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14-R-14 - GE Oil & Gas Development AgreementRESOLUTION NO. 14 -R -14 A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS AUTHORIZING A DEVELOPMENT AGREEMENT AMONG THE CITY OF SCHERTZ TEXAS, THE CITY OF SCHERTZ ECONOMIC DEVELOPMENT CORPORATION, AND GE OIL & GAS INC.; AUTHORIZING CERTAIN BENEFITS BY THE CITY PURSUANT THERETO; AND OTHER MATTERS IN CONNECTION THEREWITH WHEREAS, by City Ordinance No. 12 -T -15, the City of Schertz, Texas (the "City ") established a program under Chapter 380, Texas Local Government Code (the "Code "), as amended, to promote economic development and to stimulate business and commercial activity in the City (the "380 Program "); and WHEREAS, the City of Schertz Economic Development Corporation ( "SEDC ") Board approved the Development Agreement GE Oil & Gas Inc. set forth on Exhibit A attached hereto and incorporated herein (the "Agreement ") among the City, the SEDC, and GE Oil & Gas Inc. (the "Developer "), pursuant to the City's 380 Program, at the SEDC's Board meeting on January 17, 2014; and WHEREAS, the SEDC has recommended that the City approve and enter into the Agreement with the SEDC and the Developer; and WHEREAS, the City Council has determined that it is in the best interest of the City to enter into the Agreement. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS: Section 1. The City Council hereby authorizes the President of the SEDC and the City Manager of the City, or his designee, to execute and deliver, Development Agreement GE Oil & Gas Inc. 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resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Resolution are hereby repealed to the extent of such conflict, and the provisions of this Resolution shall be and remain controlling as to the matters resolved herein.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 Govermnent 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 ATTEST: ��u`�.� /Cy.� JnY ll City Secretary r (CITY SEAL) day of�, 2014. CITY OF S �II?RTZ, T S Mayor EXHIBIT A DEVELOPMENT AGREEMENT GE Oil & Gas Inc. DEVELOPMENT AGREEMENT GE Oil & Gas Inc. This Development Agreement (the "Agreement') is entered to be effective as of the ft �. O yr d 0 / q , among CITY OF SCHERTZ, TEXAS, a Texas municipal corporation and home rule city (hereinafter referred to as "CITY "), the CITY OF SCHERTZ ECONOMIC DEVELOPMENT CORPORATION, a Texas Non - profit Industrial Development Corporation (hereinafter referred to as "SEDC "), and GE Oil & Gas Inc., a Delaware Corporation (hereinafter referred to as "DEVELOPER ", and collectively with CITY and SEDC, the "PARTIES "). WHEREAS, by Ordinance No. 12 -T -15, the CITY established a City of Schertz Economic Development hrcentives Policy tinder Chapter 380, Texas Local Government Code, as amended ( "Chapter 380 "), and under the Development Corporation Act, Title 12, Subchapter Cl, Texas Local Government Code, as amended (the "Development Corporation Act'), to promote economic development and to stimulate business and commercial activity in the CITY; and WHEREAS, CITY is authorized and empowered under Chapter 380 and under the provisions of Article III, Section 52 -a of the Texas Constitution to aid in the development of enterprises within the geographic boundaries of the CITY by offering economic and other incentives to prospective new, developing, and expanding businesses; and WHEREAS, CITY actively seeks economic development prospects in the CITY through the SEDC, which was established pursuant to the Development Corporation Act to promote economic development in the CITY by sponsoring and funding economic development projects; and WHEREAS, DEVELOPER is involved in the manufacturing, provision, and furtherance of cryogenic plant design and fabrication, and a majority of the products of DEVELOPER are ultimately exported to regional, statewide, national, or international markets infusing new dollars into the local economy; and WHEREAS, DEVELOPER has expressed its desire and intent to enhance and expand its facilities at an existing 400,000 square foot facility on an approximately 40.3 acre tract of land located at 1150 Schwab Road, Schertz, Texas; and Exhibit D -1 I P a g e 50691089.3 WHEREAS, CITY and the SEDC are willing to participate in enhancing, expanding, and retaining businesses within the CITY that are qualified economic development prospects; and WHEREAS, the City Council of the CITY and the Board of Directors of the SEDC have found that the economic development incentives provided in this Agreement are required or suitable for the development, retention, or expansion of manufacturing and industrial facilities in the CITY and for the creation