Contract - Houghton Mifflin Harcourt & 2015 La Fron - 6/11/2015 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,
2015 La Frontera Plaza, Ltd., a Texas limited partnership ("Plaza"), and Houghton Mifflin
Harcourt Publishing Company, a Massachusetts corporation("HMH' .
RECITALS
WHEREAS, Plaza intends to expend at least$14,250,000 in the construction of a Class A
Office Building and other improvements (the "Facility's to be located on a tract of land (the
"Property', as described on the attached Exhibit A; and
WHEREAS, by entering into this Agreement, Plaza confirms its intent to construct the
Facility and to lease a majority of said Facility to HMH for the purpose of HMH's locating
business offices in the Facility which will result in at least 270 new full-time jobs over the term
of this Agreement, thereby resulting in new economic development in City; and
WHEREAS, HMH intends to install at least $3,000,000 worth of removable
improvements and personal property (the "Personal Property's within the Facility, as described
on the attached Exhibit B;and
WHEREAS, by entering into this Agreement, HMH confirms its intent to lease a
majority of the Facility from Plaza for the purpose of locating business offices in the Facility
which will result in at least 270 new full-time jobs over the term of this Agreement, thereby
resulting in new economic development in City; and
WHEREAS, Plaza and HMH each confirm that the City's grant of the tax abatement
provided for herein is expressly conditioned on their compliance with the development and job
creation obligations set forth herein; and
WHEREAS, on the 11th day of June, 2015, the City Council of the City of Round Rock,
Texas, adopted Ordinance No.0-2015 establishing Reinvestment Zone No. 28 (the
"Reinvestment Zone") City of Round Rock, Texas for commercial/industrial tax abatement,
hereinafter referred to as "Ordinance No. 0-2015-2`F�,6", 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 Facility will be located on the Property within the Reinvestment Zone;
and
WHEREAS, the City has adopted Ordinance No. 0-2015-2251, 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 construction and contemplated use of the
Facility and creation of jobs, as well as the terms of this Agreement are consistent with
encouraging development in the Reinvestment Zone in accordance with the purposes for its
�'2X LC�?-259v
creation and are in compliance with Ordinance No. 0-2015-2251 and the guidelines and criteria
adopted by the City and all applicable laws; and
WHEREAS, the construction of the Facility constitutes 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 Facility will
not constitute a hazard to public safety, health, or welfare, NOW THEREFORE, the parties
hereto do mutually agree as follows:
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 11, 2015.
2. Definitions. As used in this Agreement, the following terms shall have the
meanings set forth below:
(a) "Abatement"means the full or partial exemption from ad valorem taxes of
the Property, the Facility and Personal Property in the Reinvestment Zone as more
particularly set forth in Section 5.
(b) "Abatement Period" means the period of time beginning with the
Effective Date of Abatement and continuing until December 31, 2026.
(c) "Abatement Value"means the assessed value of the Facility, Property and
of the Personal Property, as determined annually by the WCAD on behalf of the City,
less the amount of the Base Year Value.
(d) "Affiliate of Plaza" means any person under common control with,
controlled by, or controlling Plaza. For purposes of this definition, (i) "control"means the
possession, directly or indirectly, of the power to direct or cause the direction of the
management and policies of a person, whether through ownership of voting securities, by
contract or otherwise; and (ii) "person" means any individual, corporation, association,
partnership,joint venture, real estate investment trust, other trust estate or other entity or
organization.
(e) "Base Year Value"means the assessed value of the Facility, Property and
the Personal Property on January 1, 2016 (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 WCAD on behalf of the City.
(f) "City Guidelines" means the Tax Abatement Guidelines and Criteria for
Granting Tax Abatement in Reinvestment Zones, as set forth in §38-22, Round Rock
Code of Ordinances, 2010 Edition, as amended.
(g) "Effective Date of Abatement' means the period commencing January 1,
2017.
PROPERTY TAX ABATEMENT AGREEMENT CITY OF ROUND ROCK/PLAZA/HMH
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(h) "Facility"means the building and other improvements, or portion thereof,
constructed by Plaza on the Property at a cost of at least $14,250,000, a majority of which
will be leased to HMH by Plaza.
(i) "Ineligible Property"means any personal property that was located within
the Facility at any time before the period covered by this Agreement.
0) "Personal Property" means any removable improvements, and the
furniture, fixtures, and equipment owned by HMH located within the Facility and
described in Exhibit B.
(k) "Property"means the tract of real property owned by Plaza located in the
Reinvestment Zone and described in Exhibit A.
(1) "Recapture Liability" means the amount of permit fees waived and ad
valorem taxes that were abated as result of this Agreement that are subject to recapture by
the City under the terms of Section 10 in the event of a default as described in Section 9.
(m) "Reinvestment Zone" means the reinvestment zone established on the
11 th day of June, 2015, in Ordinance No. establishing
Reinvestment Zone No. 28.
(n) "Tax Code"means the Tax Code of the State of Texas
(p) "WOAD"means the Williamson Central Appraisal District of Williamson
County, Texas.
3. Subiect Property. During the Abatement Period, a majority of the Facility shall
be leased to HMH and used consistent with the general purpose of encouraging development or
redevelopment within the Reinvestment Zone. The Property 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. Cost of Facility, Waiver of Permit Fees, and Cost of Personal Property.Plaza
agrees to spend, or to cause an Affiliate of Plaza to spend, at least $14,250,000 for the
construction of the Facility. Plaza agrees to provide City with documentation showing that this
obligation has been satisfied. The City shall have the right, following reasonable advance notice
to Plaza, to audit Plaza's records (or the records of the appropriate Affiliate of Plaza) to verify
that this obligation has been satisfied. City agrees to waive up to $25,000 of site preparation and
construction permit fees for the Facility.
HMH agrees to install at least $3,000,000 worth of Personal Property in the
Facility. The City shall have the right, following reasonable advance notice to HMH, to audit
HMH's records to verify that this obligation has been satisfied.
