Contract - Toppan Photomasks Round Rock, Inc - 4/27/2023 TOPPAN
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ROUND ROCK, INC. `CU 1d Rock ""
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NOTICE OF NAME CHANGE
October 11`h, 2024
Round Rock Transportation and Economic Development Corporation
221 E. Main Street
Round Rock,TX 78664
Attn: City Manager
Sheets&Crossfield
309 E. Main Street
Round Rock,TX 78664
Attn: Stephan L. Sheets
Re: Economic Development Incentive Agreement(the "Agreement") dated the 27`h day of April,
2023 between the Round Rock Transportation and Economic Development Corporation
("TEDCO") and Toppan Photomasks Round Rock, Inc. ("Toppan")
From:Toppan
To:TEDCO
In reference to the above Agreement,Toppan hereby gives notice to TEDCO that as of November 1,
2024, its corporate name will be changed to Tekscend Photomask Round Rock Inc.
Toppan Photomasks Round Rock, Inc.
R� jAee
Si nature
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Matthew Lakey,Sr US Finance Manager&Treasurer (Printed name and title)
DRAFT—Notice of name change;Toppan.docx
ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT
This Economic Development Incentive Agreement ("Agreement") is entered into this day of
AptiL., 2023, by and between the Round Rock Transportation and Economic Development
oC rporation, a Type B Corporation ("TEDCO'� created pursuant to Chapter 505 of the Texas Local
Government Code (the "Code"), and Toppan Photomasks Round Rock,Inc. a Delaware corporation
("Toppan'�. The foregoing are referred to collectively as the"Parties."
WHEREAS, Toppan has an existing manufacturing facility located in the City of Round Rock, Texas
("City")at 400 Texas Ave., Round Rock,Texas 78664, (the "Facility"); and
WHEREAS,Toppan is in the business of manufacturing photomasks; and
WHEREAS,Toppan is planning to construct,in three separate phases,significant additions,expansions,
and improvements to the Facility, and to increase the number of its employees; and
WHEREAS, in the first phase, Toppan agrees to invest at least $11,588,217 in Real Property
Improvements (as defined in Section 2.6) to the Facility, and to invest $42,161,783 in the purchase of
Business Personal Property, (as defined in Section 2.1)to be installed in the Facility,and to increase the
number of employees by twenty-four(24), for a total of 255, (the"Phase I"); and
WHEREAS, in the second phase, Toppan agrees to invest a total of$100,161,783 in the purchase of
Business Personal Property,to be installed in the Facility, and to increase the number of employees to
261,(the"Phase 2"); and
WHEREAS, in the third phase,Toppan agrees to invest at least a total of$28,014,550 in Real Property
Improvements to the Facility, including any such investment made as part of Phase 1 and Phase 2, and
agrees to invest $157,481,975 in the purchase of Business Personal Property, to be installed in the
Facility,including any such investment made as part of Phase 1 and Phase 2,and to increase the number
of employees to 281, (the"Phase 3"); and
WHEREAS, TEDCO conducted a public hearing as required by §505.159 of the Code and has
determined that the above-described expenditures are for a "project" as described by §501.101 of the
Code,and that it will result in the creation or retention of"primary jobs" as defined by §501.002 of the
Code; and
WHEREAS,TEDCO agrees to provide performance based Economic Incentive Payments("EIPs")(as
defined in Section 2.2)to Toppan in order to defray a portion of Toppan's development expenses;
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, TEDCO, and
Toppan agree as follows:
Toppan—Photomask—economic—incentive—agreement;3.08.23CORR Clean Final 4881-9037-1413 v.l
Tf3- 4043- ()0q
1. Authority. TEDCO's execution of this Agreement is authorized by §501.158 of the Code, any
by resolution of its Board of Directors. Toppan's execution of this Agreement is authorized by
its Articles of Incorporation, its Bylaws, and or resolution adopted by its Board of Directors.
