Loading...
R-11-02-10-11C3 - 2/10/2011RESOLUTION NO. R -11-02-10-11C3 WHEREAS, the City of Round Rock ("City") has established an Economic Development Program to encourage Flix Brewhouse, LLC ("Flix") to locate a combination six screen first run cinema and restaurant ("Cinema/Restaurant") in the City of Round Rock on Lot 4A, Hesters Crossing Shopping Center, and WHEREAS, to further promote economic development, the City wishes to enter into an Economic Development Program Agreement ("Agreement") with Flix regarding Flix's construction, development and operation of a Cinema/Restaurant in the City of Round Rock, 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, an Economic Development Program Agreement with Flix Brewhouse, LLC, a copy of same being attached hereto as Exhibit "A" and incorporated herein for all purposes. 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 RESOLVED this 10th day of February, 2011. ALAN MCGRAW, Mayor City of Round Rock, Texas ATTEST: SARA L. WHITE, City Secretary O:\wdox\SCClnts\0112\ 1104\MUNICIPAL\002I3389.1DOC/rmc EXHIBIT nAn ECONOMIC DEVELOPMENT PROGRAM AGREEMENT This Economic Development Program Agreement ("Agreement") is entered into this day of , 2011, by and between the City of Round Rock, Texas, a Texas home rule municipal corporation ("City"), and Flix Brewhouse, LLC, a Texas limited liability company ("Flix"). WHEREAS, the City has adopted (a) Resolution No. , attached as Exhibit A-1 ("Program Resolution"), establishing an economic development program and Resolution No. , attached hereto as Exhibit A-2 (the "Authorizing Resolution"), authorizing the Mayor to enter into this Agreement with Flix in recognition of the positive economic benefits to the City through Flix's development on Lot 4A, Hesters Crossing Shopping Center, (the "Property") of a combination six screen first run cinema and restaurant containing approximately thirty-one thousand five hundred (31,500) square feet as set forth on the Site Plan described in the attached Exhibit B (the "Cinema/Restaurant") (the Program Resolution and the Authorizing Resolution being collectively referred to herein as the "City Resolutions"); and WHEREAS, the purpose of this Agreement is to promote economic development as contemplated by Chapter 380 of the Texas Local Government Code whereby Flix intends to construct, develop and operate the Cinema/Restaurant, or cause the Cinema/Restaurant to be operated, in conformance with the City's development approvals for the Cinema/Restaurant, and; WHEREAS, the City agrees to provide performance based economic development grants to Flix to defray a portion of the Cinema/Restaurant's costs. NOW, THEREFORE, in consideration of the mutual benefits and promises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the City and Flix agree as follows: 1. Authority. The City's execution of this Agreement is authorized by Chapter 380 of the Texas Local Government Code and the City Resolutions, and constitute a valid and binding obligation of the City in the event Flix proceeds with the development of the Property. The City acknowledges that Flix is acting in reliance upon the City's performance of its obligations under this Agreement in making its decision to commit substantial resources and money to develop the Property. 2. Definitions. 2.1 "Cinema/Restaurant" means Flix's planned development of the Property which shall consist of a combination six screen first run cinema and restaurant containing approximately thirty-one thousand five hundred (31,500) square feet. 2.2 "Economic Incentive Payment(s)" ("EIPs") means payments of the amount required to be paid by the City to Flix under the Program and this Agreement. 2.3 "Effective Date" is the date this Agreement is executed to be effective by the City and Flix. ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 00211996.DOC 1 CITY OF ROUND ROCK / FLU{ BREWHOUSE LLC. 2.4 "Program" means the economic development program established by the City pursuant to Chapter 380 of the Texas Local Government Code and under the City Resolution to promote local economic development and stimulate business and commercial activity within the 3. Term. This Agreement shall become enforceable upon its Effective Date. This Agreement shall terminate five (5) years after the Cinema/Restaurant first opens for business. 4. Rights and Obligations of Flix. In consideration of the City's compliance with this Agreement, Flix agrees as follows: 4.1 Compliance with Development Regulations and Other Ordinances. In consideration of the City's agreement to enter into this Agreement, Flix represents that it intends to construct and/or install the improvements and personal property for the purpose of opening and operating Cinema/Restaurant, and Flix acknowledges that the City's obligations hereunder are conditioned upon Flix's construction of the Cinema/Restaurant. In the event that Flix fails to substantially complete the Cinema/Restaurant and open for business on or before September 1, 2011 (subject to delays caused by events of Force Majeure), the City may terminate this Agreement by giving Flix written notice of such termination prior to the date Flix opens the Cinema for business. As additional consideration, Flix agrees and covenants to provide and/or retain at least the number of jobs within the Cinama/Restaurant according to the following schedule: Date Retain New Total On September 1, 2011 0 85 85 On December 31, 2011 85 0 85 On December 31,.2012 85 4 89 On December 31, 2013 89 0 89 On December 31, 2014 89 0 89 On December 31, 2015 89 0 89 On December 31, 2016 89 0 89 Flix agrees to provide to the City annual manpower reports on the form attached hereto as Exhibit C on September 1, 2011 and within sixty (60) days following the end of each calendar year as set forth above. 