PROPERTY TAX ABATEMENT AGREEMENT CITY OF ROUND ROCK/PLAZA/HMH
3
5. Grant of Abatement.
(a) To Plaza. Subject to (i) Plaza's satisfaction of its obligation to spend
$14,250,000 on the construction of the Facility; (ii) Plaza's satisfaction of its obligation
to partially lease the Facility to HMH; (iii) HMH's satisfaction of its obligations to lease
a portion of the Facility from Plaza throughout the term of this Agreement; (iv) HMH's
satisfaction of its obligation to provide 270 jobs throughout the term of this Agreement;
(v) all other terms and conditions contained herein; and (vi) the rights of the holders of
any outstanding bonds of the City; the City hereby grants the Abatement on the
Abatement Value of the Facility as follows:
(1) Year 1 (2017) 100%
(2) Year 2 (2018) 100%
(3) Year 3 (2019) 75%
(4) Year 4 (2020) 75%
(5) Year 5 (2021) 50%
(6) Year 6 (2022) 50%
(7) Year 7 (2023) 25%
(8) Year 8 (2024) 25%
(9) Year 9 (2025) 25%
(10) Year 10 (2026) 25%
For purposes hereof, Plaza's obligations may be satisfied by any Affiliate of Plaza who
acquires title to the Property and to whom Plaza's rights and obligations under this
Agreement are assigned.
Plaza acknowledges that the foregoing grant of abatement is conditioned both upon its
compliance with its covenants in Section 8(a) below and HMH's compliance with its
covenants contained in Section 8(b)below.
(b) To HMH. Subject to (i) Plaza's satisfaction of its obligation to spend
$14,250,000 on the construction of the Facility; (ii) Plaza's satisfaction of its obligation
to partially lease the Facility to HMH; (iii) HMH's satisfaction of its obligation to lease a
portion of the Facility from Plaza throughout the term of this Agreement; (iv) HMH's
satisfaction of its obligation to provide 270 jobs throughout the term of this Agreement;
(v) HMH's obligation to install $3,000,000 worth Personal Property in the Facility; (vi)
all other terms and conditions contained herein; and (vii) the rights of the holders of any
outstanding bonds of the City; the City hereby grants the Abatement on the Abatement
Value of the Personal Property located within the Facility as follows:
PROPERTY TAX ABATEMENT AGREEMENT CITY OF ROUND ROCK/PLAZA/HMH
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(1) Year 1 (2017) 100%
(2) Year 2 (2018) 75%
(3) Year 3 (2019) 75%
HMH acknowledges that the foregoing grant of abatement is conditioned both upon its
compliance with its covenants in Section 8(b) below and Plaza's compliance with its
covenants contained in Section 8(a)below.
(c) Abatement Reduction. Regardless of anything contained herein to the
contrary, the failure of HMH to provide 270 jobs shall not be considered an event of
default as defined in Section 9 below unless the number of jobs actually provided is less
than 75% of 270, or 203. If the actual number of jobs provided at the end of any year is
less than 270 but 203 or more, then the Abatement for the following year shall be reduced
as follows: The percentage of the Abatement shall be reduced by the same percentage
that the actual number of jobs bears to the required number of jobs. By way of
illustration, if on December 31, 2018, HMH has provided 243 jobs, then the requirement
to provide 270 jobs will be short by 27 jobs, or 10%. Therefore, Plaza's and HMH's
Abatement for 2019 shall each be reduced by 10 points. Accordingly, the Abatement to
be provided to Plaza would be reduced by ten points from 75% to 65% and the
Abatement to be provided to HMH would be reduced by ten points from 75% to 65%.
Failure of HMH to provide at least 203 jobs shall be considered an event of default on the
part of both HMH and Plaza, subject to the provisions of Section 9.
6. Term of Abatement. Plaza and HMH shall receive the Abatement commencing
on the Effective Date of the Abatement and continuing for Abatement Period.
7. Taxable Property. During the Abatement Period, ad valorem taxes shall be
payable on the 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 Facility, Property and Personal Property, as
determined by the WCAD shall be fully taxable.
8. Covenants.
(a) Plaza's Covenants. In consideration of the City's agreement to enter into
this Agreement, Plaza covenants and agrees that it (or an Affiliate of Plaza) will (i)
expend at least $14,250,000 to construct the Facility; (ii) substantially complete the
construction of the Facility by the 31st day of December, 2016 (subject to delays caused
by events of Force Majeure); and (iii) lease a majority of the Facility to HMH for
business offices in the City for the term of this Agreement.
PROPERTY TAX ABATEMENT AGREEMENT CITY OF ROUND ROCK/PLAZA/HMH
5
(b) HMH's Covenants. In consideration of the City's agreement to enter into
this Agreement, HMH covenants and agrees that it will (i) install at least $3,000,000
worth of Personal Property in the Facility; (ii) lease a majority of the Facility for the term
of this Agreement from Plaza (or an Affiliate of Plaza) for business offices; and (iii)
provide at least 270 jobs throughout the term of this Agreement. HMH also covenants
and agrees to provide to the City an affidavit stating the number of employees that it has
within the Facility in the form attached hereto as Exhibit C no later than March 1 of each
calendar year during the Abatement Period.
(c) Breach of Covenants. Plaza and HMH each acknowledges that the City's
obligations hereunder are conditioned upon HMH's continued operation of said business
offices and to the provision of at least 270 jobs throughout the term of this Agreement,
subject to the provisions of Section 5(c) above. In the event Plaza fails to construct the
Facility by the 31st day of December, 2016 (subject to delays caused by events of Force
Majeure), or in the event that HMH fails to comply with its obligation to operate its
facility and to provide the number of jobs required under the terms of this Agreement, the
City may terminate this Agreement by giving Plaza and HMH written notice of such
termination, and exercise its rights under Section 10 below. In addition, the City will
notify the WCAD of such termination.
