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R-05-05-26-12D2 - 5/26/2005RESOLUTION NO. R -05-05-26-12D2 WHEREAS, the City of Round Rock has established an Economic Development Program, and WHEREAS, to further promote economic development, the City wishes to enter into an Economic Development Agreement ("Agreement") with the Round Rock Transportation System Development Corporation, Simon Property Group, L.P., and CPG Round Rock, L.P. regarding Simon's development of a retail outlet mall in the City of Round Rock, and WHEREAS, the City Council wishes to approve the Resolution of the Board of Directors of the Round Rock Transportation System Development Corporation authorizing its President to execute the Agreement, 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 Agreement with the Round Rock Transportation System Development Corporation, Simon Property Group, and CPG Round Rock, L.P., a copy of same being attached hereto as Exhibit "A" and incorporated herein for all, purposes, and BE IT FURTHER RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS, That the City Council hereby approves the Resolution of the Board of Directors of the Round Rock Transportation System Development Corporation authorizing its President to execute the Agreement. 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 @PFDesktop\::ODMA/WORLDOX/O:/WDOX/RESOLUTI/R50526D2.WPD/sls 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 RESOLVED this 26th day of May, 2005. NYLE Ci CHRISTINE R. MARTINEZ, City Secre 2 r Round Rock, Texas ECONOMIC DEVELOPMENT AGREEMENT This Economic Development Agreement ("Agreement") is entered into this day of , 2005, by and between the City of Round Rock, Texas, a Texas home rule municipal corporation ("City"), the Round Rock Transportation System Development Corporation, a corporation created pursuant to the Development Corporation Act — Art. 5190.6(4)(B), ("4B Corp") and Simon Property Group (Texas), L.P., and CPG Round Rock, L.P., their successors and assigns ("Simon"). 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 Simon in recognition of the positive economic benefits to the City through Simon's development of approximately 87.193 acres of land, as more particularly described on the attached Exhibit "B" ("Property") as a premium destination retail outlet mall and ancillary uses ("Project"); and WHEREAS, the 4B Corporation has adopted Resolution No. R-05-36, attached as Exhibit "C" ("4B Resolution") authorizing the Board President to enter into this Agreement with Simon in recognition of the aforesaid benefits; and WHEREAS, the purpose of this Agreement is to promote economic development as contemplated by Chapter 380 of the Texas Local Government Code and the Development Corporation Act - ART. 5190.6 TEx. REV. Ctv. STAT. ANN. (Vernon's 1987 and Vernon's Supp. 2003) whereby Simon will construct, develop and operate the Project, or cause the Project to be operated, in conformance with the City's development approvals for the Project, and the City and 4B Corp will participate in the funding of certain roadway, utility, and other related improvements in accordance with the terms of this Agreement; and WHEREAS, development of the Project requires the cooperation and participation of the City, 4B Corp and Simon in the design and construction of various roadway and public utility improvements; and WHEREAS, the City and 4B Corp have agreed to assume responsibility for the design and construction, at the City's cost, of the IH -35 ramps and related improvements as described on the attached Exhibit "D" ("Public Road Improvements"); and WHEREAS, Simon has agreed to construct certain roadway improvements described in Section 5.2 of this Agreement ("Simon Road Improvements") and; WHEREAS, the City and 4B Corp have agreed to provide performance based economic development grants to Simon to defray a portion of the project 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, 4B Corp and Simon agree as follows: 86885 EXHIBIT 1. Authority, The City's and 4B Corp's execution of this Agreement are authorized by both Chapter 380 and Chapter 395 of the Texas Local Government Code, the Development Corporation Act — ART. 5190.6 TEX. REV. Civ. STAT. ANN. (Vernon's 1987 and Vernon's Supp. 2003) the City Resolution and the 4B Resolution, constitute a valid and binding obligation of the City in the event Simon proceeds with the development of the Property. The City and 4B Corp acknowledge that Simon is acting in reliance upon their 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 "Adjusted Gross Leasable Sales Area" shall mean the gross leasable area of the Project less any storage areas, bathroom facilities, courtyards, hallways or other areas not utilized for the sale of goods and services, the proposed cinema and outlot uses or pad sites providing only services. 2.2 "Commencement of Construction" shall mean the commencement of work on piers, foundations or other improvements necessary for the construction of vertical improvements. 2.3 "Economic Incentive Payment(s)" ("EIPs") means the amount paid by the City to Simon under the Program. 2.4 "Effective Date" is the date this Agreement is executed to be effective by the City, 4B Corp and Simon. 2.5 "Net Present Value Basis" shall be calculated as set forth in Section 6.2.2.(f). 2.6 "One Cent Sales Tax Revenues" means that portion of Sales Tax Revenues (defined below) resulting from the imposition of a one percent municipal sales tax on sales arising from the Project, such as that presently in effect pursuant to Texas Tax Code §321.101(a) and §321.103. If the City ever elects to charge less than a one percent (1%) sales tax but isallowed by law to collect a. sales tax of one percent (1%) or more, then instead of being based on actual collections, One Cent Sales Tax Revenues attributable to sales tax collected shall be deemed to be computed as if the City did elect to charge a one percent sales tax. 2.7 "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..8 "Project" is Simon's planned development of the Property which shall consist of a premium outlet center and related facilities, all of which. are commonly referred to as "Round Rock Premium Outlets" The Project shall include approximately five hundred fifty thousand (550,000) square feet of Adjusted Gross Leasable Sales Area in a phased development of some or all of the following uses: retail, banking, restaurants, entertainment, theater, offices, hotel and/or recreation space. The 2 Project will include walkways in the retail -pedestrian areas, public space with outside pedestrian amenities, such as benches, landscape features, fountains and/or water features and dining areas. If constructed in phases, the first phase ("First Phase") shall contain at least four hundred twenty thousand (420,000) square feet of Adjusted Gross Leasable Sales Area. 2.9 "Project Area" is the area within the Property that will be developed for the Project and is otherwise described in Exhibit B — "Property Description". 2.10 "Sales Tax Effective Date" is first day of the month following the date upon which Simon certifies in writing that it and/or its tenants has received one or more certificates of occupancy for and has begun retail operation of at least fifty thousand (50,000) square feet of Adjusted Gross Leasable Sales Area for the Project or the First Phase, if constructed in phases. 2.11 "Sales Tax Revenues" means the amount of sales tax collected by the City arising from the Project. The term "Sales Tax Revenues" shallinclude any taxes authorized by the State in the future that are intended to replace sales or use tax revenues currently available to the City. 3. Notice to Proceed and Expenditure of Funds Prior to Delivery of Written Notice to Proceed by Simon. 3.1 Activities Prior to Delivery of Written Notice to Proceed by Simon. 3.1.1 It may be desirable for the City, 4B Corp and/or Simon to commence certain engineering, design and/or preliminary site work activities before Simon delivers the Written Notice to Proceed described in Section 3.2 below in order to maximize the ability of the Project to open to the public on the anticipated schedule. No party shall have any obligation to repay or reimburse any other party for such activities unless they have entered into an Advance Funding Agreement. Simon, in its sole discretion, may elect to engage in such advance funding. 3.1.2 Any advance funding commitments made by Simon under paragraph 3.1.1 shall be recognized as inducement costs to be reimbursed or repaid as Economic Incentive Payments in accordance with the provisions of this Agreement. 3.2 Post -Delivery of Written Notice. by Simon. The rights and obligations of Simon and of the City and 4B Corp set forth in this Agreement shall be of no force or effect unless and until Simon shall deliver written notice to the City and 4B Corp that it: 3.2.1 Has acquired fee title to the Property; and 3 3.2.2 Is prepared in a diligent manner to commence and pursue construction of the Project to completion as evidenced by the issuance by the City of a Certificate of Occupancy to Simon. 4. Term. This Agreement shall become enforceable upon its Effective Date. This Agreement shall terminate upon the earlier to occur of: (i) eight (8) years after the Sales Tax Effective Date; (ii) Simon's receipt of reimbursement of its aggregated actual costs of construction of Teravista Blvd, "C", Oakmont Drive "A", Oakmont Drive "B2" and one-half of its actual cost of Oakmont Drive "B1" pursuant to Section 6.1.3; or (iii) Simon's receipt of the total EIPs equal to the Maximum Payment Amount (defined in paragraph 6.2.2(e)). In recognition of the fact that EIPs, by necessity, are calculated and paid after taxes have been assessed and paid to the City, and therefore always run in arrears, the term of this Agreement shall be deemed to include any payments for Sales Tax Revenues collected by Simon's tenants during the Term of this Agreement but not received by the City until after the termination date . An equitable adjustment shall be made to the Term if the completed Project is closed for a significant period of time due to a `force majeure event" as defined in paragraph 7.15 below. 5. Rights and Obligations of Simon. In consideration of the City's and 4B Corp's compliance with this Agreement, Simon agrees as follows: 5.1 Simon Road Improvements. Simon will: (a) Donate rights-of-way associated with Oakmont Drive Extension — Segment A from south property line of the Simon tract to Teravista Parkway —Segment C; Donate or cause to be donated all or a part of the right-of-way for the Oakmont Drive Extension — Segments B1 and B2 from Chandler Road to south property line. of Simon tract, through a series of land transactions among Simon, Barshop & Oles, Scott & White, and Newland Properties, donate any such parts of the rights-of-way associated with Oakmont Drive Extension — Segments B1 and B2 from Chandler Road to south property line of Simon tract; (c) Donate rights-of-way associated with Teravista Parkway — Segment C from the intersection with Oakmont Drive Extension — Segment A to the IFI -35 frontage road; (b) (d) Be responsible for construction of the following roads, either directly or on behalf of the City. Simon shall use its best efforts to ensure completion of the roads no later than September 1, 2006. (e) Fund the cost of construction of the road improvements: (i) Oakmont Drive Extension — Segment A, currently estimated to be $1,419,834; (f) (ii) Oakmont Drive Extension — Segment B1 currently estimated to be $334,411; and Segment B2 currently estimated to be $627,730, (note: only one-half of the Segment B2 cost is to be included in the total cost of construction as set forth in Sec. 6.1.3 below); and (iii) Teravista Parkway Segment C from theintersection with the North/South Road (Oakmont Drive Extension — Segment A) to the IH - 35 frontage road, currently estimated to be $1,198,494; Comply with the statutory bidding requirements of Chapter 252 of the Local Government Code with respect to the Public Road Improvements listed above but not otherwise: 5.2 Compliance with Development Regulations and Other Ordinances. Simon shall comply with the City's development approval processes and shall develop the Project on the Property consistent with City ordinances, City -approved PUD zoning ordinance for the Property, City -approved development regulations, and other City development requirements. 5.3 Simon Accounting. Simon shall maintain complete books and records showing all expenses of any nature that City is to or will reimburse or pay under this Agreement which books and records shall be deemed complete if kept in accordance with generally acceptable accounting principles as applied to Texas partnerships. Such books and records shall be available for examination by the duly authorized officers or agents of the City during normal business hours upon request made not less than ten (10) business days prior to the date of such examination. Simon shall maintain such books and records throughout the term of this Agreement and for four (4) years thereafter. 5.4 Waiver of Sales Tax Confidentiality. Simon agrees to obtain a Waiver of Sales Tax Confidentiality from tenants of the Project in a form approved by the Texas Comptroller's Office ("Waiver Form"), a copy of which is attached hereto as Exhibit "E". The Waiver Form will be utilized by the City to obtain reports filed by Simon's tenants to determine the amount of sales tax revenues generated from the Project for the previous calendar quarter. Such reports shall be based upon reports filed by the Project's tenants with the Texas Comptroller's office. 5.5 Reimbursement of Unearned Incentive Payments. In the event that Simon receives full reimbursement of its actual costs from the 4B Corp pursuant to Section 6.2.1, below: 5.5.1 Simon will use commercially reasonable efforts to operate the retail facility for a period equal to the term set forth in Section 6.2.2 (f), below; and 5.5.2 At the end of the Term, the amount of the City Payment EIP's pursuant to Section 6.2.2. that would have otherwise been earned by Simon and paid by the City may be calculated, at the City's option. If this calculation results in an amount less than the amount of the EIP actually paid to Simon by the 4B 5 Corp pursuant to Section 6.2.1, then at the City's election, Simon will refund to the 4B Corp the difference. Said refund shall be paid no later than thirty (30) days after Simon receives written notice from the City or the 4B Corp that the refund is due. 6. Rights and Obligations of the City and 4B Corp. In consideration of Simon's compliance with this Agreement, the City and 4B Corp agree as follows: 6.1 Public Road Improvements. 6.1.1 The City, either on its own or acting through 4B Corp, shall fund the construction of the Public Frontage Road Improvements, currently estimated to cost approximately $8,440,579 before financing costs. The City has previously entered into an Advanced Funding Agreement with the Texas Department of Transportation (TxDOT) regarding the design and construction of the Chandler Road Interchange and IH35 Improvements currently estimated to cost $6,150,220. The City shall use its best efforts to ensure completion of these improvements no later than September 1, 2006. 6.1.2 Simon is seeking to acquire the right-of-way for the Oakmont Drive Extension — Segments B1 and B2 from Chandler Road to south property line of Simon tract, through a series of land transactions among Simon, Barshop & Oles, Scott & White, and Newland Properties. If Simon determines it is unable to acquire all or part of said right-of-way, it may so notify the City at anytime and request the City to acquire the right-of-way pursuant to its powers of eminent domain Simon agrees to pay all of the actual cost of such acquisition, including, but not limited to, appraisal fees, expert testimony, and reasonable attorney fees. Upon receipt of such notice, the City will utilize reasonable efforts to acquire the right-of-way for the proposed Oakmont Drive Extension — (Segments B1 and B2) from Chandler Road to the south property line of the Property as soon as is reasonably possible . 6.1.3 Subject to the conditions set forth herein, the City or the. 4B Corp shall reimburse Simon all of the actual costs of constructing the following roadway improvements, including but not limited to engineering, pavement, drainage, erosion and sedimentation control, mobilization, overhead, and lighting within the public right of way, currently estimated to aggregate to $3,266,604, of the following improvements: (a) Oakmont Drive Extension — be $1,754,245: (b) Oakmont Drive Extension $313,865; and 6 Segments A, and B1, currently estimated to — Segment B2, currently estimated to be (c) Teravista Parkway — Segment C from the intersection with the North/South Road (Oakmont Drive Extension — Segment A) to the IH - 35 frontage road —currently estimated to be $1,198,494 6.2 Economic Incentive Payments. 6.2.1 4B Payments. The 4B Corp shall have the option of making the reimbursement for the Public Road Improvements as set forth on Exhibit D, in whole or in part, to Simon upon the issuance by the City of a Certificate of Occupancy for the First Phase of the Project. The 4B Corp shall notify Simon in writing in the event it decides to exercise the aforesaid option. 6.2.2 City Payments. In the event that the 4B Corp elects not, either in whole or in part, to make the reimbursement payment due Simon under Section 6,2.1, above, the City shall pursuant to Chapter 380 of the Texas Local Government Code, but subject to the conditions set out here, make quarterly EIPs to Simon of any such unpaid reimbursements. The EIPs are to be calculated as follows: (a) Calculations will be based upon sales subject to the City's one -cent (10) general sales tax; (b) (c) Calculations shall be based on such annual sales in excess of Two Hundred Seventy-five Dollars ($275) per square foot of Adjusted Gross Leasable Sales Area; Upon the opening of each phase of the Project, Simon will provide a certification of the amount of Adjusted Gross Leasable Sales Area; (d) The EIPs will be an amount equal to one hundred percent (100%) of the One Cent Sales Tax Revenues from sales (as defined in subsections a and b, above); (e) The Maximum Amount of the EIPs will be a Net Present Value of the aggregated actual costs estimated to be $3,266,604 (not otherwise reimbursed by the 4B Corp, as described in Section 6.1.3 (d), above, of the improvements described in Section 6.1.3 above. (f) The Maximum Term shall be the earlier of the date when the aggregate amount of the EIPs made to Simon on a Net Present Value Basis (discounted at six percent (6%) from the Sales Tax Effective Date) is equal to the Maximum Amount of the EIPs estimated to be $3,266,604, or eight (8) years from the first day of the month following the Sales Tax Effective Date. 6.2.3 Changes in Law. If, during the term of this Agreement, state law applicable to municipal taxation changes the form of sales taxes, and as a result, the EIPs differ from the amount which would have been paid to Simon under the laws in effect as of the Effective Date of this Agreement, then the City, in its sole 7 discretion, may adjust the EIPs using whatever discretionary taxes and revenues that are legally available to City which can be allocated to the EIPs. However, this section is not intended to require the City to use funds from other sources which are not within the City's discretion to allocate to the Project, so as to achieve the same economic benefits to both parties as would have resulted had the law not changed. 6.2.4 Payments Subject to Future Appropriations. Although certain payments under this Agreement are calculated based on a formula applied to sales tax revenues, this Agreement shall not be construed as a commitment, issue or obligation of any specific taxes or tax revenues for payment to Simon. All payments by the City under this Agreement are subject to the City's appropriation of funds forsuchpayments in the budget year for which they are made. The payments to be made to Simon, 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 forpayments due under this Agreement., such failure shall not be considered a default under Section 7.3, and the City shallnot be liable to Simon for such payments, but Simon 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. 6.2.5 City Accounting. The City shall maintain complete books and records showing sales taxes remitted to the City by the State and disbursements of income incentive grant payments, which books and records shall be deemed complete if kept in accordance with generally acceptable accounting principles as applied to Texas municipalities. In addition, the City shall prepare an annual report documenting accrued interest, any carry -forward of accrued interest, unamortized balances, and amortized balances. Such books and records shall be available for examination by the duly authorized officers or agents of Simon during normal business hours upon request made not less than ten (10) business days prior to the date of such examination. The City shall maintain such books and records throughout the term of this Agreement and for four (4) years thereafter. 6.2.6 Utility Services for the Property. The City shall provide water and wastewater to Simon for the Project, subject to the same fees and charges assessed to similarly situated properties. 6.2.7 Permitting. The City shall cooperate with Simon to expeditiously process all City permit applications and City inspections. 8 7. Miscellaneous. 7.1 Mutual Assistance. The City, 4B Corp and Simon 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. 7.2 Representations and Warranties. The City and 4B Corp represent and warrant to Simon 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. Simon represents and warrants to the City and 4B Corp that it has the requisite authority to enter into this Agreement. 7.3 Default. If either the City, 4B Corp or Simon 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 or 4B Corp remain in default after notice and opportunity to cure, Simon shall have the right to pursue any remedy at law or in equity for the City's or 4B Corp's breach. If Simon remains in default after notice and opportunity to cure, the City's or 4B Corp's remedy shall be limited to a termination of the EIPs, which accrue after the date of such default. Any EIPs from City or 4B Corp to Simon which is not timely paid by City or 4B Corp shall incur interest at the highest rate per annum allowed by the applicable law of the State of Texas from the date such E1Ps are due until paid. Any funds owed by Simon to the City or 4B Corp which are not timely paid by Simon shall incur interest at the highest rate per annum allowed by the applicable law of the State of Texas from the date such funds are due until paid. 7.4 Attorney's Fees. In, the eventany legal action or proceeding is commenced between the .City, 4B Corp and Simon 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, 4B Corp and Simon. 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. Simon may assign all or part of its rights and obligations to a third party upon thirty days written notice to the City and 4B Corp. 9 7.8 Amendment. This Agreement may be amended by the mutual written agreement of the parties. 7.9 Termination. In the event Simon elects not to proceed with the Project as contemplated by this Agreement, Simon shall notify the City and 4B Corp 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. In addition, this Agreement shall terminate when Simon has been paid the Maximum Payment Amount in full, or eight (8) years after the first day of the month following the Sales Tax Effective Date, whichever first occurs. 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: Simon: with a copy to: with a copy to: with a copy to: Simon Property Group Attn: Kathy Shields 115 West Washington Street Indianapolis, IN 46204 Ph: (317) 263-7076 Fx: (317) 685-7299 Mr. David B. Armbrust Armbrust & Brown, L.L.P. 100 Congress Ave., Suite 1300 Austin, Texas 78701 Ph: (512) 435-2301 Fx: (512) 435-2360 Simon Property Group Attn: Bill Hammer 115 West Washington Street Indianapolis, IN 46204 Ph: (317) 263-7006 Fx: (317) 263-7648 Chelsea Property Group Attn: Mark J. Silvestri 105 Eisenhower Parkway Roseland, NJ 07068 10 with a copy to: City: 4 B Corp: with a copy to: Ph: (973) 228-6111 Fx: (973) 364-2503 Chelsea Property Group Attn: General Counsel 105 Eisenhower Parkway Roseland, NJ 07068 Jim Nuse, City Manager City of Round Rock 221 East Main St. Round Rock, TX 78664 Ph: (512) 218-5401 Fx: (512) 218-7097 Jim Nuse, City Manager City of Round Rock 221 East Main St. Round Rock, TX 78664 Ph: (512) 218-5401 Fx: (512) 218-7097 Stephan L. Sheets, City Attorney 309 East Main St. Round Rock, TX 78664 Ph: (512) 255-8877 Fx: (512) 255-8986 Either party may designate a different address at any time upon written notice to the other party. 7.11 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. 7.12 Applicable Law. This Agreement is made, and shall be construed and interpreted, under the laws of the State of Texasand 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 11 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 andwill 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 "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. 