R-07-06-28-11D1 - 6/28/2007 RESOLUTION NO. R-07-06-28-11D1
WHEREAS, the City Council, on the 28th day of June, 2007, in
Ordinance No. G-07-06-28-10A I , created Reinvestment Zone No. 24 in the
City of Round Rock, Texas, and
WHEREAS, in accordance with Chapter 312, Tax Code, V.A.T.S. as
amended, the City desires to enter into a tax abatement agreement with
Komico Technology, Inc. , regarding property located in Reinvestment
Zone No. 24, and
WHEREAS, the Council has determined that all requirements of the
guidelines and criteria amended and readopted by Ordinance No. G-06-03-
09-8B1 have been complied with, 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 a Tax Abatement Agreement with Komico Technology,
Inc. , a copy of said agreement being attached hereto as Exhibit "A" and
incorporated herein.
The City Council hereby finds and declares that written notice of
the date, hour, place and subject of the meeting at which this
Resolution was adopted was posted and that such meeting was open to the
public as required by law at all times during which this Resolution and
the subject matter hereof were discussed, considered and formally acted
upon, all as required by the Open Meetings Act, Chapter 551, Texas
Government Code, as amended.
0:\wdox\RESOLUTI\R70628D1.WPD/rmc/0112-0709
RESOLVED this 28th day of June, 2 0
Vic
NY WE Mayor
City-of Round Rock, Texas
A EST:
N�R - llwjtl-�a
CHRISTINE R. MARTINEZ, City Secre ary
2
PROPERTY TAX ABATEMENT AGREEMENT
This Property Tax Abatement Agreement (this "Agreement") is entered into by and
between the City of Round Rock, Texas (the "City"), a Texas home rule municipal corporation,
and Komico Technology, Inc., a Texas corporation("Komico-).
RECITALS
WHEREAS, Komico has purchased certain real estate located at 201 Michael Angelo
Way, Austin, TX 78728 (the"Facility"), and desires to purchase equipment for the servicing and
sale of equipment related to the manufacture and cleaning of semiconductor equipment, as
described in Exhibit A(the"Equipment") and to make substantial improvements to the Facility
including the construction of office space, architectural, mechanical, instrumentation and
electrical, training facilities, manufacturing space, and clean rooms (the "Improvements). The
Facility was purchased by Komico as a shell building.
WHEREAS, by entering into this Agreement, Komico confirms its intent to purchase the
Equipment and to construct the Improvements, thereby resulting in new economic development
in City; and
WHEREAS, on the 28th day of June, 2007, the City Council, of the City of Round Rock,
Texas, adopted Ordinance No. G-07-06-28- establishing Reinvestment Zone No. 24 (the
"Reinvestment Zone") City of Round Rock, Texas for commercial/industrial tax abatement,
hereinafter referred to as "Ordinance No. G-07-06-28-_", as authorized by the Texas Property
Redevelopment and Tax Abatement Act, Chapter 312, Tax Code, V.A.T.S. as amended (the
"Tax Abatement Act") ; and
WHEREAS, the City has adopted Ordinance No. G-06-03-09-8131, which Ordinance
adopted appropriate guidelines and criteria governing reinvestment zones and tax abatement
agreements to be entered into by the City as contemplated by the Tax Abatement Act; and
WHEREAS, the City has determined that the contemplated use of the Equipment and
Improvements (as hereinafter defined) as well as the terms of this Agreement are consistent with
encouraging development in the Reinvestment Zone in accordance with the purposes for its
creation and are in compliance with Ordinance No. G-06-03-09-8131 and the guidelines and
criteria adopted by the City and all applicable laws; and
WHEREAS, the Equipment and Improvements constitute a major investment within the
Reinvestment Zone that will substantially increase the appraised value of the property within the
Reinvestment Zone; and will contribute to the retention of primary and secondary employment
within the City; and
WHEREAS, the City finds that there will be no substantial adverse effects on the
provision of governmental services or on its tax base and that the planned use of the Premises
will not constitute a hazard to public safety, health, or welfare,NOW THEREFORE, the parties
hereto do mutually agree as follows:
PROPERTY TAX ABATEMENT AGREEMENT
CITY OF ROUND ROCK/KOMICO TECHNOLOGY,INC.
116737
nAm
1. Authorization. This Agreement is authorized by the Tax Abatement Act, and by
Resolution of the City Council of the City of Round Rock,Texas dated June 28, 2007.
2. Definitions. As used in this Agreement, the following terms shall have the
meanings set forth below:
(a) "Abatement Value" means the assessed value of the Eligible Property as
determined annually by the Williamson County Appraisal District on behalf of the City less the
amount of the Base Year Value.
(b) "Abatement"means the full or partial exemption from ad valorem taxes of
certain property in the Reinvestment Zone as more particularly set forth in Section 4.
(c) "Affiliate of Komico" means all companies under common control with,
controlled by, or controlling Komico Technology, Inc. For purposes of this definition, "control"
means 50%or more of the ownership determined by either value or vote.
(d) "Base Year Value" means the assessed value of the Eligible Property on
January 1,2007 (or on January 1 of the year of execution of this Agreement if determined to be
otherwise required by applicable law), as such value is determined by the Williamson County
Appraisal District on behalf of the City.
(e) "City Guidelines" means the Guidelines and Criteria for Granting Tax
Abatement in Reinvestment Zones created in Round Rock,Texas.
(f) "Eligible Property"means collectively the Equipment and Improvements.
(g) "Equipment"means the items listed in Exhibit A.
(h) "Facility"means Komico's manufacturing facility located on the Komico
Tract.
(i) "Improvements" means the improvements to the Facility including build-
out of office space and cleanroom for the purpose of manufacturing, housing cleaning
equipment, coating equipment, and MST tools, and installation of other related capital
equipment,which will meet the Equipment's facility requirements.
0) "Ineligible Property"means any personal property that was located within
the Komico Tract at any time before the period covered by this Agreement and Komico's
existing facility,excluding Equipment and Improvements.
