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HomeMy WebLinkAbout029490 RES - 05/29/2012Page 1 of 3 Resolution Approving a. business incentive agreement for the creation and retention of jobs between the Corpus Christi Business and Job Development Corporation ("Type A Corporation") and Plant Bikes LLC ("Rugged Cycles"), which provides a grant of up to $200,000 for building improvements to expand their current location in Corpus Christi and the creation and retention of jobs, and authorizing the City Manager or designee to execute a business incentive project support agreement with the Type A Corporation regarding implementation and administration of the Rugged Cycles Business Incentive Agreement for the creation and retention of jobs WHEREAS, the Type A Corporation has budgeted funds to assist businesses create or retain jobs in the City of Corpus Christi, Texas ("City"). WHEREAS, the Type A Corporation has requested proposals from businesses that will create or retain jobs within the City, and determined that the proposal from Rugged Cycles for building improvements to expand their current location in Corpus Christi and the creation and retention of jobs, will best satisfy this goal; WHEREAS, City Council deems that it is in the best interest of the City and citizens to approve the business incentive agreement for building improvements to expand their current location in Corpus Christi and the creation and retention of jobs between the Type A Corporation and Rugged Cycles; WHEREAS, there is a need for a business incentive project support agreement between the City and the Type A Corporation for the implementation and administration of the business incentive agreement for the creation and retention of jobs between the Type A Corporation and Rugged Cycles. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS: SECTION 1. That the business incentive agreement for the creation and retention of jobs between the Type A Corporation and Rugged Cycles for the creation and retention of jobs, which is attached to this resolution as Exhibit A, is approved. SECTION 2. That the City Manager, or designee, is authorized to execute a project support agreement between the City and Type A Corporation for the implementation and administration of the business incentive agreement with Rugged Cycles, which is attached to this resolution as Exhibit B. This resolutr takes effect upon City Council approval on this the o'4 P day of Apt, , 2012. d3174edf-8a59-41)01)-8d 16-d c8df6eb746a, docx 029490 INDEXED Page 2 of 3 ATTEST: THE CITY OF CORPUS CHRISTI iliArmando Chapa City Secretary Mayor zege4k-11 Joe Ada* d3174edf-8a59-4b0b-8d16-dc8df6eb746a.docx Corpus Christi, Texas Al* of in OA, , 2012 The above resolution was passed by the following vote: Joe Adame ajik C Chris N. Adler Larry R. Elizondo, Sr. Kelley Allen Priscilla Leal David Loeb John E. Marez Nelda Martinez Mark Scott d3174edf-8a59-4b0b-8d16-dc8df6eb746a.docx 029490 Page 3of3 [NESS INCE TII E CI'IRISTI BUSINESS AND JOEVELQ►PE T CORPOF Bt , .CLC FEAR THE RET II tTTI N A i 'C TI ?Itl` CSP Jt rtltts i sl l"mss trfioerttive Agr (intent % Caplfial lrtuestment '°and tK Creation :and f etenttonl f .lois (A reemartned into bet Teen the Corpus Christi Business end Job Dsveloprnent Corporation ',("Corporation" )4 tnd Plant Bikes LLC ("Rugg Oycl ), a::Texas for profit (fruited liability: corporation._ WHEREA , the TexasILegtsl0ure in Section:14koFArttcle 5190 , Vernons Texas Revised Civil Statutes (Development Corporation Act; oft 97 ), row codified es Sul;E title 01,Tttle 1 , Texas LocalGovernment Code., enmipowered I.00ai corm tunities wrth'the ability to adopt a aptlonal:lor a1 sales and. use tax .as a means ;of:%mprovtng the ecoricami+c l ealth arro % pe.:rtrty cif trleir c oxen: l REAS; ori Novembers °2002 residents of the City of Corpus Christi (fCityz p ed i�rapasrttan , iuew and.Expandedf t siness nterp Ises� rhich authors ed the adoption :of a sates erica use tax fol_fhe p omotlon and, development ttf r ew and expanded buetness enterprises at the rate of onl e t th of cane peccant fo'be mposed; far�3 years., WHET E..,AS, the"118th rent sates tart authorized by $assscle'of Proposition 2, as subsequently enacted oy the=Ctty Council and filed urrith the `State :Comptroller of Texas:, effective A'prii 1,.E2003,to be adrntr� ste'red by the •CtorptasChrtsti B tstfe s and Job Development Cotporation :BOON' WHHEREAS4 