R-13-11-14-H3 - 11/14/2013RESOLUTION NO. R -13-11-14-H3
WHEREAS, Insys Therapeutics, Inc. ("Insys") plans to expand its pharmaceutical
manufacturing facility to be located at 2700 Oakmont Drive ("Facility"); and
WHEREAS, the purpose of this Resolution is to approve an economic development agreement
as contemplated by Chapter 380 of the Texas Local Government Code whereby Insys will expend
significant sums to make the improvements to the Facility and to purchase and install the equipment in
the Facility, retain and add jobs, and occupy and operate the Facility in conformance with the City's
development approvals for the Facility, 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 Insys Therapeutics, Inc., 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 14th day of November, 2013.
ALAN MCGRAW, Mayor
City of Round Rock, Texas
ATTEST:
SARA L. WHITE, City Clerk
0112.1304, 00285985
EXHIBIT
!!A„
ECONOMIC DEVELOPMENT PROGRAM AGREEMENT
This Economic Development Program Agreement ("Agreement") is entered into this day of
, 2013, by and between the City of Round Rock, Texas, a Texas home rule municipal
corporation ("City"), and Insys Therapeutics, Inc. ("Insys").
WHEREAS, the City has adopted Resolution No. , attached as Exhibit
A ("City Resolution"), establishing an economic development program and authorizing the
Mayor to enter into this Agreement with Insys in recognition of the positive economic benefits to
the City through Insys's expansion of its pharmaceutical manufacturing facility in the City
("Facility");and
WHEREAS, the Facility will be located at 2700 Oakmont Drive, Round Rock, Texas; and
WHEREAS, the Facility will include certain improvements ("Improvements") to the Facility
and the purchase and installation of new equipment ("Equipment") with a total cost of at least
$10,500,000; and
WHEREAS, Insys will retain its current number of 11 full-time employees and will employ at
least 30 additional full-time employees over the term of this Agreement; and
WHEREAS, the purpose of this Agreement is to promote economic development as
contemplated by Chapter 380 of the Texas Local Government Code whereby Insys will expend
significant sums make the Improvements to the Facility and to purchase and install the
Equipment in the Facility and occupy and operate the Facility in conformance with the City's
development approvals for the Facility; and
WHEREAS, the City agrees to provide performance based economic development grants to
Insys;
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 Insys 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 Resolution, and constitutes a valid and
binding obligation of the City in the event Insys proceeds with the construction and
operation of the Facility. The City acknowledges that Insys 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 lease, improve and occupy the Facility.
2. Definitions.
2.1 "Economic Incentive Payment(s)" ("EIPs") means the amount paid by the City
to Insys under the Program.
286501
2.2 "Effective Date" is the date this Agreement is executed to be effective by the
City and Insys.
2.3 "Equipment" means the equipment to be purchased and installed in the Facility
as described in Exhibit "B".
2.4 "Facility" means the pharmaceutical manufacturing facility to be located at 2700
Oakmont Drive, Round Rock, Texas.
2.5 "Improvements" mean all improvements and additions made to the Facility,
including, but not limited to, the items listed in Exhibit "C".
2.6 "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 City.
2.7 "Recapture Liability" means the total amount of all EIP's that are paid as result
of this Agreement that are subject to recapture by the City from Insys in the event
of a Insys default.
3. Term. This Agreement shall become enforceable upon its Effective Date and shall
terminate on December 31, 2018.
4. Rights and Obligations of Insys.
4.1 Purchase and Installation of Improvements and Equipment. Insys agrees to
purchase and install the Improvements and the Equipment in the Facility on or
before the 31st day of December, 2014 and to begin operating the Facility on or
before the 1st day of January, 2015.
4.2 Cost of Improvements and Equipment. Insys agrees to spend at least $10,500,000
on the purchase and installation of the Improvements and Equipment. Insys agrees
to provide City with documentation showing that this obligation has been
satisfied. City shall have the right to audit Insys's records to verify that this
obligation has been satisfied.