(k) "Komico Tract"means the real property owned by Komico located in the
Reinvestment Zone and described as Lot Five (5), Block A, Resubdivision of the Remainder of
Lot 2, Corridor Park I, a subdivision in Travis County, Texas.
(1) "Reinvestment Zone"the reinvestment zone established on the day
of June,2007,in Ordinance No. G-07-06-28- establishing Reinvestment Zone No. 24.
PROPERTY TAX ABATEMENT AGREEMENT 2 CITY OF ROUND ROCK/KOMlCO TECHNOLOGY,INC.
116737
3. Subject Property. During the Abatement Period, the Komico Tract shall be used
consistent with the general purpose of encouraging development or redevelopment within the
Reinvestment Zone. The Komico Tract is not located in an improvement project financed by tax
increment bonds and does not include any property that is owned or leased by a member of the
City Council or by a member of the City Planning and Zoning Commission.
4. Grant of Abatement. Subject to the terms and conditions contained herein, and
subject to the rights of the holders of any outstanding bonds of the City, the City hereby grants
an abatement on the Abatement Value of the Eligible Property located on or at the Komico Tract
(the"Abatement") as follows:
(a) Year 1 50%
(b) Year 2 50%
(c) Year 3 50%
(d) Year 4 50%
(e) Year 5 25%
5. Term of Abatement. Komico shall receive the Abatement commencing
January 1 of the year immediately following the installation of the Equipment (the "Effective
Date of Abatement') and continuing for five (5) years, the "Abatement Period").
Notwithstanding anything herein to the contrary, the Effective Date of Abatement shall be
January 1 of the year immediately following substantial completion of the Improvements if
determined to be otherwise required by applicable law.
6. Taxable Property. During the Abatement Period, taxes shall be payable on the
Eligible Property and the Ineligible Property located within the Reinvestment Zone as follows:
(a) The value of the Ineligible Property as defined herein shall be fully
taxable; and
(b) The Base Year Value of the Eligible Property as determined by the
Williamson County Appraisal District shall be fully taxable.
Komico agrees that regardless of anything contained herein to the contrary, the value of the
Ineligible Property, plus the Base Year Value of the Eligible Property, plus that portion of the
Eligible Property that is not abated, l�us the value of the Komico Tract and improvements
located thereon shall be no less than$5,250,000.00.
7. Komieo's Development Covenants. In consideration of the City's agreement to
enter into this Agreement, Komico represents that it intends to construct the Improvements and
install the Equipment for the purpose of operating its manufacturing facility in the City and
Komico acknowledges that the City's obligations hereunder are conditioned upon Komico's
continued operation of said manufacturing facility. In the event Komico fails to substantially
complete the Improvements and install the Equipment by December 31,2007 (subject to delays
PROPERTY TAX ABATEMENT AGREEMENT 3 CITY OF ROUND ROCK/KOM1C0 TECHNOLOGY,INC.
116737
caused by events of Force Majeure), the City may terminate this Agreement by giving Komico
written notice of such termination. As additional consideration, Komico agrees and covenants to
provide and/or retain at least the number of jobs within the Facility according to the following
schedule:
Date Retain New Total
On December 31, 2007 30 0 30
On December 31,2008 30 30 60
On December 31, 2009 60 30 90
On December 31.2010 90 30 120
. Komico agrees to provide to the City annual manpower reports on the form attached hereto as
Exhibit B within sixty(60)days following the end of the calendar year.
8. Default. In the event that Komico (a) allows its ad valorem taxes related to the
property to become delinquent and fails to timely and properly follow the legal procedures for
their protest and/or contest; or (b) violates any of the material terms and conditions of this
Agreement, Komico shall be considered in default. In the event that Komico defaults under this
Agreement, the City shall give Komico written notice specifying such default. If Komico has
not cured the default within thirty(30)days after its receipt of such written notice, the City may
pursue any of its remedies for the collection of delinquent property taxes as provided generally in
the Tax Code.
9. Abatement Recapture. In the event the City terminates this Agreement as a
result of Komico's default,the City may recapture and collect from Komico the ad valorem taxes
that were abated as a result of this Agreement (the "Recapture Liability"). Komico shall pay to
the City the Recapture Liability within thirty (30) days after the date of termination, subject to
any and all lawful offsets, settlements, deduction, or credits to which Komico may be entitled.
Notwithstanding anything herein to the contrary, such Recapture Liability shall not exceed an
amount equal to all taxes which were abated pursuant to this Agreement from the Effective Date
of Abatement to the date of termination (together with interest thereon to be charged at the
statutory rate for delinquent taxes as determined by Section 33.01 of the Property Tax Code of
the State of Texas,but without the addition of a penalty). The City shall have all remedies for the
collection of the Recapture Liability as provided generally in the Tax Code for the collection of
delinquent property taxes.
10. Certification and Inspections. Komico must certify annually to the City that
Komico is in compliance with each applicable term of this Agreement and the City Guidelines
and, if not in compliance, the steps Komico intends to take to be in compliance or a statement
from Komico explaining in reasonable detail why compliance cannot be achieved. Komico
agrees that the WCAD and the City, their agents and employees, shall, upon reasonable notice,
have reasonable right of access to the Komico Tract in order to ensure that the installation of the
Equipment and the construction of the Improvements to the Komico ract is in accordance with
this Agreement and all applicable state and local laws and regulations or valid waiver thereof.
All inspections will be made with one or more representatives of Komico and in accordance with
Komico's security and safety requirements. At the time of annual certification, upon the City's
written request, Komico shall also provide a calculation of the aggregate amount of economic
PROPERTY TAX ABATEMENT AGREEMENT 4 CITY OF ROUND ROCK/KOMICO TECHNOLOGY,INC.
116737
benefit Komico has previously received pursuant to this Agreement and the Development
Agreement. In order to efficiently administer the Abatement Komico agrees also to provide
annually, before April 15, a full asset listing of personal property located on the Komico Tract
and the Komico Tract to the WCAD and such other information as may be reasonably necessary
for the Abatement and assessment of the assets for tax purposes, including any information
required by the City Guidelines.