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 Exhibits. The following Exhibits "A" - "E" are attached and incorporated by reference for all purposes: Exhibit "A": Exhibit "B": Exhibit "C": Exhibit "D": Exhibit "E": City Resolution No. Property Description 4B Resolution No. R-05-36 Public Road Improvements Waiver of Sales Tax Confidentiality Form 7.18 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, 4B Corp, its past, present and future officers, elected officials, employees and agents of the City and 4B Corp, do not assume any responsibilities or liabilities to any third party in connection with the development of the Project or the design, construction or operation of any portion of the Project. 7.19 Extension of Dates for Commencement of Construction. In the event Simon determines that an extension of a Project commencement date is necessary due to market or financing conditions, Simon may extend either or both of the Project commencement dates set forth in paragraph 3.2 for up to one (1) year. All other dates shall be extended accordingly. EXECUTED to be effective as of the day of , 2005 (the "Effective Date"). 12 APPROVED as to form: Stephan L. Sheets, City Attorney SPG ROUND ROCK NS, L.P. a Delaware limited liability company By: VPI Landco, LLC, General Partner By: Virginia Properties, Inc., Manager By: Printed Name: Title: CPG ROUND ROCK, L.P. a Texas limited partnership By: Virginia Properties, Inc., General Partner By: Printed Name: Title: CITY OF ROUND ROCK, TEXAS, a home rule city and municipal corporation By: Nyle Maxwell, Mayor ROUND ROCK TRANSPORTATION SYSTEM DEVELOPMENT CORPORATION, a Texas Development Corporation By: Nyle Maxwell, President 13 EXHIBIT "A" CITY RESOLUTION NO. 1 EXHIBIT "B" PROPERTY DESCRIPTION 1 EXHIBIT "C" 4B RESOLUTION NO. 1 EXHIBIT "D" PUBLIC ROAD IMPROVEMENTS 198756-18 05/19/2005 EXHIBIT "E" WAIVER OF SALES TAX CONFIDENTIALITY Date I authorize the Comptroller of Public Accounts to release sales tax Information pertaining to the taxpayer indicated below to , a , its successors, assigns or nominees, and the City of Round Rock. Texas, and the Round Rock Transportation System Development Corporation. I understand that this waiver applies only to our retail store located in the Premium Outlets located in the City of Round Rock, Williamson County, Texas. Please print or type the following information as shown on your Texas Sales and Use Tax permit: Name of Taxpayer Listed on Texas Sales Tax Permit: Name Under Which Taxpayer is Doing Business (d/b/a or Store Name): Taxpayer Mailing Address: Physical Location of Business Permitted for Sales Tax in Round Rock, Texas: Texas Taxpayer ID Number Tax Outlet Number (As shown of Texas Sales Tax Permit) Authorized Signature': Printed Name: Title: Phone: 1 The authorized signature must be of an owner, officer, director, partner or agent authorized to sign a Texas Sales Tax Return. If you have questions concerning this Waiver of Confidentiality, please contact Sandra C. Joseph, Texas Comptroller of Public Accounts at (800) 531-5441, Ext. 5-0411. 198756-18 05/19/2005 ECONOMIC DEVELOPMENT AGREEMENT tt��f Tihs Economic Development Agreement ("Agreement") is entered into this o(to day of , 2005, by and between the City of Round Rock, Texas, a Texas home rule munici corporation ("City"), the Round Rock Transportation System Development Corporation, a corporation created pursuant to the Development Corporation Act — Art. 5190.6(4)(B), ("4B Corp") and Simon Property Group (Texas), L.P., and CPG Round Rock, L.P., their successors and assigns ("Simon"). WHEREAS, the Cityhas adopted Resolution No.�� -�d�-14a171 pattached as Exhibit "A" ("City Resolution"), establishing an economic development program and authorizing the Mayor to enter into this Agreement with Simon in recognition of the positive economic benefits to the City through Simon's development of approximately 87.193 acres of land, as more particularly described on the attached Exhibit "B" ("Property") as a premium destination retail outlet mall and ancillary uses ("Project"); and WHEREAS, the 4B Corporation has adopted Resolution No. R-05-36, attached as Exhibit "C" ("4B Resolution"). authorizing the Board President to enter into this Agreement with Simon in recognition of the aforesaid benefits; and WHEREAS, the purpose of this Agreement is to promote economic development as contemplated. by Chapter 380 of the Texas Local Government Code and the Development Corporation Act - ART. 5190.6 TEX. REV. Civ. STAT. ANN. (Vernon's 1987 and Vernon's Supp. 2003) whereby Simon will construct, develop and operate the Project, or cause the Project to be operated, in conformance with the City's development approvals for the Project, and the City and 4B Corp will participate in the funding of certain roadway, utility, and other related improvements in accordance with the terms of this Agreement; and WHEREAS, development of the Project requires the cooperation and participation of the City, 4B Corp and Simon in the design and construction of various roadway and public utility improvements; and WHEREAS, the City and 4B Corp have agreed to assume responsibility for the design and construction, at the City's cost, of the 1H-35 ramps and related improvements as described on the attached Exhibit "D" ("Public Road Improvements"); and WHEREAS, Simon has agreed to construct certain roadway improvements described in Section 5.2 of this Agreement ("Simon Road Improvements") and; WHEREAS, the City and 4B Corp have agreed to provide performance based economic development grants to Simon to defray a portion of the project 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, 4B Corp and Simon agree as follows: 86885 k-©5-05464..21 - 1. Authority. The City's and 4B Corp's execution of this Agreement are authorized by both Chapter 380 and Chapter 395 of the Texas Local Government Code, the Development Corporation Act — ART. 5190.6 TEX. REV. Civ. STAT. ANN. (Vernon's 1987 and Vernon's Supp. 2003) the City Resolution and the 4B Resolution, constitute a valid and binding obligation of the City in the event Simon proceeds with the development of the Property. The City and 4B Corp acknowledge that Simon is acting in reliance upon their 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 "Adjusted Gross Leasable Sales Area" shall mean the gross leasable area of the Project less any storage areas, bathroom facilities, courtyards, hallways or other areas not utilized for the sale of goods and services, the proposed cinema and outlot uses or pad sites providing only services. 2.2 "Commencement of Construction" shall mean the commencement of work on piers, foundations or other improvements necessary for the construction of vertical improvements. 2.3 "Economic .Incentive Payment(s)" ("EIPs") means the amount paid by the City to Simon under the Program. 2.4 "Effective Date" is the date this Agreement is executed to be effective by the City, 4B Corp and Simon. 2.5 "Net Present Value Basis" shall be calculated as set forth in Section 6.2.2.(f). 2.6 "One Cent Sales Tax Revenues" means that portion of Sales Tax Revenues (defined below) resulting from the imposition of a one percent municipal sales tax on sales arising from the Project, such as that presently in effect pursuant to Texas Tax Code §321.101(a) and §321.103. If the City ever elects to charge less thana one percent (1%) sales tax but is allowed by law to collect a sales tax of one percent (1%) or more, then instead of being based on actual collections, One Cent Sales Tax Revenues attributable to sales tax collected shall be deemed to be computed as if the City did elect to charge a one percent sales tax. 2.7 "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. 2.8 "Project" is Simon's planned development of the Property which shall consist of a premium outlet center and related facilities, all of which are commonly referred to as "Round Rock Premium Outlets" The Project shall include approximately five hundred fifty thousand (550,000) square feet of Adjusted Gross Leasable Sales Area in a phased development of some or all of the following uses: retail, banking, restaurants, entertainment, . theater, offices, hotel and/or recreation space. The 2 Project will include walkways in the retail -pedestrian areas, public space with outside pedestrian amenities, such as benches, landscape features, fountains and/or water features and dining areas. If constructed in phases, the first phase ("First Phase") shall contain at least four hundred twenty thousand (420,000) square feet of Adjusted Gross Leasable Sales Area. 2.9 "Project Area" is the area within the Property that will be developed for the Project and is otherwise described in Exhibit B — "Property Description". 2.10 "Sales Tax Effective Date" is first day of the month following the date upon which Simon certifies in writing that it and/or its tenants has received one or more certificates of occupancy for and has begun retail operation of at least fifty thousand (50,000) square feet of Adjusted Gross Leasable Sales Area for the Project or the First Phase, if constructed in phases. 2.11 "Sales Tax Revenues" means the amount of sales tax collected by the City arising from the Project. The term "Sales Tax Revenues" shallinclude any taxes authorized by the Statein the future that are intended to replace sales or use tax revenues currently available to the City. 3. Notice to Proceed and Expenditure of Funds Prior to Delivery of Written Notice to Proceed by Simon. 3.1 Activities Prior to Delivery of Written Notice to Proceed by Simon. 3.1.1 It may be desirable for the City, 4B Corp and/or Simon to commence certain engineering, design and/or preliminary site work activities before Simon delivers the Written Notice to Proceed described in Section 3.2 below in order to maximize the ability of the Project to open to the public on the anticipated schedule. No party shall have any obligation to repay or reimburse any other party for such activities unless they have entered into an Advance Funding Agreement. Simon, in its sole discretion, may elect to engage in such advance funding. 3.1.2 Any advance funding commitments made by Simon under paragraph 3.1.1 shall be recognized as inducement costs to be reimbursed or repaid as Economic Incentive Payments in accordance with the provisions of this Agreement. 3.2 Post -Delivery of Written Notice b Simon. The rights and obligations of Simon and of the City and 4B Corp set forth in this Agreement shall be of no force or effect unless and until Simon shall deliver written notice to the City and 4B Corp that it: 3.2.1 Has acquired fee title to the Property; and 3 3.2.2 Is prepared in a diligent manner to commence and pursue construction of the Project to completion as evidenced by the issuance by the City of a Certificate of Occupancy to Simon. 4. Term. This Agreement shall become enforceable upon its Effective Date. This Agreement shall terminate upon the earlier to occur of: (i) eight (8) years after the Sales Tax Effective Date; (ii) Simon's receipt of reimbursement of its aggregated actual costs of construction of Teravista Blvd, "C", Oakmont Drive "A", Oakmont Drive "B2" and one-half of its actual cost of Oakmont Drive `Bl" pursuant to Section 6.1.3; or (iii) Simon's receipt of the total EIPs equal to the Maximum Payment Amount (defined in paragraph 6.2:2(e)). In recognition of the fact that ETPs, by necessity, are calculated and paid after taxes have been assessed and paid to the City, and therefore always run in arrears, the term of this Agreement shall be deemed to include any payments for Sales Tax Revenues collected by Simon's tenants during the Term of this Agreement but not received by the City until after the termination date . An equitable adjustment shall be made to the Term if the completed Project is closed for a significant period of time due to a `force majeure event" as defined in paragraph 7.15 below. 5. Rights and Obligations of Simon. In consideration of the City's and 4B Corp's compliance with this Agreement, Simon agrees as follows: 5.1 Simon Road Improvements. Simon will: (a) Donate rights-of-way associated with Oakmont Drive Extension — Segment A from south property line of the Simon tract to Teravista Parkway —Segment C; Donate or cause to be donated all or a part of the right-of-way for the Oakmont Drive Extension — Segments B1 and B2 from Chandler Road to south property line of Simon tract, through a series of land transactions among Simon, Barshop & Oles, Scott & White, and Newland Properties, donate any such parts of the rights-of-way associated with Oakmont Drive Extension — Segments B1 and B2 from Chandler Road to south property line of Simon tract; (c) Donate rights-of-way associated with Teravista Parkway — Segment C from the intersection with Oakmont Drive Extension — Segment A to the I1-1-35 frontage road; (b) (d) Be responsible for construction of the following roads,either directly or on behalf of the City. Simon shall use its best efforts to ensure completion of the roads no later than September 1, 2006. (e) Fund the cost of construction of the road improvements: (i) Oakmont Drive Extension — Segment A, currently estimated to be $1,419,834; 4 (ii) Oakmont Drive Extension — Segment B1 currently estimated to be $334,411; and Segment B2 currently estimated to be $627,730, (note: only one-half of the Segment B2 cost is to be included in the total cost of construction as set forth in Sec. 6.1.3 below); and (iii) Teravista Parkway Segment C from the intersection with the North/South Road (Oakmont Drive Extension — Segment A) to the IH - 35 frontage road, currently estimated to be $1,198,494; (f) Comply with the statutory bidding requirements of Chapter 252 of the Local Government Code with respectto the Public Road Improvements listed above but not otherwise. 5.2 Compliance with Development Regulations and Other Ordinances. Simon shall comply with the City's development approval processes and shall develop the Project on the Property consistent with City ordinances, City -approved PUD zoning ordinance for the Property, City -approved development regulations, and other City development requirements. 5.3 Simon Accounting. Simon shall maintain complete books and records showing all expenses of any nature that City is to or will reimburse or pay under this Agreement which books and records shall be deemed complete if kept in accordance with generally acceptable accounting principles as applied to Texas partnerships. Such books and records shall be available for .examination by the duly authorized officers or agents of the City during normal business hours upon request made not less than ten (10) business days prior to the date of such examination. Simon shall maintain such books and records throughout the term of this Agreement and for four (4) years thereafter. 5.4 Waiver of Sales Tax Confidentiality. Simon agrees to obtain a Waiver of Sales Tax Confidentiality from tenants of the Project in a form approved by the Texas Comptroller's Office ("Waiver Form"), a copy of which is attached hereto as Exhibit "E". The Waiver Form will be utilized by the City to obtain reports filed by Simon's.tenants to determine the amount of sales tax revenues generated from the Project for the previous calendar quarter. Such reports shall be based upon reports filed by the Project's tenants with the Texas Comptroller's office. 5.5 Reimbursement of Unearned Incentive Payments. In the event that Simon receives full reimbursement of its actual costs from the 4B Corp pursuant to Section 6.2.1, below: 5.5.1 Simon will use commercially reasonable efforts to operate the retail facility for a period equal tothe term set forth in Section 6.2.2 (f), below; and 5.5.2 At the end of the Term, the amount of the City Payment EIP 's pursuant to Section 6.2.2. that would have otherwise been earned by Simon and paid by the City may be calculated, at the City's option. If this calculation results in an amount less than the amount of the EIP actually paid to Simon by the 4B 5 Corp pursuant to Section 6.2.1, then at the City's election, Simon will refund to the 4B Corp the difference. Said refund shall be paid no later than thirty (30) days after Simon receives written notice from the City or the 4B Corp that the refund is due. 6. Rights and Obligations of the City and 4B Corp. In consideration of Simon's compliance with this Agreement, the City and 4B Corp agree as follows: 6.1 Public Road Improvements. 6.1.1 The City, either on its own or acting through 4B Corp, shall fund the construction of the Public Frontage Road Improvements, currently estimated to cost approximately $8,440,579 before financing costs. The City has previously entered into an Advanced Funding Agreement with the Texas Department of Transportation (TxDOT) regarding the design and construction of the Chandler Road Interchange and IH35 Improvements currently estimated to cost $6,150,220. The City shall use its best efforts to ensure completion of these improvements no later than September 1, 2006. 6.1.2 Simon is seeking to acquire the right-of-way for the Oakmont Drive Extension — Segments B1 and B2 from Chandler Road to south property line of Simon tract, through a series of land transactions among Simon, Barshop & Oles, Scott & White, and Newland Properties. If Simon determines it is unable to acquire all or part of said right-of-way, it may so notify the City at anytime and request the City to acquire the right-of-way pursuant to its powers of eminent domain. Simon agrees to pay all of the actual cost of such acquisition, including, but not limited to, appraisal fees, expert testimony, and reasonable attorney fees. Upon receipt of such notice, the City will utilize reasonable efforts to acquire the right-of-way for the proposed Oakmont Drive Extension — (Segments B1 and B2) from Chandler Road to the south property line of the Property as soon as is reasonably possible . 6.1.3 Subject to the conditions set forth herein, the City or the 4B Corp shall reimburse Simon all of the actual costs of constructing the following roadway improvements, including but not limited to engineering, pavement, drainage, erosion and sedimentation control, mobilization, overhead, and lighting within the public right of way, currently estimated to aggregate to $3,266,604, of the following improvements: (a) Oakmont Drive Extension — be $1,754,245: (b) Oakmont Drive Extension $313,865; and 6 Segments A, and B1, currently estimated to — Segment B2, currently estimated to be (c) Teravista Parkway — Segment C from the intersection with the North/South Road (Oakmont Drive Extension — Segment A) to the IH. 35 frontage road —currently estimated to be $1,198,494 6.2 Economic Incentive Payments. 6.2.1 4B Payments. The 4B Corp shall have the option of making the reimbursement for the Public Road Improvements as set forth on Exhibit D, in whole or in part, to Simon upon the issuance by the City of a Certificate of Occupancy for the First Phase of the Project. The 4B Corp shall notify Simon in writing in the event it decides to exercise the aforesaid option. 6.2.2 City Payments. In the event that the 4B Corp elects not, either in whole or in part, to make the reimbursement payment due Simon under Section 6.2.1, above, the City shall pursuant to Chapter 380 of the Texas Local Government Code, but subject to the conditions set out here, make quarterly EIPs to Simon of any such unpaid reimbursements. The EIPs are to be calculated as follows: (a) Calculations will be based upon sales subject to the City's one -cent (10) general sales tax; (b) Calculations shall be based on such annual sales in excess of Two Hundred Seventy-five Dollars ($275) per square foot of Adjusted Gross Leasable Sales Area; (c) Upon the opening of each phase of the Project, Simon will provide a certification of the amount of Adjusted Gross Leasable Sales Area; (d) The EIPs will be an amount equal to one hundred percent (100%) of the One Cent Sales Tax Revenues from sales (as defined in subsections a and b, above); (e) The Maximum Amount of the EIPs will be a Net Present Value of the aggregated actual costs estimated to be $3,266,604 (not otherwise reimbursed by the 4B Corp, as described in Section 6.1.3 (d), above, of the improvements described in Section 6.1.3 above. (fl. The Maximum Term shall be the earlier of the date when the aggregate amount of the EIPs made to Simon on a Net Present Value Basis (discounted at six percent (6%) from the Sales Tax Effective Date) is equal to the Maximum Amount of the EIPs estimated to be $3,266,604, or eight (8) years from the first day of the month following the Sales Tax Effective Date. 6.2.3 Changes in Law. If, during the term of this Agreement, state law applicable to municipal taxation changes the form of sales taxes, and as a result, the EIPs differ from the amount which would have been paid to Simon under the laws in effect as of the Effective Date of this Agreement, then the City, in its sole 7 discretion, may adjust the EIPs using whatever discretionary taxes and revenues that are legally available to City which can be allocated to the EIPs. However, this section is not intended to require the City to use funds from other sources which are not within the City's discretion to allocate to the Project, so as to achieve the same economic benefits to both parties as would have resulted had the law not changed. 6.2.4 Payments Subject to Future Appropriations. Although certain payments under this Agreement are calculated based on a formula applied to sales tax revenues, this Agreement shall not be construed as a commitment, issue or obligation of any specific taxes or tax revenues for payment to Simon. 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 Simon, 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 7.3, and the City shall not be liable to Simon for such payments, but Simon 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. 6.2.5 City Accounting. The City shall maintain complete books and records showing sales taxes remitted to the City by the State and disbursements of income incentive grant payments, which books and records shall be deemed complete if kept in accordance with generally acceptable accounting principles as applied to Texas municipalities. In addition, the City shall prepare an annual report documenting accrued interest, any carry -forward of accrued interest, unamortized balances, and amortized balances. Such books and records shall be available for examination by the duly authorized officers or agents of Simon during normal business hours upon request made not less than ten (10) business days prior to the date of such examination. The City shall maintain such books and records throughout the term of this Agreement and for four (4) years thereafter. 6.2.6 Utility Services for the Property. The City shall provide water and wastewater to Simon for the Project, subject to the same fees and charges assessed to similarly situated properties. 6.2.7 Permitting. The City shall cooperate with Simon to expeditiously process all City permit applications and City inspections. 7. Miscellaneous. 7.1 Mutual Assistance. The City, 4B Corp and Simon 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. 7.2. Representations and Warranties. The City and 4B Corp represent and warrant to Simon 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. Simon represents and warrants to the City and 4B Corp that it has the requisite authority to enter into this Agreement. 7.3 Default. If either the City, 4B Corp or Simon 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 or 4B Corp remain in default after notice and opportunity to cure, Simon shall have the right to pursue any remedy at law or in equity for the City's or 4B Corp's breach. If Simon remains in default after notice and opportunity to cure, the City's or 4B Corp's remedy shall be limited to a termination of the EIPs, which accrue after the date of such default.. Any EIPs from City or 4B Corp to Simon which is not timely paid by City or 4B Corp shall incur interest at the highest rate per annum allowed by the applicable law of the State of Texas from the date such EIPs are due until paid. Any funds owed by Simon to the City or 4B Corp which are not timely paid by Simon shall incur interest at the highest rate per annum allowed by the applicable law of the State of Texas from the date such funds are due until paid. 7.4 Attorney's Fees. In the event any legal action or proceeding, is commenced between the City, 4B Corp and Simon 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, 4B Corp and Simon. 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. Simon may assign all or part of its rights and obligations. to a third party upon thirty days written notice to the City and 4B Corp. 9 7.8 Amendment. This Agreement may be amended by the mutual written agreement of the parties. 7.9 Termination. In the event Simon elects not to proceed with the Project as contemplated by this Agreement, Simon shall notify the City and 4B Corp 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. In addition, this Agreement shall terminate when Simon has been paid the Maximum Payment Amount in full, or eight (8) years after the first day of the month following the Sales Tax Effective Date, whichever first occurs. 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: Simon: with a copy to: with a copy to: with a copy to: Simon Property Group Attn: Kathy Shields 115 West Washington Street Indianapolis, IN 46204 Ph: (317) 263-7076 Fx: (317) 685-7299 Mr. David B. Armbrust Armbrust & Brown, L.L.P. 100 Congress Ave., Suite 1300 Austin, Texas 78701 Ph: (512) 435-2301 Fx: (512) 435-2360 Simon Property Group Attn: Bill Hammer 115 West Washington Street Indianapolis, IN 46204 Ph: (317) 263-7006 Fx: (317) 263-7648 Chelsea Property Group Attn: Mark J. Silvestri 105 Eisenhower Parkway Roseland, NJ 07068 10 with a copy to: City: Ph: (973)228-6111 Fx: (973) 364-2503 Chelsea Property Group Attn: General Counsel 105 Eisenhower Parkway Roseland, NJ 07068 Jim Nuse, City Manager City of Round Rock 221 East Main St. Round Rock, TX 78664 Ph: (512) 218-5401 Fx: (512) 218-7097 4 B Corp: Jim Nuse, City Manager City of Round Rock 221 East Main St. Round Rock, TX 78664 Ph: (512) 218-5401 Fx: (512) 218-7097 with a copy to: Stephan L. Sheets, City Attorney 309 East Main St. Round Rock, TX 78664 Ph: (512) 255-8877 Fx: (512) 255-8986 Either party may designate a different address at any time upon written notice to the other party. 