the:' Corpus.Chr.:.isti Business: and Job Develops: ent Corporation exists for: tfie `0U ". "-OteizofendOLI trig and asslstirlg entities in "tri creation : floI s for the citizens: 'of C:orpt is Christi, Texas, WHERE. , the :.Board --;af Directors of the Corporattor (Eder d'7, on September 10, 2007, amended the C rporatlon's Gtatdelir es and Criteria for Granting B:usirres�s lncerttives;("fype A; utdeilnes"`), which=tl e. it Ceunctl incorporated into'the r ►ty:of Corpus c.hristi Edonorrtmo i evelopment Incenttva Pl fides 2t 0 2011 on November 17, 2009; WHEREASI the City Coundil approved the Corporation%amended Guidelines add Ctiterla for 3rant ng Busitneas incentives art Septem et 1 &, 2007, WHI I EA , the`Boarid :, on November 9, 201'0,' amended the Corporation! G t"'defines, and; Critene for renting ausinessJnoeritives, WHER the, ttiy ousicil approved the Caroorstic n's an1ended Auld lit es and criteria for.Crantr Business Incentives on Novernber 0, 20i 0, AHI PEA , Sectlort X91 1373 Texas Local Gr?ver triertt Cdde, i of terly Sectrori ;af Ie Texas aevelapmer t Corporation Acte of 10 0, Art; 5190 , ernons Texas.'Reui ea �e 1 of Ileas Incer1tive°19ieeirrent Rilgged jcles dock' Ctvrl;Ttatut4s4,:r : tare 'the C Council10.400690,A:,.# lroEgratns: arld a pertditures of,t enrpbr t.ioi WHEREAS, Rugged Cycles`has th rr headquarters located here and t ey esserrrble bfcyples Fere They lease these cath to targe companies anal colleges #pr thew errtployot and/or stu ents IIEREA , Rugged Cycles proposes to invest approximately 2 rrt%l n over a ear`pened, i HER S, the'Board°,'has doterrn reed that tt i test interests of#her ctft eris of Corpus Christi, Texas that bush a develops rent funds be pro tiled t "Rugg d Cy l through tarts Agreement wttl� t ugg d Cycles, tp be used by'RuggedCycles to c an their current.: toeatlon and ill result`li creetran of up to new fuIf tine perrrtanent tabs in the City °I'' CP, Chnstt ar the retention of 12existing full #tme jobs �ru"tth an esttrr at l annual average aiary i3f $4 ,t Elg, and 10 existing pat t time j s. in constdersitton ,af the cc eriants, promise ,rand condittorts stated tri th s agreement, Corporation acrd Rugged y tes agree as fiait ` Effective Date:Th effeettve date of t is Agreement.' ("Effeotwe ate•) is the latest date thet either.pa „,executes tliis Agreement 2 Terni. The term ofthtsAgreement �s for eight years beginning on`the. effeutLue date ,..3.., Performance Reql .utrebmt nts andGrandcThe Performance Requirements and iewhrcs eedtcri incorpated rntothralgree n ef..Grantsare-llstedrr c b Creation-'Quait 44tion. a. In order to count aa created fqb ur�derth[a:,Ac reetre nt, the fob must pay wages et:teast as high as the wages required "by Section 501 162, Texas Local Government Cole, formerly Section 38(b) of the Develops ant Corporation Act of 1979, as amended, which is -the median wage of the occupation in the Corpus Chi iStl MSA as determined by Texes,VVorlsforce Corninissron`s Texas, lnduafry Profiles r+epprt: b:, A futi firne° permanent. job is, defined in the Type A Gutoelines. c Roogod qyotet agrees to confirm and;doc ament to the corporation that h minimum number of; jobs created=as a result of funding provided by this Agreement:is marntai ed;througticutthe'terrn`bytheBusiness.: d ,Rugged Cycles agreees topro rde Corparatton with a sworn certifiCate,by authorized representative ofeaoh'business assisted under tFs Agreement certityin`g the amiss of full_ tirrte. permanent errtpioyees employed byt e busirlese Bustness�1ncgT}fivGAgre nentFtugge cies coca e 2.of e.. Rrgged Cycles shall ensure that'the Corporation {s allowed reasonable. acces to personnelrecords of the businesses �assisted,under this A.greemerit': ,Buhr Local RrQtsrort'. a Rugged ycles°agrees to use its bestceffor�ts to give preference and priority to local, manufacturers, suppliers, contractors, and,labor, ex pt where hot reasonably possible tc dos so without added expense, substantial inconven encei •or:sacri ce inoperatin efficiency -in the; -normal course of business. b ,For the :pu ir.ifaturei persons wlo County, c sea of trils section the term " local'° a used to describe , suppliers, contractors, and labor includesr trs, busirnesses,, end eside in 'or maintain an;office within a 5( ,mile radius of l luec rarrant`res. hugged Cycles warrants and represents to Corporation the fallowing: a Rugged Cycles is a corporation duly organized, validly