2. Definitions.
2.1 `Business Personal Property" means equipment which costs at least $5,000 per unit
and has a model number and/or serial number and is purchased new or pre-owned for the
purpose of supporting Toppan's manufacturing operations at the Facility.
2.2 "Economic Incentive Payment(s)" ("EIPs") means the amounts paid by TEDCO to
Toppan pursuant to Section 7.1 of this Agreement.
2.3 "Effective Date" is the 27th day of April, 2023.
2.4 "Employee" means an employee who is hired by Toppan to perform a Primary Job, as
that term is defined by § 501.002 of the Code.
2.5 "Facility" means the building located in the Round Rock city limits with an address of
400 Texas Ave., Round Rock, Texas 78664.
2.6 "Real Property Improvements" means the real property improvements to the Facility
directly related to the design, new construction, additions, rehabilitation, reconstruction,
repair,finish out and/or remodeling of the Facility for the purpose of supporting Toppan's
manufacturing operations. It does not include any other costs, including, but not limited
to, financing cost, attorney fees, architect fees, insurance, and other similar costs.
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 TEDCO from Toppan in the event of a default
by Toppan pursuant to this Agreement.
3. Term. This Agreement shall become enforceable upon its Effective Date and shall terminate on
the date the final EIP is made in accordance with Section 7.1 below, or upon Toppan's failure to
complete any of the three phases.
4. Project Phases. The Project will consist of three phases as described below.
4.1 Phase 1. On or before December 31, 2025,Toppan agrees to complete Phase 1 by:
4.1.1 Investing at least$11,588,217 in Real Property Improvements to the Facility,
4.1.2 Investing at least $42,161,783 in the purchase of Business Personal Property, to
be installed in the Facility; and
4.1.3 Relocating to the City or otherwise adding sufficient new primary jobs,for a total
of 255 primary jobs, including the current 231 primary jobs.
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4.2 Phase 2. On or before December 31,2028, Toppan agrees to complete Phase 2 by:
4.2.1 Investing at least a total of$100,161,783 in Business Personal Property,including
any such investment made as a part of Phase 1, or subsequent thereto, to be
installed in the Facility; and
4.2.2 Relocating to the City or otherwise adding sufficient new primary jobs, for a total
of 261 primary jobs, including the current 231 primary jobs, plus the number of
primary jobs added in Phase 1,or subsequent thereto.
4.3 Phase 3. On or before December 31, 2029, Toppan agrees to complete Phase 3 by:
4.3.1 Investing at least at least a total of$28,014,550 in Real Property Improvements to
the Facility,including any such investment made as part of Phase 1,or subsequent
thereto;
4.3.2 Investing at least a total of$157,481,975 in Business Personal Property,including
any such investment made as part of Phase 1 and Phase 2, or subsequent thereto,
to be installed in the Facility, and
4.3.3 Relocating to the City or otherwise adding sufficient new primary jobs, for a total
of 281 jobs, including the current 231 primary jobs plus the number of primary
jobs added in Phase 1 and Phase 2.
5. Evidence of Satisfaction of Toppan's Obligations regarding the Three Phases
5.1 Evidence of Satisfaction of Investment.
5.1.1 Real Property Improvements. On or before April 15 of each calendar year of this
Agreement, with respect to the Real Property Improvements, Toppan agrees to provide
proof satisfactory to TEDCO showing the dollar amount of said expenditures,if any,that
were made in the preceding calendar year.
5.1.2 Business Personal Property. On or before April 15 of each calendar year of this
Agreement, with respect to the Business Personal Property, Toppan agrees to provide
proof satisfactory to TEDCO showing the dollar amount of said expenditures,if any,that
were made in the preceding calendar year.
5.1.3 Documentary Evidence. The foregoing proof shall be in the form of receipts for
the purchase, installation, and construction cost of Real Property Improvements, and for
the cost of the Business Personal Property installed in the Facility. The documentation
shall be provided as a surnmary schedule with receipts or other evidence attached in an
easy-to-follow, professional format. TEDCO shall have the right, at its expense to audit
Toppan's records to verify same following reasonable advance notice to Toppan.
