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18-R-83 - Kellum Family Medicine Performance Agreement Fully ExecutedRESOLUTION NO. 18 -R -83 A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS AUTHORIZING AN AGREEMENT FOR PROVISIONS OF PROFESSIONAL SERVICES BETWEEN THE CITY OF SCHERTZ AND THE CITY OF SCHERTZ ECONOMIC DEVELOPMENT CORPORATION, AND OTHER MATTERS IN CONNECTION THEREWITH WHEREAS, the Development Corporation Act of 1979, as amended (Section 501.001 et seq, Texas Local Government Code, formerly the Development Corporation Act of 1979) (the "Act ") provides a corporation those powers incidental or necessary to the purposes of the corporation; and WHEREAS, the City of Schertz Economic Development Corporation (the "Corporation ") desires to engage the City for the provision of certain professional and other services to assist the Corporation in carrying out its goals and objectives; and WHEREAS, the Act prohibits the City from providing things of value, including professional services, in aid of corporation without receiving fair value compensation in return; and WHEREAS, the City Council has determined that it is in the best interest of the City to approve the Agreement for Provisions of Professional Services Between the City of Schertz and the Schertz Economic Development Corporation and that such agreement constitutes fair value for the services to be rendered under the agreement. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS THAT: Section 1. The City Council hereby authorizes the City Manager to execute and deliver the Agreement for Provisions of Professional Services Between the City of Schertz and the Schertz Economic Development Corporation in substantially the form set forth on Exhibit A. Section 2. The recitals contained in the preamble hereof are hereby found to be true, and such recitals are hereby made a part of this Resolution for all purposes and are adopted as a part of the judgment and findings of the City Council. Section 3. All resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Resolution are hereby repealed to the extent of such conflict, and the provisions of this Resolution shall be and remain controlling as to the matters resolved herein. Section 4. This Resolution shall be construed and enforced in accordance with the laws of the State of Texas and the United States of America. Section 5. If any provision of this Resolution or the application thereof to any person or circumstance shall be held to be invalid, the remainder of this Resolution and the application of such provision to other persons and circumstances shall nevertheless be valid, and the City Council hereby declares that this Resolution would have been enacted without such invalid provision. Section 6. It is officially found, determined, and declared that the meeting at which this Resolution is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Resolution, was given, all as required by Chapter 551, Texas Government Code, as amended. Section 7. This Resolution shall be in force and effect from and after its final passage, and it is so resolved. PASSED AND ADOPTED, this 24th day of July, 2018. CITY OF SCITRTZ, TEXAS Carpenter, Mayor ATTEST: renda Dennis, City ecretary (CITY SEAL) EXHIBIT A AGREEMENT FOR PROVISIONS OF PROFESSIONAL SERVICES BETWEEN THE CITY OF SCHERTZ AND THE SCHERTZ ECONOMIC DEVELOPMENT CORPORATION AGREEMENT FOR PROVISIONS OF PROFESSIONAL SERVICES BETWEEN THE CITY OF SCHERTZ AND THE SCHERTZ ECONOMIC DEVELOPMENT CORPORATION THE STATE OF TEXAS KNOWN ALL MEN BY THESE PRESENTS: COUNTY OF GUADALUPE THIS AGREEMENT, executed the day of , 2018, by and between the CITY OF SCHERTZ, a municipal corporation, acting by and through its City Council, situated in Guadalupe County, Texas (hereinafter referred to as "City "), and the City of Schertz Economic Development Corporation, a Texas non - profit industrial development corporation (hereinafter referred to as "SEDC ") acting by and through its President of the Board is as follows: WITNESSETH: I. The City agrees to provide management, professional, administrative, financial and investment services to the SEDC according to the terms of this agreement. Direct services the City shall perform for the SEDC shall include: Providing Salary, workers' compensation, health, and retirement expenses for City employees assigned to the SEDC. 2. Preparing all financial and investment reports and keeping all financial books and records required by applicable law. Preparing a budget for the forthcoming year for review and approval by the Board and City Council. 4. Providing all necessary budgeting, accounting, financial management and investment management through the City's Finance Department. 5. Providing accounts payable, payroll, purchasing and other bookkeeping services with oversight and training of such services. 6. Providing for a repository of records, office and conference space. 7. Providing technology support of hardware, software and phone systems through the City's Information Technology Department. Providing automotive support of vehicles through the City's Fleet Department. Page 1 of 3 9. Providing for legal services through the City Attorney's office at the rate that those services are provided to the City. 10. Providing for commercial insurance, communication equipment and services, and office equipment products and services at the rate that those products and services are provided to the City. 11. Providing for financial auditing services through the Finance Department at the rate that those services are provided to the City. 12. Providing executive and administrative support, review and oversight by various City departments including but not limited to City Manager, City Secretary, and Executive Director and appropriate staffing. 