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HomeMy WebLinkAboutPR 19656: EDC AGREEMENT WITH AJ ENTERTAINMENT, LLC Interoffice MEMORANDUM To: Mayor, City Council, City Manager From: Floyd Batiste, CEO Date: January 24, 2017 Subject: P. R. No. 19656; Council Meeting of January 31, 2017 ATTACHED IS PROPOSED RESOLUTION NO. 19656 APPROVING AN ECONOMIC DEVELOPMENT CONDITIONAL GRANT AGREEMENT BETWEEN AJ ENTERTAINMENT, LLC AND THE CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION P. R. No. 19656 01/24/2017 KVM RESOLUTION NO. A RESOLUTION APPROVING AN ECONOMIC DEVELOPMENT CONDITIONAL GRANT AGREEMENT BETWEEN AJ ENTERTAINMENT, LLC AND THE CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION FOR INFRASTRUCTURE IMPROVEMENTS WHEREAS, the City Council deems it in the public interest to authorize the City of Port Arthur Section 4A Economic Development Corporation ("PAEDC") to enter into an Economic Development Conditional Grant Agreement(the "Agreement")with AJ Entertainment, LLC; and WHEREAS, PAEDC has reviewed AJ Entertainment, LLC's incentive application, accompanying financial statements and proposals for infrastructure improvements for redevelopment of the Twin City Kia building (the "Building") in order to renovate the Building so that it can be used as a Cajun seafood restaurant and warehouse; and WHEREAS, the PAEDC Board of Directors has concluded that the expenditures found for the infrastructure improvement will promote or develop new or expanded business enterprises in the City of Port Arthur and that AJ Entertainment, LLC's proposed infrastructure improvements qualify as a Section 4A project as set forth in the Economic Development Act; and WHEREAS, PAEDC agrees to a conditional grant to AJ Entertainment, LLC in the amount of $105,500 for the purpose of making qualified infrastructure improvements to the Building based upon findings of facts of economic benefit as to the improvements to the Building; and WHEREAS, in consideration of the Agreement, AJ Entertainment, LLC shall be obligated to ensure the design and redevelopment of the Building as a Cajun seafood restaurant and warehouse; and WHEREAS, AJ Entertainment, LLC has reviewed and approved the Agreement attached hereto as Exhibit"A". NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR, TEXAS: Section 1. That the facts and opinions in the preamble are true and correct. Section 2. That PAEDC is herein authorized to enter into the Agreement with AJ Entertainment, LLC, and the President and Secretary of PAEDC are authorized to sign the Agreement in substantially the same form attached hereto as Exhibit "A". Section 3. That a copy of the caption of this Resolution be spread upon the Minutes of the City Council. READ, ADOPTED AND APPROVED on this day of A.D., 2017, at a Meeting of the City Council of the City of Port Arthur, Texas, by the following vote: AYES: Mayor Councilmembers NOES: Derrick Freeman, Mayor #1351988 Page 2 ATTEST: Sherri Bellard, City Secretary APPROVED: ArP Floyd Batis e, PAED C " APPROVED A t FORM: Guy N. Goodson, PAEDC Attorney APPROVED AS TO FORM: Ta Valecia R. Tize•o, ity •f orney #1351988 Page 3 EXHIBIT " A " ECONOMIC DEVELOPMENT CONDITIONAL GRANT AGREEMENT BETWEEN THE CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION AND AJ ENTERTAINMENT, LLC Recitals WHEREAS, AJ ENTERTAINMENT, LLC desires to redevelop the existing Twin City Kia building(the`Building") and make it a seafood restaurant; and WHEREAS, §501.103, Texas Local Government Code authorizes expenditures on infrastructure by the City of Port Arthur Section 4A Economic Development Corporation ("PAEDC") if the PAEDC Board finds the expenditure "to be required or suitable for infrastructure necessary to promote or develop new or expanded business enterprises," and WHEREAS, on December 6, 2016 following presentation by AJ ENTERTAINMENT, LLC's representatives of facts contained in Exhibit "A," the PAEDC Board found that the facts reasonably support the finding that the infrastructure improvements for redevelopment of the Building are required in order to turn the building into a real cajun seafood restaurant which will be called"Reel Cajun Seafood Restaurant and Bar"and warehouse; and WHEREAS, the PAEDC Board approved an economic development conditional grant to AJ ENTERTAINMENT, LLC to redevelop and make necessary infrastructure improvements to the Building; and WHEREAS, the PAEDC and AJ ENTERTAINMENT, LLC desire to set forth