existing,•and in good standing under'the'lavi s of the State of Texas,;hasall corporate power and authority 'o .carry on its businessas presently conduced in Corpus Christi, Texas B Rugged Cycles has`,the authority to enter into and perform, and will peiforrrm, the terms of this Agreement to the best of its ability. c. Rugged Cycles has timely filed<<and will timely file all local, State, and Federal tax reports andreturns rotoirof by laws to be'filed iled and all Texas, -assessments, tees, and other a governmental charges, including applicable: ad valorem, taxes, have be;timely paid, and Will be timely paid-,, during the teri r of this. Agreement d Rugged Cycles has received copy cit the eras E evelop� neat Corporatib Aot, 'Subt tle ., Title fit, Teas t,c cal post:010m Coda, and acknowledges that the funds granted to this Agreement: must be utilized ;solely for purposes authorized under State law acid by the terms of this Agreement., e.. The parties executing this;Agreement on behalf•of Rugged Cy l s are duly authorized, to executethis Agreement on behalf of RuggedCycles. 7 Compliance ithr Laws Ruggi d Cycles (shall observe acid obey ell applicable ordinances regulations and°:rules of th.e Federal, ;State, county, and city, govef nments. . Nen C l rumination. Rugged Cycles. covenants and agrees ttiat Rugged .Cycles will riot discriminate rfor permit, discrimination against any person ar group of persons, wit i regard to employment and.tl a provision' of services at, on,.or in the Facility, on the grounds of race, religion, national origin, mail status, sed; age,.. disability, ;0 ,30 any manner prohibited try tl e lai ►rs of 3ttr'e: United States orthe State of Texas. 4010GS s Irii nt',rie Agrees fit;R4440.:':0000.4054(: e,dncx,; Page 3of9 g Farce Majeure i tf the Gorpc r tion or Rugged Cycles are prevented, wholly car in part, from'fulfllling its obligations under this Agreement by reason afany act of God, unaodable accident, acts of enemies, tr,es,floodsgovernmentaltestai t coregutrloatliothnotthher:cakluses of force majeureor by reason of.circumstances beyond its, •..•_. en e'oigaions ofthe orporaon r oRugged Cycles are temporarily suspended dur..irg continuation of'the force Majeure: ` If either party's, obligation: rs affected by any of the, causes offotce Majeure, the party affected shall promptly notify the other', party.ir writing, giving full; particulars of the force Majeure as soon as possible after; he occurrence of'the cause or causes relie'd::upon 0. •issi nmerit : Lugged cycles may not assign ail.Orf-.,.301.:p3.:.,,t €if its rightts, privileges,. or duties under Firs Agreerrment�withput the prior writton approval of iiia ` orporation and City. Any, attempted assignment: without: approval is� void, and constitutes a breach of this greeamerrt;.: 11. Indemnity. Ragged C les covenants to folly indemnify : sere,. and hold harmless the Corporation, the City, their respective officers, employees, and agents ("Indemnitees") against all liability, damage Inas, claims demands, actions o any kind can account raf;persianait injuries (including, without limiting the' turegolag, workers' :000. .enittion and death claims), or propel kiss or damage .o f :any kind, which arise out df orare in any:Manner connected.; with or,are claimed o arise °out cf or be in any manner connected. with Rugged Cycles activities cond tcted:underorincidental this Agreement including any in, ury, toss r r damage caused b the sole :ar contributory negligence of -any +fir ail of the Indemnitees. Rug, Cycles ust, at °its own expense investigate ail those claims and demands,. attend to their settlement ar other disposition, defendrall' action based on those claims end demands *fig couns l satistacttibo indemnitees,:< and`•� a all charges etattorne. _ s and all k other cost end expenses ofany kindirf g from the Iia,lrty,, da/ha .e lass i '12. Events of Default by Rugged Cycles;'tli�s follouw►rng events constitute a-default.of this Agreerienty Rugged cycles. sIn a The Corporation or City ,determnes that any representation or -warranty on behalf of T ugged Cycles contained iii this Agreement; or in .any financial statement, certificate, report,, or opinion submitted to the Corporation in connection with this Agreement was incorrect ar misleading 'many Material respect when made; a:4; fautiness;tncerithi Agreement Oggd ty les Any judgment is. assessed against Rugged Cycles or any