11. Rendition of the Komico Tract and Improvements. Prior to January 31 of each
year of this Agreement, Komico shall submit to the Williamson County Appraisal District, a real
property rendition for the Komico Tract and a personal property rendition. The real property
rendition shall provide the cost and description of the Improvements. The personal property
rendition shall include the year of acquisition, cost and description of the Equipment, as
described in Exhibit A.
Komico shall submit the foregoing real property and personal property rendition forms to the
Williamson County Appraisal District, in the minimum amount necessary so that the taxable
value after applying the abatement provided for herein, of the Komico Tract and improvements
in such year following Substantial Completion of the Improvements shall be no less than
$5,250,000.00(the"Designated Value").
12. Annual Tax Application. It shall be the responsibility of Komico, pursuant to
V.T.C.A., Tax Code, § 11.43, to file an annual exemption application form with the Williamson
County Appraisal District. The Chief Appraiser of the Williamson County Appraisal District
shall annually determine and record both the abated taxable value and the full taxable value of
the Eligible Property in the appraisal records. The full taxable value figure listed in the appraisal
record shall be used to compute the amount of abated taxes that are required to be recaptured and
paid in the event this Agreement is terminated in a manner that results in recapture pursuant to
Section 9. Each year Komico shall furnish the Chief Appraiser with such information outlined
in V.T.C.A., Tax Code, Chapter 22, as may be necessary for the administration of the abatement
specified herein. Komico shall be entitled to appeal any determination of the Chief Appraiser in
accordance with the provisions of the Texas Tax Code.
13. Assignment. Komico may assign this Agreement to a new owner or lessee of the
Facility with the written consent of the City Council of the City, which consent shall not be
unreasonably withheld, conditioned or delayed. An assignment to an Affiliate of Komico shall
not require such written consent. Any assignment shall be in writing, and shall provide that the
assignee shall irrevocably and unconditionally assume all the duties and obligations of the
assignor upon the same terms and conditions as set out in this Agreement.
14. Notice. All notices and other communications hereunder shall be in writing
(whether or not a writing is expressly required hereby), and shall be deemed to have been given
and become effective (a) if given by either party or its counsel via an express mail service or via
courier or via receipted facsimile transmission (but only if duplicate notice is also given via
express mail service or via courier or via certified mail), then if and when delivered to and
received(or refused)by the respective parties at the below addresses (or at such other address as
a party may hereafter designate for itself by notice to the other party as required hereby), or(b) if
sent via certified mail by either party or its counsel, then on the third business day following the
PROPERTY TAX ABATEMENT AGREEMENT 5 CITY OF ROUND ROCK/KOMICO TECHNOLOGY,INC.
116737
date on which such communication is deposited in the United States mails,by first class certified
mail, return receipt requested, postage prepaid, and addressed to the respective parties at the
below addresses (or at such other address as a party may hereafter designate for itself by notice
to the other party as required hereby). Any notice provided for under the terms of this
Agreement by either party to the other shall be in writing and may be effected by registered or
certified mail,return receipt requested.
If to City: City of Round Rock
221 E. Main Street
Round Rock,TX 78664
Attn: City Manager
Phone: (512)218-5400
Fax: (512)218-7097
With a required copy to:
Sheets&Crossfield
309 E. Main Street
Round Rock, TX 78664
Attn: Stephan L. Sheets
Phone: (512)255-8877
Fax: (512)255-8986
If to Komico: Komico Technology, Inc.
201 Michael Angelo Way
Austin,Texas 78728
Attn: Yong Ha Choi
Phone: (512)238-2400/2411
Fax : (512)238-2498
15. Applicable Law. This Agreement is made and shall be construed and interpreted
under the laws of the State of Texas and shall be performable in Williamson County,Texas.
16. No Liability. It is understood and agreed between the parties that Komico, in
performing its obligations hereunder, is acting independently, and the City assumes no
responsibility or liability to third parties in connection therewith. It is further understood and
agreed among the parties that the City, in performing its obligations hereunder, is acting
independently, and Komico assumes no responsibility or liability to third parties in connection
therewith.
17. Estoppel Certificate. Any party hereto may request an estoppel certificate from
another party hereto so long as the certificate is requested in connection with a bona fide
business purpose. Each party agrees to promptly execute and deliver any estoppel certificate
requested pursuant to this Section 17. The certificate, which will upon request be addressed to
Komico, or a lessee, purchaser or assignee of Komico, shall include, but not necessarily be
limited to, statements (qualified to the best knowledge of the party providing the estoppel) that
this Agreement is in full force and effect without default(or if a default exists, the nature of such
PROPERTY TAX ABATEMENT AGREEMENT 6 CITY OF ROUND ROCK/KOMICO TECHNOLOGY,INC.
116737
default and any curative action which should be undertaken to cure same), the remaining term of
this Agreement, and such other matters reasonably requested by the party(ies) to receive the
certificate.
18. Leval Construction. In case any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect,
such invalidity, illegality, or unenforceability shall not affect any other provision thereof and this
Agreement shall be considered as if such invalid, illegal or unenforceable provision had never
been contained in this Agreement.
19. Force Majeure. Whenever a period of time is prescribed for the taking of an
action by Komico, the period of time for the performance of such action shall be extended by the
number of days that the performance is actually delayed due to strikes, acts of God, shortages of
labor or materials, war, terrorist attacks (including bio-chemical attacks), civil disturbances and
other causes beyond the reasonable control of Komico ("Force Majeure"). However, events of
Force Majeure shall not extend any period of time for the payment of sums payable by Komico.
20. Entire Aereement. This Agreement embodies the complete agreement of the
parties hereto, superseding all oral or written previous and contemporary agreements between the
parties and relating to matters in this Agreement, and except as otherwise provided herein cannot
be modified, amended, altered or revoked without written agreement of the parties hereto.