in this Agreement the terms and conditions for PAEDC's conditional grant payments for the infrastructure improvements to the Building. NOW THEREFORE,the parties agree as follows: AGREEMENT DATES AGREEMENT START DATE 1. This Economic Development Conditional Grant Agreement (the "Agreement") is entered into with an effective date of , 2017, but in no case later than , 2017, by and between the City of Port Arthur Section 4A Economic Development Corporation("PAEDC") and AJ ENTERTAINMENT, LLC. AGREEMENT END DATE • 2. This Agreement expires 30 days after AJ ENTERTAINMENT, LLC either performs fully or breaches the Agreement, subject to earlier termination or extension, voluntary or involuntary, as provided herein. PARTIES 3. City of Port Arthur Section 4A Economic Development Corporation ("PAEDC"), located at 501 Procter Street, Port Arthur, Texas 77640, is a corporation. It is duly authorized to do business in the State of Texas under Chapter 501, 504 Texas Local Government Code (the "Act" or "Development Corporation Act") and duly authorized by Resolution of the City Council of the City of Port Arthur to enter into this Agreement. So authorized and as provided by the PAEDC bylaws, the President and Secretary of the PAEDC Board have the authority to execute this Agreement. 4. AJ ENTERTAINMENT, LLC, a Texas limited liability company located at 3801 Highway 73, Port Arthur, Texas 77642. The company's registered address is Tony Nguyen located at 5250 Brigitte, Groves, Texas 77619. Tony Nguyen is duly authorized to execute and enter this Agreement on behalf of AJ ENTERTAINMENT, LLC. CONDITIONS PRECEDENT 5. This Agreement has no legal consequences unless and until: a. Both the PAEDC Board and the City of Port Arthur City Council approve the Agreement in its final form; and b. AJ ENTERTAINMENT, LLC delivers to PAEDC quarterly status reports reflecting the progress of construction improvements to the infrastructure and provides PAEDC certificates of occupancy for the proposed restaurant and proposed warehouse. PROMISED PERFORMANCE 6. The parties agree to perform as follows: a. Performance by PAEDC i. PAEDC shall conditionally grant AJ ENTERTAINMENT, LLC not to exceed $105,500.00 for the purpose of making qualified infrastructure improvements to the Building. ii. AJ ENTERTAINMENT, LLC will provide PAEDC a certificate of occupancy for the restaurant and upon receipt of that certificate of occupancy, PAEDC will reimburse AJ ENTERTAINMENT, LLC sixty percent(60%)of the Conditional Grant; and iii. AJ ENTERTAINMENT, LLC will provide PAEDC a certificate of occupancy for the warehouse and upon receipt of the certificate of occupancy, PAEDC will reimburse AJ ENTERTAINMENT, LLC twenty percent(40%) of the Conditional Grant. #1344695 Page 2 These are PAEDC's only obligations. b. Performance by AJ ENTERTAINMENT,LLC i. AJ ENTERTAINMENT, LLC shall make infrastructure improvements to the Building as outlined in the Grant Application referenced in Exhibit"B." ii. AJ ENTERTAINMENT, LLC shall provide PAEDC with quarterly reports detailing the progress of the infrastructure improvements. iii. AJ ENTERTAINMENT, LLC shall provide PAEDC certificates of occupancy for the restaurant and warehouse in order to receive the reimbursable percentage that coincides with the completion of each of the three retail spaces. iv. AJ ENTERTAINMENT, LLC shall use its best efforts to hire architect(s), engineer(s), and general subcontractor(s) from the Nine-County Southeast Texas Region for redevelopment of the Building; v. AJ ENTERTAINMENT, LLC will use its best efforts to ensure that Port Arthur, Texas residents are hired for the redevelopment of the Building to the maximum extent feasible. vi. AJ ENTERTAINMENT, LLC must complete the infrastructure improvements and receive certificate of occupancy for each space in Section 6.a. above within twelve (12) months from the date this Agreement is executed. vii. On written demand by PAEDC and in response to AJ ENTERTAINMENT, LLC's failure to achieve a performance milestone, AJ ENTERTAINMENT, LLC shall provide PAEDC within 10 business days following receipt of such written demand with assurances that it has both the intention and capabilities to perform fully its Agreement dual obligations. viii. AJ ENTERTAINMENT, LLC must obtain a Letter of Credit in the amount of $105,500 and provide to PAEDC. AJ ENTERTAINMENT LLC's PERFORMANCE MILESTONE SCHEDULE 7. Although failure to achieve a performance milestone is not a breach of Agreement, a failure is grounds for PAEDC to demand reasonable assurances1 from AJ ENTERTAINMENT, LLC that it can and will fully perform its Contractual obligations. Failure to provide demanded assurances is a breach of Agreement. 