R420RESOLUTION NO. 420
A RESOLUTION OF THE CITY OF KENNEDALE, TEXAS APPROVINGTHE
TERMS AND CONDITIONS OF A PROGRAM TO PROMOTE ECONOMIC
DEVELOPMENT AND STIMULATE BUSINESS AND COMMERCIAL
ACTIVITY IN THE CITY; AUTHORIZING THE CITY MANAGER TO
EXECUTE AN AGREEMENT WITH H & O DIE SUPPLY FOR SUCH
PURPOSES; AND PROVIDING AN EFFECTIVE DATE
WHEREAS, Chapter 380 of the Texas Local Government Code authorizes municipalities to
establish and provide for the administration of programs that promote economic development and
stimulate business and commercial activity in the city; and
WHEREAS, the City Council has been presented with a proposed agreement by and between the
City of Kennedale and H & O Die Supply a copy of which is attached hereto as Exhibit "A" and
incorporated herein by reference (hereinafter called the "Agreement "); and
WHEREAS, upon full review and consideration of the Agreement and all matters attendant and
related thereto, the City Council is of the opinion that the Agreement will assist in implementing a
program whereby economic development will be promoted and business and commercial activity will be
stimulated in the City.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
KENNEDALE,TEXAS:
SECTION 1.
The City Council finds that the terms of the Agreement will promote economic development and
stimulate business and commercial activity in the City and otherwise meet the criteria of Section 380.001
of the Texas Local Government Code.
SECTION 2.
The City Council hereby adopts and economic development program whereby the City of Kennedale will
make economic development program payments for the benefit of H & O Die Supply, and take other
specified actions in order to induce economic development within the City, in accordance with the terms
outlined in the Agreement.
SECTION 3.
The terms and conditions of the Agreement, having been reviewed by the City Council of the City of
Kennedale and found to be acceptable and in the best interest of the City and its citizens are hereby
approved.
SECTION 4.
The City Manager is hereby authorized to execute the Agreement and all other documents in connection
therewith on behalf of the City substantially according to the terms and conditions set forth in the
Agreement.
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This Resolution shall become effective from and after its passage.
PASSED, APPROVED, and EFFECTIVE this 13` day of February, 2014.
ayor, John Clark
ATTEST:
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Amethyst G. , City Secretary
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380 ECONOMIC DEVELOPMENT AGREEMENT
BETWEEN THE CITY OF KENNEDALE AND H&O DIE, INC.
Thi s Economic Development Agreement (the "Agreement") is entered into as of
_________________, 2014 (the “Effective Date”) by and between the City of
Kennedale , Texas, a home rule municipal corporation (the “City”) and H&O Die Supply ,
Inc., a Texas Domestic For Profit corporation (“H&O ”).
WITNESSETH :
WHEREAS , the City is authorized by Article 52 -a of the Texas Constitution and
Section 380.001 of the Texas Local Governme nt Code (Section 380.001) to provide
economic development grants to promote local economic development and to stimulate
business and commercial activity in the City; and
WHEREAS , H&O desires to expand its business operations located within the
City at 72 00 E. Interstate 20 , thus enhancing the property value and increasing the tax
revenues to the City ; and
WHEREAS , as an inducement to H&O to so expand its business the City has
agreed to contribute certain incentive payments to H&O upon those certain term s and
conditions described below ; and
WHEREAS , Chapter 380 of the Texas Local Government Code (the “Act”)
provides that Texas municipalities may create programs to promote economic
development as is contemplated herein; and
WHEREAS , the City has approv ed incentives to encourage expansion of
businesses in the City; and
WHEREAS , the City Council hereby finds and determines that this Agreement
will effectuate the p urposes of Chapter 380 , and that H&O ’s performance of its
obligations herein will promote lo cal economic development and stimulate business and
commercial activity in the City ; and
NOW, THEREFORE , in consideration of the mutual benefits and promises
contained he rein and for other good and valuable consideration, the receipt and
sufficiency o f which is hereby acknowledged, the parties agree as follows:
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ARTICLE 1 .
AUTHORIZATION
The City Council finds and determines that this Agreement is authorized and
governed by Se ction 380.001 of the Act .
ARTICLE 2 .
DEFINITIONS
2.01 The terms “Agreement ,” “Effective Date ,” “City ,” and “H&O ,” shall have the
meanings provided above.