7.11 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. 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 11 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 `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. 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 Exhibits. The following Exhibits "A" - "E" are attached and incorporated by reference for all purposes: Exhibit "A": Exhibit "B": Exhibit "C": Exhibit "D": Exhibit "E": City Resolution No. R--05-05'a1P`)aD`L Property Description 4B Resolution No. R-05-36 Public Road Improvements Waiver of Sales Tax Confidentiality Form 7.18 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, 4B Corp, its past, present and future officers, elected officials, employees and agents of the City and 4B Corp, do not assume any responsibilities or liabilities to any third party in connection with the development of the Project or the design, construction or operation of any portion of the Project. 7.19 Extension of Dates for Commencement of Construction. In the event Simon determines that an extension of a Project commencement date is necessary due to market or financing conditions, Simon may extend either or both of the Project commencement dates set forth in paragraph 3.2 for up to one (1) year. All other dates shall be extended accordingly. EXECUTED to be effective as of the of day of , 2005 (the "Effective Date"). 12 APPR D as t• form: Stephan 1 Sheets, City Attorney SPG ROUND ROCK NS, L.P. a Delaware limited liability company By: VPI Landco, LLC, General Partner By: Vi Lam;. Pro . - ies, Inc., Man. _er By: Printed Title: caiciai viuiaci CPG ROUND ROCK, L.P. a Texas limited partnership By: Virgi . Properties, Inc., General Partner By: Printed Name: /1 Title: ,�e 4 ID O Q f : C (far k_ e CITY OF ROUND ROCK, a home rut = & ty : d ROUND ROCK TRANSPORTATION SYSTEM DEVELOPMENT CORPORATION, a Texas Development Co By: axwell, President 13 EXHIBIT "A" CITY RESOLUTION NO. R-05-06 -)&-/ ip/ RESOLUTION NO. R -05-05-26-12D1 WHEREAS, Simon Property Group, L.P. ("Simon") is one of the largest retail shopping center development companies in the world, and WHEREAS, Simon has expressed to the City of Round Rock ("City") its desire to locate a Premium Outlet Mall in the City which will attract shoppers from outside of the area and provide hundreds of 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 Mayor is hereby authorized and directed to offer to Simon a §380.001 Program in exchange for Simon locating a Premium Outlet Mall 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 ePFDeskcop\:: ODIt/WORLmx/0:/WDOX/assowxx/1150526n1. wen/sis upon, all as required by the Open Meetings Act, Chapter 551, Texas Government Code, as amended. RESOLVED this 26th day of May, 20 Mayor Ci ' of Round Rock, Texas CHRISTINE R. MARTINEZ, City Secretary 2 EXHIBIT A The terms of the §380.001 Program to be offer to Simon in exchange for Simon's locating a Premium Outlet Mall in the City of Round Rock are as generally outlined below: 1. The City agrees to make program payments to Simon calculated on the basis of sales and use tax revenues actually received by the CITY from taxable sales generated by the Premium Outlet Mall as follows: a. The City will retain all of the sales and use tax revenues derived from the one-half cent of the tax devoted to the reduction of ad valorem property tax; b. The City will retain all of the sales and use tax revenues derived from annual gross taxable sales up to $275 per square foot of gross leasable area; c. The City will make program payments to Simon equal to the sales and use tax revenues derived from annual gross taxable sales in excess of $275 per square foot of gross leasable area; d. The total amount of program payments to Simon will not exceed the cost of the construction of needed extensions to Oakmont Dr. and Teravista Blvd., currently estimated to be $3,266,604 on a Net Present Value Basis (discounted at 6%. 2. The term of the Program shall not exceed eight years. EXHIBIT "B" PROPERTY DESCRIPTION 1 87.193 ACRE TRACT ROUND ROCK PREMIUM OUTLETS DESCRIPTION FN NO. 05-020 (CAG) FEBRUARY 22, 2005 BPI JOB NO. 1262-02 OF 87.193 ACRES OF LAND OUT OF THE EPHRAIM EVANS SURVEY, ABSTRACT NO. 212, SITUATED IN WILLIAMSON COUNTY, TEXAS, BEING A PORTION OF THAT CERTAIN 132.28 ACRE TRACT OF LAND CONVEYED TO ANC -ROUND ROCK ASSETS II, LP BY DEED OF RECORD IN DOCUMENT NO. 2001001644 OF THE OFFICIAL PUBLIC RECORDS OF WILLIAMSON COUNTY, TEXAS, AND A PORTION OF THAT CERTAIN 107.44 ACRE TRACT CONVEYED TO NNP-TERAVISTA LP BY DEED OF RECORD IN DOCUMENT NO. 2001001639 OF SAID OFFICIAL PUBLIC RECORDS; SAID 87.193 ACRES BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING, at a 1/2 inch iron rod found in the easterly right-of- way line of Interstate Highway No. 35 (R.O.W. Varies), being the northwesterly corner of that certain 74.590 acre tract of land conveyed to Scott & White Memorial Hospital and Scott, Sherwood and Brindley Foundation by deed of record in Document No. 9733254 of said Official Records of Williamson County, Texas, same being the southwesterly corner of said 132.28 acre tract and hereof; THENCE, NO2°04'48"W, along the easterly right-of-way line of Interstate Highway No. 35, being a portion of the westerly line of said 132.28 acre tract for the westerly line hereof, passing at a distance of 2307.08 feet, a concrete monument found at Highway Station 1120+00, and continuing for a total distance of 2423.43 feet to a 1/2 inch iron rod with cap set for the northwesterly corner hereof; THENCE, leaving the easterly right-of-way line of Interstate Highway No. 35, over and across said 132.28 acre, for the northerly line hereof, the following eight (8) courses and distances: 1) N48°42'48"E, along the northerly right-of-way line of Future Teravista Parkway (100' R.O.W.) a distance of 34.29 feet to a 1/2 inch iron rod with cap set for the point of curvature of a non -tangent curve to left; 2) Along said non -tangent curve to the left having a radius of 640.00 feet, a central angle of 26°55'11", an arc length of 300.69 feet and a chord which bears N70°08'O1"E, a distance of 297.94 feet to a 1/2 inch iron rod with cap set for the point of curvature of a reverse curve to the right; FN 05-020(CAG) FEBRUARY 22, 2005 PAGE 2 OF 3 3) Along said reverse curve to the right having a radius of 920.00 feet, a central angle of 56°51'30", an arc length of 912.98 feet and a chord which bears N85°06'11"E, a distance of 875.97 feet to a 1/2 inch iron rod with cap set for the point of curvature of a reverse curve to the left; 4) Along said reverse curve to the left having a radius of 950.00 feet, a central angle of 26°17'15", an arc length of 435.86 feet and a chord which bears S79°36'42"E, a distance of 432.05 feet to a 1/2 inch iron rod with cap set for the end of said curve; 5) N42°46'27"E, a distance of 36.14 feet to a 1/2 inch iron rod with cap set in the westerly right-of-way line of future Oakmont Drive (100' R.O.W.) for an angle point; 6) N82°43'03"E, over and across future Oakmont Drive, a distance of 100.78 feet to a 1/2 inch iron rod with cap set in the easterly right-of-way line of future Oakmont Drive for an angle point; 7) S50°45'31"E, a distance of 31.92 feet to a 1/2 inch iron rod with cap set for an angle point; 8) N78°33'21"E, a distance of 10.32 feet to a 1/2 inch iron rod with cap set in the common line of said 132.28 acre tract and said 107.44 acre tract for the northeasterly corner hereof; THENCE, along the common line -of said 132.28 acre tract and said 107.44 acre tract, being a portion of the easterly line hereof, the following two (2) courses and distances: 1) S06°14'24"W, a distance of 59.27 feet to a 1/2 inch iron rod with cap set for an angle point; 2) S19°01'28"E, a distance of 35.64 feet to a 1/2 inch iron rod with cap set foran angle point; THENCE, leaving said common line, over and across said 132.28 acre tract and said 107.44 acre tract, for the easterly line hereof, the following six (6) courses and distances: 1) S38°18'53"W, a distance of 50.49 feet to a 1/2 inch iron rod with cap set for the point of curvature of a non -tangent curve to the left; FN 05-020(CAG) FEBRUARY 22, 2005 PAGE 3 OF 3 2) Along said non -tangent curve to the left having a radius of 1250.00 feet, a central angle of 01°54'00", an arc length of 41.45 feet and a chord which bears S07°43'03"E, a distance of 41.45 feet to a 1/2 inch iron rod with cap set for the point of tangency; 3) S08°40' 03"E, a distance of 185.24 feet to a 1/2 inch iron rod with cap set for the point of curvature of a curve to the right; 4) Along said curve to the right having a radius of 2300.00 feet, a central angle of 24°22'51", an arc length of 978.71 feet and a chord which bears S03°31'22"W, a distance of 971.34 feet to a 1/2 inch iron rod with cap set for the point of tangency; 5) S15°42'48"W, a distance of 138.11 feet to a 1/2 inch iron rod with cap set for the point of curvature of a curve to the left; 6) Along said curve to the left having a radius of 2200.00 feet, a central angle of 12°56'48", an arc length of 497.11 feet and a chord which bears S09°14'24"W, a distance of 496.05 feet to a 1/2 inch iron rod with cap set for the end of said curve, being in the southerly line of said 132.28 acre tract, being the northerly line of said 74.590 acre tract for the southeasterly corner hereof; THENCE, S69°15'57"W, along the northerly line of said 74.590 acre tract, being in part the westerly line of said 107.44 acre tract, and in part a portion of the southerly line of said 132..28 acre tract for the southerly line hereof, passing at a distance of 61.11 feet a 1/2 inch iron rod found, being the southeasterly corner of said 132.28 acre tract, same being an angle point in the westerly line of said 107.44 acre tract, and continuing for a total distance of 1609.98 feet to the POINT OF BEGINNING, containing an area of 87.193 acres (3,798,135 sq. ft.) of land, more or less, within these metes and bounds. BEARING BASIS: REFERENCED TO THE TEXAS STATE PLANE COORDINATE SYSTEM, CENTRAL ZONE BASED ON PUBLISHED NAD 83/93 HARN VALUES FOR THE CITY OF GEORGETOWN MONUMENTATION NETWORK. BURY & PARTNERS, INC. ENGINEERS AND SURVEYORS 3345 BEE CAVES ROAD, SUITE 200 AUSTIN, TEXAS 78746 C�. ,i.vdr JOIN T. BILNOSKI DATE R.P.L.S #4998 STATE OF TEXAS CURVE TABLE LEGEND • 0 • ROB. 1/2" IRON ROO FOUND 1/2" IRON ROO SET WITH CAP HIGHWAY MONUMENT FOUND PONT OF BEGINNING 101 AC. ANC-R01.94D ROCK A.992723 la'. (QC. NO. 2002044Z 4 7 0 300 600 900 1200 1"=600' NCO' VW J -W1.1.64604' ZOOM' 1.W1 10 604 I-9 107_44 AC. t'INP-TERAVI$TA LP DOC. NO. 2001001639 Jo 87.193 ACRES (3,798,135 SQ. FT.) loz.2o AC. ANC -poi -IND RocK ASSETS H. LF DOC. NO. 200 100 1 644 EPHRAIM EVANS SURVEY ABSTRACT NO. 21 S0204 4FigE 74124' 1.0TO 44. HOP ihNESTMENTs; ETV. Doc- BP. 2104o44v/r WY STA=14204-00 2307.08' LINE TABLE No. fleoring &glu _Arc Lenoth length Chord 89rino C1 2655'11 84000 300.69 :Chord 297.94 N7008`01 E C2 56'5130" 920.00 912.98 675,97 140506'11t C3 26'17'15" 95000 43546 4,32.05 57936.42t C4 01'54'00' 1250.00 41.45 41.45 50743'03"E C5 24'22.-51" 2300.00 978.71 971.34 50331'22W C6 i 2'56'48" 2200.0,0 497.11 496.05 509'1424W LEGEND • 0 • ROB. 1/2" IRON ROO FOUND 1/2" IRON ROO SET WITH CAP HIGHWAY MONUMENT FOUND PONT OF BEGINNING 101 AC. ANC-R01.94D ROCK A.992723 la'. (QC. NO. 2002044Z 4 7 0 300 600 900 1200 1"=600' NCO' VW J -W1.1.64604' ZOOM' 1.W1 10 604 I-9 107_44 AC. t'INP-TERAVI$TA LP DOC. NO. 2001001639 Jo 87.193 ACRES (3,798,135 SQ. FT.) loz.2o AC. ANC -poi -IND RocK ASSETS H. LF DOC. NO. 200 100 1 644 EPHRAIM EVANS SURVEY ABSTRACT NO. 21 S0204 4FigE 74124' 1.0TO 44. HOP ihNESTMENTs; ETV. Doc- BP. 2104o44v/r WY STA=14204-00 2307.08' LINE TABLE No. fleoring DiConce LI 548'42'48t 34.29. L2 N42'46'27"E 38.14* 13 6182'43'03t 100.78' L4 550'45'31"E 31.92' 15 1478'33'21"E 10.32' L6 506'14'24W 59.2T 17 519'0128t 35.64' 18 538'18'5:3°W 50.49' L9 508'40'03'E 155.24* 110 515'42'48"W 138.11' 74.590 ACRES SCOTT ec WHITE MEMORIAL nosrrrAt AND SCOTT, SHERW0o0 AND BRINDLE( FOUNDATION DOC. NO. 9733264 arr in4rL.W4 _ _ - LOT f oAlO4otit cEIORE OEM 4 OAMONT tec.-1 LOT 1, BL( A HEST UWE° .4.TiQ4 0AL 0. 001. i'4•28 0:401: NIF0WIIPP. ANO NOHOW F.0010TRON DO. NO. 1006712 W02•0448" 2423.43 INTERSTATE NIBWAY 140. 35 VARIEs) Por*ers I1GtiCttitt tEtt '401.0404 -434.U40,01MA 114.01,00•400 Athi1itOttalA744 14.0t4ittert:]Altz4t.tottot:26st, oF io4o3g 644o,iilfo 0441.6AN $4041. A8sTrac7 N0212•914..19aAt(609 .cteNv 1tic4$; AID13G 4. PORWON :OF 131&T 0OTFA11 I28::A0RE UI4.T 0F(1A0.G0NYVITO., TO AK:4MM woctt AsSETS 4; L1' OrtIEG3ROWERIGO1WNTI40 200t3of64gM-1K OFEIGME POIJO01101011Bs ,kitTAAW01 O:1011m104t:Villi. A PORTEN OE THAT GERTAIN-40144ACRE: 104,0T,SESCRISED'41 SESEED TO 'MP ,TERAIAS:t4.10 IN -RECORD Mt 1100UMENT:140, 20916016394W SAID VEDOAEI.Popwoo;Oon ROUND ROOK PFtEMIUti OUTLOTS OVE::W/22/05: PIE! 1iA1,26 02 V26202EX3713WO RAM -11M:CAG 1262-02. EXHIBIT "C" 4B RESOLUTION NO. #G- 05-36 1 RESOLUTION NO. R-05-36 WHEREAS, the Round Rock Transportation System Development Corporation ("Corporation") wishes Development Agreement with the City to enter into an Economic of Round Rock, Simon Property Group, L.P., and CPG Round Rock, L.P. regarding Simon's development of a retail outlet mall in the City of Round Rock, Now Therefore BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE ROUND ROCK TRANSPORTATION SYSTEM DEVELOPMENT CORPORATION, That the President is hereby authorized and directed to execute on behalf of the Corporation an Economic Development Agreement with the City of Round Rock, Simon Property Group, L.P., and CPG Round Rock, L.P., a copy of same being attached hereto as Exhibit "A" and incorporated herein for all purposes. The Board of Directors 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. RESOLVED this 24th day of May, 2005. ROUND DEVEL NY i ATTEST: , Secretary @PFDesktop\: :OD MA/WORLDOX/O: /WDOX/R6SOLUTI/RRTSDC/0036 .WPD/rmc •' CK •. SPSRTA p• EGe/;1''4 r j STE WELL, Pk&5i DEN77' of Round Rock, Texas ECONOMIC DEVELOPMENT AGREEMENT This Economic Development Agreement ("Agreement") is entered into this day of , 2005, by and between the City of Round Rock, Texas, a Texas home rule municipal corporation ("City"), the Round Rock Transportation System Development Corporation, a corporation created pursuant to the Development Corporation Act — Art. 5190.6(4)(B), ("4B Corp") and Simon Property Group (Texas), L.P., and CPG Round Rock, L.P., their successors and assigns ("Simon"). 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 Simon in recognition of the positive economic benefits to the City through Simon's development of approximately 87.193 acres of land, as more particularly described on the attached Exhibit "B" ("Property") as a premium destination retail outlet mall and ancillary uses ("Project"); and WHEREAS, the 4B Corporation has adopted Resolution No. , attached as Exhibit "C" ("4B Resolution") authorizing the Board President to enter into this Agreement with Simon in recognition of the aforesaid benefits; and WHEREAS, the purpose of this Agreement is to promote economic development as contemplated by Chapter 380 of the Texas Local Government Code and the Development Corporation Act - ART. 5190.6 TEx. REV. Civ. STAT. Alum. (Vernon's 1987 and Vernon's Supp. 2003) whereby Simon will construct, develop and operate the Project, or cause the Project to be operated, in conformance with the City's development approvals for the Project, and the City and 4B Corp will participate in the funding of certain roadway, utility, and other related improvements in accordance with the terms of this Agreement; and WHEREAS, development of the Project requires the cooperation and participation of the City, 4B Corp and Simon in the design and construction of various roadway and public utility improvements; and WHEREAS, the City and 4B Corp have agreed to assume responsibility for the design and construction, at the City's cost, of the IH -35 ramps and related improvements as described on the attached Exhibit "D" ("Public Road Improvements"); and WHEREAS, Simon has agreed to construct certain roadway improvements described in Section 5.2 of this Agreement ("Simon Road Improvements") and; WHEREAS, the City and 4B Corp have agreed to provide performance based economic development grants to Simon to defray a portion of the project 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, 4B Corp and Simon agree as follows: 86810 EXHIBIT 1. Authority. The City's and 4B Corp's execution of this Agreement are authorized by both Chapter 380 and Chapter 395 of the Texas Local Government Code, the Development Corporation Act — ART. 5190.6 TEX. REV. Civ. STAT. ANN. (Vernon's 1987 and Vernon's Supp. 2003) the City Resolution and the 4B Resolution, constitute a valid and binding obligation of the City in the event Simon proceeds with the development of the Property. The City and 4B Corp acknowledge that Simon is acting in reliance upon their 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 "Adjusted Gross Leasable Sales Area" shall mean the gross leasable area of the Project less any storage areas, bathroom facilities, courtyards, hallways or other areas not utilized for the sale of goods and services, the proposed cinema and outlot uses or pad sites providing only services. 2.2 "Commencement of Construction" shall mean the commencement of work on piers, foundations or other improvements necessary for the construction of vertical improvements. 2.3 "Economic Incentive Payment(s)" ("EIPs") means the amount paid by the City to Simon under the Program. 2.4 "Effective Date" is the date this Agreement is executed to be effective by the City, 4B Corp and Simon. 2.5 "Net Present Value Basis" shall be calculated as set forth in Section 6.2.2.(f). 2.6 "One Cent Sales Tax Revenues" means that portion of Sales Tax Revenues (defined below) resulting from the imposition of a one percent municipal sales tax on sales arising from the Project, such as that presently in effect pursuant to Texas Tax Code §321.101(a) and §321.103. If the City ever elects to charge less than a one. percent (1%) sales tax but is allowed by law to collect a sales tax of one percent (1%) or more, then instead of being based on actual collections, One Cent Sales Tax Revenues attributable to sales tax collected shall be deemed to be computed as if the City did elect to charge a one percent sales tax. 2.7 "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. 2.8 "Project" is Simon's planned development of the Property which shall consist of a premium outlet center and related facilities, all of which are commonly referred to as "Round Rock Premium Outlets" The Project shall include approximately five , hundred fifty thousand (550,000) square feet of Adjusted Gross Leasable Sales Area in a phased development of some or all of the following uses: retail, banking, restaurants, entertainment, theater, offices, hotel and/or recreation space. The 2 Project will include walkways in the retail -pedestrian areas, public space with outside pedestrian amenities, such as benches, landscape features, fountains and/or water features and dining areas. If constructed in phases, the first phase ("First Phase") shall contain at least four hundred twenty thousand (420,000) square feet of Adjusted Gross Leasable Sales Area. 2.9 "Project Area" is the area within the Property that will be developed for the Project and is otherwise described in Exhibit B — "Property Description". 2.10 "Sales Tax Effective Date" is first day of the month following the date upon which Simon certifies in writing that it and/or its tenants has received one or more certificates of occupancy for and has begun retail operation of at least fifty thousand (50,000) square feet of Adjusted Gross Leasable Sales Area for the Project or the First Phase, if constructed in phases. 2.11 "Sales Tax Revenues" means the amount of sales tax collected by the City arising from the Project. The term "Sales Tax Revenues" shall include any taxes authorized by the State in the future that are intended to replace sales or use tax revenues currently available to the City. 3. Notice to Proceed and Expenditure of Funds Prior to Delivery of Written Notice to Proceed by Simon. 3.1 Activities Prior to Delivery of Written Notice to Proceed by Simon. 3.1.1 It may be desirable for the City, 4B Corp and/or Simon to commence certain engineering, design and/or preliminary site work activities before Simon delivers the Written Notice to Proceed described in Section 3.2 below in order to maximize the ability of the Project to open to the public on the anticipated schedule. No party shall have any obligation to repay or reimburse any other party for such activities unless they have entered into an Advance Funding Agreement. Simon, in its sole discretion, may elect to engage in such advance funding. 3.1.2 Any advance funding commitments made by Simon under paragraph 3.1.1 shall be recognized as inducement costs to be reimbursed or repaid as Economic Incentive Payments in accordance with the provisions of this Agreement. 3.2 Post -Delivery of Written Notice by Simon. The rights and obligations of Simon and of the City and 4B Corp set forth in this Agreement shall be of no force or effect unless and until Simon shall deliver written notice to the City and 4B Corp that it: 3.2.1 Has acquired fee title to the Property; and 3 3.2.2 Is prepared in a diligent manner to commence and pursue construction of the Project to completion as evidenced by the issuance by the City of a Certificate of Occupancy to Simon. 4. Term. This Agreement shall become enforceable upon its Effective Date. This Agreement shall terminate upon the earlier to occur of: (i) eight (8) years after the Sales Tax Effective Date; (ii) Simon's receipt of reimbursement of its aggregated actual costs of construction of Teravista Blvd, "C", Oakmont Drive "A", Oakmont Drive "B2" and one-half of its actual cost of Oakmont Drive "Bl" pursuant to Section 6.1.3; or (iii) Simon's receipt of the total EIPs equal to the Maximum Payment Amount (defined in paragraph 6.2.3). In recognition of the fact that EIPs, by necessity, are calculated and paid after taxes have been assessed and paid to the City, and therefore always run in arrears, the term of this Agreement shall be deemed to include any payments for Sales Tax Revenues collected by Simon's tenants during the Term of this Agreement but not received by the City until after the termination date . An equitable adjustment shall be made to the Term if the completed Project is closed for a significant period of time due to a `force majeure event" as defined in paragraph 7.15 below. 5. Rights and Obligations of Simon. In consideration of the City's and 4B Corp's compliance with this Agreement, Simon agrees as follows: 5.1 Simon Road Improvements. Simon will: (a) Donate rights-of-way associated with Oakmont Drive Extension — Segment A from south property line of the Simon tract to Teravista Parkway —Segment C; Donate or cause to be donated all or a part of the right-of-way for the Oakmont Drive Extension — Segments B1 and B2 from Chandler Road to south property line of Simon tract, through a series of land transactions among Simon, Barshop & Oles, Scott & White, and Newland Properties, donate any such parts of the rights-of-way associated with Oakmont Drive Extension — Segments B l and B2 from Chandler Road to south property line of Simon tract; (c) Donate rights-of-way associated with Teravista Parkway — Segment C from the intersection with Oakmont Drive Extension — Segment A to the IH -35 frontage road; (b) (d) Be responsible for construction of the following roads, either directly or on behalf of the City. Simon shall use its best efforts to ensure completion of the roads no later than September 1, 2006.; (e) Fund the cost of construction of the road improvements: (i) Oakmont Drive Extension — Segment A, currently estimated to be $1,419,834; 4 (ii) Oakmont Drive Extension — Segment B1 currently estimated to be $334,411; and Segment B2 currently estimated to be $627,730, (note: only one-half of the Segment B2 cost is to be included in the total cost of construction as set forth in Sec. 6.1.3 below); and Teravista Parkway Segment C from the intersection with the North/South Road (Oakmont Drive Extension — Segment A) to the IH - 35 frontage road, currently estimated to be $1,198,494; (f) Comply with the statutory bidding requirements of Chapter 252 of the Local Government Code with respect to the Public Road Improvements listed above but not otherwise. 5.2 Compliance with Development Regulations and Other Ordinances. Simon shall comply with the City's development approval processes and shall develop the Project on the Property consistent with City ordinances, City -approved PUD zoning ordinance for the Property, City -approved development regulations, and other City development requirements. 5.3 Simon Accounting. Simon shall maintain complete books and records showing all expenses of any nature that City is to or will reimburse or pay under this Agreement which books and records shall be deemed complete if kept in accordance with generally acceptable accounting principles as applied to Texas partnerships. Such books and records shall be available for examination by the duly authorized officers or agents of the City during normal business hours upon request made not less than ten (10) business days prior to the date of such examination. Simon shall maintain such books and records throughout the term of this Agreement and for four (4) years thereafter. 