4.2 Duration of Business. Flix shall keep the Cinema/Restaurant open for business at least five (5) years from the date it first opens. 5. Rights and Obligations of the City. In consideration of Flix's compliance with this Agreement, the City agrees as follows: 5.1 Economic Incentive Payments. 5.1.1 City Payments. City shall pursuant to Chapter 380 of the Texas Local Government Code, but subject to the conditions set out here, make EIPs to Flix as follows: ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 00211996.DOC 2 CITY OF ROUND ROCK / FLIX BREWHOUSE LLC. (a) $12,000 on or before 60 days following the date the Cinema/Restaurant opens for business; (b) $6,000 on or before one year following the date the Cinema/Restaurant opens for business; and (c) $3,000 on or before two years following the date the Cinema/Restaurant opens for business.. 5.1.2 Payments Subject to Future Appropriations. This Agreement shall not be construed as a commitment, issue or obligation of any specific taxes or tax revenues for payment to Flix. All payments by the City under this Agreement are subject to the City's appropriation of funds for such payments in the budget year for which they are made. The payments to be made to Flix, if paid, shall be made solely from annual appropriations from the general funds of the City or from such other funds of the City as may be legally set aside for the implementation of Article III, Section 52a of the Texas Constitution or Chapter 380 of the Local Government Code or any other economic development or financing program authorized by statute or home rule powers of the City under applicable Texas law, subject to any applicable limitations or procedural requirements. In the event that the City does not appropriate funds in any fiscal year for payments due under this Agreement, such failure shall not be considered a default under Section 6.3, and the City shall not be liable to Flix for such payments otherwise due during such fiscal year; however, the term of this Agreement shall be extended one (1) year for each year the City fails to appropriate funds for payments otherwise due under this Agreement. Flix shall also have the right but not the obligation to rescind this Agreement. To the extent there is a conflict between this paragraph and any other language or covenant in this Agreement, this paragraph shall control. 5.1.3 Permitting. The City shall cooperate with Flix to expeditiously process all City permit applications and City inspections. 6. Miscellaneous. 6.1 Mutual Assistance. The City and Flix will do all things reasonably necessary or appropriate to carry out the terms and provisions of this Agreement, and to aid and assist each other in carrying out such terms and provisions in order to put each other in the same economic condition contemplated by this Agreement regardless of any changes in public policy, the law, or taxes or assessments attributable to the Property. 6.2 Representations and Warranties. The City represents and warrants to Flix that the Program and this Agreement are within its authority, and that it is duly authorized and empowered to establish the Program and enter into this Agreement, unless otherwise ordered by a court of competent jurisdiction. Flix represents and warrants to the City that it has the requisite authority to enter into this Agreement. 6.3 Default and Remedies. If either the City or Flix should default in the performance of any obligations of this Agreement, the other party shall provide such defaulting party written notice of the default, and a minimum period of thirty (30) days to cure such default, ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 00211996.DOC 3 CITY OF ROUND ROCK / FLIX BREWHOUSE LLC. prior to instituting an action for breach or pursuing any other remedy for default. If the City remains in default after notice and opportunity to cure, Flix shall have the right to pursue any remedy at law or in equity for the City's breach. If Flix remains in default after notice and opportunity to cure, the City's remedy shall initially be limited to suspension of the EIPs that accrue after the date of such default until such default is cured. After any such default is cured, the City shall promptly forward any such suspended payment to Flix. If Flix's default is not cured within sixty (60) days after Flix's receipt of a second notice of default from the City that clearly and conspicuously indicates the City's intention to terminate this Agreement, the City may terminate this Agreement by giving Flix written notice of such termination prior to the date Flix cures such default. In the event the City terminates this Agreement as a result of Flix's default, the City may recapture and collect from Flix the EIP's paid a result of this Agreement (the "Recapture Liability"). Flix shall pay to the City the Recapture Liability within thirty (30) days after the date of termination. Notwithstanding anything herein to the contrary, such Recapture Liability shall not exceed an amount equal to all EIP's which were paid pursuant to this Agreement. 