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R-10-08-26-10C1 - 8/26/2010RESOLUTION NO. R -10-08-26-10C1 WHEREAS, the City Council, on the 26th day of August, 2010, in Ordinance No. G-10-08-26- atct , created Reinvestment Zone No. 19B in the City of Round Rock, Texas, and WHEREAS, in accordance with Chapter 312, Tax Code, V.A.T.S. as amended, the City desires to enter into a tax abatement agreement with Toppan Printing America, Inc., regarding property located in Reinvestment Zone No. 19B, and WHEREAS, the Council has determined that all requirements of the guidelines and criteria adopted by Ordinance No. G -10-03-11-9C2 have been complied with, Now Therefore BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS, That the Mayor is hereby authorized and directed to execute on behalf of the City a Property Tax Abatement Agreement with Toppan Printing America, Inc., a copy of said agreement being attached hereto as Exhibit "A" and incorporated herein. The City Council hereby finds and declares that written notice of the date, hour, place and subject of the meeting at which this Resolution was adopted was posted and that such meeting was open to the public as required by law at all times during which this Resolution and the subject matter hereof were discussed, considered and formally acted upon, all as required by the Open Meetings Act, RESOLVED this 26th day of August, 2010. ALAN MCGRAW, Mayor City of Round Rock, Texas ATTEST: SARA L. WHITE, City Secretary O:\wdox\SCCInts\0112\ 1005 \MUMCIPAL\00200305.DOC/rmc PROPERTY TAX ABATEMENT AGREEMENT This Property Tax Abatement Agreement (this "Agreement") is entered into by and between the City of Round Rock, Texas (the "City"), a Texas home rule municipal corporation, and Toppan Printing America, Inc., a Texas corporation ("TPA"). EXHIBIT RECITALS WHEREAS, TPA has or will lease space in a building located at 400 Texas Avenue, Round Rock, Texas, as shown on the attached Exhibit A, (the "Facility"), and desires to purchase equipment for its eCover Production Line Project, as described in Exhibit B (the "Equipment'); and WHEREAS, by entering into this Agreement, TPA confirms its intent to purchase the Equipment thereby resulting in new economic development in City; and WHEREAS, on the day of August, 2010, the City Council, of the City of Round Rock, Texas, adopted Ordinance No. G-10- - - establishing Reinvestment Zone No. (the "Reinvestment Zone") City of Round Rock, Texas for commercial/industrial tax abatement, hereinafter referred to as "Ordinance No. G-10--_-_", as authorized by the Texas Property Redevelopment and Tax Abatement Act, Chapter 312, Tax Code, V.A.T.S. as amended (the "Tax Abatement Act"); and WHEREAS, the Facility and Equipment are or will be located within the Reinvestment Zone; and WHEREAS, the City has adopted Ordinance No. G -10-03-11-9C2, which Ordinance adopted appropriate guidelines and criteria governing reinvestment zones and tax abatement agreements to be entered into by the City as contemplated by the Tax Abatement Act; and WHEREAS, the City has determined that the contemplated use of the Equipment (as hereinafter defined) as well as the terms of this Agreement are consistent with encouraging development in the Reinvestment Zone in accordance with the purposes for its creation and are in compliance with Ordinance No. G -10-03-11-9C2 and the guidelines and criteria adopted by the City and all applicable laws; and WHEREAS, the Equipment constitutes a major investment within the Reinvestment Zone that will substantially increase the appraised value of the property within the Reinvestment Zone; and will contribute to the retention of primary and secondary employment within the City; and WHEREAS, the City finds that there will be no substantial adverse effects on the provision of governmental services or on its tax base and that the planned use of the Facility will not constitute a hazard to public safety, health, or welfare, NOW THEREFORE, the parties hereto do mutually agree as follows: 1. Authorization. This Agreement is authorized by the Tax Abatement Act, and by Resolution of the City Council of the City of Round Rock, Texas dated , 2010. PROPERTY TAX ABATEMENT AGREEMENT 1 CITY OF ROUND ROCK / TOPPAN PRINTING AMERICA, INC. 200035 2. Defmitions. As used in this Agreement, the following terms shall have the meanings set forth below: (a) "Abatement" means the full or partial exemption from ad valorem taxes of certain property in the Reinvestment Zone as more particularly set forth in Section 4. (b) "Abatement Period" means the period of time beginning with the Effective Date of Abatement and continuing until December 31 of the fifth year thereafter. (c) "Abatement Value" means the assessed value of the Eligible Property as determined annually by the WCAD on behalf of the City less the amount of the Base Year Value. (d) "Affiliate of TPA" means all companies under common control with, controlled by, or controlling TPA. For purposes of this definition, "control" means 51% or more of the ownership determined by either value or vote. (e) "Base Year Value" means the assessed value of the Eligible Property on January 1, 2011 (or on January 1 of the year of execution of this Agreement if determined to be otherwise required by applicable law), as such value is determined by the Williamson Central Appraisal District (the "WCAD") on behalf of the City. (f) "City Guidelines" means the Guidelines and Criteria for Granting Tax Abatement in Reinvestment Zones created in Round Rock, Texas. (g) "Effective Date of Abatement' means the period commencing January 1 of the year immediately following the installation of the Equipment (h) "Eligible Property" means the Equipment. (i) "Equipment" means the items listed in Exhibit B. (j) "Facility" means the building, or