attachment or tither levy against the: property of ;Rugged Cycles with respect to a claim remains unpaid, undischarged, or not dismissed, for a period of 120 days, Rugged Yo an assignment for the benefit of creditors.. d Rugged oyo ies:files a petition in bankruptcy, or is adjudicated insolvent or oanct e If taxes'owed'.by Rugged Cycles become delinquent, and Ringed Cycles fails to timely. and properly, follow.the legal procedures for Witest or contest.. f Rugged Cycleschanges the general character of business as conducted as of the -date this Agreement is approved- by the Corpar t € n. 13. Notice:of Should the:"Corpooratior or City determine that R:ugged;;':Cycles is'. in default according to the ter::.ms of'this Agreeri ent, the Corporation or. City shall notify Rugged Cycles in writing of the event, -of default and provide,ea days fromthe date of the notice ("Cure Period") for Rugged Cycles -to cure the event pf default �,4 Results of Uncured Default by Rugged Cycles After exhausting good faith attempts to address any default during the cure Period, and taking into account any extenuating circumstances that Might have occurred'"through no fault of"`Rugged Cycles, as determined :bj the_ Board Of Directors:of the. Corporation,' the foliowing actions -must oe taken ;far any, defaUlt that:remains uncured. after tte Cure Perim.:; abugged Cycles shall immediately'repay all funds paid,by Corporation tc them; under. thisAgreement. b. Rugged. Cycles shall pay Corporation, reasonable attorney fees and costs Of court to collect arrrounts due to Corporation if not immediately repaid .upon demand from the Corporation, c. Upon payment by Rugged C ruts of all sums due,:theCorporation and Ringed Cycles oboehave no further obligations to one another under this Agreement. d ,leithetthe City, the Corporation, noir Rugged Cycles, may be held fable for' any consequents it damages No Waiver: a. No waiver of arty covenantor condition, or the breach ,of:any covenant or condition of this Agreement, constitutes ,a waiver: of arty ;subsequent breach of the covenant or condition of the Agreement:; waiver of.;any covenantor condition, or: the breach of arty covenantor condition of this.Agreement,; justifies,or authorizes the nonobservance on any Pageof9 � i fiiess i r nt ve Age ent'Ptuggsd cyd 8 dioci of f er occ siion,.of this Agreement. e cove dant Ahy waiver or ence "of Ragged FCyc. estoppel:+against the Corporation, d Itis expressly -understood that if at any time Rugged Cycles is in default in any of itsconditions or covenants of this AgreeMent, the failure on the part of the Corporation to promptly avaail itself of the rights and- remedies that the Corporation i lay have, will not be considered, a warier pan the part pt the Corporaon, but Corporation may at any time avail itself ofhi rights or re oirt:elect;:to terminate -thus Fig'reernenton account of the default. 10. Rugged Cycles specifically agrees that Corporation shalt only be liable to'lugged Cycles far the actual amountof the money grants to be conveyed to Rugged Cycles and ; h 11 not be liable to Rugged Cycles for any actual or€consequential damages, direct or indirect, ;interest, attorney fees, or cost Pt:court for:any act of default y Corporation under itherterms :of this Agreement- Payment by Corporation is ;strictly limited to those funds o allocated, budgeted end calleoted solely during the grant°;terrh of this Agreement -,Corporation shalt use:its:best�efforts to anticipate econom conditions; and to budget accordingly. However,, it e further understood and agreed: that, should the.actual total sales tax revenue collected forr"any one year be,less than the total .amount;of grants to`.be paid to.all contracting parties withh Corporation for that year, then ikthat event, all contracting parties shall receive only.their pro ratan hare of the available sales tax:revenue for that year, Less Corporation's° custarriary and:usual costs and expenses, as carripared to each corit"racting parties' grant amount forthat< year, and "Corproratror'i shall not be Mable to for any deficiency at that time or at anytime in the future Intl is.event, Corporation will provide ail supporting documentation, as requested Payments lo be made :shall else rewire a; written request from Rugged Cycles. to be a l _i . 