9. Default.
(a) Plaza's Default. In the event that (a) Plaza allows its ad valorem taxes to
the City to become delinquent and fails to timely and properly follow the legal
procedures for their protest and/or contest; (b) Plaza violates any of the material terms
and conditions of this Agreement, including, without limitation, any of the covenants
described in Section 8(a) above; or (c) HMH fails to comply with its obligation to
provide the number of jobs set forth herein (subject to Section 5(c) above), Plaza shall be
considered in default. In the event that Plaza defaults under this Agreement, the City shall
give Plaza written notice specifying such default. If Plaza has not cured the default within
thirty (30) days after its receipt of such written notice, the City may, as its sole and
exclusive remedies hereunder, (i) terminate this Agreement by given written notice
thereof to Plaza and HMH, (ii) exercise its rights under Section 10 below, and (iii)pursue
any of its remedies for the collection of delinquent property taxes as provided generally
in the Tax Code. If the City terminates this Agreement hereunder, it will notify the
WCAD thereof.
(b) HMH's Default. In the event that (a) HMH allows its ad valorem taxes to
the City to become delinquent and fails to timely and properly follow the legal
procedures for their protest and/or contest; (b) HMH fails to comply with its obligation to
provide the number of jobs set forth herein (subject to Section 5(c) above); (c) HMH
violates any of the material terms and conditions of this Agreement, including, without
limitation, any of the covenants described in Section 8(b) above; or (d) Plaza fails to
comply with its covenants described in Section 8(a) above; HMH shall be considered in
default. In the event that HMH defaults under this Agreement, the City shall give HMH
written notice specifying such default. If HMH has not cured the default within thirty
(30) days after its receipt of such written notice, the City may, as its sole and exclusive
remedies hereunder, (i) terminate this Agreement by given written notice thereof to HMH
PROPERTY TAX ABATEMENT AGREEMENT CITY OF ROUND ROCK/PLAZA/HMH
6
and Plaza, (ii) exercise its rights under Section 10 below, and (iii) pursue any of its
remedies for the collection of delinquent property taxes as provided generally in the Tax
Code. If the City terminates this Agreement hereunder, it will notify the WCAD thereof.
10. Abatement Recapture. In the event the City terminates this Agreement as a
result of Plaza's or HMH's default, the Abatement for the year in which the termination occurs
will be cancelled, and in addition, the City may recapture and collect from Plaza and HMH their
respective Recapture Liability, as herein described. Plaza and HMH shall pay to the City their
respective Recapture Liability within thirty(30) days after the date of termination, subject to any
and all lawful offsets, settlements, deduction, or credits to which Plaza and/or HMH may be
entitled. HMH's Recapture Liability hereunder shall not exceed, in the aggregate, an amount
equal to the ad valorem taxes which were abated with regard to the Personal Property pursuant to
this Agreement from the Effective Date of Abatement to the date of termination and Plaza's
Recapture Liability hereunder shall not exceed any permit fees and ad valorem taxes which were
abated with regard to the Property pursuant to this Agreement during the immediately preceding
two calendar years. In addition, HMH's and Plaza's respective Recapture Liabilities shall include
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 each party's respective Recapture Liability as
provided generally in the Tax Code for the collection of delinquent property taxes.
11. Certification and Inspections. No later than ninety (90) days after substantial
completion of the Facilities, (a) Plaza(or an Affiliate of Plaza) must certify in writing to the City
(i) that the construction of the Facilities has been substantially completed, and (ii) that HMH has
leased and accepted occupancy of its premises in the Facilities; and (b) HMH must certify in
writing to the City that HMH has satisfied its obligation with respect to the Personal Property.
No later than March 1 of each year of the Abatement Period, HMH must certify in writing to the
City that it is in compliance with each applicable terms of this Agreement and the City
Guidelines and, if not in compliance, the steps HMH intends to take to be in compliance or a
statement from HMH explaining in reasonable detail why compliance cannot be achieved. Plaza
and HMH agree that the WCAD and the City, their agents and employees, shall, upon reasonable
notice, have reasonable right of access to the Facility in order to ensure that the construction of
the Facility 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 Plaza and/or HMH and in accordance with Plaza's and HMH's security and
safety requirements. At the time of annual certification, upon the City's written request, HMH
shall also provide a calculation of the aggregate amount of economic benefit HMH has
previously received pursuant to this Agreement. In order to efficiently administer the Abatement,
HMH agrees also to provide annually for each year with respect to which HMH will receive an
abatement under Section 5(b) hereof, no later than March 1, a full asset listing of personal
property located on the Property and in the Facility 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.
Each year the City will endeavor to send HMH a reminder of its obligation under this
Section 11. However, the failure of the City to do so shall not relieve HMH of its obligations
hereunder.
PROPERTY TAX ABATEMENT AGREEMENT CITY OF ROUND ROCK/PLAZA/HMH
7
12. Annual Tax Application. It shall be the responsibility of Plaza and HMH,
pursuant to V.T.C.A., Tax Code, § 11.43, to file an annual exemption application form with the
WCAD. The Chief Appraiser of the WCAD shall annually determine and record both the abated
taxable value and the full taxable value of the Property and Personal 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 10. Each year Plaza and
HMH 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. Plaza
and/or HMH shall be entitled to appeal any determination of the Chief Appraiser in accordance
with the provisions of the Texas Tax Code.
