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HomeMy WebLinkAboutRes 2010-06-06 Economic Development Incentive Agreement - Image Visions Labs.Inc.pdfCITY OF ANNA, TEXAS RESOLUTION NO. 2010-06-06 RESOLUTION APPROVING AN ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT BETWEEN THE ANNA ECONOMIC DEVELOPMENT CORPORATION AND IMAGE VISION LABS, INC. FOR INCENTIVE GRANT FUNDS CONDITIONED ON PERFORMANCE CRITERIA WHEREAS, The City Council of the City of Anna supports the Anna Economic Development Corporation's ("EDC") desire to offer Image Vision Labs, Inc. an economic development incentive grant conditioned on performance criteria, including but not limited to the creation of new jobs within the City's corporate boundaries; and WHEREAS, The City Council of the City of Anna approves the amount of the EDC incentive grant and the terms of the performance criteria as described in Exhibit A, as well as the economic development project described therein; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS THAT: Section 1. Recitals Incorporated The recitals set forth above are incorporated herein for all purposes as if set forth in full. Section 2. The City Council of the City of Anna, Texas hereby authorizes the EDC to enter into the Economic Development Incentive Grant for Capital Investment Performance Agreement with Image Vision Labs, Inc. for grant funds in an amount up to $110,000 to be conditioned on performance criteria as described in Exhibit A. PASSED by the City Council ofthe City of Anna, Texas, on this 2200 day of June, 2010. ATTEST: Res. 2010-06-06 EDC -Image VISion Labs Agreement.doc PAGE 1 OF 1 06-22-10 ECONOMIC DEVELOPMENT INCENTIVE GRANT FOR CAPITAL INVESTMENT PERFORMANCE AGREEMENT This Economic Development Incentive Grant for Capital Investment Performance Agreement (this "Agreement") made and entered this 22nd day of June, 2010, by and between the Anna Economic Development Corporation and IMAGE VISION LABS, INC (the "Company"). WITNESSETH: WHEREAS, the Anna Economic Development Corporation is willing to provide grant proceeds for the use of the Company, provided that the Company meets certain criteria relating to Capital Investments, and the creation and retention of New Jobs consisting of Primary jobs as thatterm is defined in Texas Local Government Code §501.002(12); and WHEREAS, the Company is required to return all or a portion of the grant proceeds received to the Anna Economic Development Corporation if the performance criteria under this Agreement are not met by the Company; and WHEREAS, the Anna Economic Development Corporation and the Company desire to set forth their understanding and agreement as to the payout of the grant proceeds, obligations of the Company regarding Capital Investment, New Job creation and maintenance, and the repayment by the Company of all or part of the grant under certain circumstances; NOW, THEREFORE, in consideration of the foregoing, the mutual benefits, promises and undertakings of the parties to this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto covenant and agree as follows: Section 1. Recitals Incorporated. The above-stated recitals are incorporated into this Agreement as if set forth in full and constitute material representations by the Company to induce the Anna Economic Development Corporation to enter into this Agreement. Section 2. Definitions. "Capital Investment" means the Company's capital expenditure of at least $22,500, of which approximately $20,000 will be invested in machinery and equipment, and approximately $2,500 will be invested in the up-frt of the Facility(ies). "City" or "the City" means the City of Anna, Texas. ECONOMIC DEVELOPMENT INCENTIVE GRANT FOR CAPITAL INVESTMENT PERFORMANCE AGREEMENT PAGE 1 OF 11 "Facility" or "Facilities" shall mean the place(s) of business of the Company, including the principle place of business and any satellite offices or other business locations, all of which shall be at one or more locations within the corporate limits of the City. "New Job" means a Primary job, as that term is defined in Texas Local Government Code §501.002(12), and includes only jobs that are new, permanent, and full-time employment positions filled by individuals for an indefinite duration at the Facility for which the standard fringe benefits are paid by the Company for the employee, and for which the Company pays an average annual wage of at least $50,000. Each New Job must require a minimum of either: (1) 40 hours of an employee's time per week for the entire normal year of the Company's operations, which "normal year" must consist of at least 52 weeks; or (2) 2,080 hours per year, subject to applicable federal or Texas state law requiring the Company to grant an employee any type of leave or other time away from the job. (Seasonal or temporary positions, positions created when a job function is shifted from an existing location in the corporate limits of the