6.4 Attorney's Fees. In the event any legal action or proceeding is commenced between the City and Flix to enforce provisions of this Agreement and recover damages for breach, the prevailing party in such legal action shall be entitled to recover its reasonable attorney's fees and expenses incurred by reason of such action, to the extent allowed by law. 6.5 Entire Agreement. This Agreement contains the entire agreement between the parties. This Agreement may only be amended, altered or revoked by written instrument signed by the City and Flix. 6.6 Binding Effect. This Agreement shall be binding on and inure to the benefit of the parties, their respective successors and assigns. 6.7 Assignment. Flix may not assign all or part of its rights and obligations to a third party without the express written consent of the City (which consent shall not be unreasonably withheld, conditioned or denied). 6.8 Amendment. This Agreement may be amended by the mutual written agreement of the parties. 6.9 Termination. In the event Flix elects not to proceed with the Cinema/Restaurant as contemplated by this Agreement, Flix shall notify the City in writing of such election, and this Agreement and the obligations on the part of both parties shall thereafter be deemed terminated and of no further force or effect. Notwithstanding the above, in the event Flix does not substantially complete the construction of the Cinema/Restaurant and open for the business by September 1, 2011 (subject to delays caused by an event of force majuere), the City may terminate this Agreement by giving Flix notice thereof prior to the date the Cinema/Restaurant is opened for business. 6.10 Notice. Any notice and or statement required and permitted to be delivered shall be deemed delivered by actual delivery, facsimile with receipt of confirmation, or by depositing ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 00211996.DOC 4 CITY OF ROUND ROCK / FLIx BREWHOUSE LLC. the same in the United States mail, certified with return receipt requested, postage prepaid, addressed to the appropriate party at the following addresses: If to City: City of Round Rock 221 E. Main Street Round Rock, TX 78664 Attn: City Manager Phone: (512) 218-5400 Fax: (512) 218-7097 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 Flix: Flix Brewhouse LLC 2000 S. IH 35, Suite Q11 Round Rock, Texas 78681 Attn: Allan L. Reagan, Managing Director Phone: (512)238-0938 Email: allan.reagan@flixbrewhouse.com flixbrewhouse.com party. With a required copy to: John Gangstad Bickerstaff Heath Delgado Acosta LLP 3711 S. MoPac Expy. Building 1, Suite 300 Austin, Texas 78746 Phone: (512)472-8021 Email: jgangstad@bickerstaff.com Either party may designate a different address at any time upon written notice to the other 6.11 Interpretation. Each of the parties have been represented by counsel of their choosing in the negotiation and preparation of this Agreement. Regardless of which party prepared the initial draft of this Agreement, this Agreement shall, in the event of any dispute, however its meaning or application, be interpreted fairly and reasonably and neither more strongly for or against any party. ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 00211996.DOC 5 CITY OF ROUND ROCK / FLIX BREWHOUSE LLC. 6.12 Applicable Law. This Agreement is made, and shall be construed and interpreted, under the laws of the State of Texas and venue shall lie in Williamson County, Texas. 6.13 Severability. In the event any provisions of this Agreement are illegal, invalid or unenforceable under present or future laws, and in that event, it is the intention of the parties that the remainder of this Agreement shall not be affected. It is also the intention of the parties of this Agreement that in lieu of each clause and provision that is found to be illegal, invalid or unenforceable, a provision be added to this Agreement which is legal, valid or enforceable and is as similar in terms as possible to the provision found to be illegal, invalid or unenforceable. 6.14 Paragraph Headings. The paragraph headings contained in this Agreement are for convenience only and will in no way enlarge or limit the scope or meaning of the various and several paragraphs. 6.15 No Third Party Beneficiaries. This Agreement is not intended to confer any rights, privileges or causes of action upon any third party. 6.16 Force Majeure. Except as otherwise provided herein, an equitable adjustment shall be made for delay or failure in performing if such delay or failure is caused, prevented, or restricted by conditions beyond that Party's reasonable control (an "event of force majeure"). An event of force majeure for the purposes of this Agreement shall include, but not be limited to, acts of God, fire; explosion, vandalism; storm or similar occurrences; orders or acts of military or civil authority; litigation; changes in law, rules, or regulations outside the control of the affected Party; national emergencies or insurrections; riots; acts of terrorism; or supplier failures, shortages or breach or delay. Except as otherwise expressly provided, herein, there shall be an equitable adjustment allowed for performance under this Agreement as the result of any event of force majeure. 