4.3 Jobs.
4.3.1 Job Retention and Creation. Insys agrees to retain its current 11 employees and
to add new employees in accordance with the following schedule:
Date Retain New Total
On December 31, 2013 11 0 11
On December 31, 2014 11 5 16
On December 31, 2015 16 5 21
On December 31, 2016 21 10 31
2
On December 31, 2017 31 10 41
On December 31, 2018 41 0 41
On December 31, 2019 41 0 41
4.3.2 Salaries and Benefits. Insys agrees that the full-time jobs will have an average
annual salary of at least $50,000 plus industry standard benefits.
4.3.3 Job Compliance Affidavit. On or before February 1 of each calendar year
during the term of this Agreement, Insys agrees to provide to the City an affidavit
certifying its compliance with the foregoing job requirements in the form attached
hereto as Exhibit "D". Upon request by the City, Insys agrees to provide the City
with any and all necessary documentation to verify its compliance with the job
retention and creation obligations.
4.4 Compliance with regulations. Insys agrees that it will comply with the City's
development approval processes and shall equip, occupy and operate the Facility
consistent with City ordinances, development regulations and requirements.
4.6 Continuous operation. Insys agrees that it will continuously operate the Facility
and employ at the number of full-time employees set out in section 4.3.1 during
the term of this Agreement, including any extensions.
5. Rights and Obligations of the City.
In consideration of Insys's compliance with this Agreement, the City agrees as follows:
5.1 Economic Incentive Payments ("EIP's").
5.1.1 Initial EIP. City shall, subject to Insys's satisfaction of its obligations set
out in §§ 4.1 and 4.2, and other conditions set out herein, make an initial EIP to
Insys in the amount of $150,000. This initial EIP shall be made within thirty (30)
days after Insys has provided the City with invoices or other acceptable
documentation that this obligation has been satisfied.
5.1.2 Additional EIP. City shall, subject to Insys's satisfaction of its obligation
to retain and create jobs in accordance with the schedule set out in §4.3.1 pay an
additional EIP of $20,000 if the December 31, 2014 job requirement is satisfied.
Thereafter, the City shall pay an additional $10,000 per year if the job
requirements for 2015, 2016, and 2017 are satisfied. The additional EIP's shall be
paid within 30 days after Insys's has filed the job compliance affidavit required
by §4.3.3.
5.1.3 EIP's 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 Insys. All EIP's 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 EIP's to be made to Insys, if paid, shall be made
solely from annual appropriations from the general funds of the City or from such
3
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 EIP's due under this
Agreement, such failure shall not be considered a default under Section 7.3, and
the City shall not be liable to Insys for such EIP's, however, the City shall extend
this Agreement for another year(s). In addition, Insys shall 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.
5.2 Permitting.
5.2.1 Waiver of Fees. The City agrees to waive all building permit fees
associated with the Facility.
5.2.2 Expedited Review. The City shall cooperate with Insys to expeditiously
process all City permit applications and City inspections.
6. EIP Recapture. In the event that Insys is in default of this Agreement, the City may
recapture and collect from Insys the Recapture Liability after providing Insys written notice and
a minimum period of thirty (30) days to cure such default, and the default has not been cured
within said time. In the event Insys does not so cure, Insys shall pay to the City the Recapture
Liability within thirty (30) days after the City makes demand for same, subject to any and all
lawful offsets, settlements, deduction, or credits to which Insys may be entitled. 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.
7. Miscellaneous.
7.1 Mutual Assistance. The City and Insys will do all things reasonably necessary or
appropriate to carry out the terms and provisions of this Agreement.
7.2 Representations and Warranties. The City represents and warrants to Insys 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. Insys
represents and warrants to the City that it has the requisite authority to enter into
this Agreement.