City, and positions with contractors, suppliers, and similar multiplier or spin-off jobs shall not qualify as New Jobs.) "Obligation to Maintain" means the Company's contractual responsibility under this Agreement to: (1) maintain at the Facility(ies)-beginning on the Performance Date and ending ten years after the Start Date-the active and paid employment status of at least one individual in each of the ten New Job positions required to be created under this Agreement, except that after any such individual's termination, resignation, or other departure from active paid status, the Company shall have a reasonable period of time (but in no event longer than 60 business days or a longer time period if necessary to comply with the minimum requirements of the Family Medical Leave Act or other applicable federal or Texas state law governing mandatory employee leave or time away from the job) to fill the position with an active, paid employee; and (2) restrict-at all times before the expiration of ten years after the Start Date-the location of employment of all Other Jobs to the Facility(ies), regardless of the number of Other Jobs that may exist from time to time. "Other Job" means any job created or maintained by the Company-at any time before the expiration of ten years after the Start Date-that does not meet the definition of New Job. "Performance Date" means the date that all ten of the New Jobs required to be created and filled under this Agreement have been created and filled and the Capital Investment has been made in full as described in this Agreement. "IVL Project" means the subject of this Agreement, which is the Company's software development, marketing and sales operations within the corporate limits of the City intended to result in the creation of at least ten New Jobs at the Facility(ies) and the ECONOMIC DEVELOPMENT INCENTIVE GRANT FOR CAPITAL INVESTMENT PERFORMANCE AGREEMENT PAGE20F 11 Company's Obligation to Maintain and other duties it must perform under this Agreement. "Start Date" means the date upon which the Company establishes and begins to operate its business at the Facility under a valid written lease or purchase of property within the corporate limits of the City of Anna, Texas. "Targets" mean the Company's obligation to meet the following two criteria at the Facility: (1) make the entire amount of the Capital Investment; and (2) create and fill ten New Jobs. 'Work" means any and all of the Company's efforts, pursuits, activities, and endeavors performed or attempted and associated or in connection with or related to the IVL Project, including but not limited to all efforts, pursuits, activities, and endeavors performed by its organizers, directors, officers, agents, employees, representatives, contractors or any subcontractors. Section 3. Disbursement of the Grant. (a) The total amount of the grant to be paid by the Anna Economic Development Corporation under this Agreement is $109,999.98. The grant proceeds must be used by the Company for costs that are necessary and incident to financing and placing the IVL Project into operation. A portion of grant proceeds, in the amount of $79,999.98 will be paid to the Company in six consecutive monthly payments each totaling $13,333.33, with each payment being made on or within five business days after the 1st day of each month, the first month for payment being the month that begins at least five business days after the Start Date.1 The remainder of the grant proceeds, in the amount of $30,000, will be paid to the Company in twelve consecutive monthly payments each totaling $2,500, with each payment being made on or within five business days after the 1 st day of each month, the first month for payment being the month that begins at least five business days after the Start Date.2 Said monthly $2,500 payments shall be used by the Company during its first year of operations for all or a portion of its lease and maintenance costs for the Facility. Example 1.a The Start Date occurs on June 24, 2010. The first month in which grant proceeds will be paid is July 2010 because July 2010 begins at least five business days after the Start Date. The first monthly payment of $13,333.33 of the grant proceeds and the first monthly payment of $2,500 of the grant proceeds shall be paid to the Company within five business days after July 1, 2010 or no later than 1 See Examples 1.a. and 1.b. 2 See Examples 1.a. and 1.b. ECONOMIC DEVELOPMENT INCENTIVE GRANT FOR CAPITAL INVESTMENT PERFORMANCE AGREEMENT PAGE30F 11 July 9,2010 as there is an intervening weekend and July 5,2010 is an observed holiday. The last of the six consecutive monthly payments of $13,333.33 would be paid in December 2010. The last of the 12 consecutive monthly payments of $2,500 would be paid in June 2011. Example i.b. The Start Date occurs on June 25,2010. The first month in which grant proceeds will be paid is August 2010 because August 2010 