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HomeMy WebLinkAbout08/02/2005 Blue Sheet C-Path Economic Funding Agreement TOWN COUNCIL MEETING INFORMATION TOWN OF MARANA MEETING DATE: August 2, 2005 AGENDA ITEM: I. 5 TO: MAYOR AND COUNCIL FROM: Frank Cassidy, Town Attorney SUBJECT: Resolution No. 2005-99: Relating to Economic Development; au- thorizing an economic funding agreement between the Town of Marana and the Critical Path to Accelerate Therapies Institute (C-PATH); and declaring an emergency. DISCUSSION On October 4, 2004, the Town Council held a study session and heard a presentation on the pro- posed establishment of a pharmaceutical research facility in Tucson. The Critical Path to Accel- erate Therapies Institute (C-P A TH) has now received funding commitments from local govern- ments, including a $750,000 a year combined commitment from Pima County and the City of Tucson. This resolution would approve and authorize the execution of a funding agreement between C-PATH and Marana, committing $25,000 per year for five years, subject to annual appropria- tion, to be used by C-PATH for equipment, personnel, and operating expenses to enable C-P A TH to carry out operations in Pima County. The agreement is the same form approved by the City of Tucson on June 7 by Resolution No. 20100 and by Pima County on June 21 by Reso- lution No. 2005-145. RECOMMENDATION Staffrecommends adoption of Resolution No. 2005-99, approving and authorizing the execution of the C-PATH economic development funding agreement. A TT ACHMENT(S) Economic development funding agreement between the Town of Marana and C-PATH. SUGGESTED MOTION I move to adopt Resolution No. 2005-99. (OOOOl016.DOC /) FJC/cds 7/26/05 MARANA RESOLUTION NO. 2005-99 RELATING TO ECONOMIC DEVELOPMENT; AUTHORIZING AN ECONOMIC FUNDING AGREEMENT BETWEEN THE TOWN OF MARANA AND THE CRITICAL PATH TO ACCELERATE THERAPIES INSTITUTE (C-PATH); AND DECLARING AN EMERGENCY. WHEREAS, C-PATH was founded by the University of Arizona and SRI International for the purpose of supporting the U. S. Food and Drug Administration in its effort to implement the Critical Path Initiative; and WHEREAS, the Mayor and Council of the Town of Marana has identified the expansion and strengthening of regional industry clusters, including life sciences, as strategic goals for long- term economic growth; and WHEREAS, the Mayor and Council find that the terms and conditions of the economic funding agreement between the Town of Marana and C-P A TH are in the best interest of the Town. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE TOWN OF MARANA, ARIZONA, that the economic funding agreement between the Town of Marana and C-P A TH, attached to and incorporated by this reference in this resolution as Exhibit A is hereby approved, and the Mayor is hereby authorized to execute it for and on behalf of the Town of Marana. IT FURTHER RESOLVED that the Town's Manager and staff are hereby directed and authorized to undertake all other and further tasks required or beneficial to carry out the terms, obligations, and objectives of the aforementioned agreement. BE IT FURTHER RESOLVED that since it is necessary for the preservation of the peace, health and safety of the Town of Marana that this resolution become immediately effective, an emergency is hereby declared to exist, and this resolution shall be effective immediately upon its passage and adoption. PASSED AND ADOPTED BY THE MAYOR AND COUNCIL OF THE TOWN OF MARANA, ARIZONA, this 2nd day of August, 2005. Mayor Ed Honea ATTEST: APPROVED AS TO FORM: Jocelyn C. Bronson, Town Clerk Frank Cassidy, Town Attorney {OOOOI017.DOC /} FJC!cds 7/26/05 ECONOMIC DEVELOPMENT FUNDING AGREEMENT BETWEEN THE TOWN OF MARANA AND THE CRITICAL PATH TO ACCELERATE THERAPIES INSTITUTE This ECONOMIC DEVELOPMENT FUNDING AGREEMENT ("Agreement") is made and entered into by and between the TOWN OF MARANA, ARIZONA, a municipal corporation (the "Town") and THE CRITICAL PATH To ACCELERATE THERAPIES INSTITUTE, an Arizona non-profit corporation ("C-PATH"). The Town and C-PATH are sometimes collectively referred to as the "Parties" and are sometimes individually referred to as a "Party". RECITALS A. C-PATH was founded by The University of Arizona and SRI International for the purpose of supporting the U.S. Food and Drug Administration in its effort to imple- ment the Critical Path Initiative. This will be accomplished by conducting research and developing procedures that will enable the pharmaceutical industry to accelerate the development and approval of new medical products. B. The Mayor and Council has identified the expansion and strengthening of regional industry clusters, including life sciences, as strategic goals for long-term economic growth. C. The