portion thereof, leased by TPA located at 400 Texas Avenue, Round Rock, Texas.. (k) "Ineligible Property" means any personal property that was located within the Facility at any time before the period covered by this Agreement. (1) "TPA Tract" means the two tracts of real property owned by Toppan Photomasks, Inc. located in the Reinvestment Zone and described as Block A, Lot 1 of the DPI Subdivision in Round Rock, Williamson County, Texas, and Block E, Lot 3, Crystal Park Subdivision, Round Rock, Williamson County, Texas. (m) "Recapture Liability" means the amount of ad valorem taxes that were abated as result of this Agreement that are subject to recapture by the City from TPA in the event of a TPA default as described in Section 9. PROPERTY TAX ABATEMENT AGREEMENT 2 CITY OF ROUND ROCK / TOPPAN PRINTING AMERICA, INC. 200035 (n) "Reinvestment Zone" means the reinvestment zone established on the day of , 2010, in Ordinance No. G-10- - - establishing Reinvestment Zone No. 19b. — — County, Texas. (o) "WCAD" means the Williamson Central Appraisal District of Williamson 3. Subject Property. During the Abatement Period, the Facility shall be used consistent with the general purpose of encouraging development or redevelopment within the Reinvestment Zone. The TPA Tract is not located in an improvement project financed by tax increment bonds and does not include any property that is owned or leased by a member of the City Council or by a member of the City Planning and Zoning Commission. 4. Grant of Abatement. Subject to the terms and conditions contained herein, and subject to the rights of the holders of any outstanding bonds of the City, the City hereby grants the Abatement on the Abatement Value of the Eligible Property located within the Facility as follows: (a) Year 1 (2012) 80% (b) Year 2 (2013) 80% (c) Year 3 (2114) 80% (d) Year 4 (2015) 80% (e) Year 5 (2016) 35% 5. Term of Abatement. TPA shall receive the Abatement commencing on the Effective Date of the Abatement and continuing for Abatement Period. 6. Taxable Property. During the Abatement Period, taxes shall be payable on the Eligible Property and the Ineligible Property located within the Reinvestment Zone as follows: (a) The value of the Ineligible Property as defined herein shall be fully taxable; and (b) The Base Year Value of the Eligible Property as determined by the WCAD shall be fully taxable. TPA agrees that regardless of anything contained herein to the contrary, during the Abatement Period, the value of the Equipment located thereon shall be no less than $4,000,000.00. 7. TPA's Development Covenants. In consideration of the City's agreement to enter into this Agreement, TPA represents that it intends to install the Equipment for the purpose of operating its manufacturing facility in the City and TPA acknowledges that the City's obligations hereunder are conditioned upon TPA's continued operation of said manufacturing facility throughout the term of this Agreement. In the event TPA fails to install the Equipment by PROPERTY TAX ABATEMENT AGREEMENT 3 CITY OF ROUND ROCK / TOPPAN PRINTING AMERICA, INC. 200035 April 1, 2011 (subject to delays caused by events of Force Majeure), the City may terminate this Agreement by giving TPA written notice of such termination. As additional consideration, TPA agrees and covenants to provide and/or retain at least the number of jobs within the Facility according to the following schedule: Date Retain New Total On April 1, 2011 0 9 9 On December 31, 2011 9 11 20 On December 31, 2012 20 11 31 On December 31,.2013 31 4 35 On December 31, 2014 35 0 35 On December 31, 2015 35 0 35 TPA agrees to provide to the City annual manpower reports on the form attached hereto as Exhibit C within sixty (60) days following the end of each calendar year during the Abatement Period. 8. Default. In the event that TPA (a) allows its ad valorem taxes to the City to become delinquent and fails to timely and properly follow the legal procedures for their protest and/or contest; or (b) violates any of the material terms and conditions of this Agreement, TPA shall be considered in default. In the event that TPA defaults under this Agreement, the City shall give TPA written notice specifying such default. If TPA has not cured the default within thirty (30) days after its receipt of such written notice, the City may pursue any of its remedies for the collection of delinquent property taxes as provided generally in the Tax Code. 9. Abatement Recapture. In the event the City terminates this Agreement as a result of TPA's default, the City may recapture and collect from TPA the Recapture Liability. TPA shall pay to the City the Recapture Liability within thirty (30) days after the date of termination, subject to any and all lawful offsets, settlements, deduction, or credits to which TPA may be entitled. Notwithstanding anything herein to the contrary, such Recapture Liability shall not exceed an amount equal to all taxes which were abated pursuant to this Agreement from the Effective Date of Abatement to the date of termination (together with interest thereon to be charged at the statutory rate for delinquent taxes as determined by Section 33.01 of the Property Tax Code of the State of Texas, but without the addition of a penalty). The City shall have all remedies for the collection of the Recapture Liability as provided generally in the Tax Code for the collection of delinquent property taxes. 