is the first month that begins at least five business days after the Start Date (July 2010 begins only four business days after the Start Date). The first monthly payment of $13,333.33 of the grant proceeds and the first monthly payment of $2,500 of the grant proceeds shall be paid to the Company within five business days after August 1,2010, or no later than August 6, 2010 as August 1, 2010 falls on a Sunday). The last of the six consecutive monthly payments of $13,333.33 would be paid in January 2011. The last of the 12 consecutive monthly payments of $2,500 would be paid in July 2011. (b) The effectiveness of this Agreement is subject to the duly authorized approval of the IVL Project and this Agreement by the Anna Economic Development Corporation Board of Directors and the City of Anna City Council and absent said approval shall be null and void notwithstanding any other provision or statement in this Agreement. After the last of said approvals, and the duly authorized approval of this Agreement by the Company, the Anna Economic Development Corporation will implement the disbursement of the grant proceeds to the Company in accordance with the schedule set forth in subsection (a), above, in exchange for the Company's promises in this Agreement, which include but are not limited to the promise to achieve the Targets at the Facility before the expiration of the 24-month time period stated in Section 4(a) of this Agreement and to thereafter abide by the Obligation to Maintain. Section 4. Perfonnance Date and Obligation to Maintain. (a) Performance Date. The Company is responsible to ensure that the Performance Date occurs-and the Targets that the Company must meet in connection with said date are met-on or before the expiration of 24 months after the date the Company receives the first disbursement of grant proceeds under this Agreement. (b) Obligation to Maintain. The Company must fulfill its Obligation to Maintain for ten years after the Start Date. ECONOMIC DEVELOPMENT INCENTIVE GRANT FOR CAPITAL INVESTMENT PERFORMANCE AGREEMENT PAGE40F11 Section 5. Repayment Obligation and Other Remedies. (a) Determination of Inability to Meet Targets. If the Anna Economic Development Corporation or the City determines at any time prior to the Performance Date (the "Determination Date") that the Company is unable or unwilling to meet the Targets within the 24-month period set forth in Section 4(a) of this Agreement­ and provided that the Anna Economic Development Corporation or the City notifies the Company of such determination in writing within ten business days of the Determination Date-the Company must repay 100% of the grant proceeds. (b) Repayment for Failure to Meet Targets. Regardless of whether the Anna Economic Development Corporation or the City provides a determination notice as set forth under subsection (a) above, the Company must repay 100% of the grant proceeds if it fails to meet either of the Targets within the 24-month period set forth in Section 4(a) of this Agreement. (c) Repayment after Performance Date. If neither the Anna Economic Development Corporation nor the City provides a determination notice and the Company meets its Targets within the 24-month period set forth in Section 4(a) of this Agreement, then the Company shall only be obligated to repay grant proceeds if it fails to meet its Obligation to Maintain. If the Company fails to meet its Obligation to Maintain, the amount to be repaid will be determined by the date upon which the failure to meet the Obligation to Maintain first occurs, according to the schedule set forth on the following page. [REMAINDER OF PAGE LEFT BLANK INTENTIONALLy] ECONOMIC DEVELOPMENT INCENTIVE GRANT FOR CAPITAL INVESTMENT PERFORMANCE AGREEMENT PAGE 50F 11 First date of failure to meet Obligation to Maintain Percentage of total grant proceeds to be repaid Anytime after the Performance Date, but before the expiration of five years after the Performance Date 100% Anytime between the expiration of five years after the Performance Date, but before the expiration of eight years after the Start Date 80% Anytime between the expiration of eight years after the Start Date, but before the expiration of eight and % years after the Start Date 70% Anytime between the expiration of eight and % years after the Start Date, but before the expiration of nine years after the Start Date 60% Anytime between the expiration of nine years after the Start Date, but before the expiration of nine and % years after the Start Date 50% Anytime between the expiration of nine and % years after the Start Date, but before the expiration of ten years after the Start Date 40% Upon the expiration of ten years after the Start Date and at all times thereafter No repayment obligation (d) Repayment Dates. Any required repayments shall be due from the Company to the Anna Economic Development Corporation within 90 days of the Determination Date, or within 