17 NO11.0,1, a iy required written notices i all be prepaid, addresse°d..as: follows: ed Cycles: Rugged `Cycles n Vince aenais 401 South Water Street Cc rpus'Christi, Takes 78401 ant rxia.iI certified ilial, postage. tusirnes 1ht %tiv Ag ementJ oration. City of Corpus Christi Business and Job Development Corporation. Attu Executive Dire or 1201 Leopard Street Corpus Christi, Texas 78401 copy%.of all notices and correspondence must be sent the City at the allowing address: City ofCorpus Christi Attn City Manager P ,lox 9277 Corpus Christi, Texas 78469-92: 7 c. Notice is effective ,upon deposit in the United States mail in° the manner prOVidod,aboVeli 18 Incorporation of eider documents The Corpus Christi Business an:d Joie Development Corporation Guidelines. and Criteria for Granting Business Incentives (,'Corpora ion G ideiine$7. aS ar ended,, are incorporated into Agreeme t. 19. Amendments or Modifications.. No a 'riendments:cr modifications to th s a greement may be- made, ,nor any provision waived;, unless in writing signed by a person duly .authorized to sign Agreements 00:-..0.040.1tof each party., 20 ':14elationShip,rOf Parties In performing this Agreement£ both the Corporation and. Rugged Cycles win atct inj an.,individual capacity, and not as agents, representatives employees, employers partners, joint -venturers, or associates<of one another The employees or agentsk.ofeither party may :not be; nor be construed tc be- theemployees nr ag<ents of th , other party for any>purpose. 21 :Captions. 'The.captions in this:Agreement-'are for. convenience only and are nota: part of thisAgreement The;captions do not. in anyway limit or arnplif the terms,,and provisions; of this Agreement, 22. ,;Severability::. a if for any reason, any section, paragraph, subdivision, clause, provision, phrase o(Word,of ttiis Agreement or the application of thisAgreement to any, person or circumstance iso to any extent,, held'lilegal, invalid, or unenfbrceable- under present Or future iari or by final judgment of.a outt-q-40.iiijotont lui'isoiction, their the remainder of this, igreenient, orthe=applicatiion o`f the terra or,provisionJo; iersons.or circumstances othehan those.as to which;is ietd illegal, invalid, c r, unenforceable, Will not be affected by the aw ar judgmerit, for it i the definite :intent of the ,parties td this Agreement:that every section swinei Igc a iii re:Ag it. egged Ocie& dacx Page 7 of:9`. par raph, i ul division, clause, provision, phrase, or yord' r fthis Agreement be glvi n full ford and effect for its purpose. Ix To the extent that any clause or provision'is held illegal invalid, or unenforceable under' present or,future i ffective during.;the tern of this Agreet ent, then the remainder of°this ree ent is not:afi%cted by.=the law, and rn lieu of any illegal, invalid, or unenforceainle clause or provision, a clause or provision, as similar in: termsto tete illegal, invalid, car unerz orceahle cla..use or provision as may be possible and: be legal, valid., and enforceable, wilt: be added: to this Agreerx'ient automatically.: 2 Venue.,: Venue for any legal action related to this agreement lett' Nueces'Coun� 24 Sole Agreement This Agreement constitutes the sole Agreement Between Corporation and Rugged Cycles Any prior Agreements, promises, negotiations, or representations,: verbalor other y se, not expressly stated in this Agreement, area no force and 'effe t. 25Survival of terms ofAgreement and obligations,of parties. The..terms of this Agreementai d the obligation ofthe parties relating` to Section 144brid', b ehall,survive thte termination of this Agreement. 'Corpus Christi Business & ;Job Development By: Eloy Salazar President Cate; Attest. y. Armando Chapa Assistant: Secretary APPROVED AS TO FORM: ;days uf' L 2U; 2. Charlotte be em, Assistant City Attorney For CityAorney. Page 8 of g Business in eri#ive Agreeme4A0gged cycI s;docx, Date:' THE,'STATE OF TEXAS COUNT F NUECE This instrument was acknowledged before me on " 012, by VinceDeriais, President, for" Rugged Cycles, ,a f or profit imJd Iiability corporation, on behalf of the Plant Bikes, LLG+. MARY JANE YBARBO 4 Ory Rha • SPVE;TEXASF . ( o« My.cwim Ftp. �t 4 •2012 ; nce ive Agreeit ent Rugged Cyeies(docx EXHIBIT A. PERFORMANCE MEASURES / I D CORPORATION GRANTS 9 Rugged: Cycles shall purchasetheir current location at 4O1 S Water Street; Corpus Christi, Texas..and invest atleast.'