8. AJ ENTERTAINMENT, LLC's performance milestones are contained in Exhibit"C." Examples of reasonable assurances are copies of pending Agreement s and commitment letters. #1344695 Page 3 PAEDC's CONDITIONAL OBLIGATIONS AND LIMITED LIABILITY 9. The PAEDC's sole liability/obligations, if any, shall be to AJ ENTERTAINMENT, LLC and shall be limited to the conditional incentive obligations detailed in this Agreement. The PAEDC shall not be liable, in Agreement or otherwise, to AJ ENTERTAINMENT, LLC, or to any person or entity claiming by or through AJ ENTERTAINMENT, LLC., for any expense, expenditure or cost incurred by or on behalf of AJ ENTERTAINMENT, LLC related to the redevelopment of the Building made the basis of this Agreement. LIQUIDATED DAMAGES FOR BREACH OF AGREEMENT BY AJ ENTERTAINMENT,LLC. 10. In the event AJ ENTERTAINMENT, LLC breaches this Agreement or does not fulfill its obligation to complete infrastructure improvements in order to provide PAEDC certificates of occupancy, AJ ENTERTAINMENT, LLC will not be reimbursed for costs incurred by them for infrastructure improvements. 11. It is expressly understood and agreed by the parties that any right or remedy shall not preclude the exercise of any other right or remedy under this Agreement or under any provision of law, nor shall any action taken in the exercise of any right or remedy by deemed a waiver of any other rights or remedies. Failure to exercise any right or remedy hereunder shall not constitute a waiver of the right o exercise that or any other right or remedy at any time. RECORDS/INSPECTION/PAEDC AUDIT 12. AJ ENTERTAINMENT, LLC shall maintain records as necessary to allow the PAEDC to audit in compliance with this Agreement and the representations and warranties contained herein and in AJ ENTERTAINMENT,LLC's application. 13. AJ ENTERTAINMENT, LLC shall give the PAEDC, or any of its duly authorized representatives, access to and right to examine all books, accounts, records, reports, files and other papers, things or property belonging to or in use by AJ ENTERTAINMENT, LLC pertaining to this Agreement. Such rights to access shall continue as long as the records are maintained by AJ ENTERTAINMENT, LLC. AJ ENTERTAINMENT, LLC. agrees to maintain such records in and accessible location. Driver's license information is appropriate for interim reporting of Port Arthur residents hired. The reporting objective is to include documentation necessary for PAEDC to verify AJ ENTERTAINMENT, LLC's reports without further outside inquiry. 14. All records pertinent to this Agreement shall be retained by AJ ENTERTAINMENT,LLC at least three (3) years following the date of termination of this Agreement, whether said termination is a result of default or whether said termination is a result of final submission of a close out report by AJ ENTERTAINMENT, LLC detailing AJ ENTERTAINMENT, LLC's compliance with its obligations provided herein. Further, in the event any litigation, claim or audit arising out of or related to this Agreement is instituted before the expiration of the three (3) year period and extends beyond the tree (3) year period, the records will be maintained until all litigation, claims, or audit findings involving this Agreement and the records made the basis of same has been resolved. #1344695 Page 4 15.Upon written request, AJ ENTERTAINMENT, LLC shall provide PAEDC with all reports reasonably necessary for PAEDC to comply with the Development Corporation Act. 16. It is expressly understood and agreed by the parties hereto that if AJ ENTERTAINMENT, LLC fails to submit to PAEDC in a timely and satisfactory manner any report required by this Agreement, PAEDC, may at its sole discretion, demand assurances that AJ ENTERTAINMENT, LLC can and will fully perform its Contractual obligations. If AJ ENTERTAINMENT, LLC fails to provide adequate assurances in ten (10) business days then AJ ENTERTAINMENT, LLC is in breach and PAEDC is not obligated to reimburse AJ ENTERTAINMENT, LLC for expenses incurred for infrastructure improvements. 