90 days of the date that the Anna Economic Development Corporation or the City provides written notice to the Company of its failure to meet the Obligation to Maintain or its obligations with respect to the Performance Date. (e) Remedies. In the event that the Company fails to timely repay the grant proceeds or otherwise materially breaches this Agreement, Company agrees that the Anna Economic Development Corporation or the City has the option to initiate legal action to collect the grant proceeds. If legal action is initiated, ECONOMIC DEVELOPMENT INCENTIVE GRANT FOR CAPITAL INVESTMENT PERFORMANCE AGREEMENT PAGE 60F 11 Company agrees to pay all fees, cost and expenses incurred by the Anna Economic Development Corporation or the City related to the collection of the grant proceeds. The remedies stated in this Agreement are cumulative of and do not limit any other remedies that the Anna Economic Development Corporation or the City may have at law or in equity. Section 6. Company Reporting. The Company shall provide, at the Company's expense, detailed verification reasonably satisfactory to the Anna Economic Development Corporation of the Company's progress on the Targets and, as applicable, the Cornpany's Obligation to Maintain. Such progress reports will be provided annually, starting at twelve months from the date that the Company receives the first disbursement of grant proceeds, but may be required quarterly upon written request by the Anna Economic Development Corporation or the City, and at such other times as the Anna Economic Development Corporation or the City may require during the period of ten years from the Start Date. Section 7. Notices. (a) Any notices required or permitted under this Agreement shall be given in writing, and shall be deemed to be received upon receipt or refusal after mailing of the same via United States certified mail, postage fully pre-paid, return receipt requested or by overnight courier (refusal shall mean return or certified mail not accepted by the addressee): If to the Company, to: Name: IMAGE VISION LABS, INC Address: 404 Powell Parkway Anna,Texas 75409 Attention: Chief Operations Officer If to the Anna Economic Development Corporation, to: Name: Anna Economic Development Corporation Address: PO Box 776 Anna, Texas 75409 Attention: Chief Administrative Officer (b) Either party may change its addresses for notice by providing written notice of same to the other party and to the City via the manner set forth in subsection (a), above. ECONOMIC DEVELOPMENT INCENTIVE GRANT FOR CAPITAL INVESTMENT PERFORMANCE AGREEMENT PAGE 7 OF 11 Section 8. Miscellaneous. (a) Entire Agreement; Amendments. This Agreement constitutes the entire agreement between the parties hereto as to the subject matter contained herein and may not be amended or modified, except in writing signed by each of the parties. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. The Company may not assign its rights and obligations under this Agreement without the prior written consent of the Anna Economic Development Corporation. (b) Governing Law; Venue. This Agreement is made, and is intended to be performed, in the corporate limits of the City and shall be construed and enforced by local and state laws within the State of Texas. Jurisdiction, forum and venue for any litigation arising out of, relating in any way to, or involving this Agreement shall lie exclusively in a court in Collin County, Texas or, as applicable, in the federal district court that is the proper venue for claims arising out of Collin County, Texas. (c) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be an original, and all of which together shall be one and the same instrument. (d) Severability. If any provision of this Agreement is determined to be unenforceable, then the remaining provisions of this Agreement shall, in the discretion of the Anna Economic Development Corporation, be voidable or interpreted as in effect as if such unenforceable provision were not included herein. (e) Indemnification and Limitation of Liability. It is expressly understood and agreed that the Anna Economic Development Corporation has no right of control, supervision, or direction over the IVL Project or the Work nor does the Anna Economic Development Corporation have any control, supervision or direction of the means, methods, sequences, procedures, and techniques utilized to complete the Work. There shall be no joint control the IVL Project or the Work. THE COMPANY AGREES TO FULLY DEFEND, INDEMNIFY AND HOLD HARMLESS THE ANNA ECONOMIC DEVELOPMENT CORPORATION FROM ANY CLAIM, PROCEEDING, CAUSE OF ACTION, JUDGMENT, PENALTY, OR ANY OTHER COST OR EXPENSE ARISING OR GROWING OUT OF, ASSOCIATED OR IN CONNECTION WITH THE IVL PROJECT OR THE WORK. THE COMPANY'S DUTY TO INDEMNIFY AND HOLD HARMLESS INCLUDES, BUT IS NOT LIMITED TO, ATTORNEY FEES INCURRED BY THE ANNA ECONOMIC DEVELOPMENT CORPORATION IN DEFENDING