Contract - Valex Corp. - 5/26/2022 ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT
This Economic Development Incentive Agreement ("Agreement") is entered into this day of
2022, by and between the Round Rock Transportation and Economic
Developm6nt Corporation, a Type B Corporation created pursuant to Chapter 505 of the Texas Local
Government Code("TEDCO"),and Valex Corp.a California corporation ("Valet").The foregoing are
referred to collectively as the "Parties."
WHEREAS, Valex is a leading manufacturer of ultra-high purity process components used in the
semiconductor,LCD,and solar industries and it intends to locate its business in an existing shell building
(the"Facility") located at 120 E. Old Settlers Blvd, in the City of Round Rock, Texas("City"); and
WHEREAS, Valex intends to invest at least $5,000,000 in Real Property Improvements (as defined in
Section 2.6)to the Facility,and$7,000,000 in new equipment and Business Personal Property(as defined
in Section 2.1) for the Facility; and
WHEREAS, TEDCO has determined that the above-described expenditures are for a "project" as
described by §501.101 of the Local Government Code and that it will result in the creation or retention
of primary jobs as defined by Section 501.002 Texas Local Government Code; and
WHEREAS, TEDCO agrees to provide performance based Economic Incentive Payments (as defined
in Section 2.2)to Valex defray a portion of Valex'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
Valex agree as follows:
1. Authority. TEDCO's execution of this Agreement is authorized by§501.158 of the Texas Local
Government Code.
2. Definitions.
2.1 "Business Personal Property" means equipment which costs at least $5,000 and has a
model number and/or serial number and is purchased and used for the purpose of
supporting Valex's manufacturing operations at the Facility.
2.2 "Economic Incentive Payment(s)" ("E1Ps") means the amounts paid by TEDCO to
Valex under this Agreement.
2.3 "Effective Date" is the date this Agreement is executed to be effective by the Parties.
2.4 "Employee"means an employee who is hired by Valex to perform a Primary Job, as that
term is defined by § 501.002 of the Texas Local Government Code.
Economic Development Agreement;FINAL:5-16-22 48594186-2176 v.I
2.5 "Facility" means the existing shell building located in the Round Rock city limits with
an address of 120 E. Old Settlers Blvd.
2.6 "Real Property Improvements" means the real property improvements to the Facility
directly related to the design, rehabilitation, reconstruction, repair, finish out and/or
remodeling of the Facility for the purpose of supporting Valex'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 Valex in the event of a Valex
default.
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 5.1 below.
4. Rights and Obligations of Valex.
4.1 Lease the Facility. Valex agrees to execute a lease for the Facility with a term of at
least seven years and to occupy the Facility for that period of time for its manufacturing
business. Valex agrees to provide TEDCO with an executed copy of the aforesaid lease.
4.2 Investment in the Facility. Valex agrees to spend at least $5,000,000 for Real Property
Improvements and $7,000,000 for Business Personal Property for the Facility according
to the schedule set forth below:
Real Property Business Personal
On or Before Improvements Property
December 31, 2022 $ 2,500,000 $ 3,000,000
December 31, 2023 $ 2,500,000 $ 2,000,000
December 31,2024 $ 0.00 $ 2,000,000
TOTAL $ 5,000,000 $ 7,000,000
4.3 Evidence of Satisfaction of Investment. On or before April 15 of the following calendar
year, Valex agrees to provide proof to TEDCO that the above required expenditures have
been made. TEDCO shall have the right at its expense to audit Valex's records to verify
same following reasonable advance notice to Valex.
4.4 Employees. Over the term of this Agreement, Valex agrees to relocate to the City or
otherwise create a minimum of 75 new employee positions with an average salary of
$50,000, plus industry standard benefits in accordance with the following schedule:
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On or Before New Jobs Created
December 31, 2022 25
December 31, 2023 25
December 31, 2024 25
TOTAL 75
4.5 Job Compliance Affidavit. On or before April 15 of 2023, and of each calendar year
thereafter through April 15,2025,Valex agrees to provide to TEDCO a Job Compliance
Affidavit, the form of such Job Compliance Affidavit being attached hereto as Exhibit
A. TEDCO shall have the right, at its expense following reasonable advance notice to
Valex, to audit Valex's records to verify that this obligation has been satisfied.
4.6 Compliance with regulations. Valex agrees that it will comply with the City's
development approval processes and shall operate the Facility consistent with City
ordinances, development regulations, and requirements.