2.02 “Affiliate ” means (1) any entity 50% or more owned or controlled by H&O , or any
of its principal shareholders or any trust created for their benefit, (2) any entity
taking over H&O’s interest in this Agreement as a result of merger or
consolidation, (3) any entity acquiring all or substantially all of the assets of H&O,
or (4) any entity which has acquired a majority of the outstanding stock of H&O .
2.03 “Eligible Ad Valorem Tax Revenue ” means, with res pect to any particular year,
that additional revenue the City receives fro m ad valorem property taxes for such
year , excluding any ad valorem taxes derived from the mineral interests , o n the
Property resulting from H&O’s expansion of its b usiness pursuant to this
Agreement . The base ad valorem value is $688,500.
2.04 “Event of Bankruptcy or Insolvency ” mean s the dissolution or termination (other
than a dissolution or termination by reason of a merger with an A ffiliate) of a
party’s existence as a going business, insolvency, appointment of receiver for
any part of a party’s property and such appointment is not terminated within
ninety (90) days after such appointment is initially made, any general assignment
for the benefit of creditors, or the c ommencement of any proceeding under any
bankruptcy or insolvency laws by or against a party and in the event such
proceeding is not voluntarily commenced by the party, such proceeding is not
dismissed within ninety (90) days after the filing thereof.
2.05 “Gran t Payment (s)” means the periodic payment by the City to H&O of a n
am ount equal to the Eligible Ad Valorem T ax Revenue as provided herein.
2.06 “Property ” means that t ract of land located 7200 E. Interstate 20, more
particularly described as, Block 2, Lot 1A, AA Addition , Kennedale, Tarrant
County, Texas, as more particularly described in Exhibit “A .”
ARTICLE 3 .
TERM
3.01.1 T he term of this Agreement shall commence on the Effective Date and will
terminate five (5 ) years there after on ___________________. Notwithstand ing
the above, this Agreement shall automatically terminate o n December 31, 2014 if
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H&O fails to accomplish the expansion of its business operations contemplated
herein .
ARTICLE 4 .
COVENANTS OF H&O
4.01 Dedication By H&O. In consideration of the City ag reeing to pay H&O the Grant
Payments in accordance with the terms , provisions and conditions of this
Agreement, H&O agrees to the following, which are not obligations of H&O, but
are duties that must be fulfilled in order to receive Grant Payments :
(A) H&O sha ll expand its business operations located at 7200 E. Interstate 20
by remodeling a portion of their building to do repair and maintenance of
dies used in the metal stamping business .
(B) H&O shall purchase equipment associated with its operations expansions
as follows: machining equipment, including lathes, milling equipment, etc.
(C) H&O remains in Kennedale during the terms of this Agreement.
(D) H&O shall r emain current and paid on all ad valorem taxes on the
Property , subject to appeal rights in accordance with la w and subject to a
right to cure any delinquency .
4.02. Condition Precedent . Notwithstanding any other provisions hereof, the City shall
not be obligated to make any Grant Payment or other payment or grant pursuant
to this Agreement unless : (1) H&O is in compliance with the provisions of this
Agreement in all material respects and (2) the Eligible Ad Valorem Tax Revenue
for the Property for the year prior to the year in which the Grant P ayment is due
has been received by the City.
ARTICLE 5 .
CITY AGREEMEN TS
5.01 I n accordance with the provisions of this Agreement, the City agrees that, subject
to the terms and conditions contained herein, H&O shall be entitled to receive an
annual Grant Payment equal to the amount of the Eligible Ad Valorem Tax
Revenue receive d by the City for the prior calendar year .
5.02 Subject to the continued compliance with the terms of this Agreement by H&O,
t he initial G rant P aymen t shall be made on or before May 1 , 2014 and
subsequent Grant Payments shall be made on or before May 1 of eac h
subsequent year throughout the term of this Agreement .
5.03 The Grants Payments shall cease upon the earlier of:
(A) May 1, 2019 ; or
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(B) The date u pon which H&O defaults on the terms of this Agreement as
defined by Article 7 below.
ARTICLE 6 .
AUTHORITY; COMPLI ANCE WITH LAW
6.01 H&O hereby represents and warrants to the City that it has full lawful right, power
and authority to execute and deliver and perform the terms and obligations of this
Agreement and that the execution and delivery of this Agreement has been d uly
authorized by all necessary action by H&O and this Agreement constitutes the
legal, valid and binding obligation of H&O, and is enforceable in accordance with
its terms and provisions.