and retention of "primary jobs ", meaning those jobs that are available at a company in the manufacturing sector for which a majority of the products or services of that company are ultimately exported to regional, statewide, national, or international markets infusing new dollars into the local economy; and WHEREAS, CITY and SEDC consider DEVELOPER to be a qualified economic development prospect that currently employs two hundred and 225 (225) people in primary jobs and plans to add one hundred seventy -five (175) new primary jobs by the year 2015 to the CITY's workforce. NOW, THEREFORE, for and in consideration of the premises and mutual covenants and promises hereinafter set forth, the Parties hereby agree as follows: 1. Definitions 1.1. "Project" means collectively the implementation of New Capital Investment, continuation of Existing Gross Payroll, and creation of New Gross Payroll 1.2. "Property" means the existing 400,000 square foot facility (the "Facility ") ou approximately 40.3 acre tract of land located at 1150 Schwab Road, Schertz, Comal County, Texas, more particularly described in Exhibit A attached hereto and incorporated herein and graphically represented in Exhibit B attached hereto and incorporated herein. 1.3. "Fast Tracking" means efforts made by the CITY to expedite the review, permitting, and occupation processes for the applicable components of the Project as outlined in Section 2.1.2. 1.4. "Full -Time Jobs" means any jobs including temp- to- hire(excluding temporary or seasonal) on the payroll and having an officially scheduled work week of thirty- 21 Page 50691089.3 five (35) hours or more that according to company policy are entitled to full benefits. 1.5. "Existing Gross Payroll" means the existing two hundred twenty five (225) Full- Time Jobs and associated payroll that are located at the Property and are a part of the Project. The DEVELOPER will substantiate the initial, or baseline, Existing Gross Payroll number by providing to the CITY the most recent quarterly reports provided to the Texas Workforce Commission through the Texas Employers Quarterly Wage Report and according to terms in Section 5.1.1. 1.6. "New Gross Payroll" means the one hundred seventy five (175) Full -Time Jobs and associated gross payroll that are to be added per Section 3.3 to the CITY's workforce as part of the DEVELOPER's performance under this Agreement. The DEVELOPER will substantiate the New Gross Payroll by providing to the CITY the applicable quarterly reports provided to the Texas Workforce Commission through the Texas Employers Quarterly Wage Report when requested by CITY. 1.7. "Development Performance Measures" means actions required by DEVELOPER as outlined in Sections 3.1 -3.3 herein. 1.8. "Infrastructure Incentive" means construction by the CITY, or by a third party engaged by the CITY, of the extension of David Lack Drive as generally represented in Exhibit C attached hereto and incorporated herein. 1.9. "New Capital Investment" means a minimum of Eight Million and No /100 Dollars ($8,000,000) in renovations to the Facility and /or the purchase of additional machinery, equipment, and other personal property to be permanently located at the Property. 1.10. "Texas Employers Quarterly Wage Reports" means quarterly reports required by State law to be filed with the Texas Workforce Commission. These reports will be utilized in part by the CITY to qualify and substantiate Development Performance Measures. 3 1 P a g e 50691089.3 1.11. "Annual Certification Report" means an annual reporting form, in the format to be provided to DEVELOPER by CITY, on which the DEVELOPER shall certify its compliance with the Development Performance Measures. This Annual Certification Report must be signed by the General Manager of DEVELOPER. 1.12 "Event of Bankruptcy or Insolvency" means the dissolution or termination of DEVELOPER's existence as a going business, DEVELOPER's insolvency, appointment of receiver for any significant part of DEVELOPER's property with such appointment not being terminated within ninety (90) days after such appointment is initially made, any general assignment for the benefit of DEVELOPER's creditors, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against DEVELOPER with such proceeding not being dismissed within ninety (90) days after the filing thereof. 1.13 "Governmental Authority" means any federal, state, or local governmental entity having jurisdiction over the matter in question. 1.14 "Governmental Rule" means any applicable law, rule, or regulation of a Governmental Authority. 