$:12 m llion td expand their current Iacation ever a; two year term. Rugged Cycles shall further, over the term of this Agreement, retain 11 full- time and part time jobs and create up to 3 herd full-time, with eh average en.r ual salary of $47,000 fora fuIi-tlme job: a d $30,000 for a part-time job�as described in the schedule bels umber of Number of • ew Jobs Retained, Jobs (Full/Part Time) 911,000 ital nvestment 200,01.0 1 00, 000 5 15/10 The tart incentive payment, ©f 50,000 is, due within 60 days -of when Rugged Cycles closes an their current -property as..evidenced oy the: executed.• closing papers and they have entered'into ani agreement With Texas A&M University to supply°the College:Statiort campus with bicyCies as evidenced by'a signed agreement b. The reat Otte'grant {$150,000) gill be paido cut wtthrn 0 days f the anniversary -day, not to exceed ?$50,000 per year and a:currulative total of $150,000 over three years. c. Should the company fall.below the Perforrnance:Standards, in any one year;° the Company shall:receive::a reduced percentageof the: Cash::lncentive Iris of fecit :that y r. Such reduction will be In that percentage equal to the percentage the Company`s performance falls below thePerformanc ;StandardsHowever if the Company: falls below 70% then there is. no payment for that year , Ry way of;;example anly assume a partial Cash. incentive payrrment is required In the second year of this Agreement, and tie Performance ,Standards have not been -reached, For the purposes af calcu IatinO:this reduced:"CesltIneen#eve, it is;- agreed,that $120,000, or 80% of'the Cash incentive "is tieing given prem sed on A-1 gusto s 9ncertt ve dement Fugged,Vy tes.docx the payroll; requtremer to of t i A rrernefta d.$.0,or :ia attril a able the' inve tmenfrequirements. Thetceduced Casa I,hcentlueshal[_be calculated a fQtivws . Arcual payroll corrimilnent: 2th :year; '$072,0. 2th .year $.07L0007. Percent of Total; `90:%` Ahrftiei Irruesthient cora rrlitment: 2th year, '�1�,00(000 , th year agtuatt 1000 000'; Percent oTotal; Redac 1, +r astr l rcentrue calci tin l4optiOnr0l. pentlue- gaidulatrori 8G% x 90% 50 QQb 30,000, iOb0' x 20% x SO,000 = $1O Ot Total Cash Incel tive. $36,.000 4$1Q,OOO 4 $46,000; In the2nd year; the Companywoutd receive,a reduced :Cash, incentive of $46,000 from the Corporation fornot meeting tFe performance gals for annual payroll requirements. 2 Tie Ct r oradr wtll,award a grant tougg d Cycles based onthe f armula move, payable not later'than. ;0 days afterthe annivversary o closing ori the atrlldit of atoll yyear if ,ugg Cyctes,rcakes the` required capital Investmel t buildings, Purr itcrre; fixtures and equipment retains the minimum number of rrr the preceding; year described rn paragraph 1 above (collectively; the "annual`performarice en r ark "). dna 1neenti Ag ,01b0ged 9y60d0-0cg BUSINESS INCENTIVE PROJECT SERVICE AGREEMENT This Business Incentives Project Service Agreement ("Project Service Agreement") is entered into between the Corpus Christi Business and Job Development Corporation ("Type A Corporation") and the City of Corpus Christi, Texas ("City"). WHEREAS, the Texas Legislature in Section 4A of Article 5190.6, Vernon's Texas Revised Civil Statutes (Development Corporation Act of 1979), now codified as Subtitle C1, Title 12, Texas Local Government Code, empowered local communities with the ability to adopt an optional local sales and use tax as a means of improving the economic health and prosperity of their citizens; WHEREAS, on November 5, 2002, residents of the City passed Proposition 2, New and Expanded Business Enterprises, which authorized the adoption of a sales and use tax for the promotion and development of new and expanded business enterprises at the rate of one-eighth of one percent to be imposed for 15 years; WHEREAS, the 1/8 cent sales tax authorized by passage of Proposition 2 was subsequently enacted by the City Council and filed with the State Comptroller of Texas, effective April 1, 2003, to be administered by the Type A Corporation's Board of Directors ("Board"); WHEREAS, the Type A Corporation exists for the purposes of encouraging and assisting entities in the creation of jobs for the citizens of Corpus Christi, Texas; WHEREAS, the Board of Directors of the Corporation ("Board"), on September 10, 2007, amended the Corporation's Guidelines and Criteria for Granting Business Incentives; WHEREAS, the City Council approved the Corporation's amended Guidelines and Criteria for Granting Business Incentives on September 18, 2007, which the