Mayor and Council has agreed that establishment of C-P A TH in Pima County will advance the economic development goals of the Town by, among other benefits, increasing employment levels and positively impacting the incomes of citizens in the County. D. The Mayor and Council, on October 4, 2004, committed to funding C-P A TH in the amount of $25,000 per year for five years, subject to annual appropriation, to be used by C-PATH for equipment, personnel, and operating expenses to enable C-PATH to carry out operations in Pima County. AGREEMENT Now, THEREFORE, the Town and C-PATH, pursuant to the above, and in consid- eration of the matters and things hereinafter set forth, do mutually agree as follows: 1. Purpose. The Town, along with Pima County and the private sector, agreed to provide financial and development assistance to C-P A TH for the establishment of its administrative head- quarters in Pima County and for operating expenses in consideration of the economic de- {0000099I.DOC 12l - I - velopment benefits to be derived by expanding the bioindustry sector of Pima County's economy. 2. Term. The term of this Agreement shall be from the date of execution until June 30, 2010 ("Term"). 3. Parties to the Agreement (a) The Town. The Town is a municipal corporation of the State of Arizona, a public body corporate, exercising governmental functions and powers pursuant to the Marana Town Charter and Arizona law. The execution of this Agreement and any other documents required to implement the provisions of this Agreement was author- ized by Resolution No. 2005-99 passed by the Marana Town Council on August 2, 2005. The principal office of the Town is located at 11555 W. Civic Center Drive, Building A3, Marana, Arizona, 85653. (b) C-PATH. C-PATH is an Arizona non-profit corporation in good standing, au- thorized to do business in Arizona, and exists as a tax-exempt organization qualified for federal income tax exemption under section ~501(c)(3) of the United States In- ternal Revenue Code. The principal office of C-P A TH is located at 4280 N. Camp- bell Ave., Ste. 214, Tucson, Arizona, 85718, and will be C-PATH's principal office pending the completion of construction of an Institute facility at a location in Pima County yet to be determined. C-PATH is an independent contractor in the perform- ance of all activities, functions, duties and obligations pursuant to this Agreement. C-P A TH and the Town are not and shall not be considered as joint venturers, partners or agents of each other. C-PATH's officers, employees, agents and subcontractors shall not be considered as officers, employees, agents or subcontractors of the Town. The Town and C-P A TH hereby agree not to represent to anyone that they are agents of one another or have authority to act on behalf of one another. 4. Change in Management or Control; No Assignments (a) C-PATH understands and agrees that the qualifications ofC-PATH are of par- ticular concern to the Town in light of: (i) the importance of the creation of new employment opportunities and the economic development benefits associated with the scientific and educational ac- tivities to be undertaken by C-P A TH in Pima County; and (ii) the substantial financing and other public aids that have been made avail- able by law and by the government for the purpose of making such economic de- velopment possible; and (iii) the fact that a significant change in control of C-P A TH or of a substantial part thereof, as defined in subsection (b) below, is for practical purposes a transfer of the rights and responsibilities set forth in this Agreement. {00000991.DOC! 2} - 2 - C-P A TH further recognizes that it is because of such qualifications that the Town is entering into this Agreement with C-PATH. No voluntary or involuntary successor in interest of C-P A TH shall acquire any rights or powers under this Agreement without the Town's prior written approval. (b) This Agreement may be terminated by the Town if there is any significant change (voluntary or involuntary) in the purpose, intent or control of C-PATH that has not been approved in writing by the Town prior to such change. (c) C-PATH agrees to and shall indemnify and hold the Town harmless from or against all claims, demands and obligations asserted by or from any party who ac- quires C-PATH's interest in violation of this Section 3 and who thereafter claims a right, interest or ownership to this Agreement, arising out of or in connection with re- lationships entered into by C-PATH or its partners with such other party which are in violation or breach of this Section 4. 