13. AssiEnment. Prior to the date that Plaza satisfies it obligations hereunder to
construct the Facility and enter into a lease with HMH for the lease of a portion thereof, Plaza
may (i) assign this Agreement to a new owner of the Property with the written consent of the
City Council of the City, which consent shall not be unreasonably withheld, conditioned or
delayed, or (ii) assign this Agreement to an Affiliate of Plaza, which shall not require any such
written consent, provided that Plaza shall give written notice thereof to the City. After the
completion of the Facility and the lease by HMH of a portion thereof, Plaza may assign this
Agreement to a new owner of the Property without the consent of any party, provided that Plaza
shall give written notice thereof to City. Any assignment shall be in writing, and shall provide
that the assignee shall irrevocably and unconditionally assume, from and after the date thereof,
all the duties and obligations of the assignor upon the same terms and conditions as set out in this
Agreement. HMH may assign this Agreement without the consent of the City Council of the
City to an entity which controls, is controlled by or is under common control with HMH, any
successor entity to HMH by way of merger, consolidation or other non-bankruptcy corporate
reorganization, or an entity which acquires all or substantially all of HMH's assets, partnership
or membership interests, or capital stock. All other assignments of this Agreement by HMH are
subject to the written consent of the City Council of the City, which consent shall not be
unreasonably withheld, conditioned or delayed.
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, 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 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.
PROPERTY TAX ABATEMENT AGREEMENT CITY OF ROUND ROCK/PLAZA/HMH
8
If to City: City of Round Rock
221 E. Main Street
Round Rock,TX 78664
Attn: City Manager
Phone: (512) 218-5400
Email: citylnana er(clroundrocktexas.gov
With a required copy to:
Sheets & Crossfield
309 E. Main Street
Round Rock, TX 78664
Attn: Stephan L. Sheets
Phone: (512) 255-8877
Email: steve@scrrlaw.com
If to Plaza: c/o Live Oak- Gottesman LLC
4330 Gaines Ranch Loop, Suite 100
Austin, Texas 78735
Attn: Steven A. Younkman
Email: steve@liveoak.com
With a required copy to:
Nick von Kreisler
Kuperman, Orr&Albers, P.C.
1501 S. Mopac Expressway, Suite 325
Austin, Texas 78746
Email: nvk@koalaw.com
If to HMH: Houghton Mifflin Harcourt Publishing Company
222 Berkeley Street
Boston, MA 02116
Attn: General Counsel
With a required copy to:
Houghton Mifflin Harcourt Publishing Company
9400 South Park Center Loop
Orlando,FL 32819
Attn: Manager of Lease Administration
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 Plaza and
HMH, in performing their obligations hereunder, are each acting independently, and the City
assumes no responsibility or liability to third parties in connection therewith. It is further
PROPERTY TAX ABATEMENT AGREEMENT CITY OF ROUND ROCK/PLAZA/HMH
9
understood and agreed among the parties that the City, in performing its obligations hereunder, is
acting independently and Plaza and HMH assume 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 and requests commercially reasonable certifications. Each party agrees to
promptly execute and deliver any estoppel certificate reasonably requested pursuant to this
Section 17. The certificate, which will upon request be addressed to Plaza and/or HMH, or a
lessee, purchaser or assignee of Plaza and/or HMH, 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
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 Plaza and/or HMH, 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 Plaza and/or HMH. However,
events of Force Majeure shall not extend any period of time for the payment of sums payable by
Plaza or HMH.
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
PROPERTY TAX ABATEMENT AGREEMENT CITY OF ROUND ROCK/PLAZA/HMH
10
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.
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").
(SIGNATURES ON FOLLOWING PAGES)
PROPERTY TAX ABATEMENT AGREEMENT CITY OF ROUND ROCK/PLAZA/HMH
11
THE CITY OF ROUND ROCK, TEXAS,
a Texas eJjR,,ule Municipality
By: / �t
Alan McGraw, Mayor
Date: June 11, 2015
Attest:
Sara White, City Clerk
APPR ED AS TO FOM:
Stepharf Sheets, City Attorney
Acknowledy-ment
State of Texas
County of Williamson
This instrument was acknowledged before me on this the 11 th day of June, 2015 by Alan
McGraw, as Mayor of the City of Round Rock, Texas.
\\0X%%1unupjj//'
P'qX P uee I.
Notary Publ c State of ex
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PROPERTY TAX ABATEMENT AGREEMENT CITY OF ROUND ROCK/PLAZA/HMH
12
2015 La Frontera Plaza,Ltd.,
a Texas limited partnership
By: 2015 La Frontera Plaza GP, LLC, a Texas
limited liability company
By:
Steven ' . Younkman, Manager
Date: June,,�LO, 2015
Acknowledgment
State of Texas
County of W.A\ic-w5or\
This instrument was acknowledged before me on this the day of June, 2015 by
Steven A. Younkman, Manager of 2015 La Frontera Plaza GP, LLC, a Texas limited liability
company, general partner of 2015 La Frontera Plaza, Ltd., a Texas limited partnership, on behalf
of said limited partnership.
pY Pgym; SARIDON CHAMBLESS S'Notar Public, State of Texas
;.oto ,
Notary Public.State of Texas
+; My Commission Expires
oFz;o May 17, 2016
PROPERTY TAX ABATEMENT AGREEMENT CITY OF ROUND ROCK/PLAZA/HMH
13
Houghton Mifflin Harcourt Publishing
Company,
a Massachusetts corporation
By: l
Name: D C
Its: P - }-1r aST�T�
Acknowledgment
State of �PXCLS
County of(-�I L Ut ar\n56-r"
This instrument was acknowledged before me on this the �6 qday of June, 2015 by
as V�I � �sV W of Houghton Mifflin Harcourt Publishing Company, a
Massachusetts corporation, on behalf of said corporation.
Notary Public, State of
`=�IPaY PGgl��i SARIDON CHAMBLESS
Notary Public,State of Texas
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May 1 1, 2016
PROPERTY TAX ABATEMENT AGREEMENT CITY OF ROUND ROCK/PLAZA/HMH
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EXHIBIT A
PROPERTY DESCRIPTION
Lot 1, Block G, AMENDING PLAT OF LOTS 1 AND 3, BLOCK G, LA FRONTERA
SECTION IIIB, subdivision in Williamson County, Texas, according to the map or plat thereof
recorded in Cabinet V, Slide 145 of the Plat Records of Williamson County, Texas.