6.02 Notwithstanding any other provision of this Agreement, H&O shall c omply with all
federal , state , and local laws.
6.03 During the term of this Agreement, H&O agrees not to knowingly employ any
undocumented workers at the Property , and if convicted of a violation under 8
U.S.C. Section 1324a(f ), H&O shall repay the amount of t he Grant Payments
received by H&O as of the date of such violation within 120 business days after
the date H&O is notified by the City of such violation, plus interest at the rate the
City is paying on its most recent issuance of bonded indebtedness prior to H&O’s
violation of this section.
ARTICLE 7 .
DEFAULT AND REMEDIES
7.01 Default by H&O. In the event: (i) H&O fails to fulfill its obligations under Section
4.01 of this Agreement; (ii) H&O has delinquent ad valorem taxes owed to the
City (provided that H&O retains the right to timely and properly protest and/or
contest any such taxes ); (ii i ) upon the occurrence of any Event of Bankruptcy or
Insolvency by H&O ; or (i v ) H&O materially breaches any of the material terms or
conditions of this Agreement, then H&O after the expiration of the notice and
cure periods described herein, shall be in default of this Agreement. In the event
of such a default, the City shall give H&O written notice of such breach and/or
default, and if H&O has not cured such breach or default within thirty (30) days
after receipt of such notice, the City may terminate this Agreement by written
notice to H&O, and the City shall have no further obligation to H&O. H&O shall
not be liable to the City for any alleged consequential damages an d the City
hereby waives any rights or remedies available that a re related to consequential
damages at law or in equity. Notwithstanding the above, if such Act of Default is
such a matter that cannot be cured by reasonably diligent efforts within thirty (3 0)
days, then H&O shall have an additional thirty (3 0) days to cure the breach so
long as H&O promptly initiates and diligently and continuously attempts to cure
the same.
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7.02 Default by the City . Should the City fail to timely or substantially comply with a ny
one or more of the requirements, obligations, duties, terms, conditions or
warranties of this Agreement, such failures shall be an Act of Default by the City
and the City and shall have thirty (3 0) days to cure and remove the Default upon
receipt of wri tten notice to do so from H&O. H&O specifically agrees that the City
shall only be liable to H&O for the amount of the Grant Payments it is required to
pay to H&O under this Agreement and shall not be liable to H&O for any alleged
consequential damages. O ther than H&O’s right to seek payment of the Grant
Payments hereunder, H&O hereby waives any rights or remedies available to it
at law or in equity . Notwithstanding the above, if such Act of Default is such a
matter that cannot be cured by reasonably dili gent efforts within thirty (3 0) days,
then the City shall have an additional thirty (3 0) days to cure the breach so long
as City promptly initiates and diligently and continuously attempts to cure the
same.
7.03 Waiver . No waiver or any breach of any term or condition of this Agreement shall
be construed to waive any subsequent breach of the same or any other term or
condition of this Agreement. Any waiver of any term or condition of this
Agreement must be in writing and approved by the City Council.
7.04 Remedi es . S hould H&O fail to comply with its obligations under Section 4.01 of
this Agreement, subject to Force Majeure, the City may, following the applicable
notice and cure periods , exercise the following remedies as the sole remedies for
such default : (i) c ease payment of any remaining Grant Payments ; (ii) terminate
this Agreement ; and (iii) demand repayment of the cumulative amount of Grant
Payments previously paid to H&O under this Agreement .
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ARTICLE 8 .
RIGHT OF OFFSET
H&O agrees that, subject to the provision of n otice by the City and 3 0 -day period
following receipt of n otice in which H&O may respond or act , the City may offset the
amount of any Grant Payment installment due to H&O for any calendar year under this
Agreement against an y amount which i s: (i) lawfully due to the City from H&O pursuant
to this Agreement , and (ii) not subject to challenge by H&O in a court of competent
jurisdiction by H&O.
ARTICLE 9 .
VENUE AND GOVERNING LAW
This Agreement is performable in Tarrant County, Texas and ve nue of any action
arising out of this Agreement shall be exclusively in Tarrant County, Texas. This
Agreement shall be governed and construed in accordance with the Charter,
ordinances, and resolutions of the City, applicable federal and state laws, viola tion of
which shall constitute a default of this Agreement. To the extent permitted by law, the
laws of the State of Texas shall apply without regard to applicable principles of conflicts
of law, and the parties submit to the jurisdiction of the state and federal courts in
Kennedale , Tarrant County, Texas.