21. Recordation of Agreement. A certified copy of this Agreement, or a
memorandum summarizing this Agreement, in recordable form may be recorded in the Deed of
Records of Williamson County,Texas.
22. Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
23. Authority. The individuals executing this Agreement on behalf of the respective
parties hereto represent to each other and to others that all appropriate and necessary action has
been taken to authorize the individual who is executing this Agreement to do so for and on
behalf of the party for which his or her signature appears, that there are no other parties or
entities required to execute this Agreement in order for the sameto be an authorized and binding
agreement on the party for whom the individual is signing this Agreement and that each
individual affixing his or her signature hereto is authorized to do so, and such authorization is
valid and effective on the date hereof.
24. Multiple Counterparts. This Agreement may be executed in a number of
identical counterparts, each of which shall be deemed an original and all of which, when taken
together, shall constitute one and the same instrument.
25. Time of Essence. Time is of the essence in this Agreement.
26. Joint Drafting. The parties agree this Agreement has been drafted jointly by the
parties and their legal representatives.
PROPERTY TAX ABATEMENT AGREEMENT 7 CrrY OF ROUND ROCK/KOMICO TECHNOLOGY,INC.
116737
27. Exhibits. All exhibits to this Agreement are incorporated herein by reference for
all purposes wherever reference is made to the same.
IN WITNESS WHEREOF, the parties have executed this Agreement and caused this Agreement
to be effective on the latest date as reflected by the signatures below(the"Effective Date").
THE CITY OF ROUND ROCK,TEXAS,
a Texas municipal corporation
By:
Nyle Maxwell, Mayor
Date:
Attest:
Christine Martinez, City Secretary
APPROVED AS TO FORM:
Stephan L. Sheets,City Attorney
KOMICO TECHNOLOGY, INC.
a Texas corporation
By:
enneth M iers, Vice PrPresident of Operations
Date: G le ` 0 7
PROPERTY TAX ABATEMENT AGREEMENT S CITY GF ROUND ROCK/KOMICo TECHNOLOGY,INC.
116737
EXHIBIT A
DESCRIPTION OF EQUIPMENT
Design&Permit for Construction 1
Phase.1 Construction 1
Phase.1 Electrical &Hook-up 1 $1,400,000
Phase.2 Demo. 1
Phase.2 Construction 1
scrubber for Cleaning 1 $100,000
Dust Collector for APS&Arc Coating 1 $80,000
COMPRESSOR(250HP) 1 $109,550
DI SYSTEM 1 $140,000
Waste Treatment System 1 $273,307
N2 Storage tank 1 $3,000
Wet Station-2bath 1 Rinse 3 $60,000
Wet Station-2bath 1 Rinse(l Heating) 1 1 $20,000
Wet Station-2bath(1overflow) 2 $40,000
Ano. Bath-1 Bath(l heating) 1 $5,000
Rinse Table-(Wet Room3,Skin Room1) 4 $14,000
Solvent Bath-2bath 1 Rinse 1 $26,760
H2O2 Heating Bath-2bath 1 Rinse 1 $22,280
CO2 Snow Cleaner 1 $6,229
CO2 Cleaner 1 $16,450
CO2 Working Booth 1 $5,000
300mm Skin(4ea) 4 $12,680
300mm Skin Furniture
Bead Blaster 24,60,120 3 $31,008
Gomco 1 $2,900
Comco Booth 1 $5,800
Ultrasonic-C 3 $74,220
300mm Dry Oven(3ea) 1 1 $94,680
Powder Oven-APS Coatin 1 $5,517
Vacuum Dry Oven 1 $133,474
Manual Packing Machine 2 $1,000
Auto Packing Machine 1 $3,500
Cart(Self)-Whole 18 1 $15,175
Inspection Table 18 $19,276
Masking Table 5 $4,815
Steam Cleaner 1 $5,529
Wet Dry Oven 1 $9,830
APS Coating System 1 $254,670
APS Robot 1 $106,841
Arc Robot 1 $92,905
APS&Robot Installation 1 $41,387
APS Working Booth 1 $17,000
Arc Working Booth 1 $17,000
Arc Spray Coating System 1 $41,000
PROPERTY TAX ABATEMENT AGREEMENT 9 CITY OF ROUND ROCK/KOMICO TECHNOLOGY,INC.
116737
Surface Plate 2 $8,000
Di imatic Vernier Calipers 2 $800
Di imatic Mirometer 2 $400
Di imatic Height Gauge 2 $2,100
Microscope 1 $3,000
Roughness Gauge 2 $6,200
Roughness Gauge Probe 2 $1,690
Thickness Gau e 2 $3,600
Thickness Gauge Probe 2 $1,560
Pin Gauge 2 $1,000
Height Gage 1 $200
PSM&PTM 1 $120,000
Non-contact Thermo. 2 $1,000
Gas Meter 1 $800
Multimeter 2 $200
Weight Gage 2 1 $6,000
ERP PC 10 $15,000
ERP SYSTEM 1 $50,000
Lazer Printer 2 $10,000
Label Printer 2 $4,000
Ji Bead/Arc/APS Coatin )set 1 $30,000
Cart Set : 10) 1 $20,000
TOTAL$3,597,333.00
PROPERTY TAX ABATEMENT AGREEMENT 10 CITY OF ROUND ROCK/KOMICO TECHNOLOGY,INC.
116737
Exhibit"B"
Manpower Report
Positlons/Jobs
Annual Salary
Budget
Annual
Investments
PROPERTY TAX ABATEMENT AGREEMENT I 1 CITY OF ROUND ROCK/KOMICO TECHNOLOGY,INC.
116737
KOMICO USA
(Reinvestment Zone 024,5.542 ac.)
A 4 1
N1
W Loins I*nna Blvd
t
(SH 45)
i
f
,f �r
DATE: June 21, 2007
SUBJECT: City Council Meeting - June 28, 2007
ITEM: 11D1. Consider a resolution authorizing the Mayor to execute a Tax
Abatement Agreement with Komico Technology, Inc.