5.4 Waiver of Sales Tax Confidentiality. Simon agrees to obtain a Waiver of Sales Tax Confidentiality from tenants of the Project in a form approved by the Texas Comptroller's Office ("Waiver Form"), a copy of which is attached hereto as Exhibit "E". The Waiver Form will be utilized by the City to obtain reports filed by Simon's tenants to determine the amount of sales tax revenues generated from the Project for the previous calendar quarter. Such reports shall be based upon reports filed by the Project's tenants with the Texas Comptroller's office. 5.5 Reimbursement of Unearned incentive Payments. In the event that Simon receives full reimbursement of its actual costs from the 4B Corp pursuant to Section 6.2.1, below: 5.5.1 Simon will use commercially reasonable efforts to operate the retail facility for a period equal to the term set forth in Section 6.2.2 (f), below; and 5.5.2 At the end of the Term, the amount of the City Payment EIP's pursuant to Section 6.2.2. that would have otherwise been earned by Simon and paid by the City may be calculated, at the City's option. If this calculation results in an amount less than the amount of the EIP actually paid to Simon by the 4B 5 Corp pursuant to Section 6.2.1, then at the City's election, Simon will refund to the 4B Corp the difference. 6. Rights and Obligations of the City and 4B Corp. In consideration of Simon's compliance with this Agreement, the City and 4B Corp agree as follows: 6.1 Public Road Improvements. 6.1.1 The City, either on its own or acting through 4B Corp, shall fund the construction of the Public Frontage Road Improvements, currently estimated to cost approximately $8,440,579 before financing costs. The. City has previously entered into an Advanced Funding Agreement with the Texas Department of Transportation (TxDOT) regarding the design and construction of the Chandler Road Interchange and IH35 Improvements currently estimated to cost $6,150,220. The City shall use its best efforts to ensure completion of these improvements no later than September 1, 2006. 6.1.2 Simon is seeking to acquire the right-of-way for the Oakmont Drive Extension — Segments B1 and B2 from Chandler Road to south property line of Simon tract, through a series of land transactions among Simon, Barshop & Oles, Scott & White, and Newland Properties. If Simon determines it is unable to acquire all or part of said right-of-way, it may so notify the City at anytime and request the City to acquire the right-of-way pursuant to its powers of eminent domain. Simon agrees to pay alt of the actual cost of such acquisition, including, but not limited to, appraisal fees, expert testimony, and reasonable attorney fees.. Upon receipt of such notice, the City will utilize reasonable efforts to acquire the right-of-way for the proposed Oakmont Drive Extension — (Segments B1 and B2) from Chandler Road to the south property line of the Property as soon as is reasonably possible . 6.1.3 Subject to the conditions set forth herein, the City or the 4B Corp shall reimburse Simon all of the actual costs of constructing the following roadway improvements, including but not limited to engineering, pavement, drainage, erosion and sedimentation control, mobilization, overhead, and lighting within the public right of way, currently estimated to aggregate to $3,266,604, of the following improvements: (a) Oakmont Drive Extension — Segments A, and B1, currently estimated to be $1,754,245: (b) Oakmont Drive Extension — Segment B2, currently estimated to be $313,865; and (c) Teravista Parkway — Segment C from the intersection with the North/South Road (Oakmont Drive Extension — Segment A) to the IH - 35 frontage road —currently estimated to be $1,198,494 6 6.2 Economic Incentive Payments. 6.2.1 4B Payments. The 4B Corp shall have the option of making the reimbursement for the Public Road Improvements as set forth on Exhibit D, in whole or in part, to Simon upon the issuance by the City of a Certificate of Occupancy for the First Phase of the Project. The 4B Corp shall notify Simon in writing in the event it decides to exercise the aforesaid option. 6.2.2 City Payments. In the event that the 4B Corp elects not, either in whole or in part, to make the reimbursement payment due Simon under Section 6.2.1, above, the City shall pursuant to Chapter 380 of the Texas Local Government Code, but subject to the conditions set out here, make quarterly EIPs to Simon of any such unpaid reimbursements. The EIPs are to be calculated as follows: (a) Calculations will be based upon sales subject to the City's one -cent (1¢) general sales tax; (b) Calculations shall be based on such annual sales in excess of Two Hundred Seventy-five Dollars ($275) per square foot of Adjusted Gross Leasable Sales Area; (c) Upon the opening of each phase of the Project, Simon will provide a certification of the amount of Adjusted Gross Leasable Sales Area; (d) The EIPs will be an amount equal to one hundred percent (100%) of the Sales Tax Revenues from sales (as defined in subsections a and b, above); (e) The Maximum Amount of the EIPs will be a Net Present Value -of the aggregated actual costs estimated to be $3,266,604 (not otherwise reimbursed by the 4B Corp, as described in Section 6.1.3 (d), above, of the improvements described in Section 6.1.3 above. (f) The Maximum Term shall be the earlier of the date when the aggregate amount of the EIPs made to Simon on a Net Present Value Basis (discounted at six percent (6%) from the Sales Tax Effective Date) is equal to the maximum amount of the EIPs of $3,266,604, or eight (8) years from the first day of the month following the Sales Tax Effective Date. 6.2.3 Changes in Law. If, during the term of this Agreement, state law applicable to municipal taxation changes the form of sales taxes, and as a result, the EIPs• differ from the amount which would have been paid to Simon under the laws in effect as of the Effective Date of this Agreement, then the City, in its sole discretion, may adjust the EIPs using whatever discretionary taxes and revenues that are legally available to City which can be allocated to the EIPs. However, this section is not intended to require the City to use funds from other sources which are not within the City's discretion to allocate to the 7 Project, so as to achieve the same economic benefits to both parties as would have resulted had the law not changed. 6.2.4 Payments Subject to Future Appropriations. Although certain payments under this Agreement are calculated based on a formula applied to sales tax revenues, this Agreement shall not be construed as a commitment, issue or obligation of any specific taxes or tax revenues for payment to Simon. 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 Simon, 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 7.3, and the City shall not be liable to Simon for such payments, but Simon 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. 6.2.5 City Accounting. The City shall maintain complete books and records showing sales taxes remitted to the City by the State and disbursements of income incentive grant payments, which books and records shall be deemed complete if kept in accordance with generally acceptable accounting principles as applied to Texas municipalities. In addition, the City shall prepare an annual report documenting accrued interest, any carry -forward of accrued interest, unamortized balances, and amortized balances. Such books and records shall be available for examination by the duly authorized officers or agents of Simon during normal business hours upon request made not less than ten (10) business days prior to the date of such examination. The City shall maintain such books and records throughout the term of this Agreement and for four (4) years thereafter. 6.2.6 Utility Services for the Property. The City shall provide, water and wastewater to Simon for the Project, subject to the same fees and charges assessed to similarly situated properties. 6.2.7 Permitting. The City shall cooperate with Simon to expeditiously process all City permit applications and City inspections. 7. Miscellaneous. 7.1 Mutual Assistance. The City, 4B Corp and Simon will do all things reasonably necessary or appropriate to carry out the terms and provisions of this Agreement, 8 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. 7.2 Representations and Warranties. The City and 4B Corp represent and warrant to Simon 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. Simon represents and warrants to the City and 4B Corp that it has the requisite authority to enter into this Agreement. 7.3 Default. If either the City, 4B Corp or Simon 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 or 4B Corp remain in default after notice and opportunity to cure, Simon shall have the right to pursue any remedy at law or in equity for the City's or 4B Corp's breach. If Simon remains in default after notice and opportunity to cure, the City's or 4B Corp's remedy shall be limited to a termination of the EIPs, which accrue after the date of such default. Any EIPs from City or 4B Corp to Simon which is not timely paid by City or 4B Corp shall incur interest at the highest rate per annum allowed by the applicable law of the State of Texas from the date such EIPs are due until paid. 7.4 Attorney's Fees. In the event any legal action or proceeding is commenced between the City, 4B Corp and Simon 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, 4B Corp and Simon. 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. Simon may assign all or part of its rights and obligations to a third party upon thirty days written notice to the City and 4B Corp. 7.8 Amendment. This Agreement may be amended by the mutual written agreement of the parties. 7.9 Termination. In the event Simon elects not to proceed with the Project as contemplated by this Agreement, Simon shall notify the City and 4B Corp 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. In addition, this Agreement 9 shall terminate when Simon has been paid the Maximum Payment Amount in full, or eight (8) years after the first day of the month following the Sales Tax Effective Date, whichever first occurs. 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: Simon: with a copy to: with a copy to: with a copy to: with a copy to: Simon Property Group Attn: Kathy Shields 115 West Washington Street Indianapolis, IN 46204 Ph: (317) 263-7076 Fx: (317) 685-7299 Mr. David B. Armbrust Armbrust & Brown, L.L.P. 100 Congress Ave., Suite 1300 Austin, Texas 78701 Ph: (512) 435-2301 Fx: (512) 435-2360 Simon Property Group Attn: Bill Hammer 115 West Washington Street Indianapolis, IN 46204 Ph: (317) 263-7006 Fx: (3 17) 263-7648 Chelsea Property Group Attn: Mark J. Silvestri 105 Eisenhower Parkway Roseland, NJ 07068 Ph: (973) 228-6111 Fx: (973) 364-2503 Chelsea Property Group Attn: General Counsel 105 Eisenhower Parkway Roseland, NJ 07068 10 City: Jim Nuse, City Manager City of Round Rock 221 East Main St. Round Rock, TX 78664 Ph: (512) 218-5401 Fx: (512) 218-7097 4 B Corp: Jim Nuse, City Manager City of Round Rock 221 East Main St. Round Rock, TX 78664 Ph: (512) 218-5401 Fx: (512) 218-7097 with a copy to: Stephan L. Sheets, City Attorney 309 East Main St.. Round Rock, TX 78664 Ph: (512) 255-8877 Fx: (512) 255-8986 Either party may designate a different address at any time upon written notice to the other party. 7.11 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. 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. 11 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 "force majeure event"). Aforce 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. Except as otherwise expressly provided, herein, there shall be an equitable adjustment allowed for performance under this Agreement as the result of any event offorce majeure. 7.17 Exhibits. The following Exhibits "A" - "E" are attached and incorporated by reference for all purposes: Exhibit "A": City Resolution No. Exhibit "B": Property Description Exhibit "C": 4B Resolution No. Exhibit "D": Public Road Improvements Exhibit "E": Waiver of Sales Tax Confidentiality Form 7.18 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, 4B Corp, its past, present and future officers, elected officials, employees and agents of the City and 4B Corp, do not assume any responsibilities or liabilities to any third party in connection with the development of the Project or the design, construction or operation of any portion of the Project. 7.19 Extension of Dates for Commencement of Construction. In the event Simon determines that an extension of a Project commencement date is necessary due to market or financing conditions, Simon may extend either or both of the Project commencement dates set forth in paragraph 3.2 for up to one (1) year. All other dates shall be extended accordingly. EXECUTED to be effective as of the day of , 2005 (the "Effective Date"). SIMON PROPERTY GROUP (TEXAS), L.P. a By: Printed Name: Title: 12 APPROVED as to form: Stephan L. Sheets, City Attorney CPG ROUND ROCK, L.P. a By: Printed Name: Title: CITY OF ROUND ROCK, TEXAS, a home rule city and municipal corporation By: Nyle Maxwell, Mayor ROUND ROCK TRANSPORTATION SYSTEM DEVELOPMENT CORPORATION, a Texas Development Corporation By: Nyle Maxwell, President 13 EXHIBIT "A" CITY RESOLUTION NO. EXHIBIT "B" PROPERTY DESCRIPTION 87.193 ACRE TRACT ROUND ROCK PREMIUM OUTLETS DESCRIPTION FN NO. 05-020 (CAG) FEBRUARY 22, 2005 BPI JOB NO. 1262-02 OF 87.193 ACRES OF LAND OUT OF THE EPHRAIM EVANS SURVEY, ABSTRACT NO. 212, SITUATED IN WILLIAMSON COUNTY, TEXAS, BEING A PORTION OF THAT CERTAIN 132.28 ACRE TRACT OF LAND CONVEYED TO ANC -ROUND ROCK ASSETS II, LP BY DEED OF RECORD IN DOCUMENT NO. 2001001644 OF THE OFFICIAL PUBLIC RECORDS OF WILLIAMSON COUNTY, TEXAS, AND A PORTION OF THAT CERTAIN 107.44 ACRE TRACT CONVEYED TO NNP-TERAVISTA LP BY DEED OF RECORD IN DOCUMENT NO. 2001001639 OF SAID OFFICIAL PUBLIC RECORDS; SAID 87.193 ACRES BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING, at a 1/2 inch iron rod found in the easterly right-of- way line of Interstate Highway No. 35 (R.O.W. Varies), being the northwesterly corner of that certain 74.590 acre tract of land conveyed to Scott & White Memorial Hospital and Scott, Sherwood and Brindley Foundation by deed of record in Document No. 9733254 of said Official Records of Williamson County, Texas, same being the southwesterly corner of said 132.28 acre tract and hereof; THENCE, NO2°04'48"W, along the easterly right-of-way line of Interstate Highway No. 35, being a portion of the westerly line of said 132.28 acre tract for the westerly line hereof, passing at a distance of 2307.08 feet, a concrete monument found at Highway Station 1120+00, and continuing for a total distance of 2423.43 feet to a 1/2 inch iron rod with cap set for the northwesterly corner hereof; THENCE, leaving Highway No. 35, northerly line distances: the easterly right-of-way line of Interstate over and across said 132.28 acre, for the hereof, the following eight (8) courses and N48°42'48"E, along the northerly right-of-way line of Future Teravista Parkway (100' R.O.W.) a distance of 34.29 feet to a 1/2 inch iron rod with cap set for the point of curvature of a non -tangent curve to left; 2) Along said non -tangent curve to the left having a radius of 640.00 feet, a central angle of 26°55'11", an arc length of 300.69 feet and a chord which bears N70°08'O1"E, a distance of 297.94 feet to a 1/2 inch iron rod with cap set for the point of curvature of a reverse curve to the right; F.xHJ8fl „811 FN 05-020(CAG) FEBRUARY 22, 2005 PAGE 2 OF 3 3) Along said reverse curve to the right having a radius of 920.00 feet, a central angle of 56°S1'30", an arc length of 912.98 feet and a chord which bears N85°06'11"E, a distance of 875.97 feet to a 1/2 inch iron rod with cap set for the point of curvature of a reverse curve to the left; Along said reverse curve to the left having a radius of 950.00 feet, a central angle of 26°17'15", an arc length of 435.86 feet and a chord which bears S79°36'42"E, a distance of 432.05 feet to a 1/2 inch iron rod with cap set for the end of said Curve; 5) N42°46'27"E, a distance of 36.14 feet to a 1/2 inch iron rod with cap set in the westerly right-of-way line of future Oakmont Drive (100' R.O.W.) for an angle point; 6) N82°43'03"E, over and across future Oakmont Drive, a distance of 100.78 feet to a 1/2 inch iron rod with cap set in the easterly right-of-way line of future Oakmont Drive for an angle point; 7) S50°45'31"E, a distance of 31.92 feet to a 1/2 inch iron rod with cap set for an angle point; 8) N78°33'21"E, a distance of 10.32 feet to a 1/2 inch iron rod with cap set in the common line of said 132.28 acre tract and said 107.44 acre tract for the northeasterly corner hereof; THENCE, along the common line of said 132.28 acre tract and said 107.44 acre tract, being a portion of the easterly line hereof, the following two (2) courses and distances: 1) S06°14'24"W, a distance of 59.27 feet to a 1/2 inch iron rod with cap set for an angle point; 2) S19°01'28"E, a distance of 35.64 feet to a 1/2 inch iron rod with cap set foran angle point; THENCE, leaving said common line, over and across said 132..28 acre tract and said 107.44 acre tract, for the easterly line hereof, the following six (6) courses and distances: 1) S38°18'53"W, a distance of 50.49 feet to a 1/2 inch iron rod with cap set for the point of curvature of a non -tangent curve to the left; FN 05-020(CAG) FEBRUARY 22, 2005 PAGE 3 OF 3 2) Along said non -tangent curve to the left having a radius of 1250.00 feet, a central angle of 01°54'00", an arc length of 41.45 feet and a chord which bears S07°43'03"E, a distance of 41.45 feet to a 1/2 inch iron rod with cap set for the point of tangency; 3) S08°40'03"E, a distance of 185.24 feet to a 1/2 inch iron rod with cap set for the point of curvature of a curve to the right; 4) Along said curve to the right having a radius of 2300.00 feet, a central angle of 24°22'51", an arc length of 978.71 feet and a chord which bears S03°31'22"W, a distance of 971.34 feet to a 1/2 inch iron rod with cap set for the point of tangency; 5) S15°42' 48"W, a distance of 138.11 feet to a 1/2 inch iron rod with cap set for the point of curvature of a curve to the left; 6) Along said curve to the left having a radius of 2200.00 feet, a central angle of 12°56'48", an arc length of 497.11 feet and a chord which bears S09°14'24"W, a distance of 496.05 feet to a 1/2 inch iron rod with cap set for the end of said curve, being in the southerly line of said 132.28 acre tract, being the northerly line of said 74.590 acre tract for the southeasterly corner -hereof ; THENCE, S69°15'57"W, along the northerly line of said 74.590 acre tract, being in part the westerly line of said 107.44 acre tract, and in part a portion of the southerly line of said 132..28 acre tract for the southerly line hereof, passing at a distance of 61.11 feet a 1/2 inch iron rod found, being the southeasterly corner of said 132.28 acre tract, same being an angle point in the westerly line of said 107.44 acre tract, and continuing for a total distance of 1609.98 feet to the POINT OF BEGINNING, containing an area of 87.193 acres (3,798,135 sq. ft.) of land, more or less, within these metes and bounds. BEARING BASIS: REFERENCED TO THE TEXAS STATE PLANE COORDINATE SYSTEM, CENTRAL ZONE BASED ON PUBLISHED NAD 83/93 HARM VALUES FOR THE CITY OF GEORGETOWN MONUMENTATION NETWORK. BURY & PARTNERS, INC. ENGINEERS AND SURVEYORS 3345 BEE CAVES ROAD, SUITE 200 AUSTIN, TEXAS 78746 JO T. BILNOSKI DATE R. .L.S #4998 STATE OF TEXAS CURVE TABLE .k, • II .t I i • i 1 • i h .r. .... hr. : . . 1 264.55 11... 64000 300.69 297.94 070'0801 'E -.'6.2 56'51.30" 920.00 912.96 8 7. 5, , 97 N850841"E C3 2r1715- 959.90 435.86 432.95 S79 3642E .C4 01'5400' 16.0.00 41.45 41.45 S07'43'03"E C5 24'22'.51/ 2300.00 978.71 971.34 613311'22nti C6 12'56'48" 2200.90 497.11 496.95 S09'14.24W LEGEND 1 0 P.0.8. IRON ROD FOUND MON ROD sET WITH CAP HIGHWAY MONUMENT FOUND POINT OF BEGINNING • QM AC. ANC-ROLIND AROLTS LP: 00D. NO. 2O442 0. • rep -coal afaialaeiv.eouvrr kw. 6 C4 L9 tor.44 AC. NNP -TERAV MIA LP DOC. NO. 2001001539 1.•10 OETD LINE 87.193 ACRES (3.798,135 SQ. FT.) 132.28 AC. ANC -ROUND ROCK ASSETS 0, LP DOC. NO. 2001001544 EPHRAIM EVANS SURVEY ABSTRACT NO. zia :08! UNE TABLE No pogring Diqtcpco 11 S46'42'48E 34.29' 12 1.14Z46'271/4 36,14! 13 t8 4303 100:7-8* L4 S50'45'31% 31.9.2-' 15 N713`33'21"E 116.32` 16 SO6'14.2414/ 592T 17 SI 9.028.t E 55.64/ 18 s38•1613'w 50.49' 19 SO8'40'03''t 185.24' 110 S1542'48"W 138.11' 74.590 ACRES SCOTT .& WiirrE MEMORIAL HOSPITAL AND SCOTT. SHERWOOD ANO amour FOUNDATION DOC. NO. 9733254 Ote LIIRT LAT LOT I oAAtfr CENTRE DEC. 4 • Lor I mock FIRST UNITEO. ADIXTION CAB. o. alit 12-2.3 WPM SHERSICP44 .#14 BRROZY 0414k4T105 boa N. 0706780 S02'04 48,E 74.324' _LAO, AC. Hor .11iVEMENT0-, LID. .000..0141, .41000-0401 . „ HWY STA -=-1120+00 P',dtblets iNra i.-06.0041 4.0.40410,t4T-t1 .1100.004:106 40.01.0, 1404. RM. t4..-14001411it1oti:47.9g5. 54ipipatik. NO2 •2423.43 INTERSTATE /GOWN( NO. 35 (R,O.W. VARIES) SkEitif TO A0004iiiiibtiefitPTIOW 0 V.193 k#6: -OF 440::0*0: ASSITIka440 I1.2A4 Astumstoccolont 1014%,..)E1545..A.P.051154.:5C' 1120TAIN.10428 ADRE-TRAOT.0E,LAW.CONVEYEIT'Vwf/0400oND: voc:.oamg; tA:0cOEC0154.1CP5C91,15t5 -10 2041051444W:111 .-.5.M0.41;:.056.W.55115115.-5f:Yitti.AMStff 045141.14A/Kli; AND A PORTION -00 ITNAT CERTAIN :10.744 ARE liTADTiDESCMSOYM:tH0020s TO ]0NP-41ERAYISTA,CP'OF-020001i14 DOCOMENTNO, 20i00139 CF NOVItk °Mc. Ki;41D*:, 041 -i - SM. 1.11404 PROD VOL 55 • ROUND ROOK PREMIUM -.MOTS r -O 02/22/DS. 1400..2-62 ViV9..-25292EX5744Wq N:ki,P009;,721046) :19,84WN -13.ne.AG -4 40 1262..-02: EXHIBIT "C" 4B RESOLUTION NO. 1 OCHX3tOS LS All IS\Nva\ n\cic\.n 5 19.49 AC. GEORGETOWN APARTMENT LAND. LTO. DOC. NO. 2002006357 uP o 02-212- 'P O aFyn Om n RO -4- a�u .tea 0 ti mans. sr. m 0o ROUND ROCK, TEXAS SIMON PROPERTY GROUP OAKMONT DRIVE AND TERAVISTA PARKWAY EXHIBIT I1 Bury-Parmera EXHIBIT "E" WAIVER OF SALES TAX CONFIDENTIALITY Date I authorize the Comptroller of Public Accounts to release sales tax Information pertaining to the taxpayer indicated below to , a , its successors, assigns or nominees, and the City of Round Rock. Texas, and the Round Rock Transportation System Development Corporation. I understand that this waiver applies only to our retail store located in the Premium Outlets located in the City of Round Rock, Williamson County, Texas. Please print or type the following information as shown on your Texas Sales and Use Tax permit: Name of Taxpayer Listed on Texas Sales Tax Permit Name Under Which Taxpayer is Doing Business ( d/b/a or Store Name): Taxpayer Mailing Address: Physical Location of Business Permitted for Sales Tax in Round Rock, Texas: Texas Taxpayer ID Number Tax Outlet Number (As shown of Texas Sales Tax Permit) Authorized Signature': Printed Name: Title: Phone: The authorized signature must be of an owner, officer, director, partner or agent authorized to sign a Texas Saks Tax Return. If you have questions concerning this Waiver of Confidentiality, please contact Sandra C. Joseph, Texas Comptroller of Public Accounts a (800) 531-5941, Ext. 5-0411. 198756-18 05/19/2005 EXHIBIT "D" PUBLIC ROAD IMPROVEMENTS 198756-18 05/19/2005 -"- 1.18111X3 --,-!:=1:.-=z =z AVA�1liVd il3 VISIAV1 do0HO Alkl3d0Nd NOYIIS = - "'oi" H4 aNV 3AlIia 1NOW)1VO Waal NOM miaow :^ .. _.,,.. idm amu, m u u d• 4�N ��" ppUA� _fLu ''..• SIV F > �NL' siu' _ $� tt (1 ui 1A s o Ska ` &,oa e� Ct 1 � deo $� SEGMENT °B-2" 2.06 AC. 4 t tO a c) 9YNO. 35 l — t \..,,..cc_;;;—,,,,,,,,4',t Ili i � - '\ '�Z 1 00 a Ii ga U W • Q ti4! 44' 2 03 Camp W T N. U �' O W� 1 X w arca • ;1 z If L?,, `Q W .4 ,© N. o;i144 c, SEGMENT MCn 3.93 AC. III V *44 0 •v '?U •°OI COQ • 4• ../ oIv 44"Q •ii �` �~umn �a La°"' :Ago �•' L 1„LLJ`� sft°M I> 4 r 6 CE'" a w d u �} Oi i ii [W2002002 ON -DOG i - 'Oil 'ONYI IN3HIMY4Y 1010.13a21033 JY 6961 .' n c Q �"' m =t o gz" m FA F S �a o a sir -ii 0. C i EXHIBIT "E" WAIVER OF SALES TAX CONFIDENTIALITY Date I authorize the Comptroller of Public Accounts to release sales tax Information pertaining to the taxpayer indicated below to , a , its successors, assigns or nominees, and the City of Round Rock. Texas, and the Round Rock Transportation System Development Corporation. I understand that this waiver applies only to our retail store located in the Premium Outlets located in the City of Round Rock, Williamson County, Texas. Please print or type the following information as shown on your Texas Sales and Use Tax permit: Name of Taxpayer Listed on Texas Sales Tax Permit: Name Under Which Taxpayer is Doing Business (d/b/a or Store Name): Taxpayer Mailing Address: Physical Location of Business Permitted for Sales Tax in Round Rock, Texas: Texas Taxpayer ID Number Tax Outlet Number (As shown of Texas Sales Tax Permit) Authorized Signature': Printed Name: Title: Phone: 1 The authorized signature must be of an owner, officer, director, partner or agent authorized to sign a Texas Sales Tax Return. If you have questions concerning this Waiver of Confidentiality, please contact Sandra C. Joseph, Texas Comptroller of Public Accounts at (800) 531-5441, Ext. 5-0411. 