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HomeMy WebLinkAboutPR 15577: SERVICE ZONE, INC. MUTUAL RELEASE & HOLD HARMLESS AGREEMENTInteroffice MEMORANDUM To: Mayor, City Council, City Manager From: Floyd Batiste, CEO Date: November 13, 2009 Subject: P. R. No. 15577; Council Meeting of November 17, 2009 Attached is P. R. No. 15577 approving Mutual Release and Hold Harmless Agreement executed by and among the City of Port Arthur Section 4A Economic Development Corporation and Service Zone, Inc. P. R. No. 15577 10/13/2009 RESOLUTION NO. A RESOLUTION APPROVING MUTUAL RELEASE AND HOLD HARMLESS AGREEMENT EXECUTED BY AND AMONG THE CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION AND SERVICE ZONE, INC. WHEREAS, City of Port Arthur Section 4A Economic Development Corporation (the "PAEDC"), together with Jefferson County, Te:Kas (the "County") entered into a Lease with Option to Purchase, dated June 30, 2001, with Service Zone, Inc. (the "Lease") WHEREAS, the Lease required, among other covenants that the County and PAEDC, construct to and for the benefit of Service Zone, Inc., a facility for the operation of a six hundred (600) seat permanent telecommunication facility (the "Leased Premises") on the real property as described on Exhibit "A". WHEREAS, Service Zone, Inc. agreed t:o occupy the Leased Premises and to employ individuals to provide telecommunication and telemarketing services. Further, in the period of seven (7) years following the date of issuance of the Certificate of Occupancy for the improvements on the Leased Premises, Service Zone, Inc. was to produce a minimum employee payroll goal for a minimum of three hundred (300) full-time employees at a total employment payroll of Six MILLION ONE HUNDRED DOLLARS ($6,000,100.00) per year (the "Minimum Employee Payroll") for a total of FORTY TWO MILLION SEVEN HUNDRED THOUSAND DOLLARS ($42,700,000.00) over the seven (7) year term commitment. WHEREAS, under the Lease, Service Zone, Inc. was to earn job credits equal to ONE DOLLAR ($1.00) for every FOURTEEN DOLLARS AND TWENTY-FIVE CENTS ($14.25) in total employee payroll. WHEREAS, over seven (7) years have expired since the issuance of the Certificate of Occupancy at the Leased Premises. PAEDC has confirmed to its satisfaction that payroll credits have been generated at the Leased Premises in an amount to meet the Minimum Employee Payroll outlined. WHEREAS, Service Zone, Inc. along with affiliated businesses was acquired by Client Logic Corporation during the term of the Lease;, and subsequently, Client Logic Corporation purchased Sitel Corporation also during the term of the Lease and changed its business operations to Sitel Worldwide Corporation. WHEREAS, Service Zone, Inc. acknowledges that notwithstanding the business through which business records or employee payroll records were generated, all business operations at the Leased Premises were performed in compliance with the obligations under the Lease and that Service Zone, Inc. through affiliated business operations has continuously conducted business on the Leased Premises during the term of the Lease. WHEREAS, PAEDC, after review, ac;knowledges and affirms that the Minimum Employee Payroll was achieved by Service Zone, Inc. operating by and under Service Zone, Inc., Client Logic Corporation and/or Sitel Corporation ("Sitel"). WHEREAS, PAEDC and Service Zone, ][nc. agree that while assignments or transfers of the Lease were not formally executed by and between the parties to the Lease as was otherwise acquired, PAEDC and Service Zone, Inc. acknowledge that the business operations were continually conducted on the Leased Premises in accordance with the Lease. #723896 Page 2 WHEREAS, PAEDC accepts the performance by Service Zone, Inc. under the Lease, both through its business operations and through operations conducted on the Leased Premises by Client Logic Corporation together with Sitel. WHEREAS, Service Zone, Inc. acting by and for its affiliated businesses and intending to be bound hereby agrees that all obligations of both PAEDC and the County under the Lease fully have been met and satisfied. WHEREAS, to ratify the performance of all the obligations under the terms of the Lease, PAEDC on its behalf and on behalf of the County and Service Zone, Inc. on its behalf and on behalf of all affiliated business interest as to the Leased Premises including but not limited to Client Logic Corporation, Sitel or Sitel Worldwide Corporation has executed the attached Mutual Release and Hold Harmless Agreement to acknowledge full compliance with all terms, conditions and obligations to each other. WHEREAS, PAEDC on October 8, 2009 approved the execution of the Mutual Release and Hold Harmless Agreement and now requests that the City Council of the City of Port Arthur ratify, affirm and approve the execution of the Muutual Release and Hold Harmless Agreement by PAEDC. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR: Section 1. That the facts and opinions in the preamble are true and correct. Section 2. That the City of Port Arthur Section 4A Economic Development Corporation is herein authorized to execute and deliver the 1'vlutual Release and Hold Harmless Agreement attached hereto as Exhibit "B" and made a part hereof for all purposes. #723896 Page 3 Section 3. That a copy of the caption of the Resolution be spread upon the Minutes of the City Council. READ, ADOPTED AND APPROVED on this day of A.D., 2009, at a Meeting of the City Council of the City c-f Port Arthur, Texas, by the following vote: AYES: Mayor Councilmembers NOES: DELORIS "BOBBIE" PRINCE, MAYOR ATTEST: TERRI HANKS, CITY SECRETARY APPROVED: FLOYD BATISTE, PAEDC CEO #723896 Page 4 APPROVE AS TO FORM: GUY N. GOODSON, PAEDC ATTORNEY APPROVED AS TO FORM: VALECIA R. TIZENO, CTING CITY ATTORNEY #723896 Pages EXHIBIT "A" NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM THE INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICE',NSE NUMBER. SPECIAL WARRANTY DEED STATE OF TEXAS § COUNTY OF JEFFERSON § The City of Port Arthur Section 4A Economic Development Corporation ("Grantor") in consideration of the sum of TEN AND NO/100 DOLLARS ($10.00) and other good and valuable consideration, to Grantor in hand paid by Service Zane, Inc. ("Grantee") the receipt of which is hereby acknowledged, has GRANTED, SOLD and CONVE`~ED, to Grantee, all that certain property situated in the County of .lefferson, State of Texas, described as follows, to-wit: That tract of land more fully described on Exhibit "A" attached hereto and made a part hereof for all purposes (the "Property"). This conveyance is made subject to the following: (1) easements and rights-of--way appearing of record in the office of the County Clerk of Jefferson County, Texas; (2) all covenants, restrictions, and all conditions, exceptions, reservations and conveyances of minerals and/or royalties, oil acid gas and/or mineral leases, affecting the above described property, of record in the Office of the County Clerk of Jefferson County, Texas, to the extent they are still in ei:fect and relate to the above described property; (3) taxes on the above described property for 2009 and subsequent years not yet due and payable; and (4) all zoning laws, regulations and ordinances of municipal and other governmental authorities, if any, but only to the extent that they are still in effect, relating to the above described property. TO HAVE AND TO HOLD, the said Property, together with all rights, hereditaments and appurtenances thereto belonging, unto Grantee, its successors, heirs, and assigns forever. And Grantor does hereby bind itself, its successors, heirs, executors, administrators, and personal representatives to WARRANT AND FOREVER DEFEND the title to said Property unto Grantee, its successors, heirs, and assigns, against every person whomsoever lawfully claiming or to claim the same or any part thereof, by, through, or under Grantor, but not otherwise. When Grantor or Grantee or both of them are more than one (1) person, or when Grantor or Grantee or both of them are a corporation, limited liability company, partnership, trustee, administrator, executor, or personal representative, this Deed shall read as though pertinent verbs, nouns, and pronouns are changed correspondingly, and pronouns of the masculine gender where used herein shall be construed to include persons of the female sex. When this Deed is executed by or to or by and to a corporation, limited liability company or partnership, references to "heirs, executors, administrators, and personal representatives" shall be appropriately disregarded, and when this Deed is exectiited by or to or by and to a natural person or persons, references to "successors" shall be appropriately disregarded. Grantee has joined in this Deed to evidence Grantee's acceptance of this Deed. EXECUTED this the day of , 2009. GRANTOR: City of Port Arthur Section 4A Economic Development Corporation By: STATE OF TEXAS § COUNTY OF JEFFERSON § This instrument was acknowledged before me on the _ day of 2009, by of City of Port Arthur Section 4A Economic Development Corporation. Notary Public, State of Texas #721761 Page 2 Accepted by GRANTEE: STATE OF TEXAS § COUNTY OF JEFFERSON § Service Zone, Inc. By: This instrument was acknowledged before me on the _ day of 2009, by of Service Zone, Inc. Notary Public, State of Texas GRANTEE'S MAILING ADDRESS: Service Zone, Inc. c/o Dixie Pepper Carrigan Sitel Asst. General Counsel Two American Center 3102 West End Avenue, Suite 1000 Nashville, TN 37203 USA #721761 Page 3 EXHIBIT "B" MUTUAL RELEASE AND HOLD HARMLESS AGREEMENT This Mutual Release and Hold Harmless Agreement is executed by and among the City of Port Arthur Section 4A Economic Development Corporation ("PAEDC"), an economic development corporation, organized and existing under the laws of the State of Texas and Service Zone, Inc., a Florida Corporation, which is duly authorized to transact business in the State of Texas ("Service Zone"). RECITALS: A. PAEDC, together with Jefferson County, Texas (the "County") entered into a Lease with Option to Purchase, dated June 30, 2001, with Service Zone (the "Lease"). B. The Lease required, among other covenants that the County and PAEDC, construct to and for the benefit of Service Zonf;, a facility for the operation of a six hundred (600) seat permanent telecommunication facility (the "Leased Premises") on the real property as described on Exhibit "A". C. Service Zone agreed to occupy thf; Leased Premises and to employ individuals to provide telecommunication and telemarketing