13. Providing for project management services. It is understood and agreed that access to City staff resources by the SEDC is secondary to the needs of the City Council of the City of Schertz. Il. Subject to the SEDC continuing to contract with the City for management services, the SEDC will pay to the City for its services pursuant to this agreement, in the form of a flat fee (the Service Fee) in the amount of four hundred fifty -six thousand six hundred thirty and zero cents ($456,630.00) per year. Said amount to be paid in two equal payments on October 1, 2018 and April 1, 2019. In addition to the Service Fee, the SEDC will pay to the City the City attorney's hourly fees as charged to the City for all attorney services. In the event of the termination of this agreement, the SEDC will be responsible for paying the City only the portion of the cost allocated to periods prior to the effective date of the termination of the agreement. III. It is the express purpose of this agreement for the City to provide certain management, professional, administrative and financial services to the SEDC. IV. Subject to early termination as provided in Article V below, this agreement shall be in effect for a period of one year commencing October 1, 2018 and ending September 30, 2019, and said agreement shall be extended for additional one -year terms thereafter under the same terms Page 2 of 3 and conditions unless one party gives to the other parry written notification at least thirty (30) days prior to the end of the existing term of its desire to terminate the agreement. V. 1. This contract may be terminated by the City or SEDC, in whole, or from time to time, in part, upon thirty (3 0) days notice from the terminating parry to the other parry. Termination shall be effective thirty (3 0) days after delivery of Notice of Termination specifying to what extent performance or work under the contract shall be terminated thirty (30) days after receipt by the notified party. 2. After receipt of a Notice of Termination the City shall: a. Stop work on the date as specified in the thirty (30) day Notice of Termination to the extent possible. b. Place no further orders or subcontracts except as may be necessary for completion of the work not terminated. C. Terminate all orders and subcontracts to the extent that they relate to the performance of work terminated by the Notice of Termination in so far as possible. d. The SEDC shall pay all expenses incurred through the date of termination. VI. This Agreement shall take effect on the day of execution. IN WITNESS WHEREOF, the parties have executed this Contract in the year and on the day indicated. CITY OF SCHERTZ ECONOMIC DEVELOPMENT CORPORATION Tim Brown President CITY OF SCHERTZ, TEXAS Brian James Acting City Manager Page 3 of 3 ECONOMIC DEVELOPMENT PERFORMANCE AGREEMENT KELLUM FAMILY MEDICINE This Performance Agreement ( "Agreement") is entered into to be effective as of the Effective Date (as defined in Article III below), by and between the City of Schertz Economic Development Corporation, located in Guadalupe County, Texas, a Texas non - profit industrial development corporation under the Development Corporation Act and governed by TEx. Loc. Gov. CODE chapters 501, 502 and 505 and the Texas Non -Profit Corporation Act (hereinafter called "Corporation ") created by, and for the benefit of the City of Schertz, Texas (hereinafter the called the "City ") Kellum Family Medicine, Inc. a Texas Corporation, its successors or assigns (hereinafter called "Company "), the Corporation and the Company collectively known as the "Parties" to this Agreement. RECITALS WHEREAS, the Development Corporation Act of 1979, as amended (Section 501.001 et sdq, Texas Local Government Code, formerly the Development Corporation Act of 1979) (the "Act") authorizes a development corporation to fund certain projects as defined by the Act and requires development corporations to enter into performance agreements to establish and provide for the direct incentive or make an expenditure on behalf of a business enterprise under a project; and WHEREAS, Section 501.103 authorizes expenditures for certain infrastructure, improvement projects that are found by the board of directors to be required or suitable for infrastructure necessary to promote or develop new or expanded business enterprises; and WHEREAS, Section 501.158 of the Act requires a performance agreement to provide at a minimum for a schedule of additional payroll or jobs to be created or retained and capital investment to be made as consideration for any direct incentives provided or expenditures made by a corporation under the agreement and to specify the terms under which repayment must be made if the business enterprise does not meet the performance requirements specified in the agreement; and WHEREAS, The Company has purchased the Schertz Medical Center Land (as defined below), as more precisely described on Exhibit A (attached hereto and incorporated herein); and WHEREAS, the Corporation adopted the Schertz Incentive Policy in May 2017 to guide and ensure consistency when providing incentives within the City of Schertz to promote economic development; and WHEREAS, the Corporation desires to offer an Infrastructure Grant to the Company to enable the development the Schertz Medical Center Land pursuant to this Agreement in substantial conformity with the Schertz Incentive Policy and the Act; and WHEREAS, the location of the Schertz Medical Center Land and the Facilities, as proposed, will contribute to the economic development of the City by creating new jobs and increased employment, promoting and developing expanded business enterprises, increased 1 development, increased real property value and tax revenue for the City, and will have both a direct and indirect positive overall improvement/stimulus in the local and state economy; and WHEREAS, the Parties are executing and entering into this Agreement to set forth certain terms and obligations of the Parties with respect to such matters; and WHEREAS, the Parties