1.15 "Infrastructure Incentive Amount" means the costs incurred by the CITY and the SEDC (including salary and overhead costs for employees of the CITY and the SEDC, as applicable) for constructing, or causing to be constructed, the extension of David Lack Drive as generally represented in Exhibit C attached hereto and incorporated herein. 2. CITY's Development Incentive Package, Obligations, and Representations 2.1. CITY agrees to provide the Infrastructure Incentive and Fast Tracking to DEVELOPER as authorized by Chapter 380 as follows: 2.1.1 Infrastructure Incentive — As soon as reasonably practicable, taking into account the CITY's other public works and public infrastructure obligations, the CITY will construct, or cause to be constructed, an 4 1 P a g e 50691089.3 extension of David Lack Drive as generally represented in Exhibit C attached hereto and incorporated herein. 2.1.2 Fast Tracking — The CITY will make all reasonable efforts to Fast Track the Project once all necessary plans and materials have been prepared by DEVELOPER and submitted to CITY. Fast Tracking of the Project will focus on the following areas: (i) Permit(s) for implementation of New Capital Investment, and (ii) Permit for a driveway cut from David Lack Drive into Property as generally represented in Exhibit D attached hereto and incorporated herein. 3. DEVELOPER's Obligations and Representations DEVELOPER hereby makes the following representations, warranties, covenants, and agreements: 3.1. Operation of the Project 3.1.1 DEVELOPER agrees to continue to operate the Property throughout the term of this Agreement. 3.2 Capital Investment; Construction of Extension 3.2.1 DEVELOPER agrees to invest New Capital Investment at the Property in an amount of no less than Eight Million and No /100 Dollars ($8,000,000) on or before 30 March 2014 3.3. Job Relocation and Creation Time Frame Full -Time Jobs Gross Payroll 7 5 1 P a g e ` 50691089.3 Current 225 $9,000,000 Calendar Year 2014 300 $12,000,000 Calendar Year 2015 400 $16,000,000 Calendar Year 2015 through Term of the Agreement 400 $16,000,000 3.3.1 DEVELOPER agrees and covenants to continue to maintain the Existing Gross Payroll at the Property as identified in the above Job Relocation and Creation Schedule. 3.3.2 DEVELOPER agrees and covenants that it will create New Gross Payroll as identified in the above Job Relocation and Creation schedule. 3.3.3 DEVELOPER agrees and covenants that it will maintain Existing Gross Payroll and New Gross Payroll at Property for a minimum period of six (6) years after the Effective Date of this Agreement. 3.4 No Employment of Undocumented Workers DEVELOPER certifies and agrees as follows: 3.4.1 DEVELOPER certifies that its operation within the CITY will not knowingly employ an undocumented worker, as defined in Chapter 2264, Subchapter A, Texas Government Code, as amended (the "Act'); and 3.4.2 Pursuant to the Act, if DEVELOPER is convicted of a violation under 8 U.S.C. Section 1324a(f) with respect to its operations in the CITY, after receiving all or any portion of the "public subsidy" (as defined in the Act) authorized by this Agreement, DEVELOPER shall (x) promptly give the CITY written notice of such violation, and (y) repay the amount of the public subsidy with interest, at the rate of the prime rate of interest per 61 Page 50691089.3 annum of the CITY's depository bank (the "Bank ") in effect on the date DEVELOPER notifies the CITY of the violation. Such repayment shall be made not later than the 120th day after the date DEVELOPER notifies the CITY of the violation. 3.5 Existence DEVELOPER has the fall power and authority to enter into and perform this Agreement. The person signing this Agreement on behalf of DEVELOPER has been properly authorized and empowered to enter into this Agreement and represents that he has authorization to sign on behalf of the DEVELOPER. 3.6 Authorization The execution, delivery, and performance by DEVELOPER of this Agreement have been duly authorized by all necessary action and will not violate the organizational documents of DEVELOPER or result in the breach of or constitute a default under any loan or credit agreement, or other material agreement to which DEVELOPER is a party or by which DEVELOPER or its material assets may be bound or affected. The execution of this Agreement by DEVELOPER does not require any consent or approval that has not been obtained, including without limitation the consent or approval of any Governmental Authority. 3.7 Enforceable Obligations Assuming due authorization, execution, and delivery by each other Party hereto, this Agreement, all documents executed by DEVELOPER pursuant hereto, and all obligations of DEVELOPER hereunder and thereunder are enforceable against DEVELOPER in accordance with their respective terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, or other similar laws affecting the enforcement of creditor's rights generally, and by general equity principles (regardless of whether such enforcement is considered in a proceeding in equity or at law). 