6.17 Exhibits. The following Exhibits A --C are attached and incorporated by reference for all purposes: Exhibit A-1: Exhibit A-2: Exhibit B: Exhibit C: City Resolution No. City Resolution No. Cinema/Restaurant Site Plan Manpower Report (Program Resolution) (Authorizing Resolution) 6.18 No Joint Venture. It is acknowledged and agreed by the parties that the terms hereof are not intended to and shall not be deemed to create any partnership or joint venture among the parties. The City, its past, present and future officers, elected officials, employees and agents of the City, do not assume any responsibilities or liabilities to any third party in connection with the development of the Cinema/Restaurant or the design, construction or operation of any portion of the Cinema/Restaurant. EXECUTED to be effective as of the day of, 2011 (the "Effective Date"). ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 00211996.DOC 6 CITY OF ROUND ROCK / FLIX BREWHOUSE LLC. APPROVED as to form: Stephan L. Sheets, City Attorney ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 00211996.DOC CITY OF ROUND ROCK, TEXAS, a home rule city and municipal corporation By: Alan McGraw, Mayor FLIX BRE , : OUSE LLC, a Texas /Liabi1%Co By: Date: Allan L. Reagan, its Managg Director .3774W// 7 CITY OF ROUND ROCK / FLIX BREWHOUSE LLC. RESOLUTION NO. R -11 -02 -10 - WHEREAS, Flix Brewhouse, LLC ("Flix") is a Texas limited liability company, and WHEREAS, Flix has expressed to the City of Round Rock ("City") its desire to locate a combination six screen first run cinema and restaurant in the City which will provide new jobs, and WHEREAS, §380.001 Local Government Code provides that a municipality may establish a program ("Program") to promote local economic development and to stimulate business and commercial activity in the municipality, and WHEREAS, the City Council has determined that the Program described in Exhibit "A" will meet the goals set forth in said §380.001 and will be of mutual benefit to both parties, Now Therefore BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS, That the City offers to Flix a §380.001 Program in exchange for Flix locating a combination six screen first run cinema and restaurant in the City of Round Rock, and BE IT FURTHER RESOLVED That the offer of the Program shall be as generally outlined in Exhibit "A" attached hereto and incorporated herein for all purposes. 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, Chapter 551, Texas Government Code, as amended. O:\wdox\SCCInts\0112\ 1104\MUNICIPAL\00213368.DOC RESOLVED this 10th day of February, 2011. ALAN MCGRAW, Mayor City of Round Rock, Texas ATTEST: SARA L. WHITE, City Secretary EXHIBIT A The terms of the §380.001 Program to be offered to Flix Brewhouse, LLC in exchange for Flix Brewhouse, LLC 's locating a combination six screen first run cinema and restaurant in the City of Round Rock are as generally outlined below: 1. The City agrees to make program payments to Flix Brewhouse, LLC calculated on the basis of an agreed upon portion of the property tax revenues actually received by the City and generated by development. 2. The term of the Program shall terminate on December 31, 2016. 3. The terms and provisions of the Program will be set out in more detail in the Economic Development Program Agreement of even date herewith. 3 RESOLUTION NO. R -11 -02 -10 - WHEREAS, the City of Round Rock ("City") has established an Economic Development Program to encourage Flix Brewhouse, LLC ("Flix") to locate a combination six screen first run cinema and restaurant ("Cinema/Restaurant") in the City of Round Rock on Lot 4A, Hesters Crossing Shopping Center, and WHEREAS, to further promote economic development, the City wishes to enter into an Economic Development Program Agreement ("Agreement") with Flix regarding Flix's construction, development and operation of a Cinema/Restaurant in the City of Round Rock, 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, an Economic Development Program Agreement with Flix Brewhouse, LLC, a copy of same being attached hereto as Exhibit "A" and incorporated herein for all purposes. 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 RESOLVED this 10th day of February, 2011. ALAN MCGRAW, Mayor City of Round Rock, Texas ATTEST: SARA L. WHITE, City Secretary O:\wdox\SCCInts\�L 12\ 1104\MUNICIPAL \00213389.DOGrmc er rFThI 'GiiIi:�� J_LII_LL_ _1J_Ll_ _1J_L1Jet D bC - Z FLIX BREWHOUSE SKY RIDGE PLAZA 2200 SOUTH INTERSTATE HIGHWAYJS, SURE SI SOUND ROCK T15 SUSS EXHIBIT C MANPOWER REPORT I, , [name], [title] of Flix Brewhouse LLC do hereby certify that as of the day of 20 Flix Brewhouse LLC had ( ) employees at its location in the City of Round Rock, Texas. [Name] [Title] State of Texas County of Williamson SWORN TO and SUBSCRIBED BEFORE ME by [name], this day of , 20_, to certify which witness my hand and seal of office, in the capacity therein stated. Notary Public, State of Texas ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 11 4019866v.5 CITY OF ROUND ROCK / FLIx PROPERTY, INC. ROUND ROCK, TEXAS PURPOSE. PASSION. PROSPERITY Agenda Item No. 11C3. City Council Agenda Summary Sheet Consider a resolution approving an Economic Development Agreement with Flix Agenda