7.3 Default. If either the City or Insys 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, 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,
Insys shall have the right to pursue any remedy at law or in equity for the City's
4
breach. If Insys remains in default after notice and opportunity to cure, City shall
have the right to pursue any remedy at law or in equity for Insys's breach, in
addition to the right of EIP recapture set forth above.
7.4 Attorney's Fees. In the event any legal action or proceeding is commenced in a
court of competent jurisdiction between the City and Insys 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.
7.5 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 Insys.
7.6 Binding Effect. This Agreement shall be binding on and inure to the benefit of
the parties, their respective successors and assigns.
7.7 Assignment. Insys may not assign all or part of its rights and obligations to a
third party without the express written consent of the City provided, however, that
this Agreement may be assigned by either party without the consent of the other
to an affiliate or to any third party who succeeds to substantially all of its business
or assets.
7.8 Amendment. This Agreement may be amended by the mutual written agreement
of the parties.
7.9 Termination. In the event Insys elects not to purchase the Facility as
contemplated by this Agreement, Insys shall notify the City in writing, and this
Agreement and the obligations on the part of both parties shall be deemed
terminated and of no further force or effect.
7.10 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 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
Email: snorwood@roundrocktexas.gov
5
If to Insys:
With a required copy to:
Sheets & Crossfield
309 E. Main Street
Round Rock, TX 78664
Attn: Stephan L. Sheets
Phone: (512) 255-8877
Email: steve@scrrlaw.com
Insys Therapeutics, Inc.
811 Paloma Dr., Suite C
Round Rock, Texas 78665
Attn: Bryan Waltrip
Phone: (512) 583-6975
Email: bwaltrip@insystrx.com
Either party may designate a different address at any time upon written notice to the other party.
7.11 Interpretation. Each of the parties has 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.
7.12 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.
7.13 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.
7.14 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.
7.15 No Third Party Beneficiaries. This Agreement is not intended to confer any
rights, privileges or causes of action upon any third party.
7.16 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 (a
6
`force majeure event"). A force majeure event 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.
7.17 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 Facility or the design, construction or operation of any portion of the
Facility.
EXECUTED to be effective as of the day of , 2013 (the "Effective Date").
THE CITY OF ROUND ROCK, TEXAS,
a Texas Home Rule Municipality
Date:
Attest:
Sara White, City Clerk
APPROVED AS TO FORM:
Stephan L. Sheets, City Attorney
By:
Alan McGraw, Mayor
INSYS THERAPEUTICS, INC
a Texas corporation
By:
, (printed name)
, (title)
Date:
7
EXHIBIT
RESOLUTION NO. R -13-11-14-H2
WHEREAS, Insys Therapeutics, Inc., ("Insys") has expressed to the City of Round Rock
("City") its desire to expand its operations in the City which will provide jobs and additional tax base
to the City, and
WHEREAS, §380.001 Local Government Code provides that a municipality may establish an
economic development 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 Insys a §380.001 Program in exchange for Insys expanding its
operations in the City, 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.
0112.1304; 00286003
RESOLVED this 14th day of November, 2013.
Or)i ./(
ALAN MCGRAW, Mayor
City of Round Rock, Texas
ATTEST:
c52mAr.uktb!�
SARA L. WHITE, City Clerk
EXHIBIT A
ECONOMIC DEVELOPMENT PROGRAM
The terms of the §380.001 Economic Development Program to be offered to Insys Therapeutic,
Inc. ("Insys") in exchange for Insys's expanding its operations in the City of Round Rock are as
generally outlined below:
1. Insys's obligations:
1.1. Insys agrees to open a new, expanded facility ("Facility") at 2700 Oakmont Drive,
Round Rock, Texas for the purpose of pharmaceutical manufacturing.
1.2 Insys agrees to invest at least $10,500,000 in the purchase and installation of Facility
improvements and new equipment.
1.3 Insys agrees to retain its 12 current full-time employees and to add 30 new full-time
employees over the next four years.
