project with an initial expenditure of $441,264 during 2014 and a total of$1,866,000.00 by 2018. Any material failure by NORRES to promptly begin its Project or to expend the sum of$441,264 during 2014 or the total sum of $1,866,000.00 by 2018, 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 NORRES 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 NORRES. NORRES acknowledges that the Commission is committing TIF Revenues from the Area for the purchase of the Equipment upon the representation of NORRES that it will complete its Project, in the total amount of at least $1,866,000.00 by the end of 2018 and upon the representation of NORRES that the Equipment will directly result in the creation by NORRES of 6 new jobs during 2014 and a minimum of 25 new jobs by 2018 with hourly wages averaging $14.86 per hour for laborers, $37.05 per hour for technical staff, $34.35 per hour for Managerial staff and $15.83 for administrative staff. Any failure by NORRES 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 NORRES 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 NORRES'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 NORRES 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 NORRES by any officer of NORRES 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. NORRES covenants and agrees, at the expense of NORRES, 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 NORRES. 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 Indiana Law. This Agreement shall be construed in accordance with the laws of the State of Indiana. 5.08 Notices. All notices and requests required pursuant to this Agreement shall be deemed sufficiently made if delivered, as follows: To NORRES: NORRES North America Inc. 2520 Fountain Drive South Bend, Indiana 46628 Attn: Jens Schlueter 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 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. 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 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 NORRES NORTH ERICA, INC. a Delaware corpora/n with permission to operate in Indiana By: Title: 1�T-eS evk (Signature Page to ECONOMIC DEVELOPMENT AGREEMENT) Exhibit A Equipment List r Exhibit B Equipment Lease Agreement CHDS01 920971 v 1 77