17. The PAEDC reserves the right, from time to time, to carry out field inspections/audits to ensure compliance with the requirements of this Agreement. After completion of any such audit, the PAEDC, at its option, may provide AJ ENTERTAINMENT, LLC with a written report of the audit findings. If the audit report details deficiencies in AJ ENTERTAINMENT, LLC performance under the terms and conditions of this Agreement, the PAEDC may establish requirements for the timely correction of any such deficiencies by AJ ENTERTAINMENT, LLC. HOLD HARMLESS 18.AJ ENTERTAINMENT, LLC SHALL INDEMNIFY, DEFEND AND HOLD THE PAEDC AND THE CITY (TOGETHER THE "INDEMNIFIED PARTIES") HARMLESS FROM ALL INJURIES, CLAIMS, LIABILITIES, COSTS OR DAMAGES (INCLUDING COURT COSTS AND REASONABLE ATTORNEY'S FEES) SUSTAINED BY OR THREATENED AGAINST ANY OF THE INDEMNIFIED PARTIES FOR INJURY OR DEATH TO PERSONS OR PHYSICAL DAMAGE TO PROPERTY ARISING OUT OR RELATING TO THE PERFORMANCE BY AJ ENTERTAINMENT, LLC OF ITS OBLIGATION UNDER THIS AGREEMENT. SUBCONTRACTORS 19.AJ ENTERTAINMENT, LLC may subcontract obligations under this Agreement; however, AJ ENTERTAINMENT, LLC, in subcontracting for any performances described in this Agreement, expressly understands that PAEDC is in now way liable to AJ ENTERTAINMENT, LLC's subcontractor(s). 20.AJ ENTERTAINMENT, LLC is responsible for performances, as if such performances rendered were rendered by AJ ENTERTAINMENT, LLC. PAEDC maintains any right of action which may exist or which may be subsequently accrue to PAEDC under this Agreement. 21.AJ ENTERTAINMENT, LLC, as well as all of its subcontractors, shall comply with all applicable federal, state, and local laws, regulations, and ordinances relating to the operations and activities of the redevelop of the Building. CONFLICT OF INTEREST/DISCLOSURE OBLIGATION #1344695 Page 5 22. Conflict of Interest: No employee, agent, officer or elected or appointed official of the City of Port Arthur or the PAEDC who has participated in a decision making process related to this Agreement (without recusing him/herself and executing a conflict affidavit)may obtain a personal or financial interest or benefit from an PAEDC assisted activity, or have an interest in any Agreement , subcontractors , or agreement(or proceeds thereof) with respect to an PAEDC assisted activity, during their tenure or for one (1) year thereafter. AJ ENTERTAINMENT, LLC shall ensure compliance with applicable provisions of the Act and Chapter 171,Local Government Code. 23. Disclosure: In conjunction with execution of this Agreement, AJ ENTERTAINMENT, LLC has fully disclosed to PAEDC all known and potential owners of interests in AJ ENTERTAINMENT, LLC and its general partner (whether stockholder, manager, member or otherwise). In the event of any change in ownership or control of AJ ENTERTAINMENT, LLC of five percent (5 %) or greater, AJ ENTERTAINMENT, LLC shall notify PAEDC in writing. Further,AJ ENTERTAINMENT, LLC shall be obligated to notify in writing the PAEDC in the event any time prior to, during or one (1) year after the term of this Agreement, any City or PAEDC employee or representative or any third party with a conflict of interest obtains or proposes to obtain a financial benefit, direct or indirect, from AJ ENTERTAINMENT, LLC or its general partner. Failure to provide said notice immediately or no later than five (5) business days after receipt of information shall constitute a default herein. NONDISCRIMINATION/EMPLOYMENT/REPORTING 24.AJ ENTERTAINMENT, LLC shall ensure that no person shall on the grounds of race, color, religion, sex, handicap, or national origin be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any Anchor Drive extension activity. Additionally: a. To the greatest extent feasible, opportunities for training and employment arising in connection with the redevelop of the Building will be given to Port Arthur residents; b. To the greatest extent feasible, Agreement s for work to be performed in connection with the redevelopment of the Building will be awarded first to Port Arthur residents and businesses, then to the residents and businesses of the nine-county Southeast Texas Region; and c. If AJ ENTERTAINMENT, LLC advertises for workers in any media then it will advertise in the"Port Arthur News." LEGAL AUTHORITY 25.AJ ENTERTAINMENT, LLC assures and guarantees that AJ ENTERTAINMENT, LLC possesses legal and/or corporate authority to enter into this Agreement, and to perform the services AJ ENTERTAINMENT, LLC has obligated to perform hereunder and has provided, and will in the future