2. City's obligations:
2.1 City agrees to waive City permit fees associated with building permits.
2.2 City agrees to expedite City approval of required permits.
2.3 City agrees to make an initial Economic Incentive Payment of $150,000 to Insys if it
meets its obligation to spend at least $10,500,000 for Facility improvements and new
equipment for the Facility.
2.4 City agrees to make additional Economic Incentive Payments to Insys's upon its
satisfaction of its obligation to retain and create jobs in accordance with the following:
The City will pay an additional EIP of $20,000 if the December 31, 2014 job
requirement is satisfied. Thereafter, the City will pay an additional $10,000 per year if
the job requirements for 2015, 2016, and 2017 are satisfied.
3. The terms and provisions of this Program will be set out in more detail in the Economic
Development Program Agreement of even date herewith.
3
EXHIBIT "B" TO THE ECONOMIC DEVELOPMENT AGREEMENT
Description of Equipment Model or Serial No.
Purification Pumping Skid Hipersep L
80 cm Purification Column Prochrom LC800.700.VE70
Thin Filmed Evaporators Custom
Automation Custom
Storage Vessels TBD
Control Valves and Instrumentation Custom
Eluent Vessel 3010
Solvent Adjustment Instrumentation TBD
Auto Temperature Adjustment TBD
6 - Heidolph Rotary Evaporators Rotovap L Man
Reactor Chiller TBD
Reactor Boiler TBD
Purification Line 1 Chiller TBD
Purification Line 2 Chiller TBD
Purification Boiler TBD
Facility Vacuum System TBD
Nitrogen Supply TBD
Compressed Air System TBD
Clean Rooms TBD
Diesel Generator TBD
EXHIBIT "C" TO THE ECONOMIC DEVELOPMENT AGREEMENT
DESCRIPTION OF IMPROVEMENTS
The Improvements will include but are not limited to the following: Replace all HVAC Systems
Process Piping
Information Systems
Security Systems (DEA motion, cameras, and controlled access
Furniture
DI Water System
DEA Vault (500 sq. ft.
Walk-in Cold Storage Units
EXHIBIT "D" TO THE ECONOMIC DEVELOPMENT AGREEMENT
JOB COMPLIANCE AFFIDAVIT
Before me, the undersigned authority, on this day personally appeared
(name) , known to me to be the person whose name is
subscribed below and after having been duly sworn, on his/her oat stated as follows:
1. "My name is . I am over the age of 21 years and am capable of
making this affidavit. The facts stated in this affidavit are within my personal knowledge and are true
and correct.
2. "I am the (title)
authorized to make this affidavit.
of Insys Therapeutics, Inc. and am duly
3. "As of December 31, 201_, Insys Therapeutics, Inc., had the following job positions and
salaries:
Employee ID No. Job Position or Title Annual Salary
$
$
$
$
TOTAL JOBS AVG. SALARY $
4. "In addition to the salary, all full time jobs included industry standard employee benefits.
Dated this day of , 201_
(Printed name)
(Title)
SUBSCRIBED AND SWORN TO before me on this the day of , 2013.
Notary Public, State of Texas
/./
ROUND ROCK TEXAS
RIRREE PARLOR PROSPERITY
City of Round Rock
Agenda Item Summary
Agenda Number: H.3
Title: Consider a resolution authorizing the Mayor to execute a Chapter 380
agreement with Austin Pharma/Insys Therapeutics, Inc.