Department: Administration
;staff Person: David Kautz, Assistant City Manager/CFO
.justification:
The Tax Abatement Agreement will enable the company to establish a U.S. facility that
provides important client services to Samsung. The company will provide quality jobs as well
as occupy and renovate a vacant structure formerly owned by Photronics.
Funding:
Cost: N/A
Source of funds: N/A
Outside Resources: Joe Vining, V.P. of Economic Development, Round Rock Chamber
of Commerce
Backaround Information:
Komico is a South Korean company that is a primary servicer of equipment for Samsung. This
will be their first US facility and provides a reduction of time in the turnaround of essential
equipment in Samsung's process.
Public Comment: A public hearing was held on April 26, 2007.
EXECUTED
MIWAMCUMENT
FOLIADWrS
IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIillllllllllllilllllillllllll AGR 2007098121
13 PGS
THE STATE OF TEXAS
COUNTY OF WILLIAMSON
CITY OF ROUND ROCK
I, SARA L. WHITE, 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 of Round
Rock, Texas and that the foregoing 11 pages are true and correct copies of the executed
Property Tax Abatement Agreement between Komico Technology, Inc. and the City of
Round Rock, Texas, dated June 28, 2007.
CERTIFIED by my hand and seal of the City of Round Rock, Texas on this 28t11
day of November 2007.
SARA L. WHITE
�` City Secretary
PROPERTY TAX ABATEMENT AGREEMENT
This Property Tax Abatement Agreement (this "Agreement") is entered into by and
between the City of Round Rock, Texas (the "City"), a Texas home rule municipal corporation,
and Komico Technology, Inc., a Texas corporation ("Komico").
RECITALS
WHEREAS, Komico has purchased certain real estate located at 201 Michael Angelo
Way, Austin, TX 78728 (the "Facility"), and desires to purchase equipment for the servicing and
sale of equipment related to the manufacture and cleaning of semiconductor equipment, as
described in Exhibit A (the "Equipment") and to make substantial improvements to the Facility
including the construction of office space, architectural, mechanical, instrumentation and
electrical, training facilities, manufacturing space, and clean rooms (the "Improvements). The
Facility was purchased by Komico as a shell building.
WHEREAS, by entering into this Agreement, Komico confirms its intent to purchase the
Equipment and to construct the Improvements, thereby resulting in new economic development
in City; and
WHEREAS, on the 28th day of June, 2007, the City Council, of the City of Round Rock,
Texas, adopted Ordinance No. G-07-06-28- I On! establishing Reinvestment Zone No. 24 (the
"Reinvestment Zone") City of Round Rock, Texas for commercial/industrial tax abatement,
hereinafter referred to as "Ordinance No. G-07-06-28-l0 ', as authorized by the Texas Property
Redevelopment and Tax Abatement Act, Chapter 312, Tax Code, V.A.T.S. as amended (the
"Tax Abatement Act") ; and
WHEREAS, the City has adopted Ordinance No. G-06-03-09-8B 1, which Ordinance
adopted appropriate guidelines and criteria governing reinvestment zones and tax abatement
agreements to be entered into by the City as contemplated by the Tax Abatement Act; and
WHEREAS, the City has determined that the contemplated use of the Equipment and
Improvements (as hereinafter defined) as well as the terms of this Agreement are consistent with
encouraging development in the Reinvestment Zone in accordance with the purposes for its
creation and are in compliance with Ordinance No. G-06-03-09-8B1 and the guidelines and
criteria adopted by the City and all applicable laws; and
WHEREAS, the Equipment and Improvements constitute a major investment within the
Reinvestment Zone that will substantially increase the appraised value of the property within the
Reinvestment Zone; and will contribute to the retention of primary and secondary employment
within the City; and
WHEREAS, the City finds that there will be no substantial adverse effects on the
provision of governmental services or on its tax base and that the planned use of the Premises
will not constitute a hazard to public safety, health, or welfare, NOW THEREFORE, the parties
hereto do mutually agree as follows:
R-0`1-0&-J$- i 1
PROPERTY TAX ABATEMENT AGREEMENT 1 CITY OF ROUND ROCK/Komico TECHNOLOGY,INC.
116737
1. Authorization. This Agreement is authorized by the Tax Abatement Act, and by
Resolution of the City.Council of the City of Round Rock, Texas dated June 28, 2007.
2. Definitions. As used in this Agreement, the following terms shall have the
meanings set forth below:
(a) "Abatement Value" means the assessed value of the Eligible Property as
determined annually by the Williamson County Appraisal District on behalf of the City less the
amount of the Base Year Value.
(b) "Abatement"means the full or partial exemption from ad valorem taxes of
certain property in the Reinvestment Zone as more particularly set forth in Section 4.
(c) "Affiliate of Komico" means all companies under common control with,
controlled by, or controlling Komico Technology, Inc. For purposes of this definition, "control"
means 50% or more of the ownership determined by either value or vote.
(d) "Base Year Value" means the assessed value of the Eligible Property on
January 1, 2007 (or on January 1 of the year of execution of this Agreement if determined to be
otherwise required by applicable law), as such value is determined by the Williamson County
Appraisal District on behalf of the City.
(e) "City Guidelines" means the Guidelines and Criteria for Granting Tax
Abatement in Reinvestment Zones created in Round Rock, Texas.
(f) "Eligible Property"means collectively the Equipment and Improvements.
(g) "Equipment"means the items listed in Exhibit A.
(h) "Facility"means Komico's manufacturing facility located on the Komico
Tract.
(i) "Improvements" means the improvements to the Facility including build-
out of office space and cleanroom for the purpose of manufacturing, housing cleaning
equipment, coating equipment, and MST tools, and installation of other related capital
equipment, which will meet the Equipment's facility requirements.
0) "Ineligible Property" means any personal property that was located within
the Komico Tract at any time before the period covered by this Agreement and Komico's
existing facility, excluding Equipment and Improvements.
(k) "Komico Tract"means the real property owned by Komico located in the
Reinvestment Zone and described as Lot Five (5), Block A, Resubdivision of the Remainder of
Lot 2, Corridor Park I, a subdivision in Travis County, Texas.