Caption: Brewhouse, LLC. Meeting Date: February 10, 2011 Department: Administration Staff Person making presentation: Cindy Demers Assistant City Manager Item Summary: The purpose of this agreement is to promote economic development and stimulate business and commercial activity in the City of Round Rock as contemplated by Chapter 380 of the Texas Local Government Code. With this agreement, the City will provide a performance based economic development incentive in exchange for Flix Brewhouse, LLC to locate a combination six screen first run cinema and restaurant in the Hester's Crossing Shopping Center. This will provide a revitalization of the anchor tenant space of that aging shopping center in addition to providing 89 new full time equivalent jobs to the community. Strategic Plan Relevance: 16.0— Develop financial capital needed to support business growth and development, and improve the financial advantages of operating in the City. Cost: $12,000 year 1, $6,000 year 2, $3,000 year 3 Source of Funds: Date of Public Hearing (if required): N/A Recommended Action: Approval EXECUTED DOCUMENT FOLLOWS ECONOMIC DEVELOPMENT PROGRAM AGREEMENT This Economic Development Program Agreement ("Agreement") is entered into this 1b day of 1 Qii( , 2011, by and between the City of Round Rock, Texas, a Texas home rule municipal corporation ("City"), and Flix Brewhouse, LLC, a Texas limited liability company ("Flix"). WHEREAS, the City has adopted (a) Resolution No.2.-4-0), attached as Exhibit A-1 2.4. "Program Resolution"), establishing an economic development program and Resolution j0-tt/4 attached hereto as Exhibit A-2 (the "Authorizing Resolution"), authorizing the Mayor to enter into this Agreement with Flix in recognition of the positive economic benefits to the City through Flix's development on Lot 4A, Hesters Crossing Shopping Center, (the "Property") of a combination six screen first run cinema and restaurant containing approximately thirty-one ,thousand five hundred (31,500) square feet as set forth on the Site Plan described in the attached Exhibit B (the "Cinema/Restaurant") (the Program Resolution and the Authorizing Resolution being collectively referred to herein as the "City Resolutions"); and WHEREAS, the purpose of this Agreement is to promote economic development as contemplated by Chapter 380 of the Texas Local Government Code whereby Flix intends to construct, develop and operate the Cinema/Restaurant, or cause the Cinema/Restaurant to be operated, in conformance with the City's development approvals for the Cinema/Restaurant, and; WHEREAS, the City agrees to provide performance based economic development grants to Flix to defray a portion of the Cinema/Restaurant's costs. NOW, THEREFORE, in consideration of the mutual benefits and promises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the City and Flix agree as follows: 1. Authority. The City's execution of this Agreement is authorized by Chapter 380 of the Texas Local Government Code and the City Resolutions, and constitute a valid and binding obligation of the City in the event Flix proceeds with the development of the Property. The City acknowledges that Flix is acting in reliance upon the City's performance of its obligations under this Agreement in making its decision to commit substantial resources and money to develop the Property. 2. Definitions. 2.1 "Cinema/Restaurant" means Flix's planned development of the Property which shall consist of a combination six screen first run cinema and restaurant containing approximately thirty-one thousand five hundred (31,500) square feet. 2.2 "Economic Incentive Payment(s)" ("EIPs") means payments of the amount required to be paid by the City to Flix under the Program and this Agreement. 2.3 "Effective Date" is the date this Agreement is executed to be effective by the City and Flix. ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 00211996.DOC g..-- l 1-61-10-1 1 CITY OF ROUND ROCK / FLIX BREWHOUSE LLC. 2.4 "Program" means the economic development program established by the City pursuant to Chapter 380 of the Texas Local Government Code and under the City Resolution to promote local economic development and stimulate business and commercial activity within the 3. Term. This Agreement shall become enforceable upon its Effective Date. This Agreement shall terminate five (5) years after the Cinema/Restaurant first opens for business. 4. Rights and Obligations of Flix. In consideration of the City's compliance with this Agreement, Flix agrees as follows: 4.1 Compliance with Development Regulations and Other Ordinances. In consideration of the City's agreement to enter into this Agreement, Flix represents that it intends to construct and/or install the improvements and personal property for the purpose of opening and operating Cinema/Restaurant, and Flix acknowledges that the City's obligations hereunder are conditioned upon Flix's construction of the Cinema/Restaurant. In the event that Flix fails to substantially complete the Cinema/Restaurant and open for business on or before September 1, 2011 (subject to delays caused by events of Force Majeure), the City may terminate this Agreement by giving Flix written notice of such termination prior to the date Flix opens the Cinema for business. As additional consideration, Flix agrees and covenants to provide and/or retain at least the number of jobs within the Cinama/Restaurant according to the following schedule: Date Retain New Total On September 1, 2011 0 85 85 On December 31, 2011 85 0 85 On December 31,.2012 85 4 89 On December 31, 2013 89 0 89 On December 31, 2014 89 0 89 On December 31, 2015 89 0 89 On December 31, 2016 89 0 89 Flix agrees to provide to the City annual manpower reports on the form attached hereto as Exhibit C on September 1, 2011 and within sixty (60) days following the end of each calendar year as set forth above. 