5.2 Employees. Over the term of this Agreement, Toppan agrees to relocate to the City or
otherwise create a minimum of 50 new primary jobs with a starting average annual salary
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of $70,000, plus industry standard benefits. It is agreed that for the purposes of
determining the number of new primary jobs,the base number of jobs is agreed to be 231.
5.3 Job Compliance Affidavit. On or before April 15 of 2023, and of each calendar year
thereafter through April 15,2030,Toppan agrees to provide to TEDCO a completed Job
Compliance Affidavit,the form of such Job Compliance Affidavit being attached hereto
as Exhibit A. TEDCO shall have the right, at its expense and following reasonable
advance notice to Toppan, to audit Toppan's records to verify that this obligation has
been satisfied.
6. Miscellaneous Obligations
6.1 Compliance with regulations. Toppan agrees that it will comply with the City's
development regulations and ordinances and shall operate the Facility in compliance
with City ordinances,regulations, and requirements.
6.2 Continuous operation.Toppan agrees that it will continuously operate the Facility during
the Term of this Agreement, including any extensions, subject to normal down-time and
any force majeure events.
7. Rights and Obligations of TEDCO.
In consideration of Toppan's compliance with this Agreement,TEDCO agrees as follows:
7.1 Economic Incentive Payments ("EIPs"1.
7.1.1 EIPs.TEDCO shall, subject to Toppan's satisfaction of its obligations set forth in
sections 4, 5, and 6 above, make EIPs to Toppan as set forth below. The EIPs shall be
made on or before June 1 of the calendar year following Toppan's satisfactory completion
of each of the three phases,as described below.
7.1.2 EIP for Phase 1.TEDCO agrees to make an EIP payment to Toppan in the amount
of$600,000 on or before June 1 of the year following satisfactory completion of Phase 1.
If Toppan does not complete Phase 1,including the creation of the required primacy jobs,
on or before December 31, 2025, then TEDCO shall have no obligation to pay the
$600,000 EIP to Toppan for Phase 1. In addition, Toppan's failure to complete Phase
1 shall render Toppan ineligible to receive either the Phase 2 or Phase 3 EIP's; and shall
result in the termination of this Agreement.
7.1.3 EIP for Phase 2.TEDCO agrees to make an ETP payment to Toppan in the amount
of$150,000 on or before June 1 of the year following satisfactory completion of Phase 2.
If Toppan does not complete Phase 2,including the creation of the required primary jobs,
on or before December 31, 2028, then TEDCO shall have no obligation to pay the
$150,000 EIP to Toppan for Phase 2 In addition, Toppan's failure to complete Phase 2
shall render Toppan ineligible to receive the Phase 3 EIP, and shall result in the
termination of this Agreement..
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7.1.4 EIP for Phase 3.TEDCO agrees to make an EIP payment to Toppan in the amount
of$500,000 on or before June 1 of the year following satisfactory completion of Phase 3.
If Toppan does not complete Phase 3,including the creation of the required primary jobs,
on or before December 31, 2029, then TEDCO shall have no obligation to pay the
$500,000 EIP to Toppan for Phase 3,and shall result in the termination of this Agreement.
7.1.5 EIPs Subject to Future Appropriations. This Agreement shall not be construed as
a commitment or obligation of any specific taxes or tax revenues for payment to Toppan.