recognize that all agreements of the Parties hereto and all terms and provisions hereof are subject to the laws of the State of Texas and all rules, regulations and interpretations of any agency or subdivision thereof at any time governing the subject matters hereof; and WHEREAS, the Parties agree that all conditions precedent for this Agreement to become a binding agreement have occurred and been complied with, including all requirements pursuant to the Texas Open Meetings Act and all public notices and hearings; if any, have been conducted in accordance with Texas law; and WHEREAS, on the Effective Date, the commitments contained in this Agreement shall become legally binding obligations of the Parties. NOW, THEREFORE, in consideration of the mutual covenants, benefits and agreements described and contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and further described herein, the Parties agree as follows: ARTICLE I RECITALS 1. Recitals. The recitals set forth above are declared true and correct by the Parties and are hereby incorporated as part of this Agreement. ARTICLE II AUTHORITY AND TERM 1. Authority. The Corporation's execution of this Agreement is authorized by the Act and constitutes a valid and binding obligation of the Corporation. The Corporation acknowledges that the Company is acting in reliance upon the Corporation's performance of its obligations under this Agreement in making the decision to commit substantial resources and money to the construction and establishment of the Project, hereinafter constructed and established. 2. Term. This Agreement shall become enforceable. upon the Effective Date, hereinafter established, and shall continue until the Expiration Date, hereinafter established, unless terminated sooner or extended by written mutual agreement of the Parties in the manner provided for herein. 3. Purpose. The purpose of this Agreement is to formalize the agreements between the Company and the Corporation for the granting of funds to cover certain costs associated with 0 the Project and specifically state the covenants, representations of the Parties, and the incentives associated with the Company's commitment to abide by the provisions of the Act and to abide by the terms of this Agreement which has been approved by the Corporation and the Company as complying with the specific requirements of the Act. It is expressly agreed that this Agreement constitutes a single transaction. A failure to perform any obligation by the Parties may constitute a Default and shall terminate any further commitments (if any) by the non - defaulting Party unless an alternative penalty or remedy is provided for herein. 4. Administration of Agreement. Upon the Effective Date, the Corporation delegates the administration and oversight of this Agreement to the Executive Director of the Corporation. Any proposed amendments to the Agreement shall require the approval of the Board of Directors of the Corporation. ARTICLE III DEFINITIONS As used in this Agreement, the following terms shall have the meanings ascribed below. All undefined terms shall retain their usual and customary meaning as ascribed by common and ordinary usage. "Bankruptcy" shall mean the dissolution or termination of a Party's existence as a going business, insolvency, appointment of receiver for any party of such Party's property and such appointment is not terminated within ninety (9 0) days after such appointment is initially made, any general assignment for the benefit of creditors, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against such party and such proceeding is not dismissed within ninety (90) days after the filing thereof. "Calendar Year" shall mean January 1 through December 31. "Certificate of Occupancy" shall mean the signed certificate issued by the City of Schertz Inspections Division confirming that the entire work covered by the permit and plans are in place. The Certificate of Occupancy shall be used to document the Company's Capital Investment. "Default" unless otherwise specifically defined or limited by this Agreement shall mean failure by any Party to timely and substantially comply with any performance requirement, duty, or covenant. "Effective Date" shall be the date of the last signing by a party to the agreement. "Expiration Date" shall mean the earlier of- 1. 10 years from the Effective Date; or 2. The date of termination, provided for under Article VII of this Agreement. "Facilities" shall mean the three proposed office buildings constructed on the Schertz Medical Center Land wherein Company intends to attract and expand office opportunities and jobs. "Force Majeure" shall mean any contingency or cause beyond the reasonable control of a Party, including, without limitation, acts of God or the public enemy, war riot, civil commotion, insurrection, government or de facto governmental action (unless caused by the intentionally wrongful acts or omissions of a Parry), fires, explosions or floods, strikes, slowdowns or work stoppages. "Infrastructure Grant" shall have the meaning set forth in Article IV, Section 1. "Infrastructure Improvements" shall mean those items set forth in Article V Section 1. "Letter of Acceptance" shall mean a signed letter issued by the City of Schertz accepting the Infrastructure Improvements. "New Jobs" shall mean jobs that are created as a result of the construction of the Facilities and shall exclude any job relocated from any other location of Company within the City of Schertz. "Project" shall mean the construction of the Infrastructure Improvements. "Project Costs" shall mean the actual construction costs incurred by Company for the completion of the Infrastructure Improvements, and shall specifically include the sewer line impact fee, sewer line extension and connections, water main re- locate, and road infrastructure and exclude any management fee for Company or its developer and tree mitigation fee. " Schertz Medical Center Land" shall mean the approximately 5.403 acres located within the City of Schertz, Texas as approximately shown on Exhibit A. "State of Texas" shall mean the Office of the Texas Comptroller, or its successor. ARTICLE IV CORPORATION OBLIGATION 1. Infrastructure Grant. Subject to the satisfaction of all the terms and conditions of this Agreement and the obligation of the Company to repay the Infrastructure Grant pursuant to Article VIII hereof, the Corporation shall pay the Company, for the actual construction costs of the Infrastructure Improvements, an amount not to exceed THREE HUNDRED FIFTY THOUSAND DOLLARS and N01100 ($350,000.00) (the "Infrastructure Grant "). 