3.8 No Legal Bar 71Page 50691089.3 The execution and delivery of this Agreement and the performance of its obligations hereunder by DEVELOPER will not conflict with any provision of any law, regulation, or Governmental Rules to which DEVELOPER is subject or conflict with, or result in a breach of, or constitute a default under any of the terms, conditions, or provisions of any agreement or instrument to which DEVELOPER is a party or by which it is bound or any order or decree applicable to DEVELOPER. 3.9 Litigation There are no legal actions or proceedings pending or, to the knowledge of DEVELOPER, threatened against DEVELOPER which, if adversely determined, would materially and adversely affect the ability of DEVELOPER to fulfill its obligations under this Agreement or the financial condition, business, or financial or business prospects of DEVELOPER. 3.10 Documents All documents made available by DEVELOPER to CITY and the SEDC including without limitation all financial documents relating to DEVELOPER are true, correct, and complete copies of the instruments which they purport to be and accurately depict the subject matter addressed therein. 3.11 Knowledge DEVELOPER has no knowledge of any facts or circumstances which currently evidence, or with the passage of time would evidence, that any of the representations made by DEVELOPER under this Agreement are in any way inaccurate, incomplete, or misleading. 3.12 Disclaimer DEVELOPER ACKNOWLEDGES THAT, EXCEPT FOR THE CITY'S AND THE SEDC'S EXPRESS REPRESENTATIONS AND WARRANTIES 8 1 P a g e 50691089.3 CONTAINED WITHIN THIS AGREEMENT, IF ANY, NEITHER THE CITY, THE SEDC, NOR ANY EMPLOYEE, OFFICER, ELECTED OFFICIAL, REPRESENTATIVE, OR AGENT OF THE CITY OR THE SEDC, NOR ANY RELATED PARTY OF THE CITY OR THE SEDC, HAS MADE ANY REPRESENTATION OR WARRANTY WHATSOEVER (WHETHER EXPRESS OR IMPLIED) REGARDING THE SUBJECT MATTER OF THIS AGREEMENT, OTHER THAN THE EXPRESS REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT, IF ANY. 4. Term; Termination 4.1. The tern of this Agreement is from the Effective Date through December 31, 2020 (the "Expiration Date "), a period of approximately six (6) years. 4.2 This Agreement shall terminate upon the occurrence of any one or more of the following: 4.2.1 the Expiration Date; 4.2.2 the execution by all Parties of a written agreement terminating this Agreement; 4.2.3 at the option of a Party in the event any other Party breaches any of the terns or conditions of this Agreement and such breach is not cured within thirty (30) days after written notice thereof, or, if such breach is not susceptible of cure within thirty (30) days, such period of time thereafter as the breaching Party diligently pursues the cure thereof, but in any event if such breach is not cured within one hundred eighty (180) days after written notice thereof, 4.2.4 at the option of the CITY and the SEDC, if DEVELOPER suffers an Event of Bankruptcy or Insolvency; 4.2.5 at the option of the CITY, if any ad valorem taxes owed to the CITY by DEVELOPER (both real property and personal property) shall become delinquent (provided, however DEVELOPER retains the right to timely and properly protest and contest any such ad valorem taxes); or 91 Page 50691089.3 4.2.6 any subsequent federal or state legislation or any decision by a court of competent jurisdiction declares or renders this Agreement invalid, illegal, or unenforceable. 5. Baseline and Reporting Requirements 5.1. Establishment of Payroll Baseline and Subsequently Submitted Reports 5.1.1 DEVELOPER shall submit to CITY, within thirty (30) days of the date of this Agreement, the most recent Texas Employers Quarterly Wage Report to establish the Existing Gross Payroll. DEVELOPER may take limited actions to protect the identity and related personal identifiers of DEVELOPER employees as approved and agreed upon by the CITY. 5.1.2 Upon completion of the New Capital Investment, DEVELOPER shall submit to CITY a letter signed by the General Manager of DEVELOPER certifying that all of the New Capital Investment has been made at the Property. 5.1.3 DEVELOPER shall certify annually, no later than February 15 of each year, to the CITY the amounts of the Existing Gross Payroll and the New Gross Payroll maintained at the Property. DEVELOPER shall also submit the previous four (4) Texas Employers Quarterly Wage Reports to the CITY for the subject year as an attachment to that year's Annual Certification Report. The timely and accurate submission of these reports shall be the responsibility of DEVELOPER and each must be signed by the General Manager of DEVELOPER. 