4.2 Duration of Business. Flix shall keep the Cinema/Restaurant open for business at least five (5) years from the date it first opens. 5. Rights and Obligations of the City. In consideration of Flix's compliance with this Agreement, the City agrees as follows: 5.1 Economic Incentive Payments. 5.1.1 City Payments. City shall pursuant to Chapter 380 of the Texas Local Government Code, but subject to the conditions set out here, make EIPs to Flix as follows: ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 2 CITY OF ROUND ROCK / FLIX BREWHOUSE LLC. 00211996.DOC (a) $12,000 on or before 60 days following the date the Cinema/Restaurant opens for business; (b) $6,000 on or before one year following the date the Cinema/Restaurant opens for business; and (c) $3,000 on or before two years following the date the Cinema/Restaurant opens for business.. 5.1.2 Payments Subject to Future Appropriations. This Agreement shall not be construed as a commitment, issue or obligation of any specific taxes or tax revenues for payment to Flix. All payments by the City under this Agreement are subject to the City's appropriation of funds for such payments in the budget year for which they are made. The payments to be made to Flix, if paid, shall be made solely from annual appropriations from the general funds of the City or from such other funds of the City as may be legally set aside for the implementation of Article III, Section 52a of the Texas Constitution or Chapter 380 of the Local Government Code or any other economic development or financing program authorized by statute or home rule powers of the City under applicable Texas law, subject to any applicable limitations or procedural requirements. In the event that the City does not appropriate funds in any fiscal year for payments due under this Agreement, such failure shall not be considered a default under Section 6.3, and the City shall not be liable to Flix for such payments otherwise due during such fiscal year; however, the term of this Agreement shall be extended one (1) year for each year the City fails to appropriate funds for payments otherwise due under this Agreement. Flix shall also have the right but not the obligation to rescind this Agreement. To the extent there is a conflict between this paragraph and any other language or covenant in this Agreement, this paragraph shall control. 5.1.3 Permitting. The City shall cooperate with Flix to expeditiously process all City permit applications and City inspections. 6. Miscellaneous. 6.1 Mutual Assistance. The City and Flix will do all things reasonably necessary or appropriate to carry out the terms and provisions of this Agreement, and to aid and assist each other in carrying out such terms and provisions in order to put each other in the same economic condition contemplated by this Agreement regardless of any changes in public policy, the law, or taxes or assessments attributable to the Property. 6.2 Representations and Warranties. The City represents and warrants to Flix that the Program and this Agreement are within its authority, and that it is duly authorized and empowered to establish the Program and enter into this Agreement, unless otherwise ordered by a court of competent jurisdiction. Flix represents and warrants to the City that it has the requisite authority to enter into this Agreement. 6.3 Default and Remedies. If either the City or Flix should default in the performance of any obligations of this Agreement, the other party shall provide such defaulting party written notice of the default, and a minimum period of thirty (30) days to cure such default, ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 3 CITY OF ROUND ROCK / FLIX BREWHOUSE LLC. 00211996.DOC prior to instituting an action for breach or pursuing any other remedy for default. If the City remains in default after notice and opportunity to cure, Flix shall have the right to pursue any remedy at law or in equity for the City's breach. If Flix remains in default after notice and opportunity to cure, the City's remedy shall initially be limited to suspension of the EIPs that accrue after the date of such default until such default is cured. After any such default is cured, the City shall promptly forward any such suspended payment to Flix. If Flix's default is not cured within sixty (60) days after Flix's receipt of a second notice of default from the City that clearly and conspicuously indicates the City's intention to terminate this Agreement, the City may terminate this Agreement by giving Flix written notice of such termination prior to the date Flix cures such default. In the event the City terminates this Agreement as a result of Flix's default, the City may recapture and collect from Flix the EIP's paid a result of this Agreement (the "Recapture Liability"). Flix shall pay to the City the Recapture Liability within thirty (30) days after the date of termination. Notwithstanding anything herein to the contrary, such Recapture Liability shall not exceed an amount equal to all EIP's which were paid pursuant to this Agreement. 