2. Current Revenue. The Infrastructure Grant shall be paid solely from lawfully available funds of the Corporation. Under no circumstances shall the obligations hereunder be deemed to create any debt within the meaning of any constitutional or statutory provision. The Corporation represents and warrants that it has funds available for distribution sufficient to fully and timely pay the full Infrastructure Grant, will reserve such funds solely for such purpose, and will not make any special or general allocations of the Corporation's current and future funds that would render the Corporation unable to timely make the full Infrastructure Grant along with its 4 other obligations. None of the obligations under this Agreement shall be pledged or otherwise encumbered in favor of any commercial lender and /or similar financial institution. 3. Confidentiality. The Corporation agrees to keep all information and documentation received pursuant to this Agreement confidential to the extent allowed under the Texas Public Information Act (TPIA). In the event a request is made for such information, Corporation will notify the Company and follow the process stated in the TPIA for determining what information must be released and what information should be withheld until seeking a ruling from the Attorney General of Texas. ARTICLE V PERFORMANCE OBLIGATIONS OF COMPANY The obligation of the Corporation to pay funds from the Infrastructure Grant shall be conditioned upon the Company's continued compliance with and satisfaction of each of the performance obligations set forth in this Agreement. 1. Infrastructure Improvements. The Company will construct the following Infrastructure Improvements upon the Schertz Medical Center Land, as depicted on Exhibit B: (a) Construct and-pay all sewer line extensions, connections and impact fees associated with the approximate development depicted in Exhibit B. (b) Construct and pay all water line extensions, relocation, and impact fees, associated with the approximate development depicted in Exhibit B. (e) Construct all roadway infrastructure associated with the approximate development depicted in Exhibit B. (f) All improvements must be constructed to the City specifications as identified in the City of Schertz Public Works Design Specifications. (g) Allow access by the Corporation to all construction documents related to the Infrastructure Improvements during the term of the Agreement. (h) Commence design of the Project within one - hundred eighty (180) days from the Effective Date and complete Infrastructure Improvements within three - hundred sixty -five (365) days from the Effective Date. 2. Facility Size and Capital Investment. The Company shall construct the Facilities on the Schertz Medical Center Land with the following size and minimum capital investment which shall be verified by the Company through the receipt of the Certificate of Occupancy; (a) Facility One shall be at least TWENTY -THREE THOUSAND (23,000) square feet and have a minimum capital investment of FIVE MILLION NINE HUNDRED NINETY -FIVE THOUSAND EIGHT HUNDRED NINETY -NINE DOLLARS AND NOR 00 ($5,995,899.00) (b) Facility Two shall be at least FOUR THOUSAND (4,000) square feet and have a minimum capital investment of ONE MILLION FIVE HUNDRED THOUSAND DOLLARS AND N01100 ($1,500,000.00) (c) Facility Three shall be at least - TWELVE THOUSAND (12,000) square feet and have a minimum capital investment of THREE MILLION FIVE HUNDRED THOUSAND DOLLARS AND N01100 ($3,500,000.00) 3. New Job and Annual Payroll Creation. The Company's capital investment will result in the creation of New Jobs and Annual Payroll within the Schertz Medical Center Land according to the following schedule: (a) FIFTY (50) New Jobs with a total gross payroll of TWO MILLION TWO HUNDRED THOUSAND DOLLARS AND N01100 ($2,200,000.00) as reported to the Texas Workforce Commission during the 2020 calendar year. (b) THIRTY (30) New Jobs with a total gross payroll of THREE MILLION FIVE HUNDRED THOUSAND DOLLARS AND N01100 ($3,500,000.00) as reported to the Texas Workforce Commission during the 2021 calendar year. (c) THIRTY (30) New Jobs with a total gross payroll of FOUR MILLION EIGHT HUNDRED THOUSAND DOLLARS AND N01100 ($4,800,000.00) as reported to the Texas Workforce Commission during the 2022 calendar year. (d) TEN (10) New Jobs with a total gross payroll of FIVE MILLION THREE HUNDRED THOUSAND DOLLARS AND NO /100 ($5,300,000.00) as reported to the Texas Workforce Commission during the 2023 calendar year. (e) THIRTY (30) New Jobs with a total gross payroll of SEVEN MILLION NINE HUNDRED THOUSAND DOLLARS AND N01100 ($6,600,000.00) as reported to the Texas Workforce Commission during the 2024 calendar year. (f) TWENTY -FIVE (25) New Jobs with a total gross payroll of SIX MILLION SEVEN HUNDRED THOUSAND DOLLARS AND N01100 ($7,700,000.00) as reported to the Texas Workforce Commission during the 2025 calendar year. (g) TWENTY -FIVE (25) New Jobs with a total gross payroll of NINE MILLION DOLLARS AND NO 1100 ($8,800,000.00) as reported to the Texas Workforce Commission during the 2026 calendar year. (h) FIFTEEN (15) New Jobs with a total gross payroll of NINE MILLION SEVEN HUNDRED THOUSAND DOLLARS AND N01100 ($9,400,000.00) as reported to the Texas Workforce Commission during the 2027 calendar year. (i) FIFTEEN (15) New Jobs with a total gross payroll of TEN MILLION FOUR HUNDRED THOUSAND DOLLARS AND N01100 ($10,560,000.00) as reported to the Texas Workforce Commission during the 2028 calendar year. 0) TEN (10) New Jobs with a total gross payroll of TEN MILLION EIGHT HUNDRED THOUSAND DOLLARS AND N01100 ($11,000,000.00) as reported to the Texas Workforce Commission during the 2029 calendar year. 4. Annual Report. The Company shall submit an Annual Report for the preceding Calendar Year to the Executive Director of the Corporation each year not later than February 15t. 0 The Annual Report should substantially conform to the Annual Report Form attached as Exhibit C to this Agreement. The first Annual Report will be due February 15th, 2021. 