Type: Resolution
Governing Body: City Council
Agenda Date: 11/14/2013
Dept Director: Steve Norwood, City Manager
Cost:
Indexes:
Attachments: Resolution, Exhibit A
Department: City Manager's Office
Text of Legislative File 13-897
Austin Pharma was purchased by Insys Therapeutics in 2009. Austin Pharma was
designed to manufacture the Active Pharmaceutical Ingredient, Dronabinol, USP for Insys
Therapeutics' finished drug product. The Austin Pharma facility and process is an FDA and
DEA licensed facility which is routinely audited by both federal entities. Austin
Pharma/Insys received FDA approval for the drug product in August 2011. Commercial
manufacturing has continued throughout 2012 and 2013. Based on current market share of
the existing drug and new formulations currently being reviewed by FDA, manufacturing will
need to increase and expand into a new facility. There is no room for expansion in Austin
Pharma's current location. In the new facility the current manufacturing process will be
expanded. Additionally new processes are being scheduled for the expansion which will
include finished drug product manufacturing.
Deal Points for this incentive agreement are:
City:
1. Property tax abatement of 100% year one, 75% year 2, 50% years 3-5
2. Cash grant of $150,000 to be paid upon verification of at least $10.5 million in capital
investment
3. Job creation grant not to exceed $50,000 over a 5 year period. $20,000 year one and
$10,000 in years 2-4 based on meeting job creation benchmark
Insys:
1. Retain 11 jobs and create a minimum of 30 jobs in excess of $50,000/annually average
City of Round Rock Page 1 Printed on 11/1212013
Agenda Item Summary Continued (13-897)
salary, plus benefits, within four years of relocating to the City of Round Rock.
2. Invest a minimum of $10,500,000 in real and personal property and maintain a taxable
value of $7,300,000.
Staff recommends approval.
City of Round Rock Page 2 Printed on 11/12/2013
EXECUTED
ORIGINAL
DOCUMENT
FOLLOW
ECONOMIC DEVELOPMENT PROGRAM AGREEMENT
This Economic Development Program Agreement ("Agreement") is entered into this _1 1_day of
November, 2013, by and between the City of Round Rock, Texas, a Texas home rule municipal
corporation ("City"), and Insys Therapeutics, Inc. ("Insys").
WHEREAS, the City has adopted Resolution No. t 13-11-14 - 11-2- , attached as Exhibit
A ("City Resolution"), establishing an economic development program and authorizing the
Mayor to enter into this Agreement with Insys in recognition of the positive economic benefits to
the City through Insys's expansion of its pharmaceutical manufacturing facility in the City
("Facility");and
WHEREAS, the Facility will be located at 2700 Oakmont Drive, Round Rock, Texas; and
WHEREAS, the Facility will include certain improvements ("Improvements") to the Facility
and the purchase and installation of new equipment ("Equipment") with a total cost of at least
$10,500,000; and
WHEREAS, Insys will retain its current number of 11 full-time employees and will employ at
least 30 additional full-time employees over the term of this Agreement; and
WHEREAS, the purpose of this Agreement is to promote economic development as
contemplated by Chapter 380 of the Texas Local Government Code whereby Insys will expend
significant sums make the Improvements to the Facility and to purchase and install the
Equipment in the Facility and occupy and operate the Facility in conformance with the City's
development approvals for the Facility; and
WHEREAS, the City agrees to provide performance based economic development grants to
Insys;
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 Insys 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 Resolution, and constitutes a valid and
binding obligation of the City in the event Insys proceeds with the construction and
operation of the Facility. The City acknowledges that Insys 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 lease, improve and occupy the Facility.
2. Definitions.
2.1 "Economic Incentive Payment(s)" ("EIPs") means the amount paid by the City
to Insys under the Program.
286491
.,-l3-II-I4 -142
2.2 "Effective Date" is the date this Agreement is executed to be effective by the
City and Insys.
2.3 "Equipment" means the equipment to be purchased and installed in the Facility
as described in Exhibit "B".
2.4 "Facility" means the pharmaceutical manufacturing facility to be located at 2700
Oakmont Drive, Round Rock, Texas.
2.5 "Improvements" mean all improvements and additions made to the Facility,
including, but not limited to, the items listed in Exhibit "C".
2.6 "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 City.
2.7 "Recapture Liability" means the total amount of all EIP' s that are paid as result
of this Agreement that are subject to recapture by the City from Insys in the event
of a Insys default.