4.7 Continuous operation. Valex 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.
5. Rights and Obligations of TEDCO.
In consideration of Valex's compliance with this Agreement, TEDCO agrees as follows:
5.1 Economic Incentive Payment("EIP").
5.1.1 EIP. TEDCO shall, subject to Valex's satisfaction of its obligations set forth in
section 4 above,make EIPs to Valex as set forth below.The EfP's shall be made in annual
payments on or before June 1 of each year,as follows:
Year EIP Amount
2023 $ 75,000
2024 $ 75,000
2025 $ 75,000
TOTAL $225,000
5.1.2 E1Ps Subiect 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
Valex. 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 Valex, 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
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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 Section 7.3, and TEDCO
shall not be liable to Valex for such EIPs,however, TEDCO shall extend this Agreement
for another year(s), until Valex has received all of the EIPs provided for herein. In
addition, Valex shall have the right but not the obligation to terminate this Agreement,
which shall not be deemed to constitute a default by Valex, and, in such event. Valex
shalt 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.
6. EIP Recapture. In the event that TEDCO terminates this Agreement as a result of Valex's
default, TEDCO may recapture and collect from Valex the Recapture Liability. Valex 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 Valex
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 Section 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.
7. Miscellaneous.
7.1 Mutual Assistance. The Parties will do all things reasonably necessary or appropriate to
carry out the terms and provisions of this Agreement.
7.2 Representations and Warranties. TEDCO represents and warrants to Valex 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. Valex
represents and warrants to TEDCO that it has the requisite authority to enter into this
Agreement.
7.3 Default. If either TEDCO or Valex 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 TEDCO
remains in default after notice and opportunity to cure, Valex 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 Valex 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 Valex and, upon such termination,
recapture EIP and interest thereon as provided in Section 6 and, in the event of litigation
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or a court proceeding to enforce such recapture, recovery of attorney's fees and expenses
pursuant to the Terms of Section 7.4.
7.4 Attorney's Fees. In the event any legal action or proceeding is commenced in a court of
competent jurisdiction between TEDCO and Valex 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 Iaw.
7.5 Entire Agreement. "This Agreement contains the entire agreement between the Parties
with respect to the ETP. This Agreement may only be amended, altered or revoked by
written instrument signed by the Parties.
7.6 Binding Effect. This Al,*reement shall be binding on and inure to the benefit of the Parties,
their respective successors and assigns.
7.7 Assignment. Valex 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 Valex may assign this
Agreement without the consent of TEDCO to an entity which controls, is controlled by
or is under common control with Valex, any successor entity to Valex by way of merger,
consolidation or other non-bankruptcy corporate reorganization, or an entity which
acquires all or substantially all of Valex's assets,partnership or membership interests, or
capital stock.
7.8 Amendment. This Agreement may be amended by the mutual written agreement of the
Parties.
7.9 Termination. In the event Valex elects not to proceed with the investments as
contemplated by this Agreement, Valex 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.
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 TEDCO: Round Rock Transportation and Economic Development Corporation
221 E. Main Street
Round Rock, TX 78664
Attn: City Manager
Phone: (512)218-5400
Email: Ihadleyfwroundrocktexas.gov
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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(iiscrrlaw.com
If to Valex: Valex Inc.
6080 Leland Street
Ventura, California 93003
Attn: David Dyal
Email: David.Dyal(iovalex.com
Any party may designate a different address at any time upon written notice to the other Parties.
7.l 1 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, 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, 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 Maieure. 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 majeu a 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
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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.
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.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.
7.18 Estoppel Certificate. Valex 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 Section 7.18. The
certificate, which will upon request be addressed to Valex, or a lessee, purchaser or
assignee of Valex, shall include, but not necessarily be limited to, statements (qualified
to the best knowledge of 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.
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EXECUTED to be effective as of the V-day of 2022 (the"Effective Date").
ROUND ROCK TRANSPORTATION AND
ECONOMIC DEVELOPMENT CORPORATION
By: _ /,A /
Craig or esident
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VALF.X CORP. /
By: _
Its: / �G
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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 Valex, Corp., 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, Valex, Corp. had created the following Employee positions:
EMPLOYEE ID NO. JOB POSITION OR TITLE
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TOTALJOBS
DATED THIS DAY OF , 202 .
BY: (Signature)
(Printed Name)
(Title)
SUBSCRIBED AND SWORN TO BEFORE ME ON THIS THE DAY OF
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NOTARY PUBLIC, STATE OF TEXAS
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