198756-18 05/19/2005 11111111111111111111111111111111111111111111111111111111111 THE STATE OF TEXAS COUNTY OF WILLIAMSON CITY OF ROUND ROCK RESO 71 PGS 2005046056 I, SHERRI MONROE, Assistant City Secretary of the City of Round Rock, Texas, do hereby certify that I am the custodian of the public records maintained by the City and that the above and foregoing is a true and correct copy of Resolution No. R -05-05- 26-12D2, which approves an Economic Development Agreement with the Round Rock Transportation System Development Corporation, Simon Property Group, L.P., and CPG Round Rock, L.P. regarding Simon's development of a retail outlet mall in the City. This resolution was approved by the City Council of the City of Round Rock, Texas, at a regular scheduled meeting held on the 26th day of May 2005. These minutes are recorded in the official City Council Minute Book No. 52. CERTIFIED by my hand and seal of the City of Round Rock, Texas on this 16th day of June 2005. SHERRI MONORE, Assistant City Secretary RESOLUTION NO. R -05-05-26-12D2 WHEREAS, the City of Round Rock has established an Economic Development Program, and WHEREAS, to further promote economic development, the City wishes to enter into an Economic Development Agreement ("Agreement") with the Round Rock Transportation System Development Corporation, Simon Property Group, L.P., and CPG Round Rock, L.P. regarding Simon's development of a retail outlet mall in the City of Round Rock, and WHEREAS, the City Council wishes to approve the Resolution of the Board of Directors of the Round Rock Transportation System Development Corporation authorizing its President to execute the Agreement, 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 Agreement with the Round Rock Transportation System Development Corporation, Simon Property Group, and CPG Round Rock, L.P., a copy of same being attached hereto as Exhibit A„ and incorporated herein for all purposes, and BE IT FURTHER RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS, That the City Council hereby approves the Resolution of the Board of Directors of the Round Rock Transportation System Development Corporation authorizing its President to execute the Agreement. 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 4 PFDesktop\-:ODMA/WORLDOX/O: !WDOX/RE.OLUTI/R50525D2_WPD/515 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. RESOLVED this 26th day of May, 2005 CHRISTINE R. MARTINEZ, City Secre NYLE Ci 2 r Round Rock, Texas ECONOMIC DEVELOPMENT AGREEMENT This Economic Development Agreement ("Agreement") is entered into this day of , 2005, by and between the City of Round Rock, Texas, a Texas home rule municipal corporation ("City"), the Round Rock Transportation System Development Corporation, a corporation created pursuant to the Development Corporation Act — Art. 5190.6(4)(B), ("4B Corp") and Simon Property Group (Texas), L.P., and CPG Round Rock, L.P., their successors and assigns ("Simon"). 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 Simon in recognition of the positive economic benefits to the City through Simon's development of approximately 87.193 acres of land, as more particularly described on the attached Exhibit "B" ("Property") as a premium destination retail outlet mall and ancillary uses ("Project"); and WHEREAS, the 4B Corporation has adopted Resolution No. R-05-36, attached as Exhibit "C" ("4B Resolution") authorizing the Board President to enter into this Agreement with Simon in recognition of the aforesaid benefits; and WHEREAS, the purpose of this Agreement is to promote economic development as contemplated by Chapter 380 of the Texas Local Government Code and the Development Corporation Act - ART. 5190.6 TEx. REV. Civ. STAT. ANN. (Vernon's 1987 and Vernon's Supp. 2003) whereby Simon will construct, develop and operate the Project, or cause the Project to be operated, in conformance with the City's development approvals for the Project, and the City and 4B Corp will participate in the funding of certain roadway, utility, and other related improvements in accordance with the terms of this Agreement; and WHEREAS, development of the Project requires the cooperation and participation of the City, 4B Corp and Simon in the design and construction of various roadway and public utility improvements; and WHEREAS, the City and 4B Corp have agreed to assume responsibility for the design and construction, at the City's cost, of the IH -35 ramps and related improvements as described on the attached Exhibit "D" ("Public Road Improvements"); and WHEREAS, Simon has agreed to construct certain roadway improvements described in Section 5.2 of this Agreement ("Simon Road Improvements") and; WHEREAS, the City and 4B Corp have agreed to provide performance based economic development grants to Simon to defray a portion of the project 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, 4B Corp and Simon agree as follows: 86885 EXHIBIT 1. Authority. The City's and 4B Corp's execution of this Agreement are authorized by both Chapter 380 and Chapter 395 of the Texas Local Government Code, the Development Corporation Act — ART. 5190.6 TEx. REV. CIV. STAT. ANN. (Vernon's 1987 and Vernon's Supp. 2003) the City Resolution and the 4B Resolution, constitute a valid and binding obligation of the City in the event Simon proceeds with the development of the Property. The City and 4B Corp acknowledge that Simon is acting in reliance upon their 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 "Adjusted Gross Leasable Sales Area" shall mean the gross leasable area of the Project less any storage areas, bathroom facilities, courtyards, hallways or other areas not utilized for the sale of goods and services, the proposed cinema and outlot uses or pad sites providing only services. 2.2 "Commencement of Construction" shall mean the commencement of work on piers, foundations or other improvements necessary for the construction of vertical improvements. 2.3 "Economic Incentive Payment(s)" ("EIPs") means the amount paid by the City to Simon under the Program. 2.4 "Effective Date" is the date this Agreement is executed to be effective by the City, 4B Corp and Simon. 2.5 "Net Present Value Basis" shall be calculated as set forth in Section 6.2.2.(f). 2.6 "One Cent Sales Tax Revenues" means that portion of Sales Tax Revenues (defined below) resulting from the imposition of a one percent municipal sales tax on sales arising from the Project, such as that presently in effect pursuant to Texas Tax Code §321.101(a) and §321.103. If the City ever elects to charge less than a one percent (1%) sales tax but is allowed by law to collect a sales tax of one percent (1%) or more, then instead of being based on actual collections, One Cent Sales Tax Revenues attributable to sales tax collected shall be deemed to be computed as if the City did elect to charge a one percent sales tax. 2.7 "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. 2.8 "Project" is Simon's planned development of the Property which shall consist of a premium outlet center and related facilities, all of which are commonly referred to as "Round Rock Premium Outlets" The Project shall include approximately five hundred fifty thousand (550,000) square feet of Adjusted Gross Leasable Sales Area in a phased development of some or all of the following uses: retail, banking, restaurants, entertainment, theater, offices, hotel and/or recreation space. The 2 Project will include walkways in the retail -pedestrian areas, public space with outside pedestrian amenities, such as benches, landscape features, fountains and/or water features and dining areas. If constructed in phases, the first phase ("First Phase") shall contain at least four hundred twenty thousand (420,000) square feet of Adjusted Gross Leasable Sales Area. 2.9 "Project Area" is the area within the Property that will be developed for the Project and is otherwise described in Exhibit B — "Property Description". 2.10 "Sales Tax Effective Date" is first day of the month following the date upon which Simon certifies in writing that it and/or its tenants has received one or more certificates of occupancy for and has begun retail operation of at least fifty thousand (50,000) square feet of Adjusted Gross Leasable Sales Area for the Project or the First Phase, if constructed in phases. 2.11 "Sales Tax Revenues" means the amount of sales tax collected by the City arising from the Project. The term "Sales Tax Revenues" shall include any taxes authorized by the State in the future that are intended to replace sales or use tax revenues currently available to the City. 3. Notice to Proceed and Expenditure of Funds Prior to Delivery of Written Notice to Proceed by Simon. 3.1 Activities Prior to Delivery of Written Notice to Proceed by Simon. 3.1.1 It may be desirable for the City, 4B Corp and/or Simon to commence certain engineering, design and/or preliminary site work activities before Simon delivers the Written Notice to Proceed described in Section 3.2 below in order to maximize the ability of the Project to open to the public on the anticipated schedule. No party shall have any obligation to repay or reimburse any other party for such activities unless they have entered into an Advance Funding Agreement. Simon, in its sole discretion, may elect to engage in such advance funding. 3.1.2 Any advance funding commitments made by Simon under paragraph 3.1.1 shall be recognized as inducement costs to be reimbursed or repaid as Economic Incentive Payments in accordance with the provisions of this Agreement. 3.2 Post -Delivery of Written Notice by Simon. The rights and obligations of Simon and of the City and 4B Corp set forth in this Agreement shall be of no force or effect unless and until Simon shall deliver written notice to the City and 4B Corp that it: 3.2.1 Has acquired fee title to the Property; and 3 3.2.2 Is prepared in a diligent manner to commence and pursue construction of the Project to completion as evidenced by the issuance by the City of a Certificate of Occupancy to Simon. 4. Term. This Agreement shall become enforceable upon its Effective Date. This Agreement shall terminate upon the earlier to occur of: (i) eight (8) years after the Sales Tax Effective Date; (ii) Simon's receipt of reimbursement of its aggregated actual costs of construction of Teravista Blvd, "C", Oakmont Drive "A", Oakmont Drive "B2" and one-half of its actual cost of Oakmont Drive "Bl" pursuant to Section 6.1.3; or (iii) Simon's receipt of the total EIPs equal to the Maximum Payment Amount (defined in paragraph 6.2.2(e)). In recognition of the fact that EIPs, by necessity, are calculated and paid after taxes have been assessed and paid to the City, and therefore always run in arrears, the term of this Agreement shall be deemed to include any payments for Sales Tax Revenues collected by Simon's tenants during the Term of this Agreement but not received by the City until after the termination date . An equitable adjustment shall be made to the Term if the completed Project is closed for a significant period of time due to a "force majeure event" as defined in paragraph 7.15 below. 5. Rights and Obligations of Simon. In consideration of the City's and 4B Corp's compliance with this Agreement, Simon agrees as follows: 5.1 Simon Road Improvements. Simon will: (a) Donate rights-of-way associated with Oakmont Drive Extension — Segment A from south property line of the Simon tract to Teravista Parkway —Segment C; (b) Donate or cause to be donated all or a part of the right-of-way for the Oakmont Drive Extension — Segments B1 and B2 from Chandler Road to south property line of Simon tract, through a series of land transactions among Simon, Barshop & Oles, Scott & White, and Newland Properties, donate any such parts of the rights-of-way associated with Oakmont Drive Extension — Segments B1 and B2 from Chandler Road to south property line of Simon tract; (c) Donate rights-of-way associated with Teravista. Parkway — Segment C from the intersection with Oakmont Drive Extension — Segment A to the IH -35 frontage road; (d) Be responsible for construction of the following roads, either directly or on behalf of the City. Simon shall use its best efforts to ensure completion of the roads no later than September 1, 2006. (e) Fund the cost of construction of the road improvements: (i) Oakmont Drive Extension — Segment A, currently estimated to be $1,419,834; 4 (ii) Oakmont Drive Extension — Segment B1 currently estimated to be $334,411; and Segment B2 currently estimated to be $627,730, (note: only one-half of the Segment B2 cost is to be included in the total cost of construction as set forth in Sec. 6.1.3 below); and (iii) Teravista Parkway Segment C from the intersection with the North/South Road (Oakmont Drive Extension — Segment A) to the IH - 35 frontage road, currently estimated to be $1,198,494; (f) Comply with the statutory bidding requirements of Chapter 252 of the Local Government Code with respect to the Public Road Improvements listed above but not otherwise. 5.2 Compliance with Development Regulations and Other Ordinances. Simon shall comply with the City's development approval processes and shall develop the Project on the Property consistent with City ordinances, City -approved PUD zoning ordinance for the Property, City -approved development regulations, and other City development requirements. 5.3 Simon Accounting. Simon shall maintain complete books and records showing all expenses of any nature that City is to or will reimburse or pay under this Agreement which books and records shall be deemed complete if kept in accordance with generally acceptable accounting principles as applied to Texas partnerships. Such books and records shall be available for examination by the duly authorized officers or agents of the City during normal business hours upon request made not less than ten (10) business days prior to the date of such examination. Simon shall maintain such books and records throughout the term of this Agreement and for four (4) years thereafter. 5.4 Waiver of Sales Tax Confidentiality. Simon agrees to obtain a Waiver of Sales Tax Confidentiality from tenants of the Project in a form approved by the Texas Comptroller's Office ("Waiver Form"), a copy of which is attached hereto as Exhibit "E". The Waiver Form will be utilized by the City to obtain reports filed by Simon's tenants to determine the amount of sales tax revenues generated from the Project for the previous calendar quarter. Such reports shall be based upon reports filed by the Project's tenants with the Texas Comptroller's office. 5.5 Reimbursement of Unearned Incentive Payments. In the event that Simon receives full reimbursement of its actual costs from the 4B Corp pursuant to Section 6.2.1, below: 5.5.1 Simon will use commercially reasonable efforts to operate the retail facility for a period equal to the term set forth in Section 6.2.2 (0, below; and 5.5.2 At the end of the Term, the amount of the City Payment EIP's pursuant to Section 6.2.2. that would have otherwise been earned by Simon and paid by the City may be calculated, at the City's option. If this calculation results in an amount less than the amount of the EIP actually paid to Simon by the 4B 5 Corp pursuant to Section 6.2.1, then at the City's election, Simon will refund to the 4B Corp the difference. Said refund shall be paid no later than thirty (30) days after Simon receives written notice from the. City or the 4B Corp that the refund is due. 6. Rights and Obligations of the City and 4B Corp. In consideration of Simon's compliance with this Agreement, the City and 4B Corp agree as follows: 6.1 Public Road Improvements. 6.1.1 The City, either on its own or acting through 4B Corp, shall fund the construction of the Public Frontage Road Improvements, currently estimated to cost approximately $8,440,579 before financing costs. The City has previously entered into an Advanced Funding Agreement with the Texas Department of Transportation (TxDOT) regarding the design and construction of the Chandler Road Interchange and IH35 Improvements currently estimated to cost $6,150,220. The City shall use its best efforts to ensure completion of these improvements no later than September 1, 2006. 6.1.2 Simon is seeking to acquire the right-of-way for the Oakmont Drive Extension — Segments B1 and B2 from Chandler Road to south property line of Simon tract, through a series of land transactions among Simon, Barshop & Oles, Scott & White, and Newland Properties. If Simon determines it is unable to acquire all or part of said right-of-way, it may so notify the City at anytime and request the City to acquire the right-of-way pursuant to its powers of eminent domain. Simon agrees to pay all of the actual cost of such acquisition, including, but not limited to, appraisal fees, expert testimony, and reasonable attorney fees. Upon receipt of such notice, the City will utilize reasonable efforts to acquire the right-of-way for the proposed Oakmont Drive Extension — (Segments B1 and B2) from Chandler Road to the south property line of the Property as soon as is reasonably possible . 6.1.3 Subject to the conditions set forth herein, the City or the 4B Corp shall reimburse Simon all of the actual costs of constructing the following roadway improvements, including but not limited to engineering, pavement, drainage, erosion and sedimentation control, mobilization, overhead, and lighting within the public right of way, currently estimated to aggregate to $3,266,604, of the following improvements: (a) Oakmont Drive Extension — Segments A, and B1, currently estimated to be $1,754,245: (b) Oakmont Drive Extension — Segment B2, currently estimated to be $313,865; and 6 (c) Teravista Parkway — Segment C from the intersection with the North/South Road (Oakmont Drive Extension — Segment A) to the IH - 35 frontage road -currently estimated to be $1,198,494 6.2 Economic Incentive Payments. 6.2.1 4B Payments. The 4B Corp shall have the option of making the reimbursement for the Public Road Improvements as set forth on Exhibit D, in whole or in part, to Simon upon the issuance by the City of a Certificate of Occupancy for the First Phase of the Project. The 4B Corp shall notify Simon in writing in the event it decides to exercise the aforesaid option. 6.2.2 City Payments. In the event that the 4B Corp elects not, either in whole or in part, to make the reimbursement payment due Simon under Section 6.2.1, above, the City shall pursuant to Chapter 380 of the Texas Local Government Code, but subject to the conditions set out here, make quarterly EIPs to Simon of any such unpaid reimbursements. The EIPs are to be calculated as follows: (a) Calculations will be based upon sales subject to the City's one -cent (10) general sales tax; (b) Calculations shall be based on such annual sales in excess of Two Hundred Seventy-five Dollars ($275) per square foot of Adjusted Gross Leasable Sales Area; (c) Upon the opening of each phase of the Project, Simon will provide a certification of the amount of Adjusted Gross Leasable Sales Area; (d) The EIPs will be an amount equal to one hundred percent (100%) of the One Cent Sales Tax Revenues from sales (as defined in subsections a and b, above); (e) The Maximum Amount of the EIPs will be a Net Present Value of the aggregated actual costs estimated to be $3,266,604 (not otherwise reimbursed by the 4B Corp, as described in Section 6.1.3 (d), above, of the improvements described in Section 6.1.3 above. (f) The Maximum Term shall be the earlier of the date when the aggregate amount of the EIPs made to Simon on a Net Present Value Basis (discounted at six percent (6%) from the Sales Tax Effective Date) is equal to the Maximum Amount of the EIPs estimated to be $3,266,604, or eight (8) years from the first day of the month following the Sales Tax Effective Date. 6.2.3 Changes in Law. If, during the term of this Agreement, state law applicable to municipal taxation changes the form of sales taxes, and as a result, the EIPs differ from the amount which would have been paid to Simon under the laws in effect as of the Effective Date of this Agreement, then the City, in its sole 7 discretion, may adjust the EIPs using whatever discretionary taxes and revenues that are legally available to City which can be allocated to the EIPs. However, this section is not intended to require the City to use funds from other sources which are not within the City's discretion to allocate to the Project, so as to achieve the same economic benefits to both parties as would have resulted had the law not changed. 6.2.4 Payments Subject to Future Appropriations. Although certain payments under this Agreement are calculated based on a formula applied to sales tax revenues, this Agreement shall not be construed as a commitment, issue or obligation of any specific taxes or tax revenues for payment to Simon. 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 Simon, 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 7.3, and the City shall not be liable to Simon for such payments, but Simon 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. 6.2.5 City Accounting. The City shall maintain complete books and records showing sales taxes remitted to the City by the State and disbursements of income incentive grant payments, which books and records shall be deemed complete if kept in accordance with generally acceptable accounting principles as applied to Texas municipalities. In addition, the City shall prepare an annual report documenting accrued interest, any carry -forward of accrued interest, unamortized balances, and amortized balances. Such books and records shall be available for examination by the duly authorized officers or agents of Simon during normal business hours upon request made not less than ten (10) business days prior to the date of such examination. The City shall maintain such books and records throughout the term of this Agreement and for four (4) years thereafter. 6.2.6 Utility Services for the Property. The City shall provide water and wastewater to Simon for the Project, subject to the same fees and charges assessed to similarly situated properties. 6.2.7 Permitting. The City shall cooperate with Simon to expeditiously process all City permit applications and City inspections. 7. Miscellaneous. 7.1 Mutual Assistance. The City, 4B Corp and Simon 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. 7.2 Representations and Warranties. The City and 4B Corp represent and warrant to Simon 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. Simon represents and warrants to the City and '4B Corp that it has the requisite authority to enter into this Agreement. 7.3 Default. If either the City, 4B Corp or Simon 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 or 4B Corp remain in default after notice and opportunity to cure, Simon shall have the right to pursue any remedy at law or in equity for the City's or 4B Corp's breach. If Simon remains in default after notice and opportunity to cure, the City's or 4B Corp's remedy shall ,be limited to a termination of the EIPs, which accrue after the date of such default. Any EIPs from City or 4B Corp to Simon which is not timely paid by City or 4B Corp shall incur interest at the highest rate per annum allowed by the applicable law of the State of Texas from the date such EIPs are due until paid. Any funds owed by Simon to the City or 4B Corp which are not timely paid by Simon shall incur interest at the highest rate per annum allowed by the applicable law of the State of Texas from the date such funds are due until paid. 7.4 Attorney's Fees. In the event any legal action or proceeding is commenced between the City, 4B Corp and Simon 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, 4B Corp and Simon. 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. Simon may assign all or part of its rights and obligations to a third party upon thirty days written notice to the City and 4B Corp. 9 7.8 Amendment. This Agreement may be amended by the mutual written agreement of the parties. 7.9 Termination. In the event Simon elects not to proceed with the Project as contemplated by this Agreement, Simon shall notify the City and 4B Corp 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. In addition, this Agreement shallterminate when Simon has been paid the Maximum Payment Amount in full, or eight (8) years after the first day of the month following the Sales Tax Effective Date, whichever first occurs. 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: Simon: with a copy to: with a copy to: with a copy to: Simon Property Group Attn: Kathy Shields 115 West Washington Street Indianapolis, IN 46204 Ph: (317) 263-7076 Fx: (317) 685-7299 Mr. David B. Armbrust Armbrust & Brown, L.L.P. 100 Congress Ave., Suite 1300 Austin, Texas 78701 Ph: (512) 435-2301 Fx: (512) 435-2360 Simon Property Group Attn: Bill Hammer 115 West Washington Street Indianapolis, IN 46204 Ph: (317) 263-7006 Fx: (317) 263-7648 Chelsea Property Group Attn: Mark J. Silvestri 105 Eisenhower Parkway Roseland, NJ 07068 10 with a copy to: City: 4 B Corp: with a copy to: Ph: (973) 228-6111 Fx: (973) 364-2503 Chelsea Property Group Attn: General Counsel 105 Eisenhower Parkway Roseland, NJ 07068 Jim Nuse, City Manager City of Round Rock 221 East Main St. Round Rock, TX 78664 Ph: (512) 218-5401 Fx: (512) 218-7097 Jim Nuse, City Manager City of Round Rock 221 East Main St. Round Rock, TX 78664 Ph: (512) 218-5401 Fx: (512) 2.18-7097 Stephan L. Sheets, City Attorney 309 East Main St. Round Rock, TX 78664 Ph: (512) 255-8877 Fx: (512) 255-8986 Either party may designate a different address at any time upon written notice to the other party. 7.11 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. 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 11 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 "force majeure event"). Aforce 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. 