6. Notice of Intent to Cease Operation 6.1. If DEVELOPER ceases or intends to cease operation and /or ownership of its business at the Property during the term of this Agreement it shall give forty -five (45) days prior written notice to CITY. l01Page 50691089.3 7. Compliance with Applicable Laws 7.1. At all times during which DEVELOPER owns and operates the Project and Property, DEVELOPER will remain in compliance with all applicable laws, rules, and regulations including without limitation, all applicable environmental laws, riles, and regulations. 8. Default 8.1. DEVELOPER Default 8.1.1. If DEVELOPER defaults in any material tenor or condition of this Agreement, CITY shall not be obligated to approve or disburse the Infrastructure Incentive specified under this Agreement unless default is cured by DEVELOPER within thirty (30) days from receiving written notice of any default from CITY. 8.1.2. A material breach by DEVELOPER consists of, but is not limited to, any of the following individual or cumulative events: failure of DEVELOPER to meet the Development Performance Measures set out in Section 3; failure of DEVELOPER to comply with all Governmental Rules relating to the construction of the New Capital Investments; failure of DEVELOPER to timely meet the requirements for obtaining a certificate of occupancy for the Property; failure to obtain certificate(s) of acceptance for any infrastructure improvements; submittal of any information that DEVELOPER knows or should know is incorrect at the time of its submittal to CITY; and any material misrepresentation of fact concerning the subject matter of this Agreement. 8.1.3. CITY shall give DEVELOPER written notice of any default of DEVELOPER. If DEVELOPER has not received the Infrastructure Incentive, DEVELOPER shall have the right but not the obligation to cure the default as provided herein. 111 Page 50691089.3 8.1.4. In the event DEVELOPER fails to cure any default under this Agreement within the notice and cure period and the CITY has not disbursed the Infrastructure Incentive, then CITY may withhold the Infrastructure Incentive. In the event DEVELOPER fails to cure any default within the notice and cure period and the CITY has already disbursed some or all of the Infrastructure Incentive, DEVELOPER agrees to and shall reimburse CITY One Thousand Seven Hundred Fifty and No /100 Dollars ($1,750) per Full -Time Employee under the Development Performance Measures that has not been created and /or substantiated such creation in a format acceptable to the CITY for the subject period. To the extent allowable under Texas law, and excepting the indemnity obligations of DEVELOPER for third party claims under Section 10, the CITY and SEDC agrees that the total liability of DEVELOPER on all claims of any kind, whether in contract, warranty, indemnity, tort (including negligence), strict liability or otherwise arising out of the performance or breach of this Agreement shall not exceed the Infrastructure Incentive Amount, plus any costs and expenses, including attorneys' fees, incurred by the CITY and the SEDC in connection with this Agreement, the Infrastructure Incentive, and enforcement of the provisions of this Agreement. 9. CITY Default 9.1. In the event that CITY materially breaches its obligation to provide the Infrastructure Incentive and fails to cure such default in accordance with the notice and cure provisions of this Agreement and DEVELOPER is not in default, DEVELOPER, at its option, may tenninate this Agreement and may thereafter pursue its remedies available at law; provided, however, if DEVELOPER is also in default, DEVELOPER's only remedy shall be to terminate this Agreement without further liability. 9.2 IN NO EVENT SHALL THE CITY, THE SEDC, OR THE OFFICERS, DIRECTORS, AGENTS, REPRESENTATIVES, EMPLOYEES AND ELECTED OFFICIALS OF THE CITY AND 121Page 50691089.3 THE SEDC BE LIABLE TO DEVELOPER FOR ANY CONSEQUENTIAL OR PUNITIVE DAMAGES. 