ARTICLE 1 0 .
FORCE MAJEURE
Performance of the parties’ obligations under this Agreement shall be subject to
extension due to delay by reason of events of force majeure, and the obligations shall
be aba ted during any period of force majeure. Force majeure shall include, without
limitation, damage or destruction by fire or other casualty, condemnation, strike, lockout,
civil disorder, war, issuance of any permit and/or legal authorization (including
engi neering approvals by any governmental entity), governmental approvals and
permits, shortage or delay in shipment of materials or fuel occasioned by any event
referenced herein, acts of God, unusually adverse weather or wet soil conditions or
other causes b eyond the parties’ reasonable control, including but not limited to, any
court or judgment resulting from any litigation affecting the Property or this Agreement.
ARTICLE 1 1 .
GIFT TO PUBLIC SERVANT OR TO H&O REPRESENTATIVE
11.01 No Benefit. Each party hereto represents to the other that it has not offered,
conferred, or agreed to confer and that it will not offer, confer or agree to confer
in the future any benefit upon an employee or official of the other party. For
purposes of this section, “benefit” means anything reasonably regarded as
economic advantage, including benefit to any other person in whose welfare the
beneficiary is interested, but does not include a contribution or expenditure made
and reported in accordance with law.
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11.02 Right of Reimbursement. Notwithstanding any other legal remedies, the City
may obtain reimbursement for any expenditure made to H&O as a result of the
improper offer, agreement to confer, or conferring of a benefit to a City employee
or official.
ARTICLE 1 2 .
ASSIGNMENT
H&O m ay assign all or any part of this Agreement without the City’s consent or
approval; provided, however, that the assignment is to a person or entity which is an
Affiliate. Any assignment to a person or entity which is not an Affiliate will require
approval by action of the City Council.
ARTICLE 1 3 .
INDEMNIFICATION
13.01 H&O’S INDEMNIFICATION . H&O EXPRESSLY AGREES TO FULLY AND
COMPLETELY DEFEND, I NDEMNIFY, AND HOLD H ARMLESS THE CITY,
AND ITS OFFICERS, AN D EMPLOYEES, AGAINST ANY AND ALL CLAIMS,
LAWSUITS, LIABILIT IES, JUDGMENTS, COST S, AND EXPENSES FOR
PERSONAL INJURY (INC LUDING DEATH), PROPE RTY DAMAGE OR
OTHER HARM, DAMAGES OR LIABILITY FOR WHI CH RECOVERY OF
DAMAGES IS SOUGHT, S UFFERED BY ANY PERSO N OR PERSONS, THAT
MAY ARISE OUT OF OR BE OCCASIONED BY ANY NEGLIGE NT, GROSSLY
NEGLIGENT, WRONGFUL, OR STRICTLY LIABLE A CT OR OMISSION OF
H&O OR ITS AGENTS, EMPLO YEES, OR CONTRACTORS , ARISING OUT IN
THE PERFORMANCE OF T HIS CONTRACT . Nothing in this paragraph may be
construed as waiving any governmental immunity available to the City under
state law. This provision is solely for the benefit of H&O and the City and is not
intended to create or grant any rights, contractual or otherwise, in or to any other
person.
13.02 No Joint Venture . It is acknowledged and agreed by the par ties that the terms
hereof are not intended to and shall not be deemed to create a partnership or
joint venture among the parties. The City, its past, present and future officers,
elected officials, directors, employees and agents of the City does not ass ume
any responsibility to any third party in connection with H&O’s obligations under
this Agreement.
ARTICLE 1 4 .
MISCELLANEOUS MATTERS
14.01 Time is of Essence. Time is of the essence in this Agreement. The parties
hereto will make every reasonable effort to expedite the subject matters hereof
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and acknowledge that the successful performance of this Agreement requires
their continued cooperation.
14.02 Agreement Subject to Law. This Agreement is made subject to and in
accordance with the Kennedale Home Rule Charte r and ordinances of the City,
as amended, and all applicable State and federal laws.
14.03 Interpretation. Each of the p arties have been represented by counsel of their
choosing in the negotiation and preparation of this Agreement. In the event of
any dispute regarding the interpretation of this Agreement, this Agreement will be
interpreted fairly and reasonably and neither more strongly for nor against any
p arty based on draftsmanship.