(1) "Reinvestment Zone" the reinvestment zone established on the 45 day
of June, 2007, in Ordinance No. G-07-06-28-�4�_establishing Reinvestment Zone No. 24.
PROPERTY TAX ABATEMENT AGREEMENT 2 CITY OF ROUND ROCK/Komico TECHNOLOGY,INC.
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3. Subiect Property. During the Abatement Period, the Komico Tract shall be used
consistent with the general purpose of encouraging development or redevelopment within the
Reinvestment Zone. The Komico Tract is not located in an improvement project financed by tax
increment bonds and does not include any property that is owned or leased by a member of the
City Council or by a member of the City Planning and Zoning Commission.
4. Grant of Abatement. Subject to the terms and conditions contained herein, and
subject to the rights of the holders of any outstanding bonds of the City, the City hereby grants
an abatement on the Abatement Value of the Eligible Property located on or at the Komico Tract
(the"Abatement") as follows:
(a) Year 1 50%
(b) Year 2 50%
(c) Year 3 50%
(d) Year 4 50%
(e) Year 5 25%
5. Term of Abatement. Komico shall receive the Abatement commencing
January 1 of the year immediately following the installation of the Equipment (the "Effective
Date of Abatement") and continuing for five (5) years, the "Abatement Period").
Notwithstanding anything herein to the contrary, the Effective Date of Abatement shall be
January 1 of the year immediately following substantial completion of the Improvements if
determined to be otherwise required by applicable law.
6. Taxable Property. During the Abatement Period, taxes shall be payable on the
Eligible Property and the Ineligible Property located within the Reinvestment Zone as follows:
(a) The value of the Ineligible Property as defined herein shall be fully
taxable; and
(b) The Base Year Value of the Eligible Property as determined by the
Williamson County Appraisal District shall be fully taxable.
Komico agrees that regardless of anything contained herein to the contrary, the value of the
Ineligible Property, plus the Base Year Value of the Eligible Property, plus that portion of the
Eligible Property that is not abated, plus the value of the Komico Tract and improvements
located thereon shall be no less than $5,250,000.00.
7. Komico's Development Covenants. In consideration of the City's agreement to
enter into this Agreement, Komico represents that it intends to construct the Improvements and
install the Equipment for the purpose of operating its manufacturing facility in the City and
Komico acknowledges that the City's obligations hereunder are conditioned upon Komico's
continued operation of said manufacturing facility. In the event Komico fails to substantially
complete the Improvements and install the Equipment by December 31, 2007 (subject to delays
PROPERTY TAX ABATEMENT AGREEMENT 3 CITY OF ROUND ROCK/KOMICO TECHNOLOGY,INC.
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caused by events of Force Majeure), the City may terminate this Agreement by giving Komico
written notice of such termination. As additional consideration, Komico agrees and covenants to
provide and/or retain at least the number of jobs within the Facility according to the following
schedule:
Date Retain New Total
On December 31, 2007 30 0 30
On December 31, 2008 30 30 60
On December 31, 2009 60 30 90
On December 31.2010 90 30 120
. Komico agrees to provide to the City annual manpower reports on the form attached hereto as
Exhibit B within sixty(60) days following the end of the calendar year.
8. Default. In the event that Komico (a) allows its ad valorem taxes related to the
property to become delinquent and fails to timely and properly follow the legal procedures for
their protest and/or contest; or (b) violates any of the material terms and conditions of this
Agreement, Komico shall be considered in default. In the event that Komico defaults under this
Agreement, the City shall give Komico written notice specifying such default. If Komico has
not cured the default within thirty (30) days after its receipt of such written notice, the City may
pursue any of its remedies for the collection of delinquent property taxes as provided generally in
the Tax Code.
9. Abatement Recapture. In the event the City terminates this Agreement as a
result of Komico's default, the City may recapture and collect from Komico the ad valorem taxes
that were abated as a result of this Agreement (the "Recapture Liability"). Komico shall pay to
the City the Recapture Liability within thirty (30) days after the date of termination, subject to
any and all lawful offsets, settlements, deduction, or credits to which Komico may be entitled.
Notwithstanding anything herein to the contrary, such Recapture Liability shall not exceed an
amount equal to all taxes which were abated pursuant to this Agreement from the Effective Date
of Abatement to the date of termination (together with interest thereon to be charged at the
statutory rate for delinquent taxes as determined by Section 33.01 of the Property Tax Code of
the State of Texas, but without the addition of a penalty). The City shall have all remedies for the
collection of the Recapture Liability as provided generally in the Tax Code for the collection of
delinquent property taxes.
10. Certification and Inspections. Komico must certify annually to the City that
Komico is in compliance with each applicable term of this Agreement and the City Guidelines
and, if not in compliance, the steps Komico intends to take to be in compliance or a statement
from Komico explaining in reasonable detail why compliance cannot be achieved. Komico
agrees that the WCAD and the City, their agents and employees, shall, upon reasonable notice,
have reasonable right of access to the Komico Tract in order to ensure that the installation of the
Equipment and the construction of the Improvements to the Komico ract is in accordance with
this Agreement and all applicable state and local laws and regulations or valid waiver thereof.
All inspections will be made with one or more representatives of Komico and in accordance with
Komico's security and safety requirements. At the time of annual certification, upon the City's
written request, Komico shall also provide a calculation of the aggregate amount of economic
PROPERTY TAX ABATEMENT AGREEMENT 4 CITY OF ROUND ROCK/KOMICO TECHNOLOGY,INC.
116737
benefit Komico has previously received pursuant to this Agreement and the Development
Agreement. In order to efficiently administer the Abatement Komico agrees also to provide
annually, before April 15, a full asset listing of personal property located on the Komico Tract
and the Komico Tract to the WCAD and such other information as may be reasonably necessary
for the Abatement and assessment of the assets for tax purposes, including any information
required by the City Guidelines.