6.4 Attorney's Fees. In the event any legal action or proceeding is commenced between the City and Flix to enforce provisions of this Agreement and recover damages for breach, the prevailing party in such legal action shall be entitled to recover its reasonable attorney's fees and expenses incurred by reason of such action, to the extent allowed by law. 6.5 Entire Agreement. This Agreement contains the entire agreement between the parties. This Agreement may only be amended, altered or revoked by written instrument signed by the City and Flix. 6.6 Binding Effect. This Agreement shall be binding on and inure to the benefit of the parties, their respective successors and assigns. 6.7 Assignment. Flix may not assign all or part of its rights and obligations to a third party without the express written consent of the City (which consent shall not be unreasonably withheld, conditioned or denied). 6.8 Amendment. This Agreement may be amended by the mutual written agreement of the parties. 6.9 Termination. In the event Flix elects not to proceed with the Cinema/Restaurant as contemplated by this Agreement, Flix shall notify the City in writing of such election, and this Agreement and the obligations on the part of both parties shall thereafter be deemed terminated and of no further force or effect. Notwithstanding the above, in the event Flix does not substantially complete the construction of the Cinema/Restaurant and open for the business by September 1, 2011 (subject to delays caused by an event of force majuere), the City may terminate this Agreement by giving Flix notice thereof prior to the date the Cinema/Restaurant is opened for business. 6.10 Notice. Any notice and or statement required and permitted to be delivered shall be deemed delivered by actual delivery, facsimile with receipt of confirmation, or by depositing ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 00211996.DOC 4 CITY OF ROUND ROCK / FLIX BREWHOUSE LLC. the same in the United States mail, certified with return receipt requested, postage prepaid, addressed to the appropriate party at the following addresses: If to City: City of Round Rock 221 E. Main Street Round Rock, TX 78664 Attn: City Manager Phone: (512) 218-5400 Fax: (512) 218-7097 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 Flix: Flix Brewhouse LLC 2000 S. IH 35, Suite Q11 Round Rock, Texas 78681 Attn: Allan L. Reagan, Managing Director Phone: (512)238-0938 Email: allan.reagan@,flixbrewhouse.com With a required copy to: John Gangstad Bickerstaff Heath Delgado Acosta LLP 3711 S. MoPac Expy. Building 1, Suite 300 Austin, Texas 78746 Phone: (512)472-8021 Email: jgangstad@bickerstaff.com Either party may designate a different address at any time upon written notice to the other party. 6.11 Interpretation. Each of the parties have been represented by counsel of their choosing in the negotiation and preparation of this Agreement. Regardless of which party prepared the initial draft of this Agreement, this Agreement shall, in the event of any dispute, however its meaning or application, be interpreted fairly and reasonably and neither more strongly for or against any party. ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 5 CITY OF ROUND ROCK / FLIX BREWHOUSE LLC. 00211996.DOC 6.12 Applicable Law. This Agreement is made, and shall be construed and interpreted, under the laws of the State of Texas and venue shall lie in Williamson County, Texas. 6.13 Severability. In the event any provisions of this Agreement are illegal, invalid or unenforceable under present or future laws, and in that event, it is the intention of the parties that the remainder of this Agreement shall not be affected. It is also the intention of the parties of this Agreement that in lieu of each clause and provision that is found to be illegal, invalid or unenforceable, a provision be added to this Agreement which is legal, valid or enforceable and is as similar in terms as possible to the provision found to be illegal, invalid or unenforceable. 6.14 Paragraph Headings. The paragraph headings contained in this Agreement are for convenience only and will in no way enlarge or limit the scope or meaning of the various and several paragraphs. 6.15 No Third Party Beneficiaries. This Agreement is not intended to confer any rights, privileges or causes of action upon any third party. 6.16 Force Majeure. Except as otherwise provided herein, an equitable adjustment shall be made for delay or failure in performing if such delay or failure is caused, prevented, or restricted by conditions beyond that Party's reasonable control (an "event of force majeure"). An event of force majeure for the purposes of this Agreement shall include, but not be limited to, acts of God, fire; explosion, vandalism; storm or similar occurrences; orders or acts of military or civil authority; litigation; changes in law, rules, or regulations outside the control of the affected Party; national emergencies or insurrections; riots; acts of terrorism; or supplier failures, shortages or breach or delay. Except as otherwise expressly provided, herein, there shall be an equitable adjustment allowed for performance under this Agreement as the result of any event of force majeure. 