3. Term. This Agreement shall become enforceable upon its Effective Date and shall
terminate on December 31, 2018.
4. Rights and Obligations of Insys.
4.1 Purchase and Installation of Improvements and Equipment. Insys agrees to
purchase and install the Improvements and the Equipment in the Facility on or
before the 31st day of December, 2014 and to begin operating the Facility on or
before the 1st day of January, 2015.
4.2 Cost of Improvements and Equipment. Insys agrees to spend at least $10,500,000
on the purchase and installation of the Improvements and Equipment. Insys agrees
to provide City with documentation showing that this obligation has been
satisfied. City shall have the right to audit Insys's records to verify that this
obligation has been satisfied.
4.3 Jobs.
4.3.1 Job Retention and Creation. Insys agrees to retain its current 11 employees and
to add new employees in accordance with the following schedule:
Date Retain New Total
On December 31, 2013 11 0 11
On December 31, 2014 11 5 16
On December 31, 2015 16 5 21
On December 31, 2016 21 10 31
2
On December 31, 2017 31 10 41
On December 31, 2018 41 0 41
On December 31, 2019 41 0 41
4.3.2 Salaries and Benefits. Insys agrees that the full-time jobs will have an average
annual salary of at least $50,000 plus industry standard benefits.
4.3.3 Job Compliance Affidavit. On or before February 1 of each calendar year
during the term of this Agreement, Insys agrees to provide to the City an affidavit
certifying its compliance with the foregoing job requirements in the form attached
hereto as Exhibit "D". Upon request by the City, Insys agrees to provide the City
with any and all necessary documentation to verify its compliance with the job
retention and creation obligations.
4.4 Compliance with regulations. Insys agrees that it will comply with the City's
development approval processes and shall equip, occupy and operate the Facility
consistent with City ordinances, development regulations and requirements.
4.6 Continuous operation. Insys agrees that it will continuously operate the Facility
and employ at the number of full-time employees set out in section 4.3.1 during
the term of this Agreement, including any extensions.
5. Rights and Obligations of the City.
In consideration of Insys's compliance with this Agreement, the City agrees as follows:
5.1 Economic Incentive Payments ("EIP' s").
5.1.1 Initial EIP. City shall, subject to Insys's satisfaction of its obligations set
out in §§ 4.1 and 4.2, and other conditions set out herein, make an initial EIP to
Insys in the amount of $150,000. This initial EIP shall be made within thirty (30)
days after Insys has provided the City with invoices or other acceptable
documentation that this obligation has been satisfied.
5.1.2 Additional EIP. City shall, subject to Insys's satisfaction of its obligation
to retain and create jobs in accordance with the schedule set out in §4.3.1 pay an
additional EIP of $20,000 if the December 31, 2014 job requirement is satisfied.
Thereafter, the City shall pay an additional $10,000 per year if the job
requirements for 2015, 2016, and 2017 are satisfied. The additional EIP's shall be
paid within 30 days after Insys's has filed the job compliance affidavit required
by §4.3.3.
5.1.3 EIP's 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 Insys. All EIP's 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 EIP's to be made to Insys, if paid, shall be made
solely from annual appropriations from the general funds of the City or from such
3
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 EIP's due under this
Agreement, such failure shall not be considered a default under Section 7.3, and
the City shall not be liable to Insys for such EIP's, however, the City shall extend
this Agreement for another year(s). In addition, Insys shall 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.
5.2 Permitting.
5.2.1 Waiver of Fees. The City agrees to waive all building permit fees
associated with the Facility.
5.2.2 Expedited Review. The City shall cooperate with Insys to expeditiously
process all City permit applications and City inspections.