10. Certification and Inspections. No later than April 15 of each year of the Abatement Period, TPA must certify in writing to the City that TPA is in compliance with each applicable term of this Agreement and the City Guidelines and, if not in compliance, the steps TPA intends to take to be in compliance or a statement from TPA explaining in reasonable detail why compliance cannot be achieved. TPA agrees that the WCAD and the City, their agents and employees, shall, upon reasonable notice, have reasonable right of access to the Facility in order to ensure that the installation of the Equipment in the Facility is in accordance with this Agreement and all applicable state and local laws and regulations or valid waiver thereof. All inspections will be made with one or more representatives of TPA and in accordance with TPA's security and safety requirements. At the time of annual certification, upon the City's written PROPERTY TAX ABATEMENT AGREEMENT 4 CITY OF ROUND ROCK / TOPPAN PRINTING AMERICA, INC. 200035 request, TPA shall also provide a calculation of the aggregate amount of economic benefit TPA has previously received pursuant to this Agreement and the Development Agreement. In order to efficiently administer the Abatement, TPA agrees also to provide annually, no later than April 15, a full asset listing of personal property located on the TPA Tract and in the Facility to the WCAD and such other information as may be reasonably necessary for the Abatement and assessment of the assets for tax purposes, including any information required by the City Guidelines. Each year the City will endeavor to send TPA a reminder of its obligation under this Section 10. However, the failure of the City to do shall not relieve TPA of its obligations hereunder. 11. Rendition of the Equipment. During the Abatement Period, TPA shall, in accordance with the deadlines set forth by law, timely submit to the WCAD, a personal property rendition. The personal property rendition shall include the year of acquisition, cost and description of the Equipment, as described in Exhibit B. TPA shall submit the foregoing personal property rendition forms to the WCAD, in the minimum amount necessary so that the taxable value of the Equipment prior to applying the abatement provided for herein, shall be no less than $4,000,000.00; provided however, that such minimum amount shall not be construed as determining the fair market value of the Equipment upon the expiration of this Agreement. 12. Annual Tax Application. It shall be the responsibility of TPA, pursuant to V.T.C.A., Tax Code, § 11.43, to file an annual exemption application form with the WCAD. The Chief Appraiser of the WCAD shall annually determine and record both the abated taxable value and the full taxable value of the Eligible Property in the appraisal records. The full taxable value figure listed in the appraisal record shall be used to compute the amount of abated taxes that are required to be recaptured and paid in the event this Agreement is terminated in a manner that results in recapture pursuant to Section 9. Each year TPA shall furnish the Chief Appraiser with such information outlined in V.T.C.A., Tax Code, Chapter 22, as may be necessary for the administration of the abatement specified herein. TPA shall be entitled to appeal any determination of the Chief Appraiser in accordance with the provisions of the Texas Tax Code. 13. Assignment. TPA may assign this Agreement to a new owner of the Equipment with the written consent of the City Council of the City, which consent shall not be unreasonably withheld, conditioned or delayed. An assignment to an Affiliate of TPA shall not require such written consent. Any assignment shall be in writing, and shall provide that the assignee shall irrevocably and unconditionally assume all the duties and obligations of the assignor upon the same terms and conditions as set out in this Agreement. 14. Notice. All notices and other communications hereunder shall be in writing (whether or not a writing is expressly required hereby), and shall be deemed to have been given and become effective (a) if given by either party or its counsel via an express mail service or via courier or via receipted facsimile transmission (but only if duplicate notice is also given via express mail service or via courier or via certified mail), then if and when delivered to and received (or refused) by the respective parties at the below addresses (or at such other address as a party may hereafter designate for itself by notice to the other party as required hereby), or (b) if PROPERTY TAX ABATEMENT AGREEMENT 5 CITY OF ROUND ROCK / TOPPAN PRINTING AMERICA, INC. 200035 sent via certified mail by either party or its counsel, then on the third business day following the date on which such communication is deposited in the United States mails, by first class certified mail, return receipt requested, postage prepaid, and addressed to the respective parties at the below addresses (or at such other address as a party may hereafter designate for itself by notice to the other party as required hereby). Any notice provided for under the terms of this Agreement by either party to the other shall be in writing and may be effected by registered or certified mail, return receipt requested. If to City: City of Round Rock 221 E. Main Street Round Rock, TX 78664 Attn: City Manager Phone: (512) 218-5400 Email: jnuse@round-rock.tx.us With a required copy to: Sheets & Crossfield 309 E. Main Street Round Rock, TX 78664 Attn: Stephan L. Sheets Phone: (512) 255-8877 Email: slsheets@sheets-crossfield.com If to TPA: Toppan Printing America, Inc. 131 Old Settlers Blvd. Round Rock, Texas 78664 Attn: Curt A. Jackson Phone: (512)310- (, I s Email: Curt.Jackson@photomask.com 15. Applicable Law. This Agreement is made and shall be construed and interpreted under the laws of the State of Texas and shall be performable in Williamson County, Texas. 