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 Exhibits. The following Exhibits "A" - "E" are attached and incorporated by reference for all purposes: Exhibit "A": Exhibit "B": Exhibit "C": Exhibit "D": Exhibit "E": City Resolution No. Property Description 4B Resolution No. R-05-36 Public Road Improvements Waiver of Sales Tax Confidentiality Form 7.18 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, 4B Corp, its past, present and future officers, elected officials, employees and agents of the City and 4B Corp, do not assume any responsibilities or liabilities to any third party in connection with the development of the Project or the design, construction or operation of any portion of the Project. 7.19 Extension of Dates for Commencement of Construction. In the event Simon determines that an extension of a Project commencement date is necessary due to market or financing conditions, Simon may extend either or both of the Project commencement dates set forth in paragraph 3.2 for up to one (1) year. All other dates shall be extended accordingly. EXECUTED to be effective as of the _ day of , 2005 (the "Effective Date"). 12 APPROVED as to form: Stephan L. Sheets, City Attorney SPG ROUND ROCK NS, L.P. a Delaware limited liability company By: VPI Landco, LLC, General Partner By: Virginia Properties, Inc., Manager By: Printed Name: Title: CPG ROUND ROCK, L.P. a Texas limited partnership By: Virginia Properties, Inc., General Partner By: Printed Name: Title: CITY OF ROUND ROCK, TEXAS, a home rule city and municipal corporation By: Nyle Maxwell, Mayor ROUND ROCK TRANSPORTATION SYSTEM DEVELOPMENT CORPORATION, a Texas Development Corporation By: Nyle Maxwell, President 13 EXHIBIT "A" CITY RESOLUTION NO. 1 EXHIBIT "B" PROPERTY DESCRIPTION 1 EXHIBIT "C" 4B RESOLUTION NO. 1 EXHIBIT "D" PUBLIC ROAD IMPROVEMENTS 198756-18 05/19/2005 EXHIBIT "E" WAIVER OF SALES TAX CONFIDENTIALITY Date I authorize the Comptroller of Public Accounts to release sales tax Information pertaining to the taxpayer indicated below to , a successors, assigns or nominees, and the City of Round Rock. Texas, and the Round Rock Transportation System Development Corporation. I understand that this waiver applies only to our retail store located in the Premium Outlets located in the City of Round Rock, Williamson County, Texas. Please print or type the following information as shown on your Texas Sales and Use Tax permit: Name of Taxpayer Listed on Texas Sales Tax Permit: Name Under Which Taxpayer is Doing Business ( d/b/a or Store Name): Taxpayer Mailing Address: Physical Location of Business Permitted for Sales Tax in Round Rock, Texas: Texas Taxpayer ID Number Tax Outlet Number (As shown of Texas Sales Tax Permit) Authorized Signaturel: Printed Name: Title: Phone: The authorized signature must be of an owner, officer, director, partner or agent authorized to sign a Texas Sales Tax Return. If you have questions conceming this Waiver of Confidentiality, please contact Sandra C. Joseph, Texas Comptroller of Public Accounts at (800) 531-5441, Ext. 5-0411. 198756-18 05/19/2005 ECONOMIC DEVELOPMENT AGREEMENT Th's Economic Development Agreement ("Agreement") is entered into this (Co day of , 2005, by and between the City of Round Rock, Texas, a Texas rule munici 1 corporation ("City"), home l rp ( y ), the Round Rock Transportation System Development Corporation, a corporation created pursuant to the Development Corporation Act — Art. 5190.6(4)(B), ("4B Corp") and Simon Property Group (Texas), L.P., and CPG Round Rock, L.P., their successors and assigns ("Simon"). WHEREAS, the City has adopted Resolution No. 5 �� t /hed atttached9P1 as Exhibit "A" ("City Resolution"), establishing an economic development program and authorizing the Mayor to enter into this Agreement with Simon in recognition of the positive economic benefits to the City through Simon's development of approximately 87.193 acres of land, as more particularly described on the attached Exhibit "B" ("Property") as a premium destination retail outlet mall and ancillary uses ("Project"); and WHEREAS, the 4B Corporation has adopted Resolution No. R-05-36, attached as Exhibit "C" ("4B Resolution") authorizing the Board President to enter into this Agreement with Simon in recognition of the aforesaid benefits; and WHEREAS, the purpose of this Agreement is to promote economic development as contemplated by Chapter 380 of the Texas Local Government Code and the Development Corporation Act - ART. 5190.6 TEX. REV. CRT. STAT. ANN. (Vernon's 1987 and Vernon's Supp. 2003) whereby Simon will construct, develop and operate the Project, or cause the Project to be operated, in conformance with the City's development approvals for the Project, and the City and 4B Corp will participate in the funding of certain roadway, utility, and other related improvements in accordance with the terms of this Agreement; and WHEREAS, development of the Project requires the cooperation and participation of the City, 4B Corp and Simon in the design and construction of various roadway and public utility improvements; and WHEREAS, the City and 4B Corp have agreed to assume responsibility for the design and construction, at the City's cost, of the IH -35 ramps and related improvements as described on the attached Exhibit "D" ("Public Road Improvements"); and WHEREAS, Simon has agreed to construct certain roadway improvements described in Section 5.2 of this Agreement ("Simon Road Improvements") and; WHEREAS, the City and 4B Corp have agreed to provide performance based economic development grants to Simon to defray a portion of the project 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, 4B Corp and Simon agree as follows: 86885 IQ -05-05-g, -/2Dt- 1. Authority. The City's and 4B Corp's execution of this Agreement are authorized by both Chapter 380 and Chapter 395 of the Texas Local Government Code, the Development Corporation Act — ART. 5190.6 TEx. REV. Civ. STAT. ANN. (Vernon's 1987 and Vernon's Supp. 2003) the City Resolution and the 4B Resolution, constitute a valid and binding obligation of the City in the event Simon proceeds with the development of the Property. The City and 4B Corp acknowledge that Simon is acting in reliance upon their 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 "Adjusted Gross Leasable Sales Area" shall mean the gross leasable area of the Project less any storage areas, bathroom facilities, courtyards, hallways or other areas not utilized for the sale of goods and services, the proposed cinema and outlot uses or pad sites providing only services. 2.2 "Commencement of Construction" shall mean the commencement of work on piers, foundations or other improvements necessary for the construction of vertical improvements. 2.3 "Economic Incentive Payment(s)" ("EIPs") means the amount paid by the City to Simon under the Program. 2.4 "Effective Date" is the date this Agreement is executed to be effective by the City, 4B Corp and Simon. 2.5 "Net Present Value Basis" shall be calculated as set forth in Section 6.2.2.(f). 2.6 "One Cent Sales Tax Revenues" means that portion of Sales Tax Revenues (defined below) resulting from the imposition of a one percent municipal sales tax on sales arising from the Project, such as that presently in effect pursuant to Texas Tax Code §321.101(a) and §321.103. If the City ever elects to charge less than a one percent (1%) sales tax but is allowed by law to collect a sales tax of one percent (1 %) or more, then instead of being based on actual collections, One Cent Sales Tax Revenues attributable to sales tax collected shall be deemed to be computed as if the City did elect to charge a one percent sales tax. 2.7 "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. 2.8 "Project" is Simon's planned development of the Property which shall consist of a premium outlet center and related facilities, all of which are commonly referred to as "Round Rock Premium Outlets" The Project shall include approximately five hundred fifty thousand (550,000) square feet of Adjusted Gross Leasable Sales Area in a phased development of some or all of the following uses: retail, banking, restaurants, entertainment, theater, offices, hotel and/or recreation space. The 2 Project will include walkways in the retail -pedestrian areas, public space with outside pedestrian amenities, such as benches, landscape features, fountains and/or water features and dining areas. If constructed in phases, the first phase ("First Phase") shall contain at least four hundred twenty thousand (420,000) square feet of Adjusted Gross Leasable Sales Area. 2.9 "Project Area" is the area within the Property that will be developed for the Project and is otherwise described in Exhibit B — "Property Description". 2.10 "Sales Tax Effective Date" is first day of the month following the date upon which Simon certifies in writing that it and/or its tenants has received one or more certificates of occupancy for and has begun retail operation of at least fifty thousand (50,000) square feet of Adjusted Gross Leasable Sales Area for the Project or the First Phase, if constructed in phases. 2.11 "Sales Tax Revenues" means the amount of sales tax collected by the City arising from the Project. The term "Sales Tax Revenues" shall include any taxes authorized by the State in the future that are intended to replace sales or use tax revenues currently available to the City. 3. Notice to Proceed and Expenditure of Funds Prior to Delivery of Written Notice to Proceed by Simon. 3.1 Activities Prior to Delivery of Written Notice to Proceed b Simon. 3.1.1 It may be desirable for the City, 4B Corp and/or Simon to commence certain engineering, design and/or preliminary site work activities before Simon delivers the Written Notice to Proceed described in Section 3.2 below in order to maximize the ability of the Project to open to the public on the anticipated schedule. No party shall have any obligation to repay or reimburse any other party for such activities unless they have entered into an Advance Funding Agreement. Simon, in its sole discretion, may elect to engage in such advance funding. 3.1.2 Any advance funding commitments made by Simon under paragraph 3.1.1 shall be recognized as inducement costs to be reimbursed or repaid as Economic Incentive Payments in accordance with the provisions of this Agreement. 3.2 Post -Deliver of Written Notice by Simon. The rights and obligations of Simon and of the City and 4B Corp set forth in this Agreement shall be of no force or effect unless and until Simon shall deliver written notice to the City and 4B Corp that it: 3.2.1 Has acquired fee title to the Property; and 3 3.2.2 Is prepared in a diligent manner to commence and pursue construction of the Project to completion as evidenced by the issuance by the City of a Certificate of Occupancy to Simon. 4. Term. This Agreement shall become enforceable upon its Effective Date. This Agreement shall terminate upon the earlier to occur of: (i) eight (8) years after the Sales Tax Effective Date; (ii) Simon's receipt of reimbursement of its aggregated actual costs of construction of Teravista Blvd, "C", Oakmont Drive "A", Oakmont Drive "B2" and one-half of its actual cost of Oakmont Drive "Bl" pursuant to Section 6.1.3; or (iii) Simon's receipt of the total EIPs equal to the Maximum Payment Amount (defined in paragraph 6.2:2(e)). In recognition of the fact that EIPs, by necessity, are calculated and paid after taxes have been assessed and paid to the City, and therefore always run in arrears, the term of this Agreement shall be deemed to include any payments for Sales Tax Revenues collected by Simon's tenants during the Term of this Agreement but not received by the City until after the termination date . An equitable adjustment shall be made to the Term if the completed Project is closed for a significant period of time due to a `force majeure event" as defined in paragraph 7.15 below. 5. Rights and Obligations of Simon. In consideration of the City's and 4B Corp's compliance with this Agreement, Simon agrees as follows: 5.1 Simon Road Improvements. Simon will: (a) Donate rights-of-way associated with Oakmont Drive Extension — Segment A from south property line of the Simon tract to Teravista Parkway —Segment C; (b) Donate or cause to be donated all or a part of the right-of-way for the Oakmont Drive Extension — Segments B1 and B2 from Chandler Road to south property line of Simon tract, through a series of land transactions among Simon, Barshop & Oles, Scott & White, and Newland Properties, donate any such parts of the rights-of-way associated with Oakmont Drive Extension — Segments B1 and B2 from Chandler Road to south property line of Simon tract; (c) Donate rights-of-way associated with Teravista Parkway — Segment C from the intersection with Oakmont Drive Extension — Segment A to the IH -35 frontage road; (d) Be responsible for construction of the following roads, either directly or on behalf of the City. Simon shall use its best efforts to ensure completion of the roads no later than September 1, 2006. (e) Fund the cost of construction of the road improvements: (i) Oakmont Drive Extension — Segment A, currently estimated to be $1,419,834; 4 (ii) Oakmont Drive Extension — Segment B1 currently estimated to be $334,411; and Segment B2 currently estimated to be $627,730, (note: only one-half of the Segment B2 cost is to be included in the total cost of construction as set forth in Sec. 6.1.3 below); and (iii) Teravista Parkway Segment C from the intersection with the North/South Road (Oakmont Drive Extension — Segment A) to the IH- 35 frontage road, currently estimated to be $1,198,494; (0 Comply with the statutory bidding requirements of Chapter 252 of the Local Government Code with respect to the Public Road Improvements listed above but not otherwise. 5.2 Compliance with Development Regulations and Other Ordinances. Simon shall comply with the City's development approval processes and shall develop the Project on the Property consistent with City ordinances, City -approved PUD zoning ordinance for the Property, City -approved development regulations, and other City development requirements. 5.3 Simon Accounting. Simon shall maintain complete books and records showing all expenses of any nature that City is to or will reimburse or pay under this Agreement which books and records shall be deemed complete if kept in accordance with generally acceptable accounting principles as applied to Texas partnerships. Such books and records shall be available for examination by the duly authorized officers or agents of the City during normal business hours upon request made not less than ten (10) business days prior to the date of such examination. Simon shall maintain such books and records throughout the term of this Agreement and for four (4) years thereafter. 5.4 Waiver of Sales Tax Confidentiality. Simon agrees to obtain a Waiver of Sales Tax Confidentiality from tenants of the Project in a form approved by the Texas Comptroller's Office ("Waiver Form"), a copy of which is attached hereto as Exhibit "E". The Waiver Form will be utilized by the City to obtain reports filed by Simon's.tenants to determine the amount of sales tax revenues generated from the Project for the previous calendar quarter. Such reports shall be based upon reports filed by the Project's tenants with the Texas Comptroller's office. 5.5 Reimbursement of Unearned Incentive Payments. In the event that Simon receives full reimbursement of its actual costs from the 4B Corp pursuant to Section 6.2.1, below: 5.5.1 Simon will use commercially reasonable efforts to operate the retail facility for a period equal to the term set forth in Section 6.2.2 (0, below; and 5.5.2 At the end of the Term, the amount of the City Payment EIP 's pursuant to Section 6.2.2. that would have otherwise been earned by Simon and paid by the City may be calculated, at the City's option. If this calculation results in an amount less than the amount of the EIP actually paid to Simon by the 4B 5 Corp pursuant to Section 6.2.1, then at the City's election, Simon will refund to the 4B Corp the difference. Said refund shall be paid no later than thirty (30) days after Simon receives written notice from the City or the 4B Corp that the refund is due. 6. Rights and Obligations of the City and 4B Corp. In consideration of Simon's compliance with this Agreement, the City and 4B Corp agree as follows: 6.1 Public Road Improvements. 6.1.1 The City, either on its own or acting through 4B Corp, shall fund the construction of the Public Frontage Road Improvements, currently estimated to cost approximately $8,440,579 before financing costs. The City has previously entered into an Advanced Funding Agreement with the Texas Department of Transportation (TxDOT) regarding the design and construction of the Chandler Road Interchange and IH35 Improvements currently estimated to cost $6,150,220. The City shall use its best efforts to ensure completion of these improvements no later than September 1, 2006. 6.1.2 Simon is seeking to acquire the right-of-way for the Oakmont Drive Extension — Segments B1 and B2 from Chandler Road to south property line of Simon tract, through a series of land transactions among Simon, Barshop & Oles, Scott & White, and Newland Properties. If Simon determines it is unable to acquire all or part of said right-of-way, it may so notify the City at anytime and request the City to acquire the right-of-way pursuant to its powers of eminent domain. Simon agrees to pay all of the actual cost of such acquisition, including, but not limited to, appraisal fees, expert testimony, and reasonable attorney fees. Upon receipt of such notice, the City will utilize reasonable efforts to acquire the right-of-way for the proposed Oakmont Drive Extension — (Segments B1 and B2) from Chandler Road to the south property line of the Property as soon as is reasonably possible . 6.1.3 Subject to the conditions set forth herein, the City or the 4B Corp shall reimburse Simon all of the actual costs of constructing the following roadway improvements, including but not limited to engineering, pavement, drainage, erosion and sedimentation control, mobilization, overhead, and lighting within the public right of way, currently estimated to aggregate to $3,266,604, of the following improvements: (a) Oakmont Drive Extension — be $1,754,245: (b) Oakmont Drive Extension $313,865; and 6 Segments A, and B 1, currently estimated to — Segment B2, currently estimated to be (c) Teravista Parkway — Segment C from the intersection with the North/South Road (Oakmont Drive Extension — Segment A) to the IH - 35 frontage road —currently estimated to be $1,198,494 6.2 Economic Incentive Payments. 6.2.1 4B Payments. The 4B Corp shall have the option of making the reimbursement for the Public Road Improvements as set forth on Exhibit D, in whole or in part, to Simon upon the issuance by the City of a Certificate of Occupancy for the First Phase of the Project. The 4B Corp shall notify Simon in writing in the event it decides to exercise the aforesaid option. 6.2.2 City Payments. In the event that the 4B Corp elects not, either in whole or in part, to make the reimbursement payment due Simon under Section 6.2.1, above, the City shall pursuant to Chapter 380 of the Texas Local Government Code, but subject to the conditions set out here, make quarterly EIPs to Simon of any such unpaid reimbursements. The EIPs are to be calculated as follows: (a) Calculations will be based upon sales subject to the City's one -cent (10) general sales tax; (b) Calculations shall be based on such annual sales in excess of Two Hundred Seventy-five Dollars ($275) per square foot of Adjusted Gross Leasable Sales Area; (c) Upon the opening of each phase of the Project, Simon will provide a certification of the amount of Adjusted Gross Leasable Sales Area; (d) The EIPs will be an amount equal to one hundred percent (100%) of the One Cent Sales Tax Revenues from sales (as defined in subsections a and b, above); (e) The Maximum Amount of the EIPs will be a Net Present Value of the aggregated actual costs estimated to be $3,266,604 (not otherwise reimbursed by the 4B Corp, as described in Section 6.1.3 (d), above, of the improvements described in Section 6.1.3 above. (f) The Maximum Term shall be the earlier of the date when the aggregate amount of the EIPs made to Simon on a Net Present Value Basis (discounted at six percent (6%) from the Sales Tax Effective Date) is equal to the Maximum Amount of the EIPs estimated to be $3,266,604, or eight (8) years from the first day of the month following the Sales Tax Effective Date. 6.2.3 Changes in Law. If, during the term of this Agreement, state law applicable to municipal taxation changes the form of sales taxes, and as a result, the EIPs differ from the amount which would have been paid to Simon under the laws in effect as of the Effective Date of this Agreement, then the City, in its sole 7 discretion, may adjust the EIPs using whatever discretionary taxes and revenues that are legally available to City which can be allocated to the EIPs. However, this section is not intended to require the City to use funds from other sources which are not within the City's discretion to allocate to the Project, so as to achieve the same economic benefits to both parties as would have resulted had the law not changed. 6.2.4 Payments Subject to Future Appropriations. Although certain payments under this Agreement are calculated based on a formula applied to sales tax revenues, this Agreement shall not be construed as a commitment, issue or obligation of any specific taxes or tax revenues for payment to Simon. 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 Simon, 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 7.3, and the City shall not be liable to Simon for such payments, but Simon shall have the right but not the obligation to rescind this Agreement. T o the extent there is a conflict between this paragraph and any other language or covenant in this Agreement, this paragraph shall control. 6.2.5 City Accounting. The City shall maintain complete books and records showing sales taxes remitted to the City by the State and disbursements of income incentive grant payments, which books and records shall be deemed complete if kept in accordance with generally acceptable accounting principles as applied to Texas municipalities. In addition, the City shall prepare an annual report documenting accrued interest, any carry -forward of accrued interest, unamortized balances, and amortized balances. Such books and records shall be available for examination by the duly authorized officers or agents of Simon during normal business hours upon request made not less than ten (10) business days prior to the date of such examination. The City shall maintain such books and records throughout the term of this Agreement and for four (4) years thereafter. 6.2.6 Utility Services for the Property. The City shall provide water and wastewater to Simon for the Project, subject to the same fees and charges assessed to similarly situated properties. 6.2.7 Permitting. The City shall cooperate with Simon to expeditiously process all City permit applications and. City inspections. 7. Miscellaneous. 7.1 Mutual Assistance. The City, 4B Corp and Simon 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. 7.2 Representations and Warranties. The City and 4B Corp represent and warrant to Simon 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. Simon represents and warrants to the City and 4B Corp that it has the requisite authority to enter into this Agreement. 7.3 Default. If either the City, 4B Corp or Simon 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 or 4B Corp remain in default after notice and opportunity to cure, Simon shall have the right to pursue any remedy at law or in equity for the City's or 4B Corp's breach, If Simon remains in default after notice and opportunity to cure, the City's or 4B Corp's remedy shall be limited to a termination of the EIPs, which accrue after the date of such default.. Any EIPs from City or 4B Corp to Simon which is not timely paid by City or 4B Corp shall incur interest at the highest rate per annum allowed by the applicable law of the State of Texas from the date such EIPs are due until paid. Any funds owed by Simon to the City or 4B Corp which are not timely paid by Simon shall incur interest at the highest rate per annum allowed by the applicable law of the State of Texas from the date such funds are due until paid. 7.4 Attorney's Fees. In the event any legal action or proceeding, is commenced between the City, 4B Corp and Simon 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, 4B Corp and Simon. 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. Simon may assign all or part of its rights and obligations to a third party upon thirty days written notice to the City and 4B Corp. 9 7.8 Amendment. This Agreement may be amended by the mutual written agreement of the parties. 7.9 Termination. In the event Simon elects not to proceed with the Project as contemplated by this Agreement, Simon shall notify the City and 4B Corp 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. In addition, this Agreement shall terminate when Simon has been paid the Maximum Payment Amount in full, or eight (8) years after the first day of the month following the Sales Tax Effective Date, whichever first occurs. 