6. EIP Recapture. In the event that Insys is in default of this Agreement, the City may
recapture and collect from Insys the Recapture Liability after providing Insys written notice and
a minimum period of thirty (30) days to cure such default, and the default has not been cured
within said time. In the event Insys does not so cure, Insys shall pay to the City the Recapture
Liability within thirty (30) days after the City makes demand for same, subject to any and all
lawful offsets, settlements, deduction, or credits to which Insys may be entitled. 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.
7. Miscellaneous.
7.1 Mutual Assistance. The City and Insys will do all things reasonably necessary or
appropriate to carry out the terms and provisions of this Agreement.
7.2 Representations and Warranties. The City represents and warrants to Insys 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. Insys
represents and warrants to the City that it has the requisite authority to enter into
this Agreement.
7.3 Default. If either the City or Insys 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, 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,
Insys shall have the right to pursue any remedy at law or in equity for the City's
4
breach. If Insys remains in default after notice and opportunity to cure, City shall
have the right to pursue any remedy at law or in equity for Insys's breach, in
addition to the right of EIP recapture set forth above.
7.4 Attorney' s Fees. In the event any legal action or proceeding is commenced in a
court of competent jurisdiction between the City and Insys 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.
7.5 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 Insys.
7.6 Binding Effect. This Agreement shall be binding on and inure to the benefit of
the parties, their respective successors and assigns.
7.7 Assignment. Insys may not assign all or part of its rights and obligations to a
third party without the express written consent of the City provided, however, that
this Agreement may be assigned by either party without the consent of the other
to an affiliate or to any third party who succeeds to substantially all of its business
or assets.
7.8 Amendment. This Agreement may be amended by the mutual written agreement
of the parties.
7.9 Termination. In the event Insys elects not to purchase the Facility as
contemplated by this Agreement, Insys shall notify the City in writing, and this
Agreement and the obligations on the part of both parties shall be deemed
terminated and of no further force or effect.
7.10 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 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
Email: snorwoodC roundrocktexas.gov
5
If to Insys:
With a required copy to:
Sheets & Crossfield
309 E. Main Street
Round Rock, TX 78664
Attn: Stephan L. Sheets
Phone: (512) 255-8877
Email: steve@scrrlaw.com
Insys Therapeutics, Inc.
811 Paloma Dr., Suite C
Round Rock, Texas 78665
Attn: Bryan Waltrip
Phone: (512) 583-6975
Email: bwaltrip@insystrx.com
Either party may designate a different address at any time upon written notice to the other party.
7.11 Interpretation. Each of the parties has 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.
7.12 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.
7.13 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.
7.14 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.
7.15 No Third Party Beneficiaries. This Agreement is not intended to confer any
rights, privileges or causes of action upon any third party.
7.16 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 (a
6
`force majeure event"). A force majeure event 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.
7.17 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 Facility or the design, construction or operation of any portion of the
Facility.
EXECUTED to be effective as of the 14°1 day of t 0.1604 2013 (the "Effective Date").
Attest:
Sara White, City Clerk
AP
VED AS TO ' ORM:
Steph
L. Sheets, City Attorney
THE CITY OF ROUND ROCK, TEXAS,
a Texas Home Rule Municipality
By:/1J
Alan McGraw, Mayor
Date: I I . 14 •1
INSYS THERAPEUTICS, INC
a Texas corporation
By:
_Bryan Waltrip , (printed name)
_Director of Operations , (title)
Date: _November 11, 2013
7
EXHIBIT
„A„
RESOLUTION NO. R -13-11-14-H2
WHEREAS, Insys Therapeutics, Inc., ("Insys") has expressed to the City of Round Rock
("City") its desire to expand its operations in the City which will provide jobs and additional tax base
to the City, and
WHEREAS, §380.001 Local Government Code provides that a municipality may establish an
economic development 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 Insys a §380.001 Program in exchange for Insys expanding its
operations in the City, 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.
0112.1304; 00286003
RESOLVED this 14th day of November, 2013.