16. No Liability. It is understood and agreed between the parties that TPA, in performing its obligations hereunder, is acting independently, and the City assumes no responsibility or liability to third parties in connection therewith. It is further understood and agreed among the parties that the City, in performing its obligations hereunder, is acting independently, and TPA assumes no responsibility or liability to third parties in connection therewith. 17. Estoppel Certificate. Any party hereto may request an estoppel certificate from another party hereto so long as the certificate is requested in connection with a bona fide business purpose. Each party agrees to promptly execute and deliver any estoppel certificate requested pursuant to this Section 17. The certificate, which will upon request be addressed to TPA, or a lessee, purchaser or assignee of TPA, shall include, but not necessarily be limited to, statements (qualified to the best knowledge of the party providing the estoppel) that this PROPERTY TAX ABATEMENT AGREEMENT 6 CITY OF ROUND ROCK / TOPPAN PRINTING AMERICA, INC. 200035 Agreement is in full force and effect without default (or if a default exists, the nature of such default and any curative action which should be undertaken to cure same), the remaining term of this Agreement, and such other matters reasonably requested by the party(ies) to receive the certificate. 18. Legal Construction. In case any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision thereof and this Agreement shall be considered as if such invalid, illegal or unenforceable provision had never been contained in this Agreement. 19. Force Majeure. Whenever a period of time is prescribed for the taking of an action by TPA, the period of time for the performance of such action shall be extended by the number of days that the performance is actually delayed due to strikes, acts of God, shortages of labor or materials, war, terrorist attacks (including bio -chemical attacks), civil disturbances and other causes beyond the reasonable control of TPA However, events of Force Majeure shall not extend any period of time for the payment of sums payable by TPA. 20. Entire Agreement. This Agreement embodies the complete agreement of the parties hereto, superseding all oral or written previous and contemporary agreements between the parties and relating to matters in this Agreement, and except as otherwise provided herein cannot be modified, amended, altered or revoked without written agreement of the parties hereto. 21. Recordation of Agreement. A certified copy of this Agreement, or a memorandum summarizing this Agreement, in recordable form may be recorded in the Deed of Records of Williamson County, Texas. 22. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. 23. Authority. The individuals executing this Agreement on behalf of the respective parties hereto represent to each other and to others that all appropriate and necessary action has been taken to authorize the individual who is executing this Agreement to do so for and on behalf of the party for which his or her signature appears, that there are no other parties or entities required to execute this Agreement in order for the same to be an authorized and binding agreement on the party for whom the individual is signing this Agreement and that each individual affixing his or her signature hereto is authorized to do so, and such authorization is valid and effective on the date hereof. 24. Multiple Counterparts. This Agreement may be executed in a number of identical counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one and the same instrument. 25. Time of Essence. Time is of the essence in this Agreement. 26. Joint Drafting. The parties agree this Agreement has been drafted jointly by the parties and their legal representatives. PROPERTY TAX ABATEMENT AGREEMENT 7 CITY OF ROUND ROCK / TOPPAN PRINTING AMERICA, INC. 200035 27. Exhibits. All exhibits to this Agreement are incorporated herein by reference for all purposes wherever reference is made to the same. IN WITNESS WHEREOF, the parties have executed this Agreement and caused this Agreement to be effective on the latest date as reflected by the signatures below (the "Effective Date"). THE CITY OF ROUND ROCK, TEXAS, a Texas municipal corporation By: Alan McGraw , Mayor Date: Attest: Sara White, City Secretary VED AS TO FIRM: L. Sheets, City Attorney Toppan Printing America, Inc. a Texas corporation By: C., -t 1)-T ,(printed name) lrfec r -v - , (title) Date: Augur H 2010 PROPERTY TAX ABATEMENT AGREEMENT 8 CITY OF ROUND ROCK / TOPPAN PRINTING AMERICA, INC. 200035 Acknowledgment State of Texas County of Williamson This instrument was acknowledged before me on this the day of 2010 by Alan McGraw, as Mayor of the City of Round Rock, Texas. State of Texas County of Williamson Acknowledgment Notary Public, State of Texas Thi instrument was acknowledged before me on this the iffit day of 44 &-a 5r 2010 by (JL(k i A 7A-CKW of Toppan Printing America, Inc. ,,am,,, C. D. SCHEMER -A Notary Public, State of Texas 1 . My Commission Expires vv. fri;; �r *mo April 08, 2014 *Immo kitediv Notary Public, State of Texas PROPERTY TAX ABATEMENT AGREEMENT 9 CITY OF ROUND ROCK / TOPPAN PRINTING AMERICA, INC. 200035 EXHIBIT A (Aerial photo or sketch of Facility) PROPERTY TAX ABATEMENT AGREEMENT 10 CITY OF ROUND ROCK / TOPPAN PRINTING AMERICA, INC. 200035 r r s. ■ Exhibit B. Description of Equipment Summary of tools, and support equipment for the eCover Production Line Project: 1) Incoming Inspection Module 2) Electronics Implantation Unit 3) Substrate Laminator 4) Cover Mounter 5) Cutting Module 6) Quality Assessment Tooling Total value of equipment to be purchased is expected to be app. $8M USD. Exhibit C. Manpower Report Local Transfer Total Est Salaries 4/1/2011 6 3 9 $47K avg hrly, $90K mgr/sup. 12/31/2011 19 1 20 $47K avg hrly, $90K mgr/sup. 12/31/2012 30 1 31 $47K avg hrly, $90K mgr/sup. 12/31/2013 34 1 35 $47K avg hrly, $90K mgr/sup. 12/31/2014 