The EIPs by TEDCO under this Agreement are subject to TEDCO's appropriation of
funds for such payments in the budget year for which they are made.The EIPs to be made
to Toppan, if paid, shall be made solely from annual appropriations from the general
funds of TEDCO or from such other funds of TEDCO as may be legally set aside for the
implementation of Chapters 501 and/or 505 of the Local Government Code or any other
economic development or financing program authorized by statute or other applicable
Texas law, subject to any applicable limitations or procedural requirements. In the event
that TEDCO does not appropriate funds in any fiscal year for the EIPs due under this
Agreement, such failure shall not be considered a default under Sec. 7.3, and TEDCO
shall not be liable to Toppan for such EIP's; however, TEDCO shall extend this
Agreement for another year(s), until Toppan has received all the EIPs provided herein.
In addition, Toppan shall have the right but not the obligation to terminate this
Agreement, which shall not be deemed to constitute a default by Toppan, and, in such
event,Toppan shall be permitted to retain any EIP monies received on or before the date
of termination. To the extent there is a conflict between this paragraph and any other
language or covenant in this Agreement,this paragraph shall control.
8. EIP Recapture.
8.1 Recapture. In the event that TEDCO terminates this Agreement as a result of
Toppan's default, TEDCO may recapture and collect from Toppan the Recapture
Liability. Toppan shall pay to TEDCO the Recapture Liability within thirty (30) days
after TEDCO makes written demand for same, subject to any and all lawful offsets,
settlements, deduction, or credits to which Toppan may be entitled. Notwithstanding
anything herein to the contrary such Recapture Liability shall not exceed, in the
aggregate, an amount equal to all EIPs that were paid pursuant to this Agreement from
the Effective Date to the date of termination(together with interest thereon to be charged
at the rate for delinquent taxes as determined by Sec. 33.01 of the Property Tax Code of
the State of Texas,but without the addition of a penalty). TEDCO 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.
8.2 Recapture Exception. Notwithstanding Section 8.1, TEDCO shall have no right to
terminate this Agreement and/or collect from Toppan the Recapture Liability as a result
of Toppan's failure to meet its obligations to complete the three phases. Once Toppan has
completed a phase,Toppan shall be entitled to receive and retain any EIP paid by TEDCO
to Toppan for that phase. By way of example, and for the avoidance of doubt, if Toppan
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satisfactorily completes Phase 1, but subsequently fails to satisfactorily complete Phase
2 or Phase 3,TEDCO shall have no right to recapture the EIP paid for Phase 1.
9. Miscellaneous.
9.1 Mutual Assistance. The Parties will do all things reasonably necessary or appropriate to
carry out the terms and provisions of this Agreement.
9.2 Representations and Warranties. TEDCO represents and warrants to Toppan that this
Agreement is within its authority, and that it is duly authorized and empowered to enter
into this Agreement, unless otherwise ordered by a court of competent jurisdiction.
Toppan represents and warrants to TEDCO that it has the requisite,authority to enter into
this Agreement.
9.3 Default. If either TEDCO or Toppan should default in the performance of any obligations
of this Agreement,then 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 TEDCO
remains in default after notice and opportunity to cure, Toppan shall have the right to
terminate this Agreement by giving written notice thereof to TEDCO and to pursue any
remedy at law or in equity for TEDCO's breach. If Toppan remains in default after notice
and opportunity to cure,TEDCO as its exclusive remedy shall have the right to terminate
this Agreement by giving written notice thereof to Toppan and, upon such termination,
recapture ETPs and interest thereon as provided in Sec. 8.1 and, in the event of litigation
or a court proceeding to enforce such recapture,recovery of attorney's fees and expenses
pursuant to the Terms of Sec. 9.4.
9.4 Attorney's Fees. In the event any legal action or proceeding is commenced in a court of
competent jurisdiction between TEDCO and Toppan to enforce provisions of this
Agreement and/or 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.
9.5 Entire Agreement. This Agreement contains the entire agreement between the Parties
with respect to the subject matter hereof. This Agreement may only be amended, altered
or revoked by written instrument signed by the Parties.
9.6 Binding Effect.This Agreement shall be binding on and inure to the benefit of the Parties,
their respective successors, and assigns.