5. Payment of Legal Fees. Each Parry shall bear its own legal fees in connection with the negotiation of this Agreement. The Company commits to reimburse the Corporation for the necessary legal fees in the preparation of any amendment to this Agreement, if and when such amendment is requested by the Company. Timely payment shall be made within sixty (60) days of submittal of invoice to the Company by the Corporation or its assigns. ARTICLE VI COVENANTS AND DUTIES 1. The Company Covenants and Duties. The Company makes the following covenants and warranties to the Corporation, and agrees to timely and fully perform the obligations and duties contained in Article V of this Agreement. Any false or substantially misleading statements contained herein or failure to timely and fully perform those obligations and duties within this Agreement shall be an act of Default by the Company. (a) The Company is authorized to do business and is in good standing in the State of Texas and shall remain in good standing in the State of Texas during any term of this Agreement. (b) The execution of this Agreement has been duly authorized by the Company's authorized agent, and the individual signing this Agreement is empowered to execute such Agreement and bind the entity. Said authorization, signing, and binding effect is not in contravention of any law, rule, regulation, or of the provisions of the Company's operating agreement, or of any agreement or instrument to which the Company is a party to or by which it may be bound. (c) The Company is not a party to any Bankruptcy proceedings currently pending or contemplated, and the Company has not been informed of any potential involuntary Bankruptcy proceedings. (d) To its current, actual knowledge, the Company has acquired and maintained all necessary rights, licenses, permits, and authority to carry on its business in the City and will continue to use its best efforts to maintain all necessary rights, licenses, permits, and authority. (e) The Company agrees to obtain or cause to be obtained, all necessary permits and approvals from City and/or all other governmental agencies having jurisdiction over the construction of Infrastructure Improvements and Facilities within the Schertz Medical Center Land. (f) The Company shall be responsible for paying, or causing to be paid, to the City and all other governmental agencies the cost of all applicable permit fees and licenses required for construction of the Project. The Company agrees to develop the Project in accordance with the ordinances, rules, and regulations of the City in effect on the date the Project was designed, unless specified otherwise in this VA Agreement. The Company, in its sole discretion, may choose to comply with any or all City rules promulgated after the Effective Date of this Agreement. (g) The Company agrees to commence and complete the Project in strict accordance with this Agreement. (h) The Company shall cooperate with the Corporation in providing all necessary information to assist them in complying with this Agreement. (i) During the term of this Agreement, Company agrees to not knowingly employ any undocumented workers as part of the Project, and, if convicted of a violation under 8 U.S.C. Section 1324a (1), Company shall be in Default (subject to the remedies in Article V above). Company is not liable for an unknown violation of this Section by a subsidiary, affiliate, or franchisee of Company or by a person with whom Company contracts provided however that identical federal law requirements provided for herein shall be included as part of any agreement or contract which Company enters into with any subsidiary, assignee, affiliate, or franchisee for which the Operations Grant and Annual Grant provided herein will be used. 0) Company shall not be in arrears and shall be current in the payment of all City taxes and fees as to the Schertz Medical Center Land. 2. Corporation's Covenants and Duties. (a) Infrastructure Grant. The Corporation is obligated to pay the Company an Infrastructure Grant in the amount of up to THREE HUNDRED FIFTY THOUSAND DOLLARS AND NO 1100 ($350,000.00) in accordance with Article IV, Section 1 within forty -five (45) days after the Company provides the Corporation written notice and sufficient documentation evidencing the completion of construction of the Infrastructure Improvements in accordance with Article V, Section 1, issuance of certificates of occupancy for Facility One and Facility Two per Article V, Section 2 and, if applicable based on the date payment of the Infrastructure Grant is requested, after February 15, 2021, compliance with the New Job and Annual Payroll Creation requirements of Article V, Section 3. For purposes of compliance with Article V, Section 2 copies of Certificates of Occupancy issued by the City of Schertz indicating the valuation and square footage of the completed facilities shall constitute sufficient documentation. (b) The Corporation represents and warrants to the Company that this Agreement is within their authority, and that they are duly authorized and empowered to enter into this Agreement, unless otherwise ordered by a court of competent jurisdiction. (c) Corporation shall cooperate with the Company in providing all necessary information and documentation to assist them in complying with this Agreement. 