PROPERTY TAX ABATEMENT AGREEMENT CITY OF ROUND ROCK/PLAZA/HMH
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EXHIBIT B
PERSONAL PROPERTY DESCRIPTION
Customary furniture, fixtures and equipment for general, administrative and executive office
purposes incidental to Tenant's current business, including, without limitation, the following:
1. Office Furniture—Desks, Tables and Chairs
2. Modular Furniture—Panels, Desktops and Chairs
3. Conference Room Furniture—Tables, Credenzas and Chairs
4. Telephone System
5. Video Conferencing Equipment
6. Wireless System
7. Servers and Racks
8. PC Computers
9. Laptop Computers
10. Printers and Copiers
PROPERTY TAX ABATEMENT AGREEMENT CITY OF ROUND ROCK/PLAZA/HMH
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EXHIBIT "C"
TO THEPROPERTY TAX ABATEMENT AGREEMENT
JOB COMPLIANCE AFFIDAVIT
Before me, the undersigned authority, on this day personally appeared
(name) , known to me to be the person whose name
is subscribed below and after having been duly sworn, on his/her oath stated as follows:
1. "My name is . I am over the age of 21 years and am
capable of making this affidavit. The facts stated in this affidavit are within my personal
knowledge and are true and correct.
2. "1 am the (title) of Houghton Mifflin Harcourt and I
am duly authorized to make this affidavit.
3. "As of December 31, 201_, Houghton Mifflin Harcourt had the following job positions
and salaries:
Employee ID No. Job Position or Title Annual Salary
PROPERTY TAX ABATEMENT AGREEMENT CITY OF ROUND ROCK/PLAZA/HMH
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$
$
TOTAL JOBS AVG. SALARY $
4. "In addition to the salary, all full time jobs included industry standard employee benefits.
Dated this day of , 201_
(Printed name)
(Title)
SUBSCRIBED AND SWORN TO before me on this the day of ,201_
Notary Public, State of Texas
PROPERTY TAX ABATEMENT AGREEMENT CITY OF ROUND ROCK/PLAZA/HMH
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ELECTRONICALLY RECORDED 2015050602
Williamson County Texas
PROPERTY TAX ABATEMENT AGREEMENT
This Property Tax Abatement Agreement (this "Agreement') is entered into by and
between the City of Round Rock, Texas (the "Ci4,"), a Texas home rule municipal corporation,
2015 La Frontera Plaza, Ltd, a Texas limited partnership ("Plaza"), and Houghton Mifflin
Harcourt Publishing Company, a Massachusetts corporation ("Htifit"),
RECITALS
WHEREAS,Plaza intends to expend at least$14,250,000 in the construction of a Class A
Office Building and other improvements (the "Facility') to be located on a tract of land (the
"Property"), as described on the attached Exhibit A; and
WHEREAS, by entering into this Agreement, Plaza confirms its intent to construct the
Facility and to lease a majority of said Facility to HMH for the purpose of HMH's locating
business offices in the Facility which will result in at least 270 new fuil-time jobs over the term
of this Agreement,thereby resulting in new economic development in City; and
WHEREAS, HMH intends to install at least $3,000,000 worth of removable
improvements and personal property (the "Personal Property') within the Facility, as described
on the attached Exhibit Band
WHEREAS, by entering into this Agreement, HMH confirms its intent to lease a
majority of the Facility from Plaza for the purpose of locating business offices in the Facility
which will result in at least 270 new full-time jobs over the term of this Agreement, thereby
resulting in new economic development in City; and
WHEREAS, Plaza and HMH each confirm that the City's grant of the tax abatement
provided for herein is expressly conditioned on their compliance with the development and job
creation obligations set forth herein; and
WHEREAS, on the 11th day of June, 2015, the City Council of the City of Round Rock,
Texas, adopted Ordinance No.0-M9-214h, establishing Reinvestment Zone No. 28 (the
"Reinvestment Zone") City of Round Rock, Texas for commercial/industrial tax abatement,
hereinafter referred to as "Ordinance No. 0-201 -2_Aq-k;', 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 Facility will be located on the Property within the Reinvestment Zone;
and
WHEREAS, the City has adopted Ordinance No. 0-2015-2251, 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 construction and contemplated use of the
Facility and creation of jobs, as well as the terms of this Agreement are consistent with
encouraging development in the Reinvestment Zone in accordance with the purposes for its
1?-2-V(9-29 9D
creation and are in compliance with Ordinance No. 0-2015-2251 and the guidelines and criteria
adopted by the City and all applicable laws; and
WHEREAS, the construction of the Facility constitutes 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 Facility will
not constitute a hazard to public safety, health, or welfare, NOW THEREFORE, the parties
hereto do mutually agree as follows:
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 I I, 2015.
2, Definitions. As used in this Agreement, the following terms shall have the
meanings set forth below:
(a) "Abatement"means the full or partial exemption from ad valorem taxes of
the Property, the Facility and Personal Property in the Reinvestment Zone as more
particularly set forth in Section 5.
(b) 'Abatement Period" means the period of time beginning with the
Effective Date of Abatement and continuing until December 31, 2026.
(c) "Abatement Value"means the assessed value of the Facility, Property and
of the Personal Property, as determined annually by the WCAD on behalf of the City,
less the amount of the Base Year Value.
(d) "Affiliate of Plaza" means any person under common control with,
controlled by, or controlling Plaza. For purposes of this definition, (i)"control"means the
possession, directly or indirectly, of the power to direct or cause the direction of the
management and policies of a person, whether through ownership of voting securities, by
contract or otherwise; and (ii) "person" means any individual, corporation, association,
partnership,joint venture, real estate investment trust, other trust estate or other entity or
organization.
(e) "Base Year Value means the assessed value of the Facility, Property and
the Personal Property on January 1, 2016 (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 WAD on behalf of the City.