35 0 35 $47K avg hrly, $90K mgr/sup. 12/31/2015 35 0 35 $47K avg hrly, $90K mgr/sup. ROUND ROCK, TEXAS PURPOSE. PASSION. PROSPERITY Agenda Item No. 10C1. Ci Council A:enda Summar Sheet Consider a resolution authorizing the Mayor to execute a Property Tax Abatement Agenda Caption: Agreement with Toppan Printing America, Inc. Meeting Date: August 26, 2010 Department: Administration Staff Person making presentation: Cindy Demers Assistant City Manager Item Summary: Toppan Printing America, Inc has submitted a tax abatement application to the City of Round Rock for partial exemption of ad valorem taxes for property located in Reinvestment Zone No. 19B which was created by the City Council. Toppan intends to purchase equipment for its eCover Production Line Project and will retain and create new jobs due to the new project, therefore resulting in new economic development in the City. The abatement would be for five years with an 80% abatement for the first four (4) years and a 35% abatement for the fifth (5) and final year. This tax abatement agreement would expire December 31, 2016. Strategic Plan Relevance: Economic Vitality Cost: N/A Source of Funds: N/A Date of Public Hearing (if required): N/A Recommended Action: Approval EXECUTED DOCUMENT FOLLOWS PROPERTY TAX ABATEMENT AGREEMENT This Property Tax Abatement Agreement (this "Agreement") is entered into by and between the City of Round Rock, Texas (the "City"), a Texas home rule municipal corporation, and Toppan Printing America, Inc., a Texas corporation ("TPA"). RECITALS WHEREAS, TPA has or will lease space in a building located at 400 Texas Avenue, Round Rock, Texas, as shown on the attached Exhibit A, (the "Facility"), and desires to purchase equipment for its eCover Production Line Project, as described in Exhibit B (the "Equipment"); and WHEREAS, by entering into this Agreement, TPA confirms its intent to purchase the Equipment thereby resulting in new economic development in City; and WHEREAS, on the 210 day of August, 2010, the City Council, of the City of Round Rock, Texas, adopted Ordinance No. G-10-026- t1GI establishing Reinvestment Zone No. 1616 (the "Reinvestment Zone") City of Round Rock, Texas for commercial/industrial tax abatement, hereinafter referred to as "Ordinance No. G-10-oa-26- 141", as authorized by the Texas Property Redevelopment and Tax Abatement Act, Chapter 312, Tax Code, V.A.T.S. as amended (the "Tax Abatement Act") ; and WHEREAS, the Facility and Equipment are or will be located within the Reinvestment Zone; and WHEREAS, the City has adopted Ordinance No. G -10-03-11-9C2, which Ordinance adopted appropriate guidelines and criteria governing reinvestment zones and tax abatement agreements to be entered into by the City as contemplated by the Tax Abatement Act; and WHEREAS, the City has determined that the contemplated use of the Equipment (as hereinafter defined) as well as the terms of this Agreement are consistent with encouraging development in the Reinvestment Zone in accordance with the purposes for its creation and are in compliance with Ordinance No. G -10-03-11-9C2 and the guidelines and criteria adopted by the City and all applicable laws; and WHEREAS, the Equipment constitutes a major investment within the Reinvestment Zone that will substantially increase the appraised value of the property within the Reinvestment Zone; and will contribute to the retention of primary and secondary employment within the City; and WHEREAS, the City finds that there will be no substantial adverse effects on the provision of governmental services or on its tax base and that the planned use of the Facility will not constitute a hazard to public safety, health, or welfare, NOW THEREFORE, the parties hereto do mutually agree as follows: 1. Authorization. This Agreement is authorized by the Tax Abatement Act, and by Resolution of the City Council of the City of Round Rock, Texas dated , 2010. PROPERTY TAX ABATEMENT AGREEMENT 200035 1 CITY OF ROUND ROCK / TOPPAN PRINTING AMERICA, INC. 2. Definitions. As used in this Agreement, the following terms shall have the meanings set forth below: (a) "Abatement" means the full or partial exemption from ad valorem taxes of certain property in the Reinvestment Zone as more particularly set forth in Section 4. (b) "Abatement Period" means the period of time beginning with the Effective Date of Abatement and continuing until December 31 of the fifth year thereafter. (c) "Abatement Value" means the assessed value of the Eligible Property as determined annually by the WCAD on behalf of the City less the amount of the Base Year Value. (d) "Affiliate of TPA" means all companies under common control with, controlled by, or controlling TPA. For purposes of this definition, "control" means 51% or more of the ownership determined by either value or vote. (e) "Base Year Value" means the assessed value of the Eligible Property on January 1, 2011 (or on January 1 of the year of execution of this Agreement if determined to be otherwise required by applicable law), as such value is determined by the Williamson Central Appraisal District (the "WCAD") on behalf of the City. (f) "City Guidelines" means the Guidelines and Criteria for Granting Tax Abatement in Reinvestment Zones created in Round Rock, Texas. (g) "Effective Date of Abatement" means the period commencing January 1 of the year immediately following the installation of the Equipment (h) "Eligible Property" means the Equipment. (i) "Equipment" means the items listed in Exhibit B. (j) "Facility" means the building, or portion thereof, leased by TPA located at 400 Texas Avenue, Round Rock, Texas.. (k) "Ineligible Property" means any personal property that was located within the Facility at any time before the period covered by this Agreement. (1) "TPA Tract" means the two