City Council incorporated into the City of Corpus Christi Economic Development Incentive Policies 2009-2011 on November 17, 2009; WHEREAS, the Board, on October 18, 2010, again amended the Corporation's Guidelines and Criteria for Granting Business Incentives; WHEREAS, Section 501.073, Texas Local Government Code (formerly Section 21 of the Texas Development Corporation Act of 1979, Art. 5190.6, Vernon's Texas Revised Civil Statutes), requires the City Council to approve all programs and expenditures of the Type A Corporation; WHEREAS, Plant Bikes, LLC ("Rugged Cycles") has submitted a proposal to the Type A Corporation for a $200,000 grant for locating their headquarters in Corpus Christi; WHEREAS, the Type A Corporation and Rugged Cycles have executed a business incentive project agreement for the creation of jobs related to Rugged Cycles locating their headquarters in Corpus Christi. Page 1 of 3 bd17464a-al64-47be-ae76-12e20428beb5.docx In consideration of the covenants, promises, and conditions stated in this Project Service Agreement, the Type A Corporation and the City agree as follows: 1. Project Service Agreement to Implement Business Incentives Agreement. This Project Service Agreement between the City and the Type A Corporation is executed to implement the Business Incentive Agreement for the Creation of Jobs between the Type A Corporation and Motorglobe related to Motorglobe locating their headquarters in Corpus Christi ("Business Incentive Agreement"). 2. Term. The term of this Project Service Agreement runs concurrently with the term of the Business Incentive Agreement. 3. Services to be Provided by City. a. The City Manager, or the City Manager's designee, shall administer funding on behalf of the Type A Corporation. b. The City Manager, or the City Manager's designee, shall perform contract administration responsibilities outlined in the Business Incentive Agreement for the Type A Corporation. 4. Appropriation of Funds. Any future payments by the City are subject to appropriation of funds by City's Council. 5. Effective Date. The effective date of this Project Service Agreement is January 1, 2013. 6. Amendments or Modifications. No amendments or modifications to this Project Service Agreement may be made, nor any provision waived, unless in writing signed by a person duly authorized to sign agreements on behalf of each party. 7. Severability. a. If for any reason, any section, paragraph, subdivision, clause, provision, phrase or word of this Project Service Agreement or the application of this Project Service Agreement to any person or circumstance is, to any extent, held illegal, invalid, or unenforceable under present or future law or by a final judgment of a court of competent jurisdiction, then the remainder of this Project Service Agreement, or the application of the term or provision to persons or circumstances other than those as to which it is held illegal, invalid, or unenforceable, will not be affected by the law or judgment, for it is the definite intent of the parties to this Project Service Agreement that every section, paragraph, subdivision, clause, provision, phrase, or word of this Project Service Agreement be given full force and effect for its purpose. b. To the extent that any clause or provision is held illegal, invalid, or unenforceable under present or future law effective during the term of this Project Service Agreement, then the remainder of this Project Service Agreement is not Page 2 of 3 bd17464a-a164-47be-ae76-12e20428beb5.docx affected by the law, and in lieu of any illegal, invalid, or unenforceable clause or provision, a clause or provision, as similar in terms to the illegal, invalid, or unenforceable clause or provision as may be possible and be legal, valid, and enforceable, will be added to this Project Service Agreement automatically. 8. Captions. The captions in this Project Service Agreement are for convenience only and are not a part of this Project Service Agreement. The captions do not in any way limit or amplify the terms and provisions of this Project Service Agreement. The City of Corpus Christi Corpus Christi Business & Job Development Corporation Ronald L. Olson Eloy Salazar City Manager President Date: Date: Attest Armando Chapa City Secretary APPROVED AS TO FORM: day of , 2012. Charlotte Yochem Assistant City Attorney For City Attorney Page 3 of 3 bd17464a-a164-47be-ae76-12e20428beb5.dacx