5. Representations and Warranties (a) The Town represents and warrants that: (i) The Town has full power and authority, including municipal, to enter into this Agreement; and the execution, delivery and consummation of this Agreement by the Town have been duly authorized by all necessary municipal action. (ii) The execution, delivery and consummation of this Agreement by the Town is not prohibited by and does not conflict with any other agreements or in- struments to which the Town is a party or is otherwise subject. (iii) The Town has received no notice as of the date of this Agreement assert- ing any noncompliance in any material respect by the Town with applicable stat- utes, rules and regulations of the United States of America, the State of Arizona, the Town, or of any other state or municipality or agency having jurisdiction over and with respect to the transactions contemplated in and by this Agreement, and the Town is not in default with respect to any judgment, order, injunction or de- cree of any court, administrative agency or other governmental authority which is in any respect material to the transactions contemplated in and by this Agreement. (b) C-PATH represents and warrants that: (i) C-PATH is, and shall remain for the duration of this Agreement, a non- profit corporation duly organized and validly existing under the laws of the State of Arizona, authorized to do business in the State of Arizona and qualified for federal income tax exemption under Section S501(c)(3) of the United States In- ternal Revenue Code. C-P A TH has full power and authority to enter into this Agreement, and the execution, delivery and consummation of this Agreement by C-PATH has been duly authorized by all necessary action. {00000991.DOC 12l - 3 - (ii) The execution, delivery and consummation of this Agreement by C-PATH is not prohibited by and does not conflict with any other agreements or instru- ments to which C-P A TH is a party or is otherwise subject. (iii) C-PATH has received no notice as ofthe date of this Agreement asserting any noncompliance in any material respect by C-P A TH with applicable statutes, rules and regulations of the United States of America, the State of Arizona, the Town, or of any other state, municipality or agency having jurisdiction over and with respect to the transactions contemplated in and by this Agreement, and C-P A TH is not in default with respect to any judgment, order, injunction, or de- cree of any court, administrative agency or other governmental authority in any respect material to the transactions contemplated in and by this Agreement. 6. Town Funding Commitment Subject to Mayor and Council appropriation of funds, the Town will provide a total of $125,000 ("Town Funding") to C-PATH as hereinafter provided to be used for equip- ment, personnel and operating costs and other reasonable and necessary expenses in- curred during the first five years of operations. Such expenditures shall be consistent with the applicable Institute budget to be approved by the Town pursuant to Section 7 below. The sum of $25,000 ("Initial Disbursement") will be paid to C-P A TH within five (5) business days after satisfaction of all of the prerequisites set forth in Section 7 below. Four additional payments in the amount of $25,000 each ("Annual Disbursements") will be made annually beginning in Fiscal Year 2006-2007 subject to Mayor and Council ap- propriation and the terms and conditions of this Agreement. 7. Prerequisites to Disbursement of Town Funding (a) Prerequisites to Initial Disbursement: (i) Town review of C-P A TH's business plan for the first five (5) years of op- eration. (ii) Delivery to the Town by C-PATH of copies of all organizational docu- ments, including but not limited to, certificate of good standing, determination let- ter from the Internal Revenue Service of S501(c)(3) tax-exempt status qualifica- tion, articles of incorporation and bylaws along with any amendments thereto. (b) Prerequisites to Each Annual Disbursement (i) Mayor and Council annual appropriation of funds, (ii) Town review ofC-PATH's budget projections for the current fiscal year, beginning on July 1 of the fiscal year in which such Annual Disbursement is made. {00000991. DOC I 2) - 4- 8. Institute Operating Covenants In consideration for the Town Funding, in addition to the other provisions of this Agree- ment, C-PATH expressly covenants and agrees to comply with the terms and conditions set forth in this Section 8 ("Operating Covenants") for the duration of this Agreement. C-PATH hereby affirmatively covenants and agrees for the duration ofthis Agreement as follows: (a) C-PATH shall remain a nonprofit corporation in good standing authorized to do business in the State of Arizona and qualified for federal income tax exemption pursuant to Section S50l(c)(3) of the Internal Revenue Code. (b) The Town shall have the opportunity to review