ATTEST:
c5mA/ (gt7bU
SARA L. WHITE, City Clerk
2
ALAN MCGRAW, Mayor
City of Round Rock, Texas
EXHIBIT A
ECONOMIC DEVELOPMENT PROGRAM
The terms of the §380.001 Economic Development Program to be offered to Insys Therapeutic,
Inc. ("Insys") in exchange for Insys's expanding its operations in the City of Round Rock are as
generally outlined below:
1. Insys's obligations:
1.1. Insys agrees to open a new, expanded facility ("Facility") at 2700 Oakmont Drive,
Round Rock, Texas for the purpose of pharmaceutical manufacturing.
1.2 Insys agrees to invest at least $10,500,000 in the purchase and installation of Facility
improvements and new equipment.
1.3 Insys agrees to retain its 12 current full-time employees and to add 30 new full-time
employees over the next four years.
2. City's obligations:
2.1 City agrees to waive City permit fees associated with building permits.
2.2 City agrees to expedite City approval of required permits.
2.3 City agrees to make an initial Economic Incentive Payment of $150,000 to Insys if it
meets its obligation to spend at least $10,500,000 for Facility improvements and new
equipment for the Facility.
2.4 City agrees to make additional Economic Incentive Payments to Insys's upon its
satisfaction of its obligation to retain and create jobs in accordance with the following:
The City will pay an additional EIP of $20,000 if the December 31, 2014 job
requirement is satisfied. Thereafter, the City will pay an additional $10,000 per year if
the job requirements for 2015, 2016, and 2017 are satisfied.
3. The terms and provisions of this Program will be set out in more detail in the Economic
Development Program Agreement of even date herewith.
3
EXHIBIT "B" TO THE ECONOMIC DEVELOPMENT AGREEMENT
Description of Equipment Model or Serial No.
Purification Pumping Skid Hipersep L
80 cm Purification Column Prochrom LC 800.700. VE70
Thin Filmed Evaporators Custom
Automation Custom
Storage Vessels TBD
Control Valves and Instrumentation Custom
Eluent Vessel 3010
Solvent Adjustment Instrumentation TBD
Auto Temperature Adjustment TBD
6 - Heidolph Rotary Evaporators Rotovap L Man
Reactor Chiller TBD
Reactor Boiler TBD
Purification Line 1 Chiller TBD
Purification Line 2 Chiller TBD
Purification Boiler TBD
Facility Vacuum System TBD
Nitrogen Supply TBD
Compressed Air System TBD
Clean Rooms TBD
Diesel Generator TBD
EXHIBIT "C" TO THE ECONOMIC DEVELOPMENT AGREEMENT
DESCRIPTION OF IMPROVEMENTS
The Improvements will include but are not limited to the following: Replace all HVAC Systems
Process Piping
Information Systems
Security Systems (DEA motion, cameras, and controlled access
Furniture
DI Water System
DEA Vault (500 sq. ft.)
Walk-in Cold Storage Units
EXHIBIT "D" TO THE ECONOMIC DEVELOPMENT AGREEMENT
JOB COMPLIANCE AFFIDAVIT
Before me, the undersigned authority, on this day personally appeared
(name) , known to me to be the person whose name is
subscribed below and after having been duly sworn, on his/her oat stated as follows:
1. "My name is . I am over the age of 21 years and am capable of
making this affidavit. The facts stated in this affidavit are within my personal knowledge and are true
and correct.
2. "I am the (title)
authorized to make this affidavit.
of Insys Therapeutics, Inc. and am duly
3. "As of December 31, 201_, Insys Therapeutics, Inc., had the following job positions and
salaries:
Employee ID No. Job Position or Title Annual Salary
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
TOTAL JOBS AVG. SALARY $
4. "In addition to the salary, all full time jobs included industry standard employee benefits.
Dated this day of , 201_
(Printed name)
(Title)
SUBSCRIBED AND SWORN TO before me on this the day of , 2013.
Notary Public, State of Texas