11. Rendition of the Komico Tract and Improvements. Prior to January 31 of each
year of this Agreement, Komico shall submit to the Williamson County Appraisal District, a real
property rendition for the Komico Tract and a personal property rendition. The real property
rendition shall provide the cost and description of the Improvements. The personal property
rendition shall include the year of acquisition, cost and description of the Equipment, as
described in Exhibit A.
Komico shall submit the foregoing real property and personal property rendition forms to the
Williamson County Appraisal District, in the minimum amount necessary so that the taxable
value after applying the abatement provided for herein, of the Komico Tract and improvements
in such year following Substantial Completion of the Improvements shall be no less than
$5,250,000.00 (the"Designated Value").
12. Annual Tax Application. It shall be the responsibility of Komico, pursuant to
V.T.C.A., Tax Code, § 11.43, to file an annual exemption application form with the Williamson
County Appraisal District. The Chief Appraiser of the Williamson County Appraisal District
shall annually determine and record both the abated taxable value and the full taxable value of
the Eligible Property in the appraisal records. The full taxable value figure listed in the appraisal
record shall be used to compute the amount of abated taxes that are required to be recaptured and
paid in the event this Agreement is terminated in a manner that results in recapture pursuant to
Section 9. Each year Komico shall furnish the Chief Appraiser with such information outlined
in V.T.C.A., Tax Code, Chapter 22, as may be necessary for the administration of the abatement
specified herein. Komico shall be entitled to appeal any determination of the Chief Appraiser in
accordance with the provisions of the Texas Tax Code.
13. Assignment. Komico may assign this Agreement to a new owner or lessee of the
Facility with the written consent of the City Council of the City, which consent shall not be
unreasonably withheld, conditioned or delayed. An assignment to an Affiliate of Komico shall
not require such written consent. Any assignment shall be in writing, and shall provide that the
assignee shall irrevocably and unconditionally assume all the duties and obligations of the
assignor upon the same terms and conditions as set out in this Agreement.
14. Notice. All notices and other communications hereunder shall be in writing
(whether or not a writing is expressly required hereby), and shall be deemed to have been given
and become effective (a) if given by either party or its counsel via an express mail service or via
courier or via receipted facsimile transmission (but only if duplicate notice is also given via
express mail service or via courier or via certified mail), then if and when delivered to and
received (or refused) by the respective parties at the below addresses (or at such other address as
a party may hereafter designate for itself by notice to the other party as required hereby), or(b) if
sent via certified mail by either party or its counsel, then on the third business day following the
PROPERTY TAX ABATEMENT AGREEMENT 5 CITY OF ROUND ROCK/KOMICO TECHNOLOGY,INC.
116737
date on which such communication is deposited in the United States mails, by first class certified
mail, return receipt requested, postage prepaid, and addressed to the respective parties at the
below addresses (or at such other address as a party may hereafter designate for itself by notice
to the other party as required hereby). Any notice provided for under the terms of this
Agreement by either party to the other shall be in writing and may be effected by registered or
certified mail, return receipt requested.
If to City: City of Round Rock
221 E. Main Street
Round Rock, TX 78664
Attn: City Manager
Phone: (512) 218-5400
Fax: (512) 218-7097
With a required copy to:
Sheets & Crossfield
309 E. Main Street
Round Rock, TX 78664
Attn: Stephan L. Sheets
Phone: (512) 255-8877
Fax: (512) 255-8986
If to Komico: Komico Technology, Inc.
201 Michael Angelo Way
Austin, Texas 78728
Attn: Yong Ha Choi
Phone: (512)238-2400/2411
Fax : (512)238-2498
15. Applicable Law. This Agreement is made and shall be construed and interpreted
under the laws of the State of Texas and shall be performable in Williamson County, Texas.
16. No Liability. It is understood and agreed between the parties that Komico, in
performing its obligations hereunder, is acting independently, and the City assumes no
responsibility or liability to third parties in connection therewith. It is further understood and
agreed among the parties that the City, in performing its obligations hereunder, is acting
independently, and Komico assumes no responsibility or liability to third parties in connection
therewith.
17. Estoppel Certificate. Any party hereto may request an estoppel certificate from
another party hereto so long as the certificate is requested in connection with a bona fide
business purpose. Each party agrees to promptly execute and deliver any estoppel certificate
requested pursuant to this Section 17. The certificate, which will upon request be addressed to
Komico, or a lessee, purchaser or assignee of Komico, shall include, but not necessarily be
limited to, statements (qualified to the best knowledge of the party providing the estoppel) that
this Agreement is in full force and effect without default (or if a default exists, the nature of such
PROPERTY TAX ABATEMENT AGREEMENT 6 CI'T'Y OF ROUND ROCK/KOMICO TECHNOLOGY,INC.
116737
default and any curative action which should be undertaken to cure same), the remaining term of
this Agreement, and such other matters reasonably requested by the party(ies) to receive the
certificate.
18. Legal Construction. In case any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect,
such invalidity, illegality, or unenforceability shall not affect any other provision thereof and this
Agreement shall be considered as if such invalid, illegal or unenforceable provision had never
been contained in this Agreement.
19. Force Maieure. Whenever a period of time is prescribed for the taking of an
action by Komico, the period of time for the performance of such action shall be extended by the
number of days that the performance is actually delayed due to strikes, acts of God, shortages of
labor or materials, war, terrorist attacks (including bio-chemical attacks), civil disturbances and
other causes beyond the reasonable control of Komico ("Force Majeure"). However, events of
Force Majeure shall not extend any period of time for the payment of sums payable by Komico.
20. Entire Agreement. This Agreement embodies the complete agreement of the
parties hereto, superseding all oral or written previous and contemporary agreements between the
parties and relating to matters in this Agreement, and except as otherwise provided herein cannot
be modified, amended, altered or revoked without written agreement of the parties hereto.
21. Recordation of Agreement. A certified copy of this Agreement, or a
memorandum summarizing this Agreement, in recordable form may be recorded in the Deed of
Records of Williamson County, Texas.
22. Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
23. Authority. The individuals executing this Agreement on behalf of the respective
parties hereto represent to each other and to others that all appropriate and necessary action has
been taken to authorize the individual who is executing this Agreement to do so for and on
behalf of the party for which his or her signature appears, that there are no other parties or
entities required to execute this Agreement in order for the same to be an authorized and binding
agreement on the party for whom the individual is signing this Agreement and that each
individual affixing his or her signature hereto is authorized to do so, and such authorization is
valid and effective on the date hereof.
24. Multiple Counterparts. This Agreement may be executed in a number of
identical counterparts, each of which shall be deemed an original and all of which, when taken
together, shall constitute one and the same instrument.
25. Time of Essence. Time is of the essence in this Agreement.
26. Joint Drafting. The parties agree this Agreement has been drafted jointly by the
parties and their legal representatives.
PROPERTY TAX ABATEMENT AGREEMENT / CITY OF ROUND ROCK/KOM1C0 TECHNOLOGY,INC.
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27. Exhibits. All exhibits to this Agreement are incorporated herein by reference for
all purposes wherever reference is made to the same.
IN WITNESS WHEREOF, the parties have executed this Agreement and caused this Agreement
to be effective on the latest date as reflected by the signatures below (the "Effective Date").
THE CITY OF ROUND ROCK, TEXAS,
a Texas munici al co orat'on
By:
ax ayor%lm
Date: ` 9--
Attest:
r
Christine Martinez, City Secretary
Z
AS TO FORM:
, L
Stephan .-Sheets, City Attorney
KOMICO TECHNOLOGY, INC.
a Texas corporation
By:
enneth M iers, Vice President of Operations
Date: r1 e"a/67
7
PROPERTY TAX ABATEMENT AGREEMENT Q CITY OF ROUND ROCK/KOMICO TECHNOLOGY,INC.
116737
EXHIBIT A
DESCRIPTION OF EQUIPMENT
Design & Permit for Construction 1
Phase.1 Construction 1
Phase.1 Electrical & Hook-up 1 $1,400,000
Phase.2 Demo. 1
Phase.2 Construction 1
scrubber for Cleaning 1 $100,000
Dust Collector for APS &Arc Coating 1 $80,000
COMPRESSOR(250HP) 1 $109,550
DI SYSTEM 1 $140,000
Waste Treatment System 1 $273,307
N2 Storage tank 1 $3,000
Wet Station-2bath 1 Rinse 3 $60,000
Wet Station-2bath 1 Rinse(1 Heating) 1 $20,000
Wet Station-2bath(1 overflow) 2 $40,000
Ano. Bath-1 Bath(1 heating) 1 $5,000
Rinse Table-(Wet Room3,Skin Room1) 4 $14,000
Solvent Bath-2bath 1 Rinse 1 $26,760
H2O2 Heating Bath-2bath 1 Rinse 1 $22,280
CO2 Snow Cleaner 1 $6,229
CO2 Cleaner 1 $16,450
CO2 Working Booth 1 $5,000
300mm Skin(4ea) 4 $12,680
300mm Skin Furniture
Bead Blaster(24,60,120) 3 $31,008
Gomco 1 $2,900
Comco Booth 1 $5,800
Ultrasonic-C 3 $74,220
300mm Dry Oven(3ea) 1 $94,680
Powder Oven-APS Coating 1 $5,517
Vacuum Dry Oven 1 $133,474
Manual Packing Machine 2 $1,000
Auto Packing Machine 1 1 $3,500
Cart(Self) -Whole 18 $15,175
Inspection Table 18 $19,276
Masking Table 5 $4,815
Steam Cleaner 1 $5,529
Wet Dry Oven 1 $9,830
APS Coating System 1 $254,670
APS Robot 1 1 $106,841
Arc Robot 1 $92,905
APS & Robot Installation 1 $41,387
APS Working Booth 1 $17,000
Arc Working Booth 1 $17,000
Arc Spray Coating System 1 $41,000
PROPERTY TAX ABATEMENT AGREEMENT 7 CITY OF ROUND ROCK/KOMICO TECHNOLOGY,INC.
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Surface Plate 2 $8,000
Digimatic Vernier Calipers 2 $800
Digimatic Mirometer 2 $400
Digimatic Height Gauge 2 $2,100
Microscope 1 $3,000
Roughness Gauge 2 $6,200
Roughness Gauge Probe 2 $1,690
Thickness Gauge 2 $3,600
Thickness Gauge Probe 2 $1,560
Pin Gauge 2 $1,000
Height Gage 1 $200
PSM & PTM 1 $120,000
Non-contact Thermo. 2 $1,000
Gas Meter 1 $800
Multimeter 2 $200
Weight Gage 2 $6,000
ERP PC 10 $15,000
ERP SYSTEM 1 $50,000
Lazer Printer 2 $10,000
Label Printer 2 $4,000
Jig(Bead/Arc/APS Coating)set 1 $30,000
Cart(Set : 10) 1 $20,000
TOTAL $3,597,333.00
PROPERTY TAX ABATEMENT AGREEMENT 10 CITY OF ROUND ROCK/KOMICO TECHNOLOGY,INC.
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Exhibit"B"
Manpower Report
2007Y 2008Y00•
Positions/Jobs
Annual Salary
Budget
Annual
Investments
PROPERTY TAX ABATEMENT AGREEMENT I I CITY OF ROUND ROCK/KOM1CO TECHNOLOGY,INC.
116737
Executed Property Tax Abatement Agreement for Resolution No. R-07-06-28-11D1
Approving the Komico Property Tax Abatement Agreement
AFTER RECORDING,PLEASE RETURN TO:
CITY OF ROUND ROCK
ATTN: CITY SECRETARY
221 E. MAIN STREET
ROUND ROCK,TEXAS 78664
FILED AND RECORDED
OFFICIAL PUBLIC RECORDS 2007098721
11/28/2007 02:22 PM
SURRATT $64.00
NANCY E. RISTER, COUNTY CLERK
WILLIAMSON COUNTY, TEXAS