ITSELF OR IN ENFORCING THIS AGREEMENT. BY ENTERING INTO THIS AGREEMENT, THE COMPANY WAIVES ALL RIGHTS AND REMEDIES IN ECONOMIC DEVELOPMENT INCENTIVE GRANT FOR CAPITAL INVESTMENT PERFORMANCE AGREEMENT PAGE80F 11 LAW OR IN EQUITY EXCEPT TO SEEK ENFORCEMENT OF SPECIFIC PERFORMANCE OF THE OBLIGATIONS UNDER THIS AGREEMENT. THIS PROVISION IS NOT INTENDED TO AND DOES NOT WAIVE ANY OF THE ANNA ECONOMIC DEVELOPMENT CORPORATION'S GOVERNMENTAL IMMUNITIES, INCLUDING IMMUNITY FROM SUIT AND LIABILITY. (f) Assignment or Sale. The Company may assign or sell all or a part of the IVL Project or this Agreement to another person or entity only upon advanced approval, which shall not be unreasonably withheld, of the Anna Economic Development Corporation by written resolution adopted at a duly noticed public meeting. In the event that the Company assigns, sells, or leases all or any part of IVL Project, the assignee or purchaser shall assume all of the obligations of the Company under this Agreement or the portion of those obligations, as applicable, that pertain to the part of the IVL Project assigned or sold. Any sale, merger. or acquisition of the Company resulting in any new or different ownership of the Company shall likewise occur only upon advanced approval, which shall not be unreasonably withheld, of the Anna Economic Development Corporation by written resolution adopted at a duly noticed public meeting. Any such sale, merger, or acquisition of the Company shall be deemed an assignment or sale under this Agreement and governed accordingly. (g) Dissolution of Development Corporation. Should the Anna Economic Development Corporation become dissolved at any time before the expiration of ten years after the Start Date, this Agreement shall inure in all ways to the benefit of the City, and the City shall be deemed to replace the Anna Economic Development Corporation as the party who has contracted with the Company under this Agreement. (h) Undocumented Workers. In accordance with Chapter 2264 of the Texas Government Code, the Company certifies that neither it, nor a branch, division, or department of the Company, will ever knowingly employ an undocumented worker and that if, after receiving any grant proceeds under this Agreement, the Company, or a branch, division, or department of the Company, is convicted of a violation under 8 U.S.C. §1324a(f), the Company shall repay the total amount of all grant proceeds theretofore received under this Agreement with interest at 10% per annum or the highest rate allowed by law, whichever is lower, not later than the 120th day after the date the Anna Economic Development Corporation or the City notifies the Company of the violation. [REMAINDER OF PAGE LEFT BLANK INTENTIONALLy] ECONOMIC DEVELOPMENT INCENTIVE GRANT FOR CAPITAL INVESTMENT PERFORMANCE AGREEMENT PAGE90F 11 IN WITNESS WHEREOF, the parties hereto have executed this Agreement, which shall be effective as of the date first written above. Anna Economic Development Corporation By:____------:--~__:-___­ Constance Ann Stump, its President STATE OF TEXAS § § COUNTY OF COLLIN § Before me, the undersigned notary public, on the __day of ,2010, personally appeared Constance Ann Stump known to me (or proved to me) to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that she executed the same in her capacity as President of the Anna Economic Development Corporation and on behalf of the Anna Economic Development Corporation. Notary Public, State of Texas [REMAINDER OF PAGE LEFT BLANK INTENTIONALLy] ECONOMIC DEVELOPMENT INCENTIVE GRANT FOR CAPITAL INVESTMENT PERFORMANCE AGREEMENT PAGE 100F 11 IMAGE VISION LABS, INC By:___~____________ Mitch Butler, its Director STATE OF TEXAS § § COUNTY OF COLLIN § Before me, the undersigned notary public, on the __day of , 2010, personally appeared Mitch Butler known to me (or proved to me) to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same in his capacity as a Director of IMAGE VISION LABS, INC and on behalf of IMAGE VISION LABS, INC. Notary Public, State of Texas By:____________ Steven W. White, its Director STATE OF TEXAS § § COUNTY OF COLLIN § Before me, the undersigned notary public, on the __day of , 2010, personally appeared Steven W. White known to me (or proved to me) to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same in his capacity as a Director of IMAGE VISION LABS, INC and on behalf of IMAGE VISION LABS, INC. Notary Public, State of Texas By:____________ Chad Harbour, its Director STATE OF TEXAS § § COUNTY OF COLLIN § Before me, the undersigned notary public, on the _ day of , 2010, personally appeared Chad Harbour known to me (or proved to me) to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same in his capacity as a Director of IMAGE VISION LABS, INC and on behalf of IMAGE VISION LABS, INC. Notary Public, State of Texas ECONOMIC DEVELOPMENT INCENTIVE GRANT FOR CAPITAL INVESTMENT PERFORMANCE AGREEMENT PAGE 11 OF 11