each of C-PATH's annual budgets prior to funding by the Town. (c) C-PATH shall maintain a standard, modem system of accounting that reflects the application of generally accepted accounting principles, consistently applied. C-P A TH shall furnish to the Town the following: (i) Within ninety (90) days after the close of each fiscal year, audited financial statements of C-P A TH, prepared by independent certified public accountants of recognized standing selected by C-P A TH, including a statement of financial posi- tion (balance sheet), statement of activities, statement of cash flows and statement of functional expenses, and will be prepared according to generally accepted ac- counting principles, consistently applied. (ii) When requested by the Town, such further information as the Town may reasonably request relating to any such financial statements and/or the use of the Town Funding. (d) C-P A TH shall make purchases objectively and independently, free of conflict of interest. C-P A TH must spend Town funds in a way that would serve the public in- terest and honor the public trust. (i) C-P A TH shall comply with all applicable elements and requirements of the Town of Marana Equal Employment Opportunity ordinances. In performing un- der this Agreement, C-P A TH shall not discriminate against any worker, employee or applicant, or any member of the public, because of race, color, religion, gender, national origin, age, sexual orientation or disability, nor otherwise commit an un- fair employment practice. C-P A TH will take affirmative action to insure that ap- plicants are employed, and that employees are dealt with during employment, without regard to their race, color, religion, gender, national origin, age, sexual orientation or disability. Such action shall include, but not be limited to, the fol- lowing: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of payor other forms of compensation; and selection for training, including apprenticeship. {00000991.DOC 12} - 5 - (e) C-PATH shall maintain the insurance coverage required pursuant to Section 9 below. (t) The Town shall have such access upon reasonable notice and at reasonable times to C-P ATH's books and records relating to its operations and business affairs as is required to be afforded under applicable law, provided that this shall not require that access be afforded if such access by the Town would subject to public records law confidential or proprietary information of C-P A TH, and in such event, the parties shall together develop some reasonable alternative to satisfy the Town's lawful needs. (g) C-P A TH must comply with all applicable federal, state and local regulations, codes and laws regarding its operations. Nothing in this Agreement constitutes an ex- emption or grant of a variance from applicable codes and laws. 9. Insurance C-PATH shall obtain and maintain adequate insurance coverage during the length of this Agreement. 10. Indemnification. C-P A TH shall indemnify, defend, save and hold harmless the Town and its officers, offi- cials, agents and employees (hereinafter referred to as "Indemnitee") from and against any and all claims, actions, liabilities, damages, losses or expenses (including court costs, attorneys' fees and costs of claim processing, investigation and litigation) (hereinafter referred to as "Claims") for (i) bodily injury or (ii) personal injury (including death), or (iii) loss or damage to tangible or intangible property in either such case caused, or al- leged to be caused, in whole or in part, by the negligent or willful acts or omissions of C-PATH or any of its officers, directors, agents, employees or subcontractors. This in- demnity includes any claim or amount arising out of or recovered under the Workers' Compensation Law or arising out of the failure of C-PATH to conform to any federal, state or local law, statute, ordinance, rule, regulation or court decree. It is the specific intention of the parties that except to the extent caused or contributed to by the negligent or willful acts or omissions of the Indemnitee, the Indemnitee shall, in all instances, be indemnified by C-P A TH from and against any and all claims arising as a result of or based on the above circumstances. It is agreed that C-PATH will be responsible for pri- mary loss investigation, defense and judgment costs where this indemnification is appli- cable. 11. Defaults and Remedies. (a) Events of Default. The existence or occurrences of anyone or more of the fol- lowing events shall constitute an event of default (each, an "Event of Default") under this Agreement: (i) Default by C-P A TH or the Town in the observance or performance of any of the terms, covenants, agreements or conditions contained in this Agreement for a period of thirty (30) days after notice thereof; provided, however, that if such {00000991. DOC ! 