(f) "City Guidelines" means the Tax Abatement Guidelines and Criteria for
Granting Tax Abatement in Reinvestment Zones, as set forth in §38-22, Round Rock
Code of Ordinances, 2010 Edition, as amended.
(g) "Effective Date of Abatement' means the period commencing January 1,
2017.
PROPERTY TAX ABATEMENT AGREEMENT CITY OF ROUND ROCK/PLALVIirs4,11
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(h) "Facility"means the building and other improvements, or portion thereof,
constructed by Plaza on the Property at a cost of at least$14,250,000, a majority of which
will be leased to HMH by Plaza,
(i) "Ineligible Property"means any personal property that was located within
the Facility at any time before the period covered by this Agreement.
(j) "Personal Property" means any removable improvements, and the
fLirniture, fixtures, and equipment owned by HMII located within the Facility and
described in Exhibit B.
(k) "Property"means the tract of real property owned by Plaza located in the
Reinvestment Zone and described in Exhibit A.
(1) "Recapture Liability" means the amount of permit fees waived and ad
valorem taxes that were abated as result of this Agreement that are subject to recapture by
the City under the terms of Section 10 in the event of a default as described in Section 9.
(m) "Reinvestment Zone" means the reinvestment zone established on the
1 1 th day of June, 2015, in Ordinance No. establishing
Reinvestment Zone No. 28.
(n) "Tax code"means the Tax Code of the State of Texas
(p) "WCAD"means the Williamson Central Appraisal District of Williamson
County,Texas.
3. Sjil_biestionaltl, During the Abatement Period, a majority of the Facility shall
be leased to HMH and used consistent with the general purpose of encouraging development or
redevelopment within the Reinvestment Zone, The Property 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, Cost of Facility, Waiver of Permit Fees, and Cost of Personal Property.Plaza
agrees to spend, or to cause an Affiliate of Plaza to spend, at least $14,250,000 for the
construction of the Facility. Plaza agrees to provide City with documentation showing that this
obligation has been satisfied. The City shall have the right, following reasonable advance notice
to Plaza, to audit Plaza's records (or the records of the appropriate Affiliate of Plaza) to verify
that this obligation has been satisfied. City agrees to waive up to $25,000 of site preparation and
construction permit fees for the Facility.
HMH agrees to install at least $3,000,000 worth of Personal Property in the
Facility. The City shall have the right, following reasonable advance notice to HMH, to audit
HMR's records to verify that this obligation has been satisfied.
PROPERTY TAX ABATEMENT AGREEMENT CITY OF ROUND ROCKIPLAZA/BMI-I
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5. Grant of Abatement.
(a) To Plaza. Subject to (i) Plaza's satisfaction of its obligation to spend
$14,250,000 on the construction of the Facility, (ii) Plaza's satisfaction of its obligation
to partially lease the Facility to HMH, (iii) HMH's satisfaction of its obligations to lease
a portion of the Facility from Plaza throughout the term of this Agreement; (iv) tIM1-1's
satisfaction of its obligation to provide 270 jobs throughout the ten i of this Agreement
(v) all other terms and conditions contained herein; and (vi) the rights of the holders of
any outstanding bonds of the City; the City hereby grants the Abatement on the
Abatement Value of the Facility as follows:
(1) Year 1 (2017) 100%.
(2) Year 2 (2018) 100%
(3) Year 3 (2019) 75%
(4) Year 4(2020) 75%
(5) Year 5 (2021) 50%
(6) Year 6 (2022) 50%
(7) Year 7 (2023) 25%
(8) Year 8 (2024) 25%
(9) Year 9 (2025) 25%
(10) Year 10 (2026) 25%
For purposes hereof, Plaza's obligations may be satisfied by any Affiliate of Plaza who
acquires title to the Property and to whom Plaza's rights and obligations under this
Agreement are assigned.
Plaza acknowledges that the foregoing grant of abatement is conditioned both upon its
compliance with its covenants in Section 8(a) below and l-# 11-1°s compliance with its
covenants contained in Section 8(b)below.
(b) To HMH. Subject to (i) Plaza's satisfaction of its obligation to spend
$14,250,000 on the construction of the Facility; (ii) Plaza's satisfaction of its obligation
to partially lease the Facility to .HMI-l; (iii) HMH's satisfaction of its obligation to lease a
portion of the Facility from Plaza throughout the term of this Agreement; (iv) E-IM1-1's
satisfaction of its obligation to provide 270 jobs throughout the term of this Agreement;
(v) HMH's obligation to install $3,000,000 000 worth Personal Property in the Facility; (vi)
all other terms and conditions contained herein; and (vii) the rights of the holders of any
outstanding bonds of the City; the City hereby grants the Abatement on the Abatement
Value of the Personal Property located within the Facility as follows:.
PROPERTY TAX ABATEMENT AGREEMEN r CITY OF ROUND ROMP LA?_.AIHM-I.
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(1) Year 1 (2017) 100%
(2) Year 2 (2018) 75%
(3) Year 3 (2019) 75%
HMH acknowledges that the foregoing grant of abatement is conditioned both upon its
compliance with its covenants in Section 8(b) below and Plaza's compliance with its
covenants contained in Section 8(a)below.
(c) Abatement Reduction. Regardless of anything contained herein to the
contrary, the failure of HMH to provide 270 jobs shall not be considered an event of
default as defined in Section 9 below unless the number of jobs actually provided is less
than 75% of 270, or 203. If the actual number of jobs provided at the end of any year is
less than 270 but 203 or more, then the Abatement for the following year shall be reduced
as follows: The percentage of the Abatement shall be reduced by the same percentage
that the actual number of jobs bears to the required number of jobs. By way of
illustration, if on December 31, 2018, HMH has provided 243 jobs, then the requirement
to provide 270 jobs -will be short by 27 jobs, or 10% Therefbre, Plaza's and HME's
Abatement for 2019 shall each he reduced by 10 points. Accordingly, the Abatement to
be provided to Plaza would be reduced by ten points from 75% to 65% and the
Abatement to be provided to HMH would be reduced by ten points from 75% to 65%.