3. Compliance and Default. Failure by the Company to timely comply with any performance requirement, duty, or covenant shall be considered an act of Default and shall give the Corporation the right to terminate this Agreement and collect the Recapture Amount (as defined below), as determined by the Board of Directors of the Corporation. ARTICLE VII TERMINATION 1. Termination. This Agreement shall terminate upon the earliest occurrence of any one or more of the following: (a) The written agreement of the Parties; (b) The Company satisfying all of the Performance and Obligations set forth in Article V, (1) and (2); (c) The Agreement's Expiration Date; (d) Default by the Company of the terms and conditions set forth herein. ARTICLE VIII DEFAULT 1. The Company's Events of Default. The following shall be considered an Event of Default by the Company: (a) Failure of the Company to perform any term, covenant or agreement contained in this Agreement; or (b) Corporation determines that any representation or warranty contained herein or in any financial statement, certificate, report or opinion prepared and submitted to Corporation in connection with or pursuant to the requirements of this Agreement was incorrect or misleading in any material respect when made; or (c) Any judgment is assessed against the Company or any attachment or other levy against the property of the Company with respect to a claim remains unpaid, unstayed on appeal, not discharged, not bonded or not dismissed for a period of ninety (90) days; or (d) The Company makes an assignment for the benefit of creditors; files a petition in bankruptcy; is adjudicated insolvent or bankrupt; petitions or applies to any tribunal for any receiver or any trustee of the Company or any substantial part of the Schertz Medical Center Land; commences any action relating to the Company under any reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction whether now or hereafter in effect; or if there is commenced against the Company any such action and such action remains undismissed or unanswered for a period of ninety (90) days from such filing; (e) The Company changes its present ownership more than fifty -one (51%) without written notification to Corporation within thirty (30) days of such change; or 2. Corporation Events of Default. Corporation fails to fulfill an obligation set forth within the terms and conditions of this Agreement. 3. Remedies for Default (a) The Company's sole remedy under this Agreement is specific performance for Corporation's Default of its obligations under section N of this Agreement. (b) In the event of Default by the Company, the Corporation shall provide the Company written notice of Default, and a minimum period of ninety (90) days after the receipt of said notice to cure such default. If the Company fails to cure such default or fails to take significant action to cure such default, the Corporation shall, as its sole and exclusive remedy for Default hereunder, have the right to terminate this Agreement and recapture one hundred percent (100 %) of the funds distributed from the Infrastructure Grant to Company plus interest at the rate of five percent (5 %) per annum from the Effective Date until paid in full if the Default occurs on or prior to the Expiration Date (the "Recapture Amount"). The Recaptured Amount shall be paid by Company within thirty (30) days after the date Company is notified by the Corporation of such Default (the "Payment Date "). 4. Limitation on Use of Funds in the Event of Default. Under no circumstances will the funds received under this Agreement be used, either directly or indirectly, to pay costs or attorney fees incurred in any adversarial proceeding regarding this Agreement against the City or the Corporation. ARTICLE IX MISCELLANEOUS 1. Binding Agreement. The terms and conditions of this Agreement shall be binding on and inure to the benefit, ofthe Parties, and their respective successors and assigns. The Executive Director of the Corporation shall be responsible for the administration of this Agreement and shall have the authority to execute any instruments, duly approved by the Corporation, on behalf of the Parties related thereto. 2. Mutual Assistance. The Parties will do all things reasonably necessary or appropriate to carry out the terms and provisions of this Agreement and to aid and assist each other in carrying out such terms and provisions. 3. Assignment. The Company shall have the right to assign all of its rights, duties, and obligations under this Agreement to a duly qualified third party with prior written approval of the Corporation, which approval shall not be unreasonably withheld, conditioned or delayed. Any assignment provided for herein shall not serve to enlarge or diminish the obligations and requirements of this Agreement, nor shall they relieve the Company of any liability to the Corporation including any required indemnity in the event that any Assignee hereof shall at any time be in Default of the terms of this Agreement The Corporation may demand and receive 10 adequate assurance of performance including the deposit or provision of financial security by any proposed assignee prior to its approval of an assignment. 