2} - 6- default is not curable by the payment of money and cannot reasonably be cured within thirty (30) days (but is reasonably susceptible of cure), no Event of Default shall occur hereunder so long as the defaulting party commences such cure within the thirty (30) day period and thereafter diligently and continuously prosecutes same to completion and continues to perform all of its other obligations hereunder during such period. (ii) C-PATH's failure to maintain the insurance coverage required pursuant to Section 9 above for the duration of this Agreement. (iii) The existence of any material or intentional misrepresentations of fact by C-PATH in any document submitted to the Town pursuant to this Agreement or in connection with the Town Funding. (iv) The inability of C-P A TH to pay its debts when due; or the existence of a general assigmnent made by C- PATH for the benefit of its creditors; or the filing by or against C-P A TH of a voluntary or involuntary petition in bankruptcy; or the appointment of a receiver for the commencement under any law relating to bank- ruptcy, insolvency, reorganization or relief of debtors, of proceedings for the composition, extension, arrangement or adjustment of any of C-PATH's obliga- tions; or the suspension or discontinuance of C-P A TH's business; or a default by C-PATH on any other obligation it may have to the Town; or the issuance or levy of a writ of attachment, execution or any similar process against any significant part ofC-PATH's property that is not released, stayed, bonded or vacated within a reasonable time after its issue or levy. (v) C-P A TH' s failure to cure promptly any violation of any Law or regulation or C-P ATH's failure to comply promptly with any provision of any notice, issued by or filed in any department of any governmental authority having jurisdiction over C-PATH; or C-PATH's failure to furnish to the Town, immediately and without demand, a true copy of any notice or other document received by or available to C-PATH disclosing any such requirement or violation of any such law or regulation. In this regard, "promptly" shall be deemed to mean within thirty (30) days after the giving of written notification to C-P A TH of the existence of such violation or notice or other document or, where such cure or compliance cannot be fully effected within thirty (30) days, then the commencement of the ac- tion to cure or comply within the same thirty (30) days. (b) Remedies. In the event of any Event of Default as aforesaid and if any such Event of Default shall not be cured and shall be continuing thirty (30) days after no- tice of such Event of Default, the non-defaulting party may, to the extent permitted by law, take whatever action at law or in equity as may appear necessary or desirable. (c) Attorneys' Fees and Costs. If any legal action is instituted pursuant to this Agreement, the prevailing party in such action shall be reimbursed by the other party for all costs and expenses of such action, including reasonable attorneys' fees as may be fixed by the Court. {00000991.DOC! 2} - 7 - 12. Notices, Demands and Communications Between the Parties All notices, demands or other writings in this Agreement provided to be given, made or sent by any party hereto to other parties shall be deemed to have been fully given, made or sent when made in writing and personally delivered, transmitted by telefax or received by United States postpaid registered or certified mail and addressed as follows: To C-PATH: The Critical Path to Accelerate Therapies Institute 4280 N. Campbell Ave., Ste. 214 Tucson, AZ 85718 To Town of Marana: Town Manager 11555 W. Civic Center Drive, Bldg A3 Marana, AZ 85653 The address to which any notice, demand or other writing may be given, made or sent to any party may be changed by written notice given by such party as above provided. 13. Approvals Wherever this Agreement requires a party to approve any contract, document, plan, pro- posal, specification, drawing or other matter, it shall be delivered to the attention of the Town Manager's Office. Approvals shall not be unreasonably withheld or delayed. 