services. Further, in the period of seven (7) years following the date of issuance of the Certificate of Occupancy for the improvements on the Leased Premises, Service Zone was to produce a minimum employee payroll goal for a minimum of three hundred (300) full-time employees at a total employment payroll of Six MILLION ONE HUNDRED DOLLARS ($6,000,100.00) per year (the "Minimum Employee Payroll") for a total of FORTY TWO MILLION SEVEN HUNDRED THOUSAND DOLLARS ($42,700,000.00) over the seven (7) year term commitment. D. Under the Lease, Service Zone v~ras to earn job credits equal to ONE DOLLAR ($1.00) for every FOURTEEN DOLLARS AND TWENTY-FIVE CENTS ($14.25) in total employee payroll. E. Over seven (7) years have expired since the issuance of the Certificate of Occupancy at the Leased Premises. PAEDC has confirmed to its satisfaction that payroll credits have been generated at the Leased Premises in an amount to meet the Minimum Employee Payroll outlined. F. Service Zone was purchased by ClientLogic Corporation during the term of the Lease. In 2007 ClientLogic Corporation purchased Sitel Corporation and the Sitel family of global companies was created. After the purchase of Sitel Corporation, ClientLogic changed its name to Sitel Operating Corporation and entities within the Sitel family of companies began using the trade name Sitel. Service Zone acknowledges that in Texas, it has operated under the trade name, ClientLogic and Sitel during certain time periods during the term of the Lease and Service Zone acknowledges that business operations were conducted and employee payroll records were generated under the name Client ]Logic and under the name Service Zone as to operations on the Leased Premises during the ternns of the Lease. G. PAEDC acknowledges that Minimum Employee Payroll was achieved collectively by (i) Service Zone, (ii) conducting t~usiness at times under the trade names, Service Zone, Client Logic and Sitel ("Sitel") H. PAEDC acknowledges that it is willing to accept the performance by Service Zone under the Lease, and under the trade names ClientLogic and Sitel. I. Service Zone acknowledges for i.ts affiliated businesses, that all obligations of both, PAEDC' and the County, under the Lease fully have been met and satisfied. #72271? Page 2 PAEDC and Service Zone, together with Sitel Operating Corporation, executed this Agreement with the intentions of confirming the compliance with all terms and conditions of the Lease by all parties to the Lease, including the County. NOW THEREFORE, IN CONSIDERATION OF THE RECITALS SET FORTH ABOVE, which are incorporated into this Agreement as if set forth below and in consideration of the commitments and obligations made by the County and PAEDC to Service Zone, and in consideration of the creation of payroll by Service; Zone, the parties agree as follows: 1. Compliance with the Lease. PAEDC and Service Zone, together with Sitel Operating Corporation, acknowledge that each party to this Agreement, together with and inclusive of County, has met and fully satisfied all obligations under the Lease. 2. Execution. Contingent upon the: execution of this Agreement by all parties, PAEDC shall deliver to the duly authorized repre;sentatives of Service Zone, a Special Warranty Deed attached hereto as Exhibit "B" and made. a part hereof, for all purposes, to the Leased Premises and in accordance with the terms of the Lease. 3. Mutual Release and Hold Harmless. PAEDC and Service Zone, together with Sitel Operating Corporation, to and also for the benefit of each other and the County, acknowledge that all agreements, obligations, covenants and conditions required for performance under the Lease have been met by the parties responsible to make such performance, or have been made on their behalf by parties identified in this Agreement. PAEDC may not make a claim against Service Zone or Sitel Operating Corporation nor may Service Zone and Sitel Operating Corporation not make a claim against the PAEDC for failure in any manner to perform the duties, obligations, covenants and conditions required under the Lease. #722713 Page 3 4. Binding Effect. Pursuant to Paragraph 24 of the Lease, this Agreement having been executed in accordance with said paragraph of the Lease is binding on all parties named herein. 5. Due Authority. Each of the undersigned acknowledges that they are duly authorized representatives of the parties for which are executing this Agreement. 6. Mutual Original. This document shall be signed in mutual counterparts, all of which have collectively been considered one original agreement. City of Port Arthur Section 4A Economic Development Corporation By: STATE OF TEXAS § COUNTY OF JEFFERSON § This instrument was acknowledgf;d before me on the day of , 2009, by Corporation. of City of Port Arthur Section 4A Economic Development Notary Public, State of Texas #722713 Page 4 Service Zone, Inc. By: STATE OF TEXAS § COUNTY OF JEFFERSON § This instrument was acknowledged before me on the day of , 2009, by of Service Zone, Inc. Notary Public, State of Texas By: STATE OF TENNESSEE § COUNTY OF DAVIDSON § Sitel Operating Corporation This instrument was acknowledged before me on the day of , 2009, by of Sitel Operating Corporation. Notary Public, State of Texas #723713 Page 5