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: Simon: with a copy to: Simon Property Group Attn: Kathy Shields 115 West Washington Street Indianapolis, IN 46204 Ph: (317) 263-7076 Fx: (317) 685-7299 Mr. David B. Armbrust Armbrust & Brown, L.L.P. 100 Congress Ave., Suite 1300 Austin, Texas 78701 Ph: (512) 435-2301 Fx: (512) 435-2360 with a copy to: Simon Property Group Attn: Bill Hammer 115 West Washington Street Indianapolis, IN 46204 Ph: (317) 263-7006 Fx: (317) 263-7648 with a copy to: Chelsea Property Group Attn: Mark J. Silvestri 105 Eisenhower Parkway Roseland, NJ 07068 10 with a copy to: City: Ph: (973) 228-6111 Fx: (973) 364-2503 Chelsea Property Group Attn: General Counsel 105 Eisenhower Parkway Roseland, NJ 07068 Jim Nuse, City Manager City of Round Rock 221 East Main St. Round Rock, TX 78664 Ph: (512) 218-5401 Fx: (512) 218-7097 4 B Corp: Jim Nuse, City Manager City of Round Rock 221 East Main St. Round Rock, TX 78664 Ph: (512) 218-5401 Fx: (512) 218-7097 with a copy to: Stephan L. Sheets, City Attorney 309 East Main St. Round Rock, TX 78664 Ph: (512) 255-8877 Fx: (512) 255-8986 Either party may designate a different address at any time upon written notice to the other party. 7.11 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. 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 11 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 ` force majeure event"). Aforce 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. 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 Exhibits. The following Exhibits "A" - "E" are attached and incorporated by reference for all purposes: Exhibit "A": Exhibit "B": Exhibit "C": Exhibit "D": Exhibit "E": City Resolution No. R -05- 05 -�tp-La,D1, Property Description 4B Resolution No. R-05-36 Public Road Improvements Waiver of Sales Tax Confidentiality Form 7.18 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, 4B Corp, its past, present and future officers, elected officials, employees and agents of the City and 4B Corp, do not assume any responsibilities or liabilities to any third party in connection with the development of the Project or the design, construction or operation of any portion of the Project. 7.19 Extension of Dates for Commencement of Construction. In the event Simon determines that an extension of a Project commencement date is necessary due to market or financing conditions, Simon may extend either or both of the Project commencement dates set forth in paragraph 3.2 for up to one (1) year. All other dates shall be extended accordingly. EXECUTED to be effective as of the c96 day of O_L4._ . , 2005 (the "Effective Date"). 12 City Attorney SPG ROUND ROCK NS, L.P. a Delaware limited liability company By: VPI Landco, LLC, General Partner By: Vi. Pro . ies, Inc., Man. er By: Printed ame: Title: eneral Counsel es M. Barkley CPG ROUND ROCK, L.P. a Texas limited partnership By: Virgin , Properties, Inc., General Partner By: Printed Name: %V4 Title: A\j 1 IZ2 y l QQ f 7, C licvI- CITY OF ROUND ROCK, a home rul> c ty : d : s icip. c► �orat' �n ROUND ROCK TRANSPORTATION SYSTEM DEVELOPMENT CORPORATION, a Texas Development Co B ation 13 axwell, President EXHIBIT "A" CITY RESOLUTION NO. R-Qj-drj -a69-ap/ RESOLUTION NO. R -05-05-26-12D1 WHEREAS, Simon Property Group, L.P. ("Simon") is one of the largest retail shopping center development companies in the world, and WHEREAS, Simon has expressed to the City of Round Rock ("City") its desire to locate a Premium Outlet Mall in the City which will attract shoppers from outside of the area and provide hundreds of 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 Mayor is hereby authorized and directed to offer to Simon a §380.001 Program in exchange for Simon locating a Premium Outlet Mall 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 @PFDesktop\:-ODMA/WORLDOX/O:/WDOX/RESOLUTI/R50526D1. wen/s is upon, all as required by the Open Meetings Act, Chapter 551, Texas Government Code, as amended. RESOLVED this 26th day of May, 20 ftui-tovv, CHRISTINE R. MARTINEZ, City Secretory 2 , Mayor of Round Rock, Texas EXHIBIT A The terms of the §380.001 Program to be offer to Simon in exchange for Simon's locating a Premium Outlet Mall in the City of Round Rock are as generally outlined below: 1. The City agrees to make program payments to Simon calculated on the basis of sales and use tax revenues actually received by the CITY from taxable sales generated by the Premium Outlet Mall as follows: a. The City will retain all of the sales and use tax revenues derived from the one-half cent of the tax devoted to the reduction of ad valorem property tax; b. The City will retain all of the sales and use tax revenues derived from annual gross taxable sales up to $275 per square foot of gross leasable area; c. The City will make program payments to Simon equal to the sales and use tax revenues derived from annual gross taxable sales in excess of $275 per square foot of gross leasable area; d. The total amount of program payments to Simon will not exceed the cost of the construction of needed extensions to Oakmont Dr. and Teravista Blvd., currently estimated to be $3,266,604 on a Net Present Value Basis (discounted at 6%. 2. The term of the Program shall not exceed eight years. EXHIBIT "B" PROPERTY DESCRIPTION 1 87.193 ACRE TRACT ROUND ROCK PREMIUM OUTLETS DESCRIPTION FN NO. 05-020 (CAG) FEBRUARY 22, 2005 BPI JOB NO. 1262-02 OF 87.193 ACRES OF LAND OUT OF THE EPHRAIM EVANS SURVEY, ABSTRACT NO. 212, SITUATED IN WILLIAMSON COUNTY, TEXAS, BEING A PORTION OF THAT CERTAIN 132.28 ACRE TRACT OF LAND CONVEYED TO ANC -ROUND ROCK ASSETS II, LP BY DEED OF RECORD IN DOCUMENT NO. 2001001644 OF THE OFFICIAL PUBLIC RECORDS OF WILLIAMSON COUNTY, TEXAS, AND A PORTION OF THAT CERTAIN 107.44 ACRE TRACT CONVEYED TO NNP-TERAVISTA LP BY DEED OF RECORD IN DOCUMENT NO. 2001001639 OF SAID OFFICIAL PUBLIC RECORDS; SAID 87.193 ACRES BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING, at a 1/2 inch iron rod found in the easterly right-of- way line of Interstate Highway No. 35 (R.O.W. Varies), being the northwesterly corner of that certain 74.590 acre tract of land conveyed to Scott & White Memorial Hospital and Scott, Sherwood and Brindley Foundation by deed of record in Document No. 9733254 of said Official Records of Williamson County, Texas, same being the southwesterly corner of said 132.28 acre tract and hereof; THENCE, NO2°04'48"W, along the easterly right-of-way line of Interstate Highway No. 35, being a portion of the westerly line of said 132.28 acre tract for the westerly line hereof, passing at a distance of 2307.08 feet, a concrete monument found at Highway Station 1120+00, and continuing for a total distance of 2423.43 feet to a 1/2 inch iron rod with cap set for the northwesterly corner hereof; THENCE, leaving Highway No. 35, northerly line distances: 1) N48°42'48"E, the easterly right-of-way line of Interstate over and across said 132.28 acre, for the hereof, the following eight (8) courses and along the northerl right-of-way distance of Y line of Future Teravista Parkway (100' R.O.W.) a 34.29 feet to a 1/2 inch iron rod with cap set for the point of curvature of a non -tangent curve to left; 2) Along said non -tangent curve to the left having a radius of 640.00 feet, a central angle of 26°55'11", an arc length of 300.69 feet and a chord which bears N70°08'O1"E, a distance of 297.94 feet to a 1/2 inch iron rod with cap set for the point of curvature of a reverse curve to the right; FN 05-020(CAG) FEBRUARY 22, 2005 PAGE 2 OF 3 3) Along said reverse curve to the right having a radius of 920.00 feet, a central angle of 56°51'30", an arc length of 912.98 feet and a chord which bears N85°06'11"E, a distance of 875.97 feet to a 1/2 inch iron rod with cap set for the point of curvature of a reverse curve to the left; �) Along said reverse curve to the left having a radius of 950.00 feet, a central angle of 26°17'15", an arc length of 435.86 feet and a chord which bears S79°36'42"E, a distance of 432.05 feet to a 1/2 inch iron rod with cap set for the end of said curve; 5) N42°46'27"E, a distance of 36.14 feet to a 1/2 inch iron rod with cap set in the westerly right-of-way line of future Oakmont Drive (100' R.O.W.) for an angle point; 6) N82°43'03"E, over and across future Oakmont Drive, a distance of 100.78 feet to a 1/2 inch iron rod with cap set in the easterly right-of-way line of future Oakmont Drive for an angle point; 7) S50°45'31"E, a distance of 31.92 feet to a 1/2 inch iron rod with cap set for an angle point; 8) N78°33'21"E, a distance of 10.32 feet to a 1/2 inch iron rod with cap set in the common line of said 132.28 acre tract and said 107.44 acre tract for the northeasterly corner hereof; THENCE, along the common line of said 132.28 acre tract and said 107.44 acre tract, being a portion of the easterly line hereof, the following two (2) courses and distances: 1) S06°14'24"W, a distance of 59.27 feet to a 1/2 inch iron rod with cap set for an angle point; 2) S19°01'28"E, a distance of 35.64 feet to a 1/2 inch iron rod with cap set for an angle point; THENCE, leaving said common line, over and across said 132.28 acre tract and said 107.44 acre tract, for the easterly line hereof, the following six (6) courses and distances: 1) S38°18'53"W, a distance of 50.49 feet to a 1/2 inch iron rod with cap set for the point of curvature of a non -tangent curve to the left; FN 05-020(CAG) FEBRUARY 22, 2005 PAGE 3 OF 3 2) Along said non -tangent curve to the left having a radius of 1250.00 feet, a central angle of 01°54'00", an arc length of 41.45 feet and a chord which bears S07°43' 03"E, a distance of 41.45 feet to a 1/2 inch iron rod with cap set for the point of tangency; 3) S08°40'03"E, a distance of 185.24 feet to a 1/2 inch iron rod with cap set for the point of curvature of a curve to the right; 4) Along said curve to the right having a radius of 2300.00 feet, a central angle of 24°22'51", an arc length of 978.71 feet and a chord which bears S03°31'22"W, a distance of 971.34 feet to a 1/2 inch iron rod with cap set for the point of tangency; 5) S15°42'48"W, a distance of 138.11 feet to a 1/2 inch iron rod with cap set for the point of curvature of a curve to the left; 6) Along said curve to the left having a radius of 2200.00 feet, a central angle of 12°56'48", an arc length of 497.11 feet and a chord which bears 809°14'24"W, a distance of 496.05 feet to a 1/2 inch iron rod with cap set for the end of said curve, being in the southerly line of said 132.28 acre tract, being the northerly line of said 74.590 acre tract for the southeasterly corner hereof; THENCE, S69°15'57"W, along the northerly line of said 74.590 acre tract, being in part the westerly line of said 107.44 acre tract, and in part a portion of the southerly line of said 132.28 acre tract for the southerly line hereof, passing at a distance of 61.11 feet a 1/2 inch iron rod found, being the southeasterly corner of said 132.28 acre tract, same being an angle point in the westerly line of said 107.44 acre tract, and continuing for a total distance of 1609.98 feet to the POINT OF BEGINNING, containing an area of 87.193 acres (3,798,135 sq. ft.) of land, more or less, within these metes and bounds. BEARING BASIS: REFERENCED TO THE TEXAS STATE PLANE COORDINATE SYSTEM, CENTRAL ZONE BASED ON PUBLISHED NAD 83/93 HARN VALUES FOR THE CITY OF GEORGETOWN MONUMENTATION NETWORK. BURY & PARTNERS, INC. ENGINEERS AND SURVEYORS 3345 BEE CAVES ROAD, SUITE 200 AUSTIN, TEXAS 78746 4145 - JO T. BILNOSKI DATE R .L.S #4998 STATE OF TEXAS RECORDERS MEMORANDUM All or parts of the text on this page was not clearly legible for satisfactory recordation. CURVE T jI ,Beorin . Radom; -Arc Lauth Chord length Chor4 B9FIFIq C1 26-'55'11" 64000 300.69 297,94 N70'08'01 E C2 5651'30" 920.00 91298 875,97 N85'06.114E C3 26'1715" 950400 435.8.6 432;05 529'36'42"E 'C4 01'54'00" 1250.00 41.45 41.45 S07`43103'E 'C5 2472'51" 2300.00 978.71 971.34 S03'31'22"W C6 12`5648 2200.00 497.11 496.05 S09'14'24"W LEGEND • 0 ■ P.O.B. Vaik qn C4 19 1/2" IRON ROO FOUND 1/2" IRON ROO SET WITH CAP HIGHWAY MONUMENT FOUND PONT OF BEGINNING oar tstamtera .c ooter LW 10 0 300 600 00 1200 1"=600' 107.44 AC. NNP -1' ER AV 1ST A LP 00C. N0. 2001001639 UNE TABLE No. ,Beorin . Qi$.tgloe L1 , S48'42'48"E 34.29 12 N42 46'27"E 36:14' 13 t82 43'03"E 100.78' 14 550'45'31"E 31.92( 15 N78'33'21"E 10.32' L6 506'14'24"W 59.27' 17 S19 04'28"E 35.64' L8 538'18453"W 50.49' L9 SO8'40'03"E 185.24` 110 S15'42'48"W 138.11' 14.590 ACHES SCOTT & WHITE MEMORIAL HOSI'lTAI AND SCOTT, SHERW000 AND BRINDLE( rouNQAT1oN DOC. NO. 9133254 arr IMF CAC ANC-ROIt$V0 ROCK 00. ASSETS 0 L EPHRAIM EVANS SURVEY ABSTRACT NO. 212 _I sLto 1 t'y� r Ra c6 ago c.ve� L. 87.193 ACRES (3,798.135 SQ. FT.) 132.28 AC. ANC --ROUND ROCK ASSETS It LP DOC. NO. 2001001644 6 S02'04 48"E 743:24' 140 AC. HOF IHVEFTNEM'S, LTD. DOC. NO, TOD2D44237 HWY STA=11204-oo 230.7.08' NO2'04'48"W 2423.43' ifl L0T 1, atom A F Rs ' LWTEO Amnon Gla. O, sun. 22-23 scxirr. BH€RWooD ANn 6 attEY round 1oit DOC. No. 9700132 INTERSTA?E HIGHWAY NO. 35 (12,0.W., VARIES) MCNEIL. PROD Vol 62 131 -ury1.Partners f:t(.O/t/Ef41HO fO1.41T10N3 2345_:Ae, bre. Pae, RMte N Moak Teat 74144 r.04,1031g1i4flitiit.16104.1711444 12r7tt tae,i 4e.. . �pnitht40D{ SKETCH TO ACCOMPANY DESCRIPTION OF 87`193 ACE*BS>or LAND Our Or THE EPHRAIM (VANS S&SR4I'. AHSTRACT 1i0 Zit 1N 6nt11AMSON COUNTY TEXAS; 4G A PORTION OF THAT t RTA*Ni *32.26 ACRE : T 0f 1L.146) tONVENE0 '10: ANC"ROUND ROCK- ASSET& It to. OK It(CORO 014 OOgA!Nl? !1a. 2091991644 ft -a E 4Ff1C . 1tE S 1;1f`. 41041tt tr AS :AJ40 4 PORTION OF: INAT CERTAIN '40744,..ACRE TRACT.:DEVRIRED 84 TOE REED TO #THP :IERA1iESTA -r-L.P. OF RECORD *1OO `CUUENT 40. 200100163S :OF SA1 -#SAL PITEN4 nEcORets.,: ROUND ROCK PREMIUM OTS OA : 07/22/x5 rot H. \1262\02\1-262Q2Ex37.AWG ft No f'rr05 2o(CA 0) I PAW'1 076:-C46.4 PROJ. ria: 1262-02 EXHIBIT "C" 4B RESOLUTION NO. le -05-36 1 RESOLUTION NO. R-05-36 WHEREAS, the Round Rock Transportation System Development Corporation ("Corporation") wishes to enter into an Economic Development Agreement with the City of Round Rock, Simon Property Group, L.P., and CPG Round Rock, L.P. regarding Simon's development of a retail outlet mall in the City of Round Rock, Now Therefore BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE ROUND ROCK TRANSPORTATION SYSTEM DEVELOPMENT CORPORATION, That the President is hereby authorized and directed to execute on behalf of the Corporation an Economic Development Agreement with the City of Round Rock, Simon Property Group, L.P., and CPG Round Rock, L.P., a copy of same being attached hereto as Exhibit "A" and incorporated herein for all purposes. The Board of Directors 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. RESOLVED this 24th day of May, 2005. ATTEST: , Secretary @PFDesktop\:_O0MA/WORLDOX/O:/WDOX/RESOLUTI/RRTSDC/0036.WPD/xmc ROUND 'ICK DEVEL 'A SPSRTA . ON 107 WELL, _-.-_- Rees, ocN-r f Round Rock, Texas ECONOMIC DEVELOPMENT AGREEMENT This Economic Development Agreement ("Agreement") is entered into this day of , 2005, by and between the City of Round Rock, Texas, a Texas home rule municipal corporation ("City"), the Round Rock Transportation System Development Corporation, a corporation created pursuant to the Development Corporation Act — Art. 5190.6(4)(B), ("4B Corp") and Simon Property Group (Texas), L.P., and CPG Round Rock L.P., their successors and assigns ("Simon"). ' WHEREAS, the City has adopted Resolution No. Resolution"), attached as Exhibit "A" ("City establishing an economic development program and authorizing the Mayor to enter into this Agreement with Simon in recognition of the positive economic benefits to the City through Simon's development of approximately 87.193 acres of land, as more particularly described on the attached Exhibit "B" ("Property") as a premium destination retail outlet mall and ancillary uses ("Project"); and WHEREAS, the 4B Corporation has adopted Resolution No. , attached as t "C" ("4B Resolution") authorizing the Board President to enter into this Agreement with Simon in recognition of the aforesaid benefits; and WHEREAS, the purpose of this Agreement is to promote economic development as contemplated by Chapter 380 of the Texas Local Government Code and the Development Corporation Act - ART. 5190.6 TEX. REV. Civ. STAT. ANN. (Vernon's 1987 and Vernon's Supp. 2003) whereby Simon will construct, develop and operate the Project, or cause the Project to be operated, in conformance with the City's development approvals for the Project, and the City and 48 Corp will participate in the funding of certain roadway, utility, and other related improvements in accordance with the terms of this Agreement; and WHEREAS, development of the Project requires the cooperation and participation of the City, 4B Corp and Simon in the design and construction of various roadway and public utility improvements; and WHEREAS, the City and 4B Corp have agreed to assume responsibility for the design and construction, at the City's cost, of the 11-1-35 ramps and related improvements as described on the attached Exhibit "D" ("Public Road improvements"); and WHEREAS, Simon has agreed to construct certain roadway improvements described in Section 5.2 of this Agreement ("Simon Road improvements") and; WHEREAS, the City and 4B Corp have agreed to provide performance based economic development grants to Simon to defray a portion of the project 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, 4B Corp and Simon agree as follows: 86810 EXHIBIT Authority. The City's and 4B Corp's execution of this Agreement are authorized by both Chapter 380 and Chapter 395 of the Texas Local Government Code, the Development Corporation Act — ART. 5190.6 TEx. REV. CIV. STAT. ANN. (Vernon's 1987 and Vernon's Supp. 2003) the City Resolution and the 4B Resolution, constitute a valid and binding obligation of the City in the event Simon proceeds with the development of the Property. The City and 4B Corp acknowledge that Simon is acting in reliance upon their 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 "Adjusted Gross Leasable Sales Area" shall mean the gross leasable area of the Project less any storage areas, bathroom facilities, courtyards, hallways or other areas not utilized for the sale of goods and services, the proposed cinema and outlot uses or pad sites providing only services. 2.2 "Commencement of Construction" shall mean the commencement of work on piers, foundations or other improvements necessary for the construction of vertical improvements. 2.3 "Economic Incentive Payment(s)" ("EIPs") means the amount paid by the City to Simon under the Program. 2.4 "Effective Date" is the date this Agreement is executed to be effective by the City, 4B Corp and Simon. 2.5 "Net Present Value Basis" shall be calculated as set forth in Section 6.2.2.(f). 2.6 "One Cent Sales Tax Revenues" means that portion of Sales Tax Revenues (defined below) resulting from the imposition of a one percent municipal sales tax on sales arising from the Project, such as that presently in effect pursuant to Texas Tax Code §321.101(a) and §321.103. If the City ever elects to charge less than a one percent (1%) sales tax but is allowed by law to collect a sales tax of one percent (1%) or more, then instead of being based on actual collections, One Cent Sales Tax Revenues attributable to sales tax collected shall be deemed to be computed as if the City did elect to charge a one percent sales tax. 2.7 "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. 2.8 "Project" is Simon's planned development of the Property which shall consist of a premium outlet center and related facilities, all of which are commonly referred to as "Round Rock Premium Outlets" The Project shall include approximately five hundred fifty thousand (550,000) square feet of Adjusted Gross Leasable Sales Area in a phased development of some or all of the following uses: retail, banking, restaurants, entertainment, theater, offices, hotel and/or recreation space. The 2 Project will include walkways in the retail -pedestrian areas, public space with outside pedestrian amenities, such as benches, landscape features, fountains and/or water features and dining areas. If constructed in phases, the first phase ("First Phase") shall contain at least four hundred twenty thousand (420,000) square feet of Adjusted Gross Leasable Sales Area. 2.9 "Project Area" is the area within the Property that will be developed for the Project and is otherwise described in Exhibit B — "Property Description". 2.10 "Sales Tax Effective Date" is first day of the month following the date upon which Simon certifies in writing that it and/or its tenants has received one or more certificates of occupancy for and has begun retail operation of at least fifty thousand (50,000) square feet of Adjusted Gross Leasable Sales Area for the Project or the First Phase, if constructed in phases. 2.11 "Sales Tax Revenues" means the amount of sales tax collected by the City arising from the Project. The term "Sales Tax Revenues" shall include any taxes authorized by the State in the future that are intended to replace sales or use tax revenues currently available to the City. 3. Notice to Proceed and Expenditure of Funds Prior to Delivery of Written Notice to Proceed by Simon. 3.1 Activities Prior to Delivery of Written Notice to Proceed by Simon. 3.1.1 It may be desirable for the City, 4B Corp and/or Simon to commence certain engineering, design and/or preliminary site work activities before Simon delivers the Written Notice to Proceed described in Section 3.2 below in order to maximize the ability of the Project to open to the public on the anticipated schedule. No party shall have any obligation to repay or reimburse any other party for such activities unless they have entered into an Advance Funding Agreement. Simon, in its sole discretion, may elect to engage in such advance funding. 3.1.2 Any advance funding commitments made by Simon under paragraph 3.1.1 shall be recognized as inducement costs to be reimbursed or repaid as Economic Incentive Payments in accordance with the provisions of this Agreement. 3.2 Post -Delivery of Written Notice by Simon. The rights and obligations of Simon and of the City and 4B Corp set forth in this Agreement shall be of no force or effect unless and until Simon shall deliver written notice to the City and 4B Corp that it: 3.2.1 Has acquired fee title to the Property; and 3 3.2.2 Is prepared in a diligent manner to commence and pursue construction of the Project to completion as evidenced by the issuance by the City of a Certificate of Occupancy to Simon. 4. Term. This Agreement shall become enforceable upon its Effective Date. This Agreement shall terminate upon the earlier to occur of: (i) eight (8) years after the Sales Tax Effective Date; (ii) Simon's receipt of reimbursement of its aggregated actual costs of construction of Teravista Blvd, "C", Oakmont Drive "A", Oakmont Drive "B2" and one-half of its actual cost of Oakmont Drive `BI" pursuant to Section 6.1.3; or (iii) Simon's receipt of the total EIPs equal to the Maximum Payment Amount (defined in paragraph 6.2.3). In recognition of the fact that EIPs, by necessity, are calculated and paid after taxes have been assessed and paid to the City, and therefore always run in arrears, the term of this Agreement shall be deemed to include any payments for Sales Tax Revenues collected by Simon's tenants during the Term of this Agreement but not received by the City until after the termination date . An equitable adjustment shall be made to the Term if the completed Project is closed for a significant period of time due to a `force majeure event" as defined in paragraph 7.15 below. 5. Rights and Obligations of Simon. In consideration of the City's and 4B Corp's compliance with this Agreement, Simon agrees as follows: 5.1 Simon Road Improvements. Simon will: (a) Donate rights-of-way associated with Oakmont Drive Extension — Segment A from south property line of the Simon tract to Teravista Parkway —Segment C; (b) Donate or cause to be donated all or a part of the right-of-way for the Oakmont Drive Extension — Segments B1 and B2 from Chandler Road to south property line of Simon tract, through a series of land transactions among Simon, Barshop & Oles, Scott & White, and Newland Properties, donate any such parts of the rights-of-way associated with Oakmont Drive Extension — Segments B1 and B2 from Chandler Road to south property line of Simon tract; Donate rights-of-way associated with Teravista Parkway — Segment C from the intersection with Oakmont Drive Extension — Segment A to the IH -35 frontage road; (c) (d) Be responsible for construction of the following roads, either directly or on behalf of the City. Simon shall use its best efforts to ensure completion of the roads no later than September 1, 2006.; (e) Fund the cost of construction of the road improvements: (i) Oakmont Drive Extension — Segment A, currently estimated to be $1,419,834; 4 (ii) Oakmont Drive Extension — Segment B1 currently estimated to be $334,411; and Segment B2 currently estimated to be $627,730, (note: only one-half of the Segment B2 cost is to be included in the total cost of construction as set forth in Sec. 6.1.3 below); and (iii) Teravista Parkway Segment C from the intersection with the North/South Road (Oakmont Drive Extension — Segment A) to the IH - 35 frontage road, currently estimated to be $1,198,494; (f) Comply with the statutory bidding requirements of Chapter 252 of the Local Government Code with respect to the Public Road Improvements listed above but not otherwise. 5.2 Compliance with Development Regulations and Other Ordinances. Simon shall comply with the City's development approval processes and shall develop the Project on the Property consistent with City ordinances, City -approved PUD zoning ordinance for the Property, City -approved development regulations, and other City development requirements. 