tracts of real property owned by Toppan Photomasks, Inc. located in the Reinvestment Zone and described as Block A, Lot 1 of the DPI Subdivision in Round Rock, Williamson County, Texas, and Block E, Lot 3, Crystal Park Subdivision, Round Rock, Williamson County, Texas. (m) "Recapture Liability" means the amount of ad valorem taxes that were abated as result of this Agreement that are subject to recapture by the City from TPA in the event of a TPA default as described in Section 9. PROPERTY TAX ABATEMENT AGREEMENT 2 CITY OF ROUND ROCK / TOPPAN PRINTING AMERICA, INC. 200035 day of , 2010, in Ordinance No. G-10- - - establishing Reinvestment Zone No. 19b. — — (n) "Reinvestment Zone" means the reinvestment zone established on the County, Texas. (o) "WCAD" means the Williamson Central Appraisal District of Williamson 3. Subject Property. During the Abatement Period, the Facility shall be used consistent with the general purpose of encouraging development or redevelopment within the Reinvestment Zone. The TPA Tract is not located in an improvement project financed by tax increment bonds and does not include any property that is owned or leased by a member of the City Council or by a member of the City Planning and Zoning Commission. 4. Grant of Abatement. Subject to the terms and conditions contained herein, and subject to the rights of the holders of any outstanding bonds of the City, the City hereby grants the Abatement on the Abatement Value of the Eligible Property located within the Facility as follows: (a) Year 1 (2012) 80% (b) Year 2 (2013) 80% (c) Year 3 (2114) 80% (d) Year 4 (2015) 80% (e) Year 5 (2016) 35% 5. Term of Abatement. TPA shall receive the Abatement commencing on the Effective Date of the Abatement and continuing for Abatement Period. 6. Taxable Property. During the Abatement Period, taxes shall be payable on the Eligible Property and the Ineligible Property located within the Reinvestment Zone as follows: (a) The value of the Ineligible Property as defined herein shall be fully taxable; and (b) The Base Year Value of the Eligible Property as determined by the WCAD shall be fully taxable. TPA agrees that regardless of anything contained herein to the contrary, during the Abatement Period, the value of the Equipment located thereon shall be no less than $4,000,000.00. 7. TPA's Development Covenants. In consideration of the City's agreement to enter into this Agreement, TPA represents that it intends to install the Equipment for the purpose of operating its manufacturing facility in the City and TPA acknowledges that the City's obligations hereunder are conditioned upon TPA's continued operation of said manufacturing facility throughout the term of this Agreement. In the event TPA fails to install the Equipment by PROPERTY TAX ABATEMENT AGREEMENT 3 CITY OF ROUND ROCK / TOPPAN PRINTING AMERICA, INC. 200035 April 1, 2011 (subject to delays caused by events of Force Majeure), the City may terminate this Agreement by giving TPA written notice of such termination. As additional consideration, TPA agrees and covenants to provide and/or retain at least the number of jobs within the Facility according to the following schedule: Date Retain New Total On April 1, 2011 0 9 9 On December 31, 2011 9 11 20 On December 31, 2012 20 11 31 On December 31,.2013 31 4 35 On December 31, 2014 35 0 35 On December 31, 2015 35 0 35 TPA agrees to provide to the City annual manpower reports on the form attached hereto as Exhibit C within sixty (60) days following the end of each calendar year during the Abatement Period. 8. Default. In the event that TPA (a) allows its ad valorem taxes to the City to become delinquent and fails to timely and properly follow the legal procedures for their protest and/or contest; or (b) violates any of the material terms and conditions of this Agreement, TPA shall be considered in default. In the event that TPA defaults under this Agreement, the City shall give TPA written notice specifying such default. If TPA has not cured the default within thirty (30) days after its receipt of such written notice, the City may pursue any of its remedies for the collection of delinquent property taxes as provided generally in the Tax Code. 9. Abatement Recapture. In the event the City terminates this Agreement as a result of TPA's default, the City may recapture and collect from TPA the Recapture Liability. TPA shall pay to the City the Recapture Liability within thirty (30) days after the date of termination, subject to any and all lawful offsets, settlements, deduction, or credits to which TPA may be entitled. Notwithstanding anything herein to the contrary, such Recapture Liability shall not exceed an amount equal to all taxes which were abated pursuant to this Agreement from the Effective Date of Abatement to the date of termination (together with interest thereon to be charged at the statutory rate for delinquent taxes as determined by Section 33.01 of the Property Tax Code of the State of Texas, but without the addition of a penalty). The City shall have all remedies for the collection of the Recapture Liability as provided generally in the Tax Code for the collection of delinquent property taxes. 