14.04 Counterparts Deemed Original. This Agreement may be executed in any nu mber
of counterparts, each of which shall be deemed an original and constitute one
and the same instrument.
14.05 Attorney’s Fees . If any legal action or proceeding is commenced between the
City and H&O to enforce the provisions of this Agreement or to recover damages
for its breach, the prevailing party in the legal action will be entitled to recover its
reasonable attorney’s fees and expenses incurred by reason of such action, to
the extent allowed by law.
14.06 Captions. The captions to the various clauses of this Agreement are for
informational purposes only and shall not alter the substance of the terms and
conditions of this Agreement.
14.07 Complete Agreement. This Agreement embodies the complete agreement of the
parties hereto, superseding all oral or written previous and contemporary
agreements between the parties and relating to matters in the Agreement, and
except as otherwise provided herein cannot be modified without written
agreement of the parties to be attached and made a part of this Agreement.
14.08 Notice . Any notice to be given or served hereunder or under any document or
instrument executed pursuant hereto shall be in writing and shall be (i) delivered
personally, with a receipt requested therefore; or (ii) sent by a nationally
recognized overnight cour ier service; or (iii) delivered by United States certified
mail, return receipt requested, postage prepaid. All notices shall be addressed to
the respective party at its address set forth below, and shall be effective (a) upon
receipt or refusal if deliver ed personally; (b) one business day after depositing,
with such an overnight courier service or (c) two business days after deposit in
the United States mails, if mailed. Any party hereto may change its address for
receipt of notices by service of a notic e of such change in accordance with this
subsection.
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H&O : H&O Die Supply
Attn: Jerry Ostand
7200 E. Interstate 20
Kennedale, Texas 76060 -5000
With a copy to Gerald & Maria Ostand
3807 Park Flower Court
Arlington, TX 76017 -3345
City : City Manager
City of Kennedale
405 Municipal Drive
Kennedale, Texas 76060
Telephone: (817) 985 -2100
Fa x: (817) 478 -7169
With a copy to: Wayne K. Olson
Taylor, Olson, Adkins, Sralla & Elam, L.L.P.
6000 Wes tern Place
Suite 200
Fort Worth, Texas 76107
14.09 Amendment. This Agreement may only be amended by the mutual written
agreement of the parties.
14.10 Severability. In the event any section, subsection, paragraph, subparagraph,
sentence, phrase, or word herein is held invalid, illegal, or unenforceable, the
balance of this Agreement shall stand, shall be enforceable, and shall be read as
if the parties intended at all times to delete said invalid section, subsection,
paragraph, subparagraph, sentence, phr ase, or word. In the event there shall be
substituted for such deleted provision a provision as similar in terms and in effect
to such deleted provision as may be valid, legal and enforceable.
14.11 Right to Offset. The City may, at its option, offset any amou nts due and payable
to H&O under this Agreement against any debt (including taxes) lawfully due to
the City from H&O and which are delinquent under applicable law or by
agreement , regardless of whether the amount due arises pursuant to the term s of
this Ag reement or otherwise and regardless of whether or not the debt due to the
City has been reduced to judgment by a court ; provided that if H&O is in good
faith challenging the validity of any debt, in accordance with applicable laws, the
City may not offset unless and until such challenge is finally resolved.
[Signature pages to follow]
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EXECUTED on the respective dates of acknowledgement, to be effective as of the
Effective D ate first set forth above.
THE CITY OF KENNEDALE ,
a Texas municipal corporation
By: _____________________________
Bob Hart, City Manager
Date : ____________________________
STATE OF TEXAS
COUNTY OF TARRANT
This instrument was acknowledged before me on _________, 201 4 by Bob Hart ,
known personally by me to be the City Ma nager of the City of Kennedale , on behalf of
said City.
[Notary Seal]
____________________________________________
Notary Public, State of Texas
H&O DIE , INC.
A Texas Domestic For Profit Corporation
By: _______________________
Name:_______________________
Title: _______________________
Date: _______________________
STATE OF TEXAS
COUNTY OF DALLAS
This instrument was acknowledged before me on _________, 201 4 by
__________________, known personally by me to be the ____________________for
H&O Die, Inc., on behalf of said company .
[Notary Seal] ____________________________________________
Notary Public, State of Texas
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W:\Kennedale \Agreements \H&O D ie Inc \380 Agreement.doc
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EXHIBIT A
Legal Description of Land
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EXHIBIT B
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EXHIBIT C
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EXHIBIT D