Failure of HMH to provide at least 203 jobs shall be considered an event of default on the
part of both HMH and Plaza, subject to the provisions of Section 9.
6. Term of Abatement. Plaza and LIME shall receive the Abatement commencing
on the Effective Date of the Abatement and continuing for Abatement Period.
7. Taxable Propertv. During the Abatement Period, ad valorem taxes shall be
payable on the 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 Facility, Property and Personal Property, as
determined by the WAD shall be fully taxable.
8 Covenants.
(a) Plaza's Covenants. In consideration of the City's agreement to enter into
this Agreement, Plaza covenants and agrees that it (or an Affiliate of Plaza) will (i)
expend at least $14,250,000 to construct the Facility; (ii) substantially complete the
construction of the Facility by the 31st day of December, 2016 (subject to delays caused
by events of Force Majeure); and (iii) lease a majority of the Facility to HMH for
business offices in the City for the term of this Agreement.
PROPERTY TAX ABATEMENT AGREEMENT CITY OF ROUND ROMP LAZAIHNIK
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(h) HMEI's Covenants. In consideration of the City's agreement to enter into
this Agreement. HMH covenants and agrees that it will (1) install at least $3,000,000
worth of Personal Property in the Facility; (ii) lease a majority of the Facility for the term
of this Agreement from Plaza (or an Affiliate of Plaza) for business offices; and (iii)
provide at least 270 jobs throughout the term of this Agreement. HMH also covenants
and agrees to provide to the City an affidavit stating the number of employees that it has
within the Facility in the form attached hereto as Exhibit C no later than March 1 of each
calendar year during the Abatement Period.
(c) BreacKof Covenants. Plaza and EWE each acknowledges that the City's
obligations hereunder are conditioned upon HMH's continued operation of said business
offices and to the provision of at least 270 jobs throughout the term of this Agreement,
subject to the provisions of Section 5(c) above. In the event Plaza fails to construct the
Facility by the 31st day of December, 2016 (subject to delays caused by events of Force
Majeure), or in the event that HMII fails to comply with its obligation to operate its
facility and to provide the number of jobs required under the terms of this Agreement, the
City may terminate this Agreement by giving Plaza and HMH written notice of such
termination, and exercise its rights under Section 10 below. In addition, the City will
notify the WCAD of such termination,
9 :Default.
(a) Plaza's Default. In the event that (a) Plaza allows its ad valorem taxes to
the City to become delinquent and fails to timely and properly follow the legal
procedures for their protest and/or contest; (b) Plaza violates any of the material terms
and conditions of this Agreement, including, without limitation, any of the covenants
described in Section 8(a) above; or (c) HMH fails to comply with its obligation to
provide the number of jobs set forth herein(subject to Section 5(c) above), Plaza shall be
considered in default. In the event that Plaza defaults under this Agreement, the City shall
give Plaza written notice specifying such default. If Plaza has not cured the default within
thirty (30) days after its receipt of such written notice, the City may, as its sole and
exclusive remedies hereunder, (i) terminate this Agreement by given written notice
thereof to Plaza and HMH, (ii) exercise its rights under Section 10 below, and(iii)pursue
any of its remedies for the collection of delinquent property taxes as provided generally
in the Tax Code. If the City terminates this Agreement hereunder, it will notify the
WCAD thereof
(b) HMH's Default. In the event that (a) HMH allows its ad valorem taxes to
the City to become delinquent and fails to timely and properly follow the legal
procedures for their protest and/or contest; (b) HMH fails to comply with its obligation to
provide the number of jobs set forth herein (subject to Section 5(c) above); (c) HMH
violates any of the material terms and conditions of this Agreement, including, without
limitation, any of the covenants described in Section 8(h) above; or (d) Plaza fails to
comply with its covenants described in Section 8(a) above; HMH shall be considered in
default. In the event that HMH defaults under this Agreement, the City shall give HMH
written notice specifying such default. if HMH has not cured the default within thirty
(30) days after its receipt of such written notice, the City may, as its sole and exclusive
remedies hereunder, (i)terminate this Agreement by given written notice thereof to HMH
PROPERTY TAX ABATEMENT AGREEMENT cmr OF ROUND ROCKIPLAZAIHMH
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and Plaza, (ii) exercise its rights under Section 10 below, and (iii) pursue any of its
remedies for the collection of delinquent property taxes as provided generally in the Tax
Code. If the City terminates this Agreement hereunder, it will notify the WCAD thereof.
10. Abatement Recti 4ture. In the event the City terminates this Agreement as a
result of Plaza's or HMI-Ps default, the Abatement for the year in which the termination occurs
will be cancelled, and in addition, the City may recapture and collect from Plaza and HMH their
respective Recapture Liability, as herein described. Plaza and HMH shall pay to the City their
respective Recapture Liability within thirty(30) days after the date of termination, subject to any
and all lawful offsets, settlements, deduction, or credits to which Plaza and/or EWE may be
entitled. HMH's Recapture Liability hereunder shall not exceed, in the aggregate, an amount
equal to the ad valorem taxes which were abated with regard to the Personal Property pursuant to
this Agreement from the Effective Date of Abatement to the date of termination and Plaza's
Recapture Liability hereunder shall not exceed any permit fees and ad valorem taxes which were
abated with regard to the Property pursuant to this Agreement during the immediately preceding
two calendar years. In addition, HMIH's and Plaza's respective Recapture Liabilities shall include
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 each party's respective Recapture Liability as
provided generally in the Tax Code for the collection of delinquent property taxes.