4. Independent Contractors. (a) It is expressly understood and agreed by all Parties hereto that in performing their services hereunder, Company at no time will be acting as an agent of the Corporation and that all consultants or contractors engaged by Company respectively will be independent contractors of Company; and nothing contained in this Agreement is intended by the Parties to create a partnership or joint venture between the Parties and any implication to the contrary is hereby expressly disavowed the Parties hereto understand and agree that the Corporation will not be liable for any claims that may be asserted by any third party occurring in connection with services performed by Company respectively under this Agreement, unless any such claims are due to the fault of the Corporation. (b) By entering into this Agreement, except as specifically set forth herein, the Parties do not waive, and shall not be deemed to have waived, any rights, immunities, or defenses either may have, including the defense of parties, and nothing contained herein shall ever be construed as a waiver of sovereign or official immunity by the Corporation with such rights being expressly reserved to the fullest extent authorized by law and to the same extent which existed prior to the execution hereof. (c) No employee of the Corporation, or any board member, or agent of the Corporation, shall be personally responsible for any liability arising under or growing out of this Agreement. 5. Notice. Any notice required or permitted to be delivered hereunder shall be deemed delivered by actual delivery, or on the first business day after depositing the same in the hands of a reputable overnight courier (such as United States Postal Service, FedEx or UPS) and addressed to the Party at the address set forth below: If intended for SEDC: City of Schertz Economic Development Corporation Attention: Exec. Dir. of Economic Development 1400 Schertz Parkway Schertz, TX 78154 With a copy to: Denton, Navarro, Rocha, Bernal, & Zech, PC Attention: Charles E. Zech 2517 North Main Avenue San Antonio, TX 78212 11 If to Company: Kellum Family Medicin , Inc. A Attention: DQVII' � �i . ItaffJe, M!D 3401 Roy Richard Drive Schertz, TX 78154 With a copy to: Any Party may designate a different address at any time upon written notice to the other Parties. 6. Governmental Records. All invoices, records and other documents required for submission to the City pursuant to the terms of this Agreement are Governmental Records for the purposes of Texas Penal Code Section 37.10 7. Governing Law. The Agreement shall be governed by the laws of the State of Texas, and the venue for any action concerning this Agreement shall be in the Courts of Guadalupe County. The Parties agree to submit to the personal and subject matter jurisdiction of said court. 8. Amendment. This Agreement may be amended by mutual written agreement of the Parties, as approved by the Board of Directors of the Corporation. 9. Legal Construction. In the event any one or more of the provisions contained in this Agreement shall, for any reason, be held invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect other provisions of this Agreement, and it is the intention of the Parties to this Agreement that, in lieu of each provision that is found to be illegal, invalid, or unenforceable, a provision be added to this Agreement which is legal, valid and enforceable and is as similar in terms as possible to the provision found to be illegal, invalid, or unenforceable. 10. Interpretation. Each of the Parties has been represented by counsel of their choosing in the negotiation and preparation of this Agreement. Regardless of which Party prepared the initial draft of this Agreement, this Agreement shall, in the event of any dispute, whatever its meaning or application, be interpreted fairly and reasonably and neither more strongly for or against any Party. 11. Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter covered in this Agreement. There is no other collateral oral or written agreement between the Parties that, in any manner, relates to the subject matter of this Agreement, except as provided for in any Exhibits attached hereto or duly approved amendments to this Agreement, as approved by the Board of Directors of the Corporation. 12. Paragraph Headings. The paragraph headings contained in this Agreement are for convenience only and will in no way enlarge or limit the scope or meaning of the various and several paragraphs. 13. Counterparts. This Agreement may be executed in counterparts. Each of the counterparts shall be deemed an original instrument, but all of the counterparts shall constitute one and the same instrument. 12 14. Exhibits. Any Exhibits attached hereto are incorporated by reference for all Purposes. 15. Survival of Covenants. Any of the representations, warranties, covenants, and obligations of the Parties, as well as any rights and benefits of the Parties, pertaining to a period of time following the termination of this Agreement shall survive termination. 16. Indemnification. COMPANY AGREES TO DEFEND, INDEMNIFY AND HOLD THE CORPORATION AND THE CITY, AND THEIR RESPECTIVE OFFICERS, AGENTS AND EMPLOYEES HARMLESS FROM AND AGAINST ANY AND ALL REASONABLE LIABILITIES, DAMAGES, CLAIMS, LAWSUITS, JUDGEMENTS, ATTORNEY FEES, COSTS, EXPENSES AND ANY CAUSE OF ACTION THAT DIRECTLY RELATES TO ANY OF THE FOLLOWING: ANY CLAIMS OR DEMANDS BY THE STATE OF TEXAS THAT THE CORPORATION HAS BEEN ERRONEOUSLY OR OVER -PAID SALES AND USE TAX FOR ANY PERIOD DURING THE TERM OF THIS AGREEMENT AS A RESULT OF THE FAILURE OF COMPANY TO MAINTAIN A PLACE OF BUSINESS AT THE PROPERTY OR IN THE CITY OF SCHERTZ, OR AS A RESULT OF ANY ACT OR OMISSION OR BREACH OR NON - PERFORMANCE BY COMPANY UNDER THIS AGREEMENT EXCEPT THAT THE IIVIDEMMTY PROVIDED HEREIN SHALL NOT APPLY TO ANY LIABILITY RESULTING FROM THE ACTION OR OMISSIONS OF THE CORPORATION OR CITY. THE PROVISIONS OF THIS SECTION ARE SOLELY FOR THE BENEFIT OF THE PARTIES HERETO AND NOT INTENDED TO CREATE OR GRANT ANY RIGHTS, CONTRACTUAL OR OTHERWISE, TO ANY OTHER PERSON OR ENTITY. IT BEING THE INTENTION OF THE PARTIES THAT COMPANY SHALL BE RESPONSIBLE FOR THE REPAYMENT OF ANY FUNDS PAID TO COMPANY HEREIN THAT INCLUDES CITY SALES TAX RECEIPTS THAT THE STATE OF TEXAS HAS DETERMINED WAS ERRONEOUSLY PAID, DISTRIBUTED OR ALLOCATED TO THE CORPORATION. 