9.7 Assignment.Toppan may not assign all or part of its rights and obligations to a third party
without the express written consent of TEDCO,which consent shall not be unreasonably
withheld, conditioned or delayed, provided, however, that Toppan may assign this
Agreement without the consent of TEDCO to an entity which controls, is controlled by
or is under common control with Toppan, any successor entity to Toppan by way of
merger, consolidation or other non-bankiuptcy corporate reorganization, or an entity
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which acquires all or substantially all of Toppan's assets, partnership or membership
interests, or capital stock.
9.8 Amendment. This Agreement may be amended by the mutual written agreement of the
Parties.
9.9 Termination. In the event Toppan elects not to proceed with the investments as
contemplated by this Agreement, Toppan shall notify the City in writing, and this
Agreement and the obligations on the part of all Parties shall be deemed terminated and
of no further force or effect.
9.10 Notice. Any notice and or statement required and permitted to be delivered shall be
deemed delivered by actual delivery, facsimile with receipt of confirmation, electronic
mail transmission, 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 TEDCO:
Round Rock Transportation and Economic Development Corporation
221 E. Main Street
Round Rock,TX 78664
Attn: City Manager
Phone: (512)218-5400
Email: lhadley a}roundrocktexas
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(@sci-rlaw.com
If to Toppan:
Toppan Photomasks Round Rock, Inc.
400 Texas Ave.
Round Rock,TX 78664
Attn: John Nykaza
Email: John.Nykaza ,us.photomask.com
Either Party may designate a different address at any time upon written notice to the other Party.
9.11 InteMretation. 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
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the initial draft of this Agreement, this Agreement shall, in the event of any dispute, be
interpreted fairly and reasonably and neither more strongly for nor against any Party.
9.12 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.
9.13 Severability. In the event any provisions of this Agreement are illegal, invalid, or
unenforceable under present or future laws, 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.
9.14 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.
9.15 No Third-Party Beneficiaries. This Agreement is not intended to confer any rights,
privileges, or causes of action upon any third party.
9.16 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`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;epidemic;pandemic;
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.
9.17 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. TEDCO,its past,present and future officers,elected officials,employees and
agents of TEDCO, 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.
9.18 Estoppel Certificate.Toppan may request an estoppel certificate from TEDCO so long as
the certificate is requested in connection with a bona fide business purpose and requests
commercially reasonable certifications. TEDCO agrees to promptly execute and deliver
any estoppel certificate reasonably requested pursuant to this Sec. 9.18. The certificate,
which will upon request be addressed to Toppan,or a lessor,lessee,purchaser or assignee
of Toppan or the Facility, or any lender associated with any of the foregoing, and shall
include, but not necessarily be limited to, statements (qualified to the best knowledge of
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TEDCO) that this 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.
9.19 Term of This Agreement. The term of this Agreement shall begin on the effective date of
this Agreement and terminate on December 31,2029. However, TEDCO's obligation, if
any, to pay EIPs for calendar year 2029, shall survive said termination date.
EXECUTED to be effective as of the Effective Date.
ROUND ROCK TRANSPORTATION AND
ECONOMIC DEVELOPMENT CORPORATION
By:_ , M /
Craig organ,P e ident
TOPPAN PHOTOMASKS ROUND ROCK,INC.
By: VV .
John Nykaza,President
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EXHIBIT A
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 oath stated as
follows:
"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. "I am the
(title) of Toppan, Inc., and I am duly authorized to
make this affidavit on its behalf.
As of December 31, 202_, in compliance with Section 4.3 of the Economic
Development Agreement, Toppan Inc. had created the following Employee positions:
EMPLOYEE ID NO. JOB POSITION OR TITLE
10
TOTAL JOBS
DATED THIS DAY OF , 202_.
By: (Signature)
(Printed Name)
(Title)
SUBSCRIBED AND SWORN TO BEFORE ME ON THIS THE DAY OF ,
202 .
NOTARY PUBLIC, STATE OF TEXAS
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