10. Indemnity WITHOUT WAIVING ANY GOVERNMENTAL IMMUNITY AVAILABLE TO THE INDEMNIFIED PARTIES (AS DEFINED BELOW) UNDER TEXAS LAW AND WITHOUT WAIVING ANY DEFENSES OF THE INDEMNIFIED PARTIES, DEVELOPER, ON BEHALF OF ITSELF AND ITS MEMBERS, MANAGERS, OFFICERS, AND DIRECTORS, COVENANTS AND AGREES TO AND SHALL FULLY INDEMNIFY AND HOLD HARMLESS AND DEFEND THE CITY, THE SEDC, AND THE OFFICERS, DIRECTORS, AGENTS, REPRESENTATIVES, EMPLOYEES, AND ELECTED OFFICIALS OF THE CITY AND THE SEDC (COLLECTIVELY, THE "INDEMNIFIED PARTIES "), INDIVIDUALLY AND COLLECTIVELY, FROM AND AGAINST ANY AND ALL COSTS, CLAIMS, LIENS, LOSSES, DAMAGES, EXPENSES, FEES, FINES, PENALTIES, PROCEEDINGS, ACTIONS, DEMANDS, CAUSES OF ACTION, SUITS, AND LIABILITY OF EVERY HIND AND NATURE, INCLUDING, BUT NOT LIMITED TO, THOSE FOR PERSONAL OR BODILY INJURY, DEATH, PROPERTY DAMAGE, OR BREACH OF CONTRACT, MADE UPON THE INDEMNIFIED PARTIES, DIRECTLY OR INDIRECTLY ARISING OUT OF, RESULTING FROM, OR RELATED TO THIS AGREEMENT OR THE SUBJECT MATTER HEREOF, INCLUDING ANY ACTS OR OMISSIONS OF DEVELOPER OR OF ANY AGENT, OFFICER, DIRECTOR, REPRESENTATIVE, EMPLOYEE, CONSULTANT, CONTRACTOR, OR SUBCONTRACTOR OF DEVELOPER, AND THEIR RESPECTIVE OFFICERS, AGENTS, EMPLOYEES, DIRECTORS, AND REPRESENTATIVES, WHILE IN THE EXERCISE OR PERFORMANCE OF THE RIGHTS OR DUTIES UNDER THIS AGREEMENT, AND INCLUDING, BUT NOT LIMITED TO, ALL EXPENSES OF LITIGATION, COURT COSTS, AND REASONABLE ATTORNEYS' FEES. THE PROVISIONS OF THIS INDEMNIFICATION ARE SOLELY FOR THE BENEFIT OF THE INDEMNIFIED PARTIES AND NOT INTENDED TO CREATE OR GRANT ANY RIGHTS, CONTRACTUAL OR OTHERWISE, TO ANY OTHER PERSON OR ENTITY. DEVELOPER SHALL PROMPTLY ADVISE THE CITY AND THE SEDC IN WRITING OF ANY CLAIM OR DEMAND AGAINST ANY ONE OR MORE OF THE INDEMNIFIED PARTIES OR DEVELOPER KNOWN TO DEVELOPER AND SHALL SEE TO THE INVESTIGATION AND DEFENSE OF SUCH CLAIM OR DEMAND AT DEVELOPER'S COST. THE INDEMNIFIED PARTIES SHALL HAVE THE RIGHT, AT THEIR OPTION, TO PARTICIPATE IN SUCH DEFENSE WITHOUT RELIEVING DEVELOPER OF ANY OF ITS OBLIGATIONS UNDER THIS SECTION 10. DEVELOPER FURTHER AGREES TO DEFEND, AT ITS OWN EXPENSE AND ON BEHALF OF THE INDEMNIFIED PARTIES AND IN THE NAME OF THE APPLICABLE INDEMNIFIED PARTY, ANY CLAIM OR LITIGATION BROUGHT AGAINST THE INDEMNIFIED PARTIES FOR WHICH THIS INDEMNITY SHALL APPLY, AS SET FORTH ABOVE. DEVELOPER'S OBLIGATIONS UNDER THIS SECTION 10 SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT. FOR PURPOSES OF DEVELOPER'S INDEMNITY OBLIGATION HEREUNDER, 131 Page 50691089.3 DEVELOPER SHALL NOT BE OBLIGATED TO INDEMNIFY, HOLD HARMLESS, INSURE OR DEFEND THE INDEMNIFIED PARTIES HEREIN AGAINST LIABILITY OR CLAIMS TO THE EXTENT SUCH LIABILITY OR CLAIMS (INCLUDING ATTORNEY FEES), ARE CAUSED BY OR RESULT FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF AN INDEMNIFIED PARTY 11. Release DEVELOPER, ON BEHALF OF ITSELF AND ITS MEMBERS, MANAGERS, OFFICERS, AND DIRECTORS, RELEASES, RELINQUISHES, AND DISCHARGES THE CITY, THE SEDC, AND THE OFFICERS, DIRECTORS, AGENTS, REPRESENTATIVES, EMPLOYEES, AND ELECTED OFFICIALS OF THE CITY AND THE SEDC (COLLECTIVELY, THE f°RELEASED PARTIES ") FOR ANY AND ALL CURRENTLY EXISTING CLAIMS OF EVERY KIND OR CHARACTER WHICH DEVELOPER HAS OR MAY HAVE UNDER OR PURSUANT TO THIS AGREEMENT OR THE SUBJECT MATTER HEREOF AGAINST THE RELEASED PARTIES, INDIVIDUALLY AND COLLECTIVELY. 12. Assignment This Agreement may not be assigned by DEVELOPER without the prior written consent of CITY. Additionally, a change in ownership of fifty -one percent (51 %) of the stock of DEVELOPER shall be considered an assignment for purposes of this Section 12. An assignment as prohibited above shall be a material default of this Agreement. 13. Invalidity If any provision of this Agreement shall be held to be invalid, illegal, or unenforceable by a court or other tribunal of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. The Parties shall use their best efforts to replace the respective provision or provisions of this Agreement with legal terms and conditions approximating the original intent of the Parties. 14. Written Notice All notices required by this Agreement (i) shall be in writing, (ii) shall be addressed to the Parties as set forth below unless notified in writing of a change in address, and (iii) shall be 141Page 50691089.3 deemed to have been delivered either when personally delivered or, if sent by mail, in which event it shall be sent by registered or certified mail, return receipt requested, three (3) business days after mailing. The addresses of the Parties are as follows: To DEVELOPER: GE Oil & Gas Inc 1150 Schwab Road Schertz, Texas 78154 Attn: Kyle Griffiths To CITY: City of Schertz, Texas 1400 Schertz Parkway Schertz, Texas 78154 Attn: John Kessel, City Manager With Copy to: Denton, Navarro, Rocha & Bernal, P.C. 2517 North Main Avenue San Antonio, TX 78212 Attn: Charlie Zech With Copy to: Schertz Economic Development Corporation 1400 Schertz Parkway Schertz, Texas 78154 Attn: David Gwin, Executive Director To SEDC: Schertz Economic Development Corporation 1400 Schertz Parkway Schertz, Texas 78154 Attn: David Gwin, Executive Director With Copy to: GE Oil & Gas Legal Department Justin Schwartz 4424 West Sam Houston Parkway N. Houston, Texas 77041 Attn: Justin Schwartz — GE Oil & Gas Legal Dept. With Copy to: Denton, Navarro, Rocha & Bernal, P.C. 2517 North Main Avenue