10. Certification and Inspections. No later than April 15 of each year of the Abatement Period, TPA must certify in writing to the City that TPA is in compliance with each applicable term of this Agreement and the City Guidelines and, if not in compliance, the steps TPA intends to take to be in compliance or a statement from TPA explaining in reasonable detail why compliance cannot be achieved. TPA agrees that the WCAD and the City, their agents and employees, shall, upon reasonable notice, have reasonable right of access to the Facility in order to ensure that the installation of the Equipment in the Facility is in accordance with this Agreement and all applicable state and local laws and regulations or valid waiver thereof. All inspections will be made with one or more representatives of TPA and in accordance with TPA's security and safety requirements. At the time of annual certification, upon the City's written PROPERTY TAX ABATEMENT AGREEMENT 200035 4 CITY OF ROUND ROCK / TOPPAN PRINTING AMERICA, INC. request, TPA shall also provide a calculation of the aggregate amount of economic benefit TPA has previously received pursuant to this Agreement and the Development Agreement. In order to efficiently administer the Abatement, TPA agrees also to provide annually, no later than April 15, a full asset listing of personal property located on the TPA Tract and in the Facility to the WCAD and such other information as may be reasonably necessary for the Abatement and assessment of the assets for tax purposes, including any information required by the City Guidelines. Each year the City will endeavor to send TPA a reminder of its obligation under this Section 10. However, the failure of the City to do shall not relieve TPA of its obligations hereunder. 11. Rendition of the Equipment. During the Abatement Period, TPA shall, in accordance with the deadlines set forth by law, timely submit to the WCAD, a personal property rendition. The personal property rendition shall include the year of acquisition, cost and description of the Equipment, as described in Exhibit B. TPA shall submit the foregoing personal property rendition forms to the WCAD, in the minimum amount necessary so that the taxable value of the Equipment prior to applying the abatement provided for herein, shall be no less than $4,000,000.00; provided however, that such minimum amount shall not be construed as determining the fair market value of the Equipment upon the expiration of this Agreement. 12. Annual Tax Application. It shall be the responsibility of TPA, pursuant to V.T.C.A., Tax Code, § 11.43, to file an annual exemption application form with the WCAD. The Chief Appraiser of the WCAD shall annually determine and record both the abated taxable value and the full taxable value of the Eligible Property in the appraisal records. The full taxable value figure listed in the appraisal record shall be used to compute the amount of abated taxes that are required to be recaptured and paid in the event this Agreement is terminated in a manner that results in recapture pursuant to Section 9. Each year TPA shall furnish the Chief Appraiser with such information outlined in V.T.C.A., Tax Code, Chapter 22, as may be necessary for the administration of the abatement specified herein. TPA shall be entitled to appeal any determination of the Chief Appraiser in accordance with the provisions of the Texas Tax Code. 13. Assignment. TPA may assign this Agreement to a new owner of the Equipment with the written consent of the City Council of the City, which consent shall not be unreasonably withheld, conditioned or delayed. An assignment to an Affiliate of TPA shall not require such written consent. Any assignment shall be in writing, and shall provide that the assignee shall irrevocably and unconditionally assume all the duties and obligations of the assignor upon the same terms and conditions as set out in this Agreement. 14. Notice. All notices and other communications hereunder shall be in writing (whether or not a writing is expressly required hereby), and shall be deemed to have been given and become effective (a) if given by either party or its counsel via an express mail service or via courier or via receipted facsimile transmission (but only if duplicate notice is also given via express mail service or via courier or via certified mail), then if and when delivered to and received (or refused) by the respective parties at the below addresses (or at such other address as a party may hereafter designate for itself by notice to the other party as required hereby), or (b) if PROPERTY TAX ABATEMENT AGREEMENT 5 CITY OF ROUND ROCK / TOPPAN PRINTING AMERICA, INC. 200035 sent via certified mail by either party or its counsel, then on the third business day following the date on which such communication is deposited in the United States mails, by first class certified mail, return receipt requested, postage prepaid, and addressed to the respective parties at the below addresses (or at such other address as a party may hereafter designate for itself by notice to the other party as required hereby). Any notice provided for under the terms of this Agreement by either party to the other shall be in writing and may be effected by registered or certified mail, return receipt requested. If to City: City of Round Rock 221 E. Main Street Round Rock, TX 78664 Attn: City Manager Phone: (512) 218-5400 Email: jnuse@round-rock.tx.us With a required copy to: Sheets & Crossfield 309 E. Main Street Round Rock, TX 78664 Attn: Stephan L. Sheets Phone: (512) 255-8877 Email: slsheets@sheets-crossfield.com If to TPA: Toppan Printing America, Inc. 131 Old Settlers Blvd. Round Rock, Texas 78664 Attn: Curt A. Jackson Phone: (512) 310- &Lc j Email: Curt.Jackson@photomask.com 15. Applicable Law. This Agreement is made and shall be construed and interpreted under the laws of the State of Texas and shall be performable in Williamson County, Texas. 16. No Liability. It is understood and agreed between the parties that TPA, in performing its obligations hereunder, is acting independently, and the City assumes no responsibility or liability to third parties in connection therewith. It is further understood and agreed among the parties that the City, in performing its obligations hereunder, is acting independently, and TPA assumes no responsibility or liability to third parties in connection therewith. 