17. Additional Instruments. The Parties agree and covenant to cooperate, negotiate in good faith, and to execute such other and further instruments and documents as may be reasonably required to fulfill the public purposes provided for and included within this Agreement. 18. Force Majeure. Whenever a period of time is herein prescribed for action to be taken by Company, Company shall not be liable or responsible for, and there shall be excluded from the computation of any such period of time, any delays due to causes of any kind whatsoever which are caused by Force Majeure. 19. Time Periods. Unless otherwise expressly provided herein, all periods for delivery or review and the like will be determined on a "calendar" day basis. If any date for performance, approval, delivery or Closing falls on a Saturday, Sunday or legal holiday (state or federal) in the State of Texas, the time therefor will be extended to the next day which is not a Saturday, Sunday or legal holiday. [SIGNATURE PAGE IMMEDIATELY FOLLOWING] 13 Executed on this 6 day of 20 t8- COMPANY: Kellum Family Medicine, Inc. A Texas Corporation By: Kellum Family Medicine, Inc. Its Manager By: l min)ame, h H . t I Title, ZQ -.tAz. _ STATE OF TEXAS X COUNTY OF X T 's information was acknowledged before me on this 6 day of S v.L-�-j , 2018 by I �.V(j(jwngT, as Manager of Kellum Family Medicine, Inc., on behalf of said company. %% -25 - Z0?-0 My commission expires 14 �� ^�C���J.Cti �fOeSCY Notary ublic, State of Texas o� "�'r'�r��•, SAR=ISABELLA OESER Notaf TexasCo5 -2020 5ta�`t �S+�zz— ` N725 c Notary's typed or printed name %% -25 - Z0?-0 My commission expires 14 Executed on this day of 1z , 20 / d' CITY OF SCHERTZ ECONOMIC DEVELOPMENT CORPORATION By: 4�L Name: Tboromm Title: President STATE OF TEXAS X COUNTY OF GUADALUPE X This information was acknowledged before me on this I day of d o / by-7— YGwn , for the City of Schertz Economic Development C rporation, a Texas non -profit industrial development corporation, on behalf of said agency. "a W PATTY HM ARY PUBUC - STATE OF TMMM y CamMWO Boo 011144 r� APPROVED I S TO FWSEDCAttomey By: &;a aT,,z Notary's typed or printed name My Eoninfission expires 15 -` a EXHIBIT A SCHERTZ FAMILY MEDICAL CENTER LAND LEGAL DESCRIPTION Lot 3, Block 1, Cal Stone Subdivision Replat, Guadalupe County, Texas. Lot 4, Block 1, Cal Stone Subdivision Replat, Guadalupe County, Texas. [C.el EDIT B SCBERTZ FAMILY MEDICAL CENTER LAND INFRASTRUCTURE IMPROVEMENTS Sewer line impact fee City of Schertz $172,777.18 Sewer line extension and connections $128,222.11 Water main re- location $161,069.55 Road Infrastructure /safety work $211,907.48 Proposed Infrastructure — Phase I w ` 1 � �>,. w.—rv>Y III \` • / I gg I Alp, -�. i � � � � '/ \\ ��� �' �,� t�l I i ' i I Z \ y� �u • � ��igk �i�l�`!s� k 9g2� ? lip 11 5 JY tl� d FIFIF —Q - - -"M— - - -'- 1. 4'T3Sy �� . -e- l- _ � ' •- ■ � 3 R ' - l`n fw�AY>UC - - IS- ''`•Er ti &,6 f % ' v�w� >,. ..i1 DYE ENTERPRISES la— w 17 ANNUAL REPORT 18 Annual Certification Report Reporting Period: January 1 to December 31, 20_ The Annual Certification Report for the Economic Development Performance Agreement between the City of Schertz Economic Development Corporation and Kellum Family Medicine, Inc., is due on February 15, 20_. Please sign and return the Annual Certification Report form with accompanying narrative. I. PROJECT INFORMATION Project Information: Company's legal name: Project address subject to incentive: Company primary contact: Phone number: 11. REPORTING INFORMATION E -mail address: Title: Employment and Wage Information: Has the Company employed undocumented workers? ❑ Yes ❑ No What is the total number of New Jobs created at the Schertz Medical Center during the calendar year? What is the total Annual Payroll for the Schertz Medical Center during the calendar year? Narrative: Please attach a brief narrative explaining the current year's activities and/or comments relating to any potential defaults. III. ADDITIONAL INFORMATION (VOLUNTARY) Employment: Total full -time employees: Total annual payroll: Number of full -time jobs added in past year: Number of employees that live in Schertz, Texas: Interested in being contacted about workforce training opportunities? ❑ Yes []No Interested in being contacted for assistance with City permits? ❑ Yes ❑ No 19 IV. CERTIFICATION I certify that, to the best of my knowledge and belief, the information and attachments provided herein are true and accurate and in compliance with the terms of Economic Development Performance Agreement. 1 further certify that the representations and warranties contained within the Agreement remain true and correct as of the date of this Certification, and Kellum Family Medicine Inc. remakes those representations and warranties as of the date hereof. I further certify that the employment and wage information provided is true and accurate to the best of my knowledge and I can provide documentation from the Texas Workforce Commission to support my claim if so requested, I understand that this Certificate is being relied upon by the SEDC in connection with the expenditure of public funds. I have the legal and express authority to sign this Certificate on behalf of Kellum Family Medicine Inc. Name of Certifying Officer Phone Number Signature of Certifying Officer STATE OF TEXAS COUNTY OF Certifying Officer's Title E -Mail Address Date X X This information was acknowledged before me on this day of by for Kellum Family Medicine Inc., a Texas corporation, on behalf of said agency. Notary Public, State of Texas Notary's typed or printed name My commission expires The Annual Certification Report is to be completed, signed and returned on or before February 15, 20_. Please send an original to the following address: Attention: Executive Director City of Schertz Economic Development Corporation 1400 Schertz Parkway, Bldg. No: 2 Schertz, TX 78154 20