provide, as requested by the PAEDC, such corporate resolutions necessary to evidence this authority. #1344695 Page 6 26. The person or persons signing and executing this Agreement on behalf of AJ ENTERTAINMENT, LLC, or representing themselves as signing and executing this Agreement on behalf of AJ ENTERTAINMENT, LLC, do hereby warrant and guarantee that he, she or they have been duly authorized by AJ ENTERTAINMENT, LLC to execute this Agreement on behalf of AJ ENTERTAINMENT, LLC and to validly and legally bind AJ ENTERTAINMENT, LLC to all terms,performances, and provisions herein set forth. NOTICE OF LEGAL OR REGULATORY CLAIMS AGAINST AJ ENTERTAINMENT,LLC. 27.AJ ENTERTAINMENT, LLC shall give PAEDC immediate notice in writing of 1) any legal or regulatory action, including any proceeding before an administrative agency filed against AJ ENTERTAINMENT, LLC, directly or indirectly; and 2) any material claim against AJ ENTERTAINMENT, LLC or its general partner, which may impact continued operations. For purposes herein, "material" claims shall mean claims in excess of$15,000. Except as otherwise directed by PAEDC, AJ ENTERTAINMENT, LLC shall furnish immediately to PAEDC copies of all pertinent documentation of any kind received by AJ ENTERTAINMENT, LLC with respect to such action or claim. CHANGES AND AMENDMENTS 28. Except as specifically provided otherwise in this Agreement, any alterations, additions, or deletions to the terms of this Agreement shall be by amendment in writing and executed by all parties to this Agreement. 29. It is understood and agreed by the parties hereto that performances under this Agreement must be rendered in accordance with the Act, the regulations promulgated under the Act,the assurances and certifications made to PAEDC by AJ ENTERTAINMENT, LLC, and the assurances and certifications made to the City of Port Arthur with regard to the construction of the Anchor Drive extension. Based on these considerations, and in order to ensure the legal and effective performance of this Agreement by all parties, it is agreed by the parties hereto that the performances under this Agreement may be amended in the following manner: PAEDC may from time to time during the period of performance of this Agreement issue policy directives which serve to establish interpret or clarify performance requirements under this Agreement consistent with the intent of the parties. Such policy directives shall be promulgated by the PAEDC Board of Directors in the form of PAEDC issuances shall be approved by the City Council and shall have the effect of qualifying the terms of this Agreement and shall be binding upon AJ ENTERTAINMENT, LLC, as if written herein. 30.Any alterations, additions, or deletions to the terms of this Agreement which are required by changes in federal, state, or local law are automatically incorporated into this Agreement without written amendment hereto, and shall become effective on the date designated by such law or regulation. AJ ENTERTAINMENT, LLC agrees to comply with all federal, state, and local laws whether existing or hereinafter enacted. DEFAULT/TERMINATION #1344695 Page 7 31. In the event of default of any of the obligations of AJ ENTERTAINMENT, LLC detailed herein or in the event of breach of any of the representations of or warranties of AJ ENTERTAINMENT, LLC either detailed herein or in AJ ENTERTAINMENT, LLC's application to the PAEDC, the PAEDC may, at its sole and exclusive option and remedy, terminate this Agreement, in whole or in part. In the event of such termination, but subject to the provisions hereof, in addition to (i) any other remedies available to the PAEDC as provided by the laws of the State of Texas or(ii)any other remedies available to the PAEDC as provided herein,the PAEDC may, at its sole option: a. Withhold and/or disallow further PAEDC grant payments or incentives to AJ ENTERTAINMENT, LLC, including funds to be advanced to AJ ENTERTAINMENT,LLC hereunder. 32. In addition to the foregoing, the parties agree that this Agreement may be terminated at any time when both parties agree, in writing, to the terms and conditions of any such voluntary termination. AJ ENTERTAINMENT,LLC AUDITS 33. If directed by the PAEDC Board, AJ ENTERTAINMENT, LLC shall arrange for a compliance audit by a certified public accountant to verify performances reported under this Agreement. 