San Antonio, TX 78212 Attn: Charlie Zech With Copy to: City of Schertz, Texas 1400 Schertz Parkway Schertz, Texas 78154 Attn: John Kessel, City Manager 151Page 50691089.3 15. Entire Agreement It is understood that this Agreement contains the entire agreement between the Parties and supersedes any and all prior agreements, arrangements, or understandings, written or oral, between the Parties relating to the subject matter. No oral understandings, statements, promises or inducements contrary to the terns of this Agreement exist. This Agreement cannot be changed or terminated orally. No verbal agreement or conversation with any officer, agent, or employee of the CITY, either before or after the execution of this Agreement, shall affect or modify any of the terns or obligations hereunder. 16. Amendment No amendment to this Agreement shall be effective and binding unless and until it is reduced to writing and signed by duly authorized representatives of DEVELOPER, CITY, and SEDC. 17. Texas Law; Venue This Agreement has been made under and shall be governed by the laws of the State of Texas, and venue for any action concerning this Agreement shall be exclusively in the State District Court of Guadalupe County, Texas. The Parties agree to submit to the jurisdiction of said court. 18. Place of Performance Performance and all matters related thereto shall be in Comal County, Texas, United States of America. 19. No Joint Venture It is acknowledged and agreed by the Parties that the terns hereof are not intended to, and shall not be deemed to, create a partnership or joint venture among the Parties. 20. Waiver Failure of any Party, at any time, to enforce a provision of this Agreement, shall in no way constitute a waiver of that provision, nor in any way affect the validity of this Agreement, 161Page 50691089.3 any part hereof, or the right of the Party thereafter to enforce each and every provision hereof. No tern of this Agreement shall be deemed waived or breach excused unless the waiver shall be in writing and signed by the Party claimed to have waived. Furthermore, any consent to or waiver of a breach will not constitute consent to or waiver of or excuse of any other different or subsequent breach. 21. Representation DEVELOPER represents and warrants that no member of the City Council of the CITY and no member of the Board of Directors of SEDC has an interest in the Property, and that the same are not owned or leased by any member of the City Council of the CITY or any member of the Board of Directors of SEDC. DEVELOPER further represents and warrants that no member of the City Council of the CITY and no member of the Board of Directors of SEDC is under contract either directly or indirectly with DEVELOPER or DEVELOPER's agents, contractors, or subcontractors. DEVELOPER covenants and agrees that this representation and warranty shall be in effect for the full term of this Agreement as if remade throughout the tern of the Agreement. 22. Captions. All descriptive headings and captions herein are inserted for convenience only and shall not be considered in interpreting or construing this Agreement. 23. 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 (specifically including, without limitation, Sections 3.4, 3.12, 10, 11, and 24 of this Agreement) shall survive termination of this Agreement. 24. Attorneys' Fees and Expenses In the event that DEVELOPER should default under any of the provisions of this Agreement and CITY or the SEDC should employ attomey(s) or incur other expenses for the collection of the payments due under this Agreement or the enforcement of performance or 171Page 50691089.3 observance of any obligation or agreement on the part of DEVELOPER herein contained, DEVELOPER agrees to pay to the CITY and the SEDC reasonable fees of such attorneys and such other expenses so incurred by the CITY and the SEDC. 25. Limitation on Liability It is understood and agreed among the Parties that DEVELOPER, CITY, and the SEDC, in satisfying the conditions of this Agreement, have acted independently, and assume no responsibilities or liabilities to third parties in connection with these actions. Notwithstanding anything to the contrary herein, DEVELOPER, CITY and SEDC agree that none of them shall be responsible or liable to the other for any special, consequential, incidental, indirect, exemplary, punitive or speculative damages. 26. Recitals and Exhibits The recitals and exhibits are incorporated into this Agreement for all purposes as matters of contract and not mere recitals and exhibits. 