17. Estoppel Certificate. Any party hereto may request an estoppel certificate from another party hereto so long as the certificate is requested in connection with a bona fide business purpose. Each party agrees to promptly execute and deliver any estoppel certificate requested pursuant to this Section 17. The certificate, which will upon request be addressed to TPA, or a lessee, purchaser or assignee of TPA, shall include, but not necessarily be limited to, statements (qualified to the best knowledge of the party providing the estoppel) that this PROPERTY TAX ABATEMENT AGREEMENT 6 CITY OF ROUND ROCK / TOPPAN PRINTING AMERICA, INC. 200035 Agreement is in full force and effect without default (or if a default exists, the nature of such default and any curative action which should be undertaken to cure same), the remaining term of this Agreement, and such other matters reasonably requested by the party(ies) to receive the certificate. 18. Legal Construction. In case any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision thereof and this Agreement shall be considered as if such invalid, illegal or unenforceable provision had never been contained in this Agreement. 19. Force Majeure. Whenever a period of time is prescribed for the taking of an action by TPA, the period of time for the performance of such action shall be extended by the number of days that the performance is actually delayed due to strikes, acts of God, shortages of labor or materials, war, terrorist attacks (including bio -chemical attacks), civil disturbances and other causes beyond the reasonable control of TPA However, events of Force Majeure shall not extend any period of time for the payment of sums payable by TPA. 20. Entire Agreement. This Agreement embodies the complete agreement of the parties hereto, superseding all oral or written previous and contemporary agreements between the parties and relating to matters in this Agreement, and except as otherwise provided herein cannot be modified, amended, altered or revoked without written agreement of the parties hereto. 21. Recordation of Agreement. A certified copy of this Agreement, or a memorandum summarizing this Agreement, in recordable form may be recorded in the Deed of Records of Williamson County, Texas. 22. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. 23. Authority. The individuals executing this Agreement on behalf of the respective parties hereto represent to each other and to others that all appropriate and necessary action has been taken to authorize the individual who is executing this Agreement to do so for and on behalf of the party for which his or her signature appears, that there are no other parties or entities required to execute this Agreement in order for the same to be an authorized and binding agreement on the party for whom the individual is signing this Agreement and that each individual affixing his or her signature hereto is authorized to do so, and such authorization is valid and effective on the date hereof 24. Multiple Counterparts. This Agreement may be executed in a number of identical counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one and the same instrument. 25. Time of Essence. Time is of the essence in this Agreement. 26. Joint Drafting. The parties agree this Agreement has been drafted jointly by the parties and their legal representatives. PROPERTY TAX ABATEMENT AGREEMENT 7 CITY OF ROUND ROCK / TOPPAN PRINTING AMERICA, INC. 200035 27. Exhibits. All exhibits to this all purposes wherever reference is made to IN WITNESS WHEREOF, the parties have to be effective on the latest date as reflected Attest: 9/4114,,keivte Agreement are incorporated herein by reference for the same. executed this Agreement and caused this Agreement by the signatures below (the "Effective Date"). THE CITY OF ROUND ROCK, TEXAS, a Texas municipal corporation By: (JA Alan McGraw , Mayor Date: >�� 76 2111 D Sara White, City Secretary APP OVED AS TO FARM: Stepha L. Sheets, City Attorney PROPERTY TAX ABATEMENT AGREEMENT 200035 Toppan Printing America, Inc. a Texas corporation By: Com, f /1. ,(printed name) �'✓ e� Fir- , (title) Date: �}uu s+ JO, 200 ! a 8 CITY OF ROUND ROCK/ TOPPAN PRINTING AMERICA, INC. Acknowledgment State of Texas County of Williamson This instrument was acknowledged before me on this the(/`' day of 2010 by Alan McGraw, as Mayor of the City of Round Rock, Texas. ,,,,,,,, . MONIQUE G. ADAMS ri MY COMMISSION EXPIRES September 18, 2011 .GM 14611tNotaryic, e of Texas Acknowledgment State of Texas County of Williamson This instrument was acknowledged before me on this the / /7Aday of AL(G-ic S t 2010 by -1,«T A . ;7/1 -CK CA] of Toppan Printing America, Inc. i e,o��'n','r'V ,� C. D. SCHEDLER =( "__ Notary Public, State of Texas •• My Commission Expires ��' AprII 08, 2014 PROPERTY TAX ABATEMENT AGREEMENT 200035 1 kiud)L Notary Public, State of Texas 9 CITY OF ROUND ROCK / TOPPAN PRINTING AMERICA, INC. PROPERTY TAX ABATEMENT AGREEMENT 200035 EXHIBIT A (Aerial photo or sketch of Facility) 10 CITY OF ROUND ROCK / TOPPAN PRINTING AMERICA, INC. Toppan Photomasks, Inc. MEMO% ®R OR W*E 0 300 600 Feet Exhibit B. Description of Equipment Summary of tools, and support equipment for the eCover Production Line Project: 1) Incoming Inspection Module 2) Electronics Implantation Unit 3) Substrate Laminator 4) Cover Mounter 5) Cutting Module 6) Quality Assessment Tooling Total value of equipment to be purchased is expected to be app. $8M USD. Exhibit C. Manpower Report Local Transfer Total Est Salaries 4/1/2011 6 3 9 $47K avg hrly, $90K mgr/sup. 12/31/2011 19 1 20 $47K avg hrly, $90K mgr/sup. 12/31/2012 30 1 31 $47K avg hrly, $90K mgr/sup. 12/31/2013 34 1 35 $47K avg hrly, $90K mgr/sup. 12/31/2014 35 0 35 $47K avg hrly, $90K mgr/sup. 12/31/2015 35 0 35 $47K avg hrly, $90K mgr/sup.