34. AJ ENTERTAINMENT, LLC shall take all necessary actions to facilitate the performance of any and all such audits, whether annual, mandatory, or otherwise requested under this Agreement. 35. Subject to financial privacy requirements of AJ ENTERTAINMENT, LLC and properly designated requests for non-disclosure due to proprietary reasons, all approved audit reports may be made available for public disclosure to the extent required by the Public Information Act. ENVIRONMENTAL CLEARANCE REQUIREMENTS 36.AJ ENTERTAINMENT, LLC understands and agrees that by execution of this Agreement, AJ ENTERTAINMENT, LLC shall be responsible for making all reasonable efforts in providing to PAEDC all information, concerning this PAEDC funded project, required for PAEDC to meet its responsibilities for environmental review, decision making, and other action which applies to PAEDC in accordance with and to the extent specified in federal, state, and local law. AJ ENTERTAINMENT, LLC further understands and agrees that AJ ENTERTAINMENT, LLC shall make all reasonable efforts to assist PAEDC in handling inquiries and complaints from persons and agencies seeking redress in relation to environmental reviews covered by approved certifications. ORAL AND WRITTEN CONTRACTS/PRIOR AGREEMENTS #1344695 Page 8 37.All oral and written contracts between the parties to this Agreement relating to the subject matter of this Agreement that were made prior to the execution of this Contract have been reduced to writing and are contained in this Contract. 38. The documents listed below are hereby made a part of this Agreement for all purposes, and constitute promised performances by AJ ENTERTAINMENT, LLC and/or PAEDC, as the case may be, in accordance with this Agreement: a. Exhibit"A"Findings of Fact for Infrastructure Improvements b. Exhibit "B" AJ ENTERTAINMENT, LLC Grant Application for PAEDC for funding c. Exhibit"C" Performance Milestones d. Exhibit"D" Certification Regarding Lobbying e. Exhibit"E" Compliance Statement f. Exhibit"F"Letter of Credit VENUE 39. For purposes of litigation that may accrue under this Agreement, venue shall lie in Jefferson County, Texas where substantially all the performance will occur. ADDRESS OF NOTICE AND COMMUNICATIONS City of Port Arthur Section 4A Economic Development Corporation 4173 39th Street Port Arthur, Texas 77642 ATTN: Floyd Batiste, Chief Executive Officer AJ ENTERTAINMENT,LLC 3801 Highway 73, Port Arthur, Texas 77642 ATTN: Tony Nguyen CAPTIONS 40. This Agreement has been supplied with captions to serve only as a guide to the contents. The captions does not control the meaning of any paragraph or in any way determine its interpretation or application. COMPLIANCE WITH FEDERAL,STATE AND LOCAL LAWS 41.AJ ENTERTAINMENT, LLC shall comply with all federal, state, and local laws, statutes, ordinances, resolutions, rules, regulations, orders and decrees of any court or administrative body or tribunal related to AJ ENTERTAINMENT, LLC's performance under this Agreement. Upon request by PAEDC or by the City of Port Arthur, AJ ENTERTAINMENT, LLC shall furnish reasonable satisfactory proof of its compliance herewith including execution of the Certification Regarding Lobbying attached hereto as Exhibit"D" and the Compliance Statement attached hereto as Exhibit"E". #1344695 Page 9 ASSIGNMENT 42. This Agreement may not be assigned by AJ ENTERTAINMENT, LLC to another entity unless and until the PAED, by the action of the PAEDC Board, approves the assignment. SUPPLEMENTAL COVENANT 43. Incentive Recipient and any branch, division or department of Incentive Recipient certifies that they have not and will not knowingly employ an "undocumented worker" which means "an individual who, at the time of employment, is not lawfully admitted for permanent residence to the United States or authorized under law to be employed in that manner in the United States." 44. Incentive Recipient acknowledges that it has reviewed Chapter 2264, Texas Government Code and hereby affirmatively agrees by execution of this Agreement to repay the amount of any incentive with interest at the rate of ten (10%) percent per annum not later than the 120th day after the date PAEDC notifies Incentive Recipient of a violation. 