5.3 Simon Accounting. Simon shall maintain complete books and records showing all expenses of any nature that City is to or will reimburse or pay under this Agreement which books and records shall be deemed complete if kept in accordance with generally acceptable accounting principles as applied to Texas partnerships. Such books and records shall be available for examination by the duly authorized officers or agents of the City during normal business hours upon request made not less than ten (10) business days prior to the date of such examination. Simon shall maintain such books and records throughout the term of this Agreement and for four (4) years thereafter. 5.4 Waiver of Sales Tax Confidentiality. Simon agrees to obtain a Waiver of Sales Tax Confidentiality from tenants of the Project in a form approved by the Texas Comptroller's Office ("Waiver Form"), a copy of which is attached hereto as Exhibit "E". The Waiver Form will be utilized by the City to obtain reports filed by Simon's tenants to determine the amount of sales tax revenues generated from the Project for the previous calendar quarter. Such reports shall be based upon reports filed by the Project's tenants with the Texas Comptroller's office. 5.5 Reimbursement of Unearned Incentive Payments. In the event that Simon receives full reimbursement of its actual costs from the 4B Corp pursuant to Section 6.2.1, below: 5.5.1 Simon will use commercially reasonable efforts to operate the retail facility for a period equal to the term set forth in Section 6.2.2 (f), below; and 5.5.2 At the end of the Term, the amount of the City Payment EIP's pursuant to Section 6.2.2. that would have otherwise been earned by Simon and paid by the City may be calculated, at the City's option. If this calculation results in an amount less than the amount of the EIP actually paid to Simon by the 4B 5 Corp pursuant to Section 6.2.1, then at the City's election, Simon will refund to the 4B Corp the difference. 6. Rights and Obligations of the City and 4B Corp. In consideration of Simon's compliance with this Agreement, the City and 4B Corp agree as follows: 6.1 Public Road Improvements. 6.1.1 The City, either on its own or acting through 4B Corp, shall fund the construction of the Public Frontage Road Improvements, currently estimated to cost approximately $8,440,579 before financing costs. The City has previously entered into an Advanced Funding Agreement with the Texas Department of Transportation (TxDOT) regarding the design and construction of the Chandler Road Interchange and IH35 Improvements currently estimated to cost $6,150,220. The City shall use its best efforts to ensure completion of these improvements no later than September 1, 2006. 6.1.2 Simon is seeking to acquire the right-of-way for the Oakmont Drive Extension — Segments B1 and B2 from Chandler Road to south property line of Simon tract, through a series of land transactions among Simon, Barshop & Oles, Scott & White, and Newland Properties. If Simon determines it is unable to acquire all or part of said right-of-way, it may so notify the City at anytime and request the City to acquire the right-of-way pursuant to its powers of eminent domain. Simon agrees to pay all of the actual cost of such acquisition, including, but not limited to, appraisal fees, expert testimony, and reasonable attorney fees.. Upon receipt of such notice, the City will utilize reasonable efforts to acquire the right-of-way for the proposed Oakmont Drive Extension — (Segments B1 and B2) from Chandler Road to the south property line of the Property as soon as is reasonably possible . 6.1.3 Subject to the conditions set forth herein, the City or the 4B Corp shall reimburse Simon all of the actual costs of constructing the following roadway improvements, including but not limited to engineering, pavement, drainage, erosion and sedimentation control, mobilization, overhead, and lighting within the public right of way, currently estimated to aggregate to $3,266,604, of the following improvements: (a) Oakmont Drive Extension — Segments A, and B1, currently estimated to be $1,754,245: (b) Oakmont Drive Extension — Segment B2, currently estimated to be $313,865; and (c) Teravista Parkway — Segment C from the intersection with the North/South Road (Oakmont Drive Extension — Segment A) to the IH - 35 frontage road —currently estimated to be $1,198,494 6 6.2 Economic Incentive Payments. 6.2.1 4B Payments. The 4B Corp shall have the option of making the reimbursement for the Public Road Improvements as set forth on Exhibit D, in whole or in part, to Simon upon the issuance by the City of a Certificate of Occupancy for the First Phase of the Project. The 4B Corp shall notify Simon in writing in the event it decides to exercise the aforesaid option. 6.2.2 City Payments. In the event that the 4B Corp elects not, either in whole or in part, to make the reimbursement payment due Simon under Section 6.2.1, above, the City shall pursuant to Chapter 380 of the Texas Local Government Code, but subject to the conditions set out here, make quarterly EIPs to Simon of any such unpaid reimbursements. The EIPs are to be calculated as follows: (a) Calculations will be based upon sales subject to the City's one -cent (1¢) general sales tax; (b) Calculations shall be based on such annual sales in excess of Two Hundred Seventy-five Dollars ($275) per square foot of Adjusted Gross Leasable Sales Area; Upon the opening of each phase of the Project, Simon will provide a certification of the amount of Adjusted Gross Leasable Sales Area; (d) The EIPs will be an amount equal to one hundred percent (100%) of the Sales Tax Revenues from sales (as defined in subsections a and b, above); (c) (e) The Maximum Amount of the EIPs will be a Net Present Value of the aggregated actual costs estimated to be $3,266,604 (not otherwise reimbursed by the 4B Corp, as described in Section 6.1.3 (d), above, of the improvements described in Section 6.1.3 above. (0 The Maximum Term shall be the earlier of the date when the aggregate amount of the EIPs made to Simon on a Net Present Value Basis (discounted at six percent (6%) from the Sales Tax Effective Date) is equal to the maximum amount of the EIPs of $3,266,604, or eight (8) years from the first day of the month following the Sales Tax Effective Date. 6.2.3 Changes in Law. If, during the term of this Agreement, state law applicable to municipal taxation changes the form of sales taxes, and as a result, the EIPs differ from the amount which would have been paid to Simon under the laws in effect as of the Effective Date of this Agreement, then the City, in its sole discretion, may adjust the EIPs using whatever discretionary taxes and revenues that are legally available to City which can be allocated to the EIPs. However, this section is not intended to require the City to use funds from other sources which are not within the City's discretion to allocate to the Project, so as to achieve the same economic benefits to both parties as would have resulted had the law not changed. 6.2.4 Payments Subject to Future Appropriations. Although certain payments under this Agreement are calculated based on a formula applied to sales tax revenues, this Agreement shall not be construed as a commitment, issue or obligation of any specific taxes or tax revenues for payment to Simon. 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 Simon, 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 7.3, and the City shall not be liable to Simon for such payments, but Simon 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. 6.2.5 City Accounting. The City shall maintain complete books and records showing sales taxes remitted to the City by the State and disbursements of income incentive grant payments, which books and records shall be deemed complete if kept in accordance with generally acceptable accounting principles as applied to Texas municipalities. In addition, the City shall prepare an annual report documenting accrued interest, any carry -forward of accrued interest, unamortized balances, and amortized balances. Such books and records shall be available for examination by the duly authorized officers or agents of Simon during normal business hours upon request made not less than ten (10) business days prior to the date of such examination. The City shall maintain such books and records throughout the term of this Agreement and for four (4) years thereafter.. 6.2.6 Utility Services for the Property. The City shall provide, water and wastewater to Simon for the Project, subject to the same fees and charges assessed to similarly situated properties. 6.2.7 Permitting. The City shall cooperate with Simon to expeditiously process all City permit applications and City inspections. 7. Miscellaneous. 7.1 Mutual Assistance. The City, 4B Corp and Simon will do all things reasonably necessary or appropriate to carry out the terms and provisions of this Agreement, 8 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. 7.2 Representations and Warranties. The City and 4B Corp represent and warrant to Simon 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. Simon represents and warrants to the City and 4B Corp that it has the requisite authority to enter into this Agreement. 7.3 Default. If either the City, 4B Corp or Simon 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 or 4B Corp remain in default after notice and opportunity to cure, Simon shall have the right to pursue any remedy at law or in equity for the City's or 4B Corp's breach. If Simon remains in default after notice and opportunity to cure, the City's or 4B Corp's remedy shall be limited to a termination of the EIPs, which accrue after the date of such default. Any EIPs from City or 4B Corp to Simon which is not timely paid by City or 4B Corp shall incur interest at the highest rate per annum allowed by the applicable law of the State of Texas from the date such EIPs are due until paid. 7.4 Attorney's Fees. In the event any legal action or proceeding is commenced between the City, 4B Corp and Simon 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 bythe City, 4B Corp and Simon. 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. Simon may assign all or part of its rights and obligations to a third party upon thirty days written notice to the City and 4B Corp. 7.8 Amendment This Agreement may be amended by the mutual written agreement of the parties. 7.9 Termination. In the event Simon elects not to proceed with the Project as contemplated by this Agreement, Simon shall notify the City and 4B Corp 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. In addition, this Agreement 9 shall terminate when Simon has been paid the Maximum Payment Amount in full, or eight (8) years after the first day of the month following the Sales Tax Effective Date, whichever first occurs. 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: Simon: Simon Property Group Attn: Kathy Shields 115 West Washington Street Indianapolis, IN 46204 Ph: (317) 263-7076 Fx: (317) 685-7299 with a copy to: Mr. David B. Armbrust Armbrust & Brown, L.L.P. 100 Congress Ave., Suite 1300 Austin, Texas 78701 Ph: (512) 435-2301 Fx: (512) 435-2360 with a copy to: Simon Property Group Attn: Bill Hammer 115 West Washington Street Indianapolis, IN 46204 Ph: (317) 263-7006 Fx: (317) 263-7648 with a copy to: Chelsea Property Group Attn: Mark J. Silvestri 105 Eisenhower Parkway Roseland, NJ 07068 Ph: (973) 228-6111 Fx: (973) 364-2503 with a copy to: Chelsea Property Group Attn: General Counsel 105 Eisenhower Parkway Roseland, NJ 07068 10 City: Jim Nuse, City Manager City of Round Rock 221 East Main St. Round Rock, TX 78664 Ph: (512) 218-5401 Fx: (512) 218-7097 4 B Corp: Jim Nuse, City Manager City of Round Rock 221 East Main St. Round Rock, TX 78664 Ph: (512) 218-5401 Fx: (512) 218-7097 with a copy to: Stephan L. Sheets, City Attorney 309 East Main St. Round Rock, TX 78664 Ph: (512) 255-8877 Fx: (512) 255-8986 Either party may designate a different address at any time upon written notice to the other party. 7.11 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. 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. 11 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 `force majeure event"). Aforce 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. 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 Exhibits. The following Exhibits "A" - "E" are attached and incorporated by reference for all purposes: Exhibit "A": Exhibit "B": Exhibit "C": Exhibit "D": Exhibit "E": City Resolution No. Property Description 4B Resolution No. Public Road Improvements Waiver of Sales Tax Confidentiality Form 7.18 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, 4B Corp, its past, present and future officers, elected officials, employees and agents of the City and 4B Corp, do not assume any responsibilities or liabilities to any third party in connection with the development of the Project or the design, construction or operation of any portion of the Project. 7.19 Extension of Dates for Commencement of Construction. In the event Simon determines that an extension of a Project commencement date is necessary due to market or financing conditions, Simon may extend either or both of the Project commencement dates set forth in paragraph 3.2 for up to one (1) year. All other dates shall be extended accordingly. EXECUTED to be effective as of the day of , 2005 (the "Effective Date"). SIMON PROPERTY GROUP (TEXAS), L.P. a By: Printed Name: Title: 12 APPROVED as to form: Stephan L. Sheets, City Attorney CPG ROUND ROCK, L.P. a By: Printed Name: Title: CITY OF ROUND ROCK, TEXAS, a home rule city and municipal corporation By: Nyle Maxwell, Mayor ROUND ROCK TRANSPORTATION SYSTEM DEVELOPMENT CORPORATION, a Texas Development Corporation By: 13 Nyle Maxwell, President EXHIBIT "A" CITY RESOLUTION NO. I EXHIBIT "B" PROPERTY DESCRIPTION 87.193 ACRE TRACT ROUND ROCK PREMIUM OUTLETS DESCRIPTION FN NO. 05-020 (CAG) FEBRUARY 22, 2005 BPI JOB NO. 1262-02 OF 87.193 ACRES OF LAND OUT OF THE EPHRAIM EVANS SURVEY, ABSTRACT NO. 212, SITUATED IN WILLIAMSON COUNTY, TEXAS, BEING A PORTION OF THAT CERTAIN 132.28 ACRE TRACT OF LAND CONVEYED TO ANC -ROUND ROCK ASSETS II, LP BY DEED OF RECORD IN DOCUMENT NO. 2001001644 OF THE OFFICIAL PUBLIC RECORDS OF WILLIAMSON COUNTY, TEXAS, AND A PORTION- OF ORTIONOF THAT CERTAIN 107.44 ACRE TRACT CONVEYED TO NNP-TERAVISTA LP BY DEED OF RECORD IN DOCUMENT NO. 2001001639 OF SAID OFFICIAL PUBLIC RECORDS; SAID 87.193 ACRES BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING, at a 1/2 inch iron rod found in the easterly right-of- way line of Interstate Highway No. 35 (R.O.W. Varies), being the northwesterly corner of that certain 74.590 acre tract of land conveyed to Scott & White Memorial Hospital and Scott, Sherwood and Brindley Foundation by deed of record in Document No. 9733254 of said Official Records of Williamson County, Texas, same being the southwesterly corner of said 132.28 acre tract and hereof; THENCE, NO2°04'48"W, along the easterly right-of-way line of Interstate Highway No. 35, being a portion of the westerly line of said 132.28 acre tract for the westerly line hereof, passing at a distance of 2307.08 feet, a concrete monument found at Highway Station 1120+00, and continuing for a total distance of 2423.43 feet to a 1/2 inch iron rod with cap set for the northwesterly corner hereof; THENCE, leaving Highway No. 35, northerly line distances: the easterly right-of-way line of Interstate over and across said 132.28 acre, for the hereof, the following eight (8) courses and 1) N48°42'48"E, along the northerly right-of-way line of Future Teravista Parkway (100' R.O.W.) a distance of 34.29 feet to a 1/2 inch iron rod with cap set for the point of curvature of a non -tangent curve to left; 2) Along said non -tangent curve to the left having a radius of 640.00 feet, a central angle of 26°55'11", an arc length of 300.69 feet and a chord which bears N70°08'01"E, a distance of 297.94 feet to a 1/2 inch iron rod with cap set for the point of curvature of a reverse curve to the right; EXHu31 y "Bfi FN 05-020(CAG) FEBRUARY 22, 2005 PAGE 2 OF 3 3) Along said reverse curve to the right having a radius of 920.00 feet, a central angle of 56°51'30", an arc length of 912.98 feet and a chord which bears N85°06'11"E, a distance of 875.97 feet to a 1/2 inch iron rod with cap set for the point of curvature of a reverse curve to the left; 4) Along said reverse curve to the left having a radius of 950.00 feet, a central angle of 26°17'15", an arc length of 435.86 feet and a chord which bears S79°36'42"E, a distance of 432.05 feet to a 1/2 inch iron rod with cap set for the end of said curve; 5) N42°46'27"E, a distance of 36.14 feet to a 1/2 inch iron rod with cap set in the westerly right-of-way line of future Oakmont Drive (100' R.O.W.) for an angle point; 6) N82°43'03"E, over and across future Oakmont Drive, a distance of 100.78 feet to a 1/2 inch iron rod with cap set in the easterly right-of-way line of future Oakmont Drive for an angle point; 7) S50°45'31"E, a distance of 31.92 feet to a 1/2 inch iron rod with cap set for an angle point; 8) N78°33'21"E, a distance of 10.32 feet to a 1/2 inch iron rod with cap set in the common line of said 132.28 acre tract and said 107.44 acre tract for the northeasterly corner hereof; THENCE, along the common line of said 132.28 acre tract and said 107.44 acre tract, being a portion of the easterly line hereof, the following two (2) courses and distances: 1) S06°14'24"W, a distance of 59.27 feet to a 1/2 inch iron rod with cap set for an angle point; 2) S19°01'28"E, a distance of 35.64 feet to a 1/2 inch iron rod with cap set foran angle point; THENCE, leaving said common line, over and across said 132.28 acre tract and said 107.44 acre tract, for the easterly line hereof, the following six (6) courses and distances: 1) S38°18'53"W, a distance of 50.49 feet to a 1/2 inch iron rod with cap set for the point of curvature of a non -tangent curve to the left; FN 05-020(CAG) FEBRUARY 22, 2005 PAGE 3 OF 3 2) Along said non -tangent curve to .the left having a radius of 1250.00 feet, a central angle of 01°54'00", an arc length of 41.45 feet and a chord which bears S07°43' 03"E, a distance of 41.45 feet to a 1/2 inch iron rod with cap set for the point of tangency; 3) S08°40'03"E, a distance of 185.24 feet to a 1/2 inch iron rod with cap set for the point of curvature of a curve to the right; 4) Along said curve to the right having a radius of 2300.00 feet, a central angle of 24°22'51", an arc length of 978.71 feet and a chord which bears S03°31'22"W, a distance of 971.34 feet to a 1/2 inch iron rod with cap set for the point of tangency; 5) S15°42' 48"W, a distance of 138.11 feet to a 1/2 inch iron rod with cap set for the point of curvature of a curve to the left; 6) Along said curve to the left having a radius of 2200.00 feet, a central angle of 12°56'48", an arc length of 497.11 feet and a chord which bears S09°14'24"W, a distance of 496.05 feet to a 1/2 inch iron rod with cap set for the end of said curve, being in the southerly line of said 132.28 acre tract, being the northerly line of said 74.590 acre tract for the southeasterly corner -hereof; THENCE, S69°15'57"W, along the northerly line of said 74.590 acre tract, being in part the westerly line of said 107.44 acre tract, and in part a portion of the southerly line of said 132..28 acre tract for the southerly line hereof, passing at a distance of 61.11 feet a 1/2 inch iron rod found, being the southeasterly corner of said 132.28 acre tract, same being an angle point in the westerly line of said 107.44 acre tract, and continuing for a total distance of 1609.98 feet to the POINT OF BEGINNING, containing an area of 87.193 acres (3,798,135 sq. ft.) of land, more or less, within these metes and bounds. BEARING BASIS: REFERENCED TO THE TEXAS STATE PLANE COORDINATE SYSTEM, CENTRAL ZONE BASED ON PUBLISHED NAD 83/93 HARN VALUES FOR THE CITY OF GEORGETOWN MONUMENTATION NETWORK. BURY & PARTNERS, INC. ENGINEERS AND SURVEYORS 3345 BEE CAVES ROAD, SUITE 200 AUSTIN, TEXAS 78746 v/v45- JO T. BILNOSKI DATE R. .L.S #4998 STATE OF TEXAS RECORDERS MEMORANDUM All or parts of the text on this page was not clearly legible for oatigfactery recordation. DURVE - TABLE .. C1 ..... at.o 2 .4.55 it Rpdius 64000 kc t.eligth Chgrd Lanai Chord Be1ring 300.69 207.94 t'470 08101 E 02 -.3 56-451'30* Oiado 912.98 87547 148506.11*E .1.5 2i715 95p.p0 435.86 43205 , S7916142*E 4 01'54 00 1250.0o 41.45 41.46 50743'03"E C5 ...,6 2422'51" 2300.00 978.71 971.34 S0311'22" W i26'48 2200.00 497.11 496.05 $091 4'241'W LEGEND • 1/2" IRON ROO FOUND 0 I/2- IRON ROD SET WITH CAP a HIGHWAY MONUMENT FOUND P.0.8. POINT OF BEGINNING rt toonie1/ v0 v0 Oft"! Ire I 124 4 I I I I I 4 reit irve riamiesett &war ow. to 107.44 AC. 4.* NNP-TERAVISTA LP DOC. NO. 2001001639 A140 -R40 jratite. Rot,: • Aascn_a. Lr: Dot- No. acopa4z40. 0 6 12 S02134 48"E 743.24' 1.472 24WanwENTD. LTD. Doc. NO. 2I212644221 • C4 19 C5 _0414faivr. t k - Aliveo 0£0, Litre - - 87.193 ACRES ttl (3,798,135 SQ. FT.) to 01. ect. C6 UNE TABLE No, peorirl. . , Digt9Ice. L1 , S48'42. 40*E . 34.29.. L2 1•14248*27.E .304.• 13. flp274.0.3‘t. - 00:76' 14 S50'453'11 3192.r. .1.5 N16'3'21E 10.32' L6 S0614`24"W 5927'. 17 S19'01(281 35:64' gi 53819453"W 50.49* L9 s08'40'93t 185.24* 110 SI5'42'48'W 08:11' 74.590 ACRES SCOTT .5c WHITE MEMORIAL HOSPITAL AND SCOTT. SHERWOOD AND GRINDLEY FOUNDATION DOC. NO. 9733254 Orr tmor LAW 132.28 AC. Alio-ROUND ROCK ASSETS 11, Le Doc. No. 200 100 1644 EPHRAIM EVANS SURVEY ABSTRACT NO. 21 30 .08* Lor I °Arrow CENTRE &C. 4 i.crr 1, GLOM A FIRST LIMTED ADG(TION CAR: 0 ERE. eg-2a scow, SHERWooD AND anima a4104 000. No. rlooY82 HWY STA -1120+00 131111*PArtnerS ttto imAtanco s 1414fkAa.i.;*(v.s•Attol.'sao•loo i4.4014iii .411i'*••45407ws laajocitootritait. OA TE:. 92/22M NO2'04'48"W 2423.43 .a, INTERSTATE HIGHWAY NO. 35 (ROW VARIES) • e SKETCH TO AgOOMPANY -DESCRIPTION 0..i003..k40,9r An3aokerima. 212 *4 :TE*4-VONDARORTION:0 TKO 4814I4 142.A8',ACRE'fI1ACT 4rtiklee.CONWYEM:TOW404ROUND ROCK. ASV% 0. LP OF..KCORD 30 00022614T :11M400120T244.A2-, ------ OFTIW.IVELO-RECOROS.W.01.1$14404:]4110IittICAV•MO PORGON: -Of'':;f1AT• EETLTArt A07.44 AcRE:.22AG2m50818(0 at T1 -0Xto TO NNPIERAVISTA:IP:-GritttORLFIN'ODOLIMEtit NM. 2001001639 ar SAID:9FOUVOMRW'RMAM., I1i.i/262-\92\126202E/c7.0WO -ftsi N.0,:n406.-20(CAG) INCNER PR90 vol. fit ROUND ROOK PREMIUM airman RAYv1 CAG PROJ. No: 1262-02. EXHIBIT "C" 4B RESOLUTION NO. I OCHx3tOSt9t\li s\Hxl\ n\c c \vn 9 19.49 AC. GEORGETOWN APARTMENT LAND, LTD DOC. NO. 200 200635 7 f0 P �_ryll�30 a g=;m �rnA ZFs r9:?; 915 g1;o i - Aram 0! toe ROUND ROCK, TEXAS elfin= ire IN !AMMO et SIMON PROPERTY GROUP OAKMONT DRIVE AND TERAVISTA PARKWAY EXHIBIT /181E11 -Partners EXHIBIT "E" WAIVER OF SALES TAX CONFIDENTIALITY Date I authorize the Comptroller of Public Accounts to release sales tax Information pertaining to the taxpayer indicated below to successors, assigns or nominees, and the City of Round Rock. Texas, and the Round Rock Transportation System Development Corporation. I understand that this waiver applies only to our retail store located in the Premium Outlets located in the City of Round Rock, Williamson County, Texas. Please print or type the following information as shown on your Texas Sales and Use Tax permit: Name of Taxpayer Listed on Texas Sales Tax Permit: Name Under Which Taxpayer is Doing Business (d/b/a or Store Name): Taxpayer Mailing Address: Physical Location of Business Permitted for Sales Tax in Round Rock, Texas: Texas Taxpayer ID Number Tax Outlet Number (As shown of Texas Sales Tax Permit) Authorized Signature': Printed Name: Title: Phone: The authorized signature must be of an owner, officer, director, partner or agent authorized to sign a Texas Sales Tax Return. If you have questions concerning this Waiver of Confidentiality, please contact Sandra C. Joseph, Texas Comptroller of Public Accounts at (800) 531-5441, Ext. 5-041 L _ 198756-18 05/19/2005 EXHIBIT "D" PUBLIC ROAD IMPROVEMENTS 198756-18 05/19/2005 .;46,;.84 MINX -3 AVM)iHVd VISIAVH31 ONV 3AIHO INOINNVO dmOHO ADJ3dOHd NOYYIIS dr INS ilia.. swat Toa aNnoH 0 m x W 0 /SC900LOOZ ON JOG 011 'ONY1 IN3NtNY4Y NMOUYIMOD JY 6161 Z 0 wt < �Uco to: \171D \01 \E%M\SRE\t5150l(*H30 EXHIBIT "E" WAIVER OF SALES TAX CONFIDENTIALITY Date I authorize the Comptroller of Public Accounts to release sales tax Information pertaining to the taxpayer indicated below to , a , its successors, assigns or nominees, and the City of Round Rock. Texas, and the Round Rock Transportation System Development Corporation. I understand that this waiver applies only to our retail store located in the Premium Outlets located in the City of Round Rock, Williamson County, Texas. Please print or type the following information as shown on your Texas Sales and Use Tax permit: Name of Taxpayer Listed on Texas Sales Tax Permit: Name Under Which Taxpayer is Doing Business (d/b/a or Store Name): Taxpayer Mailing Address: Physical Location of Business Permitted for Sales Tax in Round Rock, Texas: Texas Taxpayer ID Number Tax Outlet Number (As shown of Texas Sales Tax Permit) Authorized Signature': Printed Name: Title: Phone: The authorized signature must be of an owner, officer, director, partner or agent authorized to sign a Texas Sales Tax Return. If you have questions concerning this Waiver of Confidentiality, please contact Sandra C. Joseph, Texas Comptroller of Public Accounts at (800) 531-5441, Ext. 5-0411. 198756-18 05/19/2005 FILED AND RECORDED OFFICIAL PUBLIC RECORDS 2@05046056 06/20/2005 08:44 AM MARY $154.00 NANCY E. RISTER, COUNTY CLERK WILLIAMSON COUNTY, TEXAS f CA,Se-) (LCOVG, re, -f u.vYl , 0 ' cut/ �,�► �� CITY OF ROUND ROCK ADMINISTRATION 221 EAST MAIN STREET ROUND ROCK. TEXAS 78664