6.17 Exhibits. The following Exhibits A --C are attached and incorporated by reference for all purposes: Exhibit A-1: Exhibit A-2: Exhibit B: Exhibit C: City Resolution No.R-((-teriO ll0Z(Program Resolution) City Resolution No1Z4-02-04144Authorizing Resolution) Cinema/Restaurant Site Plan Manpower Report 6.18 No Joint Venture. It is acknowledged and agreed by the parties that the terms hereof are not intended to and shall not be deemed to create any partnership or joint venture among the parties. The City, its past, present and future officers, elected officials, employees and agents of the City, do not assume any responsibilities or liabilities to any third party in connection with the development of the Cinema/Restaurant or the design, construction or operation of any portion of the Cinema/Restaurant. EXECUTED to be effective as of the "Effective Date"). ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 00211996.DOC day ofiim fl» 't j , 2011 (the 6 CITY OF ROUND ROCK / FLIX BREWHOUSE LLC. APPROVED as to form: Steph. 11 . Sheets, City Attorney CITY OF ROUND ROCK, TEXAS, a home rule city and municipal corporation Alan McGraw, Mayor FLIX BREWHOUSE LLC, a Texas i 4ti Liabili)y Cor any Date: lC Allan L. Reagan, its Managir. Director ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 7 CITY OF ROUND ROCK / FLIX BREWHOUSE LLC. 00211996.DOC RESOLUTION NO. R-11-02-10-1tC.d2-- WHEREAS, Flix Brewhouse, LLC ("Flix") is a Texas limited liability company, and WHEREAS, Flix has expressed to the City of Round Rock ("City") its desire to locate a combination six screen first run cinema and restaurant in the City which will provide new jobs, and WHEREAS, §380.001 Local Government Code provides that a municipality may establish a program ("Program") to promote local economic development and to stimulate business and commercial activity in the municipality, and WHEREAS, the City Council has determined that the Program described in Exhibit "A" will meet the goals set forth in said §380.001 and will be of mutual benefit to both parties, Now Therefore BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS, That the City offers to Flix a §380.001 Program in exchange for Flix locating a combination six screen first run cinema and restaurant in the City of Round Rock, and BE IT FURTHER RESOLVED That the offer of the Program shall be as generally outlined in Exhibit "A" attached hereto and incorporated herein for all purposes. 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, Chapter 551, Texas Government Code, as amended. O:\wdox\SCClnts\0112\ 1104\MUNICIPAL\00213368.DOC RESOLVED this 10th day of February, 2011. ALAN MCGRAW, Mayor City of Round Rock, Texas ATTEST: SARA L. WHITE, City Secretary EXHIBIT A The terms of the §380.001 Program to be offered to Flix Brewhouse, LLC in exchange for Flix Brewhouse, LLC 's locating a combination six screen first run cinema and restaurant in the City of Round Rock are as generally outlined below: 1. The City agrees to make program payments to Flix Brewhouse, LLC calculated on the basis of an agreed upon portion of the property tax revenues actually received by the City and generated by development. 2. The term of the Program shall terminate on December 31, 2016. 3. The terms and provisions of the Program will be set out in more detail in the Economic Development Program Agreement of even date herewith. 3 RESOLUTION NO. R-11-02-10- i WHEREAS, the City of Round Rock ("City") has established an Economic Development Program to encourage Flix Brewhouse, LLC ("Flix") to locate a combination six screen first run cinema and restaurant ("Cinema/Restaurant") in the City of Round Rock on Lot 4A, Hesters Crossing Shopping Center, and WHEREAS, to further promote economic development, the City wishes to enter into an Economic Development Program Agreement ("Agreement") with Flix regarding Flix's construction, development and operation of a Cinema/Restaurant in the City of Round Rock, 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, an Economic Development Program Agreement with Flix Brewhouse, LLC, a copy of same being attached hereto as Exhibit "A" and incorporated herein for all purposes. 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 RESOLVED this 10th day of February, 2011. ALAN MCGRAW, Mayor City of Round Rock, Texas ATTEST: SARA L. WHITE, City Secretary O:\wdox\SCCInts\0112\ 1104\MUNICIPAL \00213389.DOC/rmc tabbies' m K W 0 0 114,11 0,11 0 SI zq f11-rT" rl--rr TTrTl r T1-rr 1-i FTT -r1-rrT= fTF1-rUn- TTr: LSJ LJ L�J_!J -I- -1 L_1 LJ_J 0 0 0 G]s-ems VI T no } 0 0 ij FLIX BREWHOUSE SKY RIDGE PLAZA ]]W SOUTH INTERSTATE HIGHWAY 1; SUITE 11 ROUND ROC, T%TENI n EXHIBIT C MANPOWER REPORT I, , [name], Brewhouse LLC do hereby certify that as of the Brewhouse LLC had City of Round Rock, Texas. State of Texas County of Williamson [title] of Flix day of , 20, Flix ( ) employees at its location in the [Name] [Title] SWORN TO and SUBSCRIBED BEFORE ME by [name], this day of , 20_, to certify which witness my hand and seal of office, in the capacity therein stated. ECONOMIC DEVELOPMENT PROGRAM AGREEMENT 4019866v.5 Notary Public, State of Texas 11 CITY OF ROUND ROCK / FLIx PROPERTY, INC.