45. Incentive Recipient acknowledges PAEDC may bring a civil action or cover any amounts owed under this Chapter and further acknowledges that PAEDC may recover court costs and reasonable attorneys' fees incurred in an action brought under §2264.101(a). Incentive Recipient is not liable for a violation of this Chapter by a subsidiary, affiliate or franchisee of the Incentive Recipient or by a person with whom the Incentive Recipient contracts. ATTORNEY APPROVALS APPROVED AS TO FORM: Guy Goodson, General Counsel for PAEDC VERIFIED AS CONSISTANT WITH CITY COUNCIL RESOLUTION: Resolution Number : Valecia Tizeno, City Attorney #1344695 Page 10 CONTRACT EXECUTION CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION SIGNED AND AGREED TO on the day of ,2017. By: By: President Secretary Witness Witness #1344695 Page 11 AJ ENTERTAINMENT,LLC. SIGNED AND AGREED TO on the day of , 2017. AJ ENTERTAINMENT, LLC., a Texas limited liability company By: Tony Nguyen Witness #1344695 Page 12 EXHIBIT "A" FINDING OF FACT FOR INFRASTRUCTURE IMPROVEMENTS FACTS: • AJ ENTERTAINMENT, LLC has requested an incentive agreement from the PAEDC for infrastructure improvements for the old Twin City Kia building located at 7300 N. Twin City Highway(the "Building") and its parking area. • AJ ENTERTAINMENT, LLC wants to make infrastructure improvements to the Building in order to make it suitable for a seafood restaurant called Reel Cajun and a warehouse facility. FINDINGS: • The PAEDC Board of Directors has found that constructing infrastructure improvements to the Building and its parking area would lead to the development of new and expanded business enterprises in the City of Port Arthur. • The infrastructure improvements may lead to the opening of two new businesses in the City of Port Arthur. • The opening of such businesses would increase sales tax revenues for the City of Port Arthur and add to the City ad valorem tax base. #1344695 Page 13 EXHIBIT "B" AJ ENTERTAINMENT, LLC Grant Application #1344695 Page 14 EXHIBIT "C" PERFORMANCE MILESTONE SCHEDULE AJ ENTERTAINMENT, LLC. A J ENTERTAINMENT LLC MILESTONE SCHEDULE Deadline Milestone (a) January 31,2017 Review approved construction plans by the City of Port Arthur and projected costs with PAEDC CEO for the retrofitting of the Project at 7500 N Twin City Hwy,Port Arthur, Texas (b) March 1,2017 AJ Entertainment,LLC Issue a status report to PAEDC CEO on Project retrofitting facility at 7500 N Twin City Hwy,Port Arthur,Texas (c) June 30,2017 AJ Entertainment obtain Certificate of Occupancy for Restaurant and provide a Copy to PAEDC CEO PAEDC issue 60%of Economic Incentive Grant. (d) July 31,2017 AJ Entertainment Issue a status report to PAEDC CEO on the retrofitting of the Warehouse space at 7500 N Twin City Hwy,Port Arthur,Texas (e) August 31,2017 AJ Entertainment obtain Certificate of Occupancy for Warehouse space and provide a Copy to PAEDC CEO PAEDC issue the additional 40%of Economic Incentive Grant. (f) September 15,2017 AJ Entertainment,LLC meets all their contractual requirement. File is closed. (g) September 15. 2017 PAEDC Board release Letter of Credit to AJ Entertainment #1344695 Page 15 EXHIBIT "D" CERTIFICATION REGARDING LOBBYING For Contracts, Grants, Loans, and Cooperative Agreements The undersigned certifies,to the best of his knowledge and belief,that: 1. No funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of any agency, a member of the City or of the PAEDC in connection with the awarding of any contract, the making of any grant, the making of any loan, the entering into of any cooperative agreement, or modification of any contract, grant, loan, or cooperative agreement. 2 The undersigned shall require that the language of this certification be included in the award documents for all sub-awards at all tiers (including subcontracts, sub- grants, and contracts under grants, loans, and cooperative agreements), and that all Subs shall certify and disclose accordingly. This certification is material representation of fact which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction. AJ ENTERTAINMENT,LLC., a Texas limited liability company Date: By: Tony Nguyen #1344695 Page 16 EXHIBIT "E" COMPLIANCE STATEMENT AJ ENTERTAINMENT, LLC. hereby certifies that it has fully complied with Local Government Code §176.006, as amended, which mandates the disclosure requirements for persons who contract or seek to contract with a local governmental entity. AJ ENTERTAINMENT, LLC., a Texas limited liability company Date: By: Tony Nguyen #1344695 Page 17 EXHIBIT F LETTER OF CREDIT (Not included but to be provided by Incentive Recipient and Incentive not to be funded until executed Letter of Credit received and approved by PAEDC) #1344695 Page 18