27. Counterparts This Agreement may be executed in multiple counterparts. Each of the counterparts shall be deemed an original instrument, but all of the counterparts shall constitute one and the same instrument. [ Signatures and acknowledgments on the following pages ] 181 gage 50691089.3 SIGNATURE PAGE TO DEVELOPMENT AGREEMENT GE OIL& GAS INC. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the dates set forth below to be effective as of the Effective Date. GE Oil & Gas Inc., a Delaware Corporation By: 'I�P_io Name: KYLE GRxFFr-r f45 Title: General Manager THE STATE OF TEXAS § COUNTY OF GUADALUPE § This instrument was acknowledged before 09 day of 'SANUAkQ , 2014, by Kqt & Gas Inc., a Delaware corporation, on behalf of so a JACKIE N. CLINE i MY COMMISSION EXPIRES �3 4 May 24, 2017 the undersigned Notary Public, on this 1RxFFTTHS, General Manager GE Oil State of Texas [Signatures and acknowledgements continue on the following page] 50691099.3 S- 1IPage SIGNATURE PAGE TO DEVELOPMENT AGREEMENT GE OIL & GAS INC. CITY OF SCHERTZ, a Texas municipal corporation BY: _ John . Kessel, City Manager THE STATE OF TEXAS COUNTY OF GUADALUPE This instr r rent was acknowledged before me, the undersigned Notary Public, on this day of Y-41 , 2014, by John C. Kessel, City Manager of the City of Schertz, Texas, a Texas municipal corporation, on behalf of said City. SS:ARAH E. 0- 0-0-0.0. otary PUNK O tate of Texas m, Exp, 10- 2016 ota y Public in and or the State of Xedas [ Signatures and acknowledgements continue on the following page] S- 2IPage 50691089.3 SIGNATURE PAGE TO GE OIL & GAS INC. CITY OF SCHERTZ ECONOMIC DEVELOPMENT CORPORATION, a Texas Non- profit Industrial Development Corporation BY:t .._._ . Tin Town, President THE STATE OF TEXAS COUNTY OF GUADALUPE This rosin went was acknowledged before me, the undersigned Notary Public; on this 214, day of &,aA -s , 2014, by Tiro Brown, President of the City of Schertz Economic Development Corporation, a Texas non -profit industrial development corporation, on behalf of said non - profit industrial development corporation. o\oo' N01ARY PUBI.IC y "-e v c Q U 2 a m1{1Lh BRENDA LORISE DENNIS Notary Public m and for the State of Texas UATE My CommIsslnn Exptros 11.03 -2014 [ Signatures continue on the follawurg page] S-3 I h , €s o 506910993 DEVELOPMENT AGREEMENT GE OIL & GAS INC. ATTEST: �_.�(`�� � �^!�,•.��.� � ~�~ fit~ Brenda Dennis, City Secretary Date APPROVED AS TO FORM: -_J K�thcrr 1p A. 141ey, Git A# 3 •= 3k W- ) Date i AS TO CONTENT: Executive Director Dad' S-4111a €,.e 50691099.3 Legal Description: Lot 1, Block 2, Lack's Subdivision, according to the plat thereof recorded as Document #200706013878 in the plat records of Comal County, Texas. Exhibit A -1 I P a g e 50691089.3 Exhibit B:Map of Property /4 11Q L6' / t P� Legend Property :ROWL!ne]s oad D Building Footprints Exhibit B -1 1 P a g e 50691089.3 Exhibit C: Infrastructure Incentive Graphic Scale: Feet 0 50 100 200 300 400 500 50691089.3 Legend Road Extension - - - - -- Existing Right of Way Exhibit G1 I P a g e Exhibit D: Driveway Cut for David Lack Drive r d iT ,\ r �f e ON r Jl Legend Proposed Driveway Cut - - - - -- Existing Right of Way Road Extension Exhibit D -1 I P a g e 50691089.3 RESOLUTION NO, 14 -R -14 A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS AUTHORIZING A DEVELOPMENT AGREEMENT AMONG THE CITY OF SCHERTZ TEXAS, THE CITY OF SCHERTZ ECONOMIC DEVELOPMENT CORPORATION, AND GE OIL & GAS INC.; AUTHORIZING CERTAIN BENEFITS BY THE CITY PURSUANT THERETO; AND OTHER MATTERS IN CONNECTION THEREWITH WHEREAS, by City Ordinance No. 12 -T -15, the City of Schertz, Texas (the "City ") established a program under Chapter 380, Texas Local Government Code (the "Code "), as amended, to promote economic development and to stimulate business and commercial activity in the City (the "380 Program "); and WHEREAS, the City of Schertz Economic Development Corporation ( "SEDC ") Board approved the Development Agreement GE Oil & Gas Inc. set forth on Exhibit A attached hereto and incorporated herein (the "Agreement ") among the City, the SEDC, and GE Oil & Gas Inc. (the "Developer "), pursuant to the City's 380 Program, at the SEDC's Board meeting on January 17, 2014; arid WHEREAS, the SEDC has recommended that the City approve and enter into the Agreement with the SEDC and the Developer; and WHEREAS, the City Council has determined that it is in the best interest of the City to enter into the Agreement. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS: Section 1. The City Council hereby authorizes the President of the SEDC and the City Manager of the City, or his designee, to execute and deliver, Development Agreement GE Oil & Gas Inc. 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 day ofA 1, 2014. CITY OF :• Mayor ATTEST: <:&City Secretary (CITY SEAL) EXHIBIT A DEVELOPMENT AGREEMENT GE Oil & Gas Inc.