14. General Provisions (a) Conflict of interests. No member, official or employee of the Town shall have any direct or indirect interest in this Agreement, nor participate in any decision relat- ing to the Agreement which is prohibited by law. The parties hereto acknowledge that this Agreement is subject to cancellation pursuant to the provisions of A.R.S. ~ 38-511. (b) Warranty Against Payment of Consideration for Agreement. C-PATH war- rants that it has not paid or given, and will not payor give, any third person any money or other consideration for obtaining this Agreement, other than normal costs of conducting business and costs of professional services such as architects, engi- neers, realtors and attorneys. (c) Non-liability of Town Officials and Employees. No member, official or em- ployee of the Town shall be personally liable to C-PATH, or any successor-in- interest, in the event of any default or breach by the Town or for any amount which may become due to C-PATH or successor, or on any obligation under the terms of this Agreement. (d) Non-Availability of Funds. Every payment obligation of the Town under this Agreement is conditioned upon the availability of funds appropriated or allocated for {00000991. DOC I 2} - 8 - the payment of such obligation. If funds are not allocated and available for the con- tinuance of this Agreement, this Agreement may be terminated by the Town at the end of the period for which funds are available. No liability shall accrue to the Town in the event this provision is exercised, and the Town shall not be obligated or liable for any future payments or for any damages as a result of termination under this para- graph. (e) Enforced Delay; Extension of Time of Performance. In addition to specific provisions of this Agreement, performance by any party hereunder shall not be deemed to be in default where delays or defaults are due to war; insurrection; strikes, lock-outs; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; inability (when either party is faultless) of any contractor, subcontractor or supplier; acts of the other party. An extension of time for any such cause shall only be for the period of the enforced delay, which period shall commence to run from the time of the com- mencement of the cause. If, however, notice by the party claiming such extension is sent to the other parties more than thirty (30) calendar days after the commencement of the cause, the period shall commence to run only thirty (30) calendar days prior to the giving of such notice. Times of performance under this Agreement may also be extended in writing by the parties hereto. (f) No Waiver. Except as otherwise expressly provided in this Agreement, any failure or delay by any party in asserting any of its rights or remedies as to any de- fault, shall not operate as a waiver of any default, or of any such rights or remedies, or deprive any such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. (g) Severability. If any provision of this Agreement shall be found invalid or un- enforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall not be affected thereby and shall be valid and enforceable to the full- est extent permitted by law. (h) Captions. The captions contained in this Agreement are merely a reference and are not to be used to construe or limit the text. (i) Entire Agreement, Waivers and Amendments. This Agreement is executed in three (3) duplicate originals each of which is deemed to be an original. This Agree- ment constitutes the entire understanding and agreement of the parties. This Agree- ment integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties with re- spect to all or any part of the subject matter hereof. All waivers of the provisions of this Agreement must be in writing and signed by the appropriate authorities of the Town or C-PATH, and all amendments hereto must be in writing and signed by the appropriate authorities of the parties hereto. (j) Employment and Organization Disclaimer; Independent Contract Status. This Agreement is not intended to, and will not constitute, create, give rise to, or otherwise {00000991. DOC I 2} - 9 - recognize a joint venture, partnership or formal business association or organization of any kind as existing between the parties, and the rights and the obligations of the parties shall be only those expressly set forth herein. Neither party is the agent of the other and neither party is authorized to act on behalf of the other party. In Witness Whereof, the Town has caused this Agreement to be executed by the Mayor upon resolution of the Mayor and Council and attested to by its Clerk, and C- PATH has caused this Agreement to be executed by its President. THE TOWN: C-PATH: TOWN OF MARANA, an Arizona municipal corporation THE CRITICAL PATH TO ACCELERATE THERAPIES INSTITUTE, an Arizona non- profit corporation By: By: Ed Honea, Mayor [Print Name and Title] Date: Date: ATTEST: Jocelyn Bronson, Town Clerk ApPROVED AS TO FORM: Frank Cassidy, Town Attorney STATE OF ARIZONA) ) ss.: COUNTY OF PIMA ) The foregoing instrument was acknowledged before me this _ day of , 2005, by of The Critical Path to Accelerate Therapies Institute, an Arizona non-profit corporation, on behalf of the corporation. Notary Public {0000099 I. DOC /2} - 10-