11. jitlea1 IDS eCtiOrtS. No later than ninety (90) days after substantial
completion of the Facilities, (a) Plaza (or an Affiliate of Plaza)must certify in writing to the City
(i) that the construction of the Facilities has been substantially completed, and (ii) that HMH has
leased and accepted occupancy of its premises in. the Facilities; and (h) HMH must certify in
writing to the City that HMH has satisfied its obligation with respect to the Personal Property.
No later than March 1 of each year of the Abatement Period, EIMEI must certify in writing to the
City that it is in compliance with each applicable terms of this Agreement and the City
Guidelines and, if not in compliance, the steps HMH intends to take to be in compliance or a
statement from HMH explaining in reasonable detail why compliance cannot be achieved. Plaza
and HMH agree that the WCAD and the City,their agents and employees, shall,upon reasonable
notice, have reasonable right of access to the Facility in order to ensure that the construction of
the Facility 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 Plaza and/or HMH and in accordance with Plaza's and HRH's security and
safety requirements. At the time of annual certification, upon the City's written request, FIMEI
shall also provide a calculation of the aggregate amount of economic benefit HMH has
previously received pursuant to this Agreement. In order to efficiently administer the Abatement,
HMH agrees also to provide annually for each year with respect to which HMH will receive an
abatement under Section 5(b) hereof, no later than March 1, a full asset listing of personal
property located on the Property and in the Facility 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.
Each year the City will endeavor to send HMH a reminder of its obligation under this
Section IL However, the failure of the City to do so shall not relieve HMII of its obligations
hereunder.
PROPERTY TAX ABATEMENT AGREEMENT CITY OF ROUND ROMP LAZAMM H
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12, Annual Tax Application, It shall be the responsibility of Plaza and HMI,
pursuant to V.T.C.A.., Tax Code, § 11,43, to file an annual exemption application form with the
WCAD. The Chief Appraiser of the WCAD shall annually determine and record both the abated
taxable value and the full taxable value of the Property and Personal 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 10. Each year Plaza and
}MB 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. Plaza
and/or HMO shall be entitled to appeal any determination of the Chief Appraiser in accordance
with the provisions of the Texas Tax Code.
13. Assignment, Prior to the date that Plaza satisfies it obligations hereunder to
construct the Facility and enter into a lease with HMH for the lease of a portion thereof, Plaza
may (i) assign this Agreement to a new owner of the Property with the written consent of the
City Council of the City, which consent shall not be unreasonably withheld, conditioned or
delayed, or (ii) assign this Agreement to an Affiliate of Plaza, which shall not require any such
written consent, provided that Plaza shall give written notice thereof to the City. After the
completion of the Facility and the lease by HMH of a portion thereof, Plaza may assign this
Agreement to a new owner of the Property without the consent of any party, provided that Plaza
shall give written notice thereof to City. Any assignment shall be in writing, and shall provide
that the assignee shall irrevocably and unconditionally assume, from and after the date thereof,
all the duties and obligations of the assignor upon the same terms and conditions as set out in this
Agreement. HMH may assign this Agreement without the consent of the City Council of the
City to an entity which controls, is controlled by or is under common control with MAIL any
successor entity to HIVIE by way of merger, consolidation or other non-bankruptcy corporate
reorganization, or an entity which acquires all or substantially all of HMH's assets, partnership
or membership interests, or capital stock.. All other assignments of this Agreement by IIMIT are
subject to the written consent of the City Council of the City, which consent shall not be
unreasonably withheld, conditioned or delayed.
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, 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 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 fur 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.
PROPERTY TAX ABATEMENT AGREEMENT CITY OF ROUND ROCK/PLAZA/HMH
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If to City: City of Round Rock
221 E. Main Street
Round Rock TX 78664
Attn: City Manager
Phone:(512) 218-5400
Email: citymanager roundrocktexas.gov
With a required copy to:
Sheets &Crossfield
309 E. Main Street
Round Rock,TX 78664
Attn: Stephan L. Sheets
Phone: (512) 255-8877
Email: steve@scrrlaw.com
If to Plaza: do Live Oak- Gottesman LLC
4330 Gaines Ranch Loop, Suite 100
Austin, Texas 78735
Attn: Steven A. Younkman
Email: Steve@liveoak.com
With a required copy to:
Nick von Kreisler
Kuperman, On&Albers,P.C.
1501 S. Mopac Expressway, Suite 325
Austin, Texas 78746
Email:nark(€a koalaw,com
If to HMH: Houghton Mifflin Harcourt Publishing Company
222 Berkeley Street
Boston, MA 02116
Attn: General Counsel
With a required copy to:
Houghton Mifflin.Harcourt Publishing Company
9400 South Park Center Loop
Orlando,FL 32819
Attn: Manager of Lease Administration
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 Plaza and
HMVfH, in performing their obligations hereunder, are each acting independently, and the City
assumes no responsibility or liability to third parties in connection therewith. It is further
PROPERTY TAX ABATEMENT AGREEMENT CIV OF ROUND ROCK'PLAZA HMH
understood and agreed among the parties that the City, in performing its obligations hereunder, is
acting independently and Plaza and HMH assume no responsibility or liability to third parties in
connection therewith.
17. Estoppel,...LQpitifjsatt. 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 and requests commercially reasonable certifications. Each party agrees to
promptly execute and deliver any estoppel certificate reasonably requested pursuant to this
Section 17. The certificate, which will upon request be addressed to Plaza and/or HMH, or a
lessee, purchaser or assignee of Plaza and/or HMH, 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
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 Const. uction. 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 Plaza and/or HMH, 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 Plaza and/or I-FMH, However,
events of Force Majeure shall not extend any period of time for the payment of sums payable by
Plaza or
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. Autho . 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
PROPERTY TAX ABATEMENT AGREEMENT ern,OF ROUND ROCKIPLAZA,TIMH
individual affixing his or her signature hereto is authorized to do so, and such authorization is
valid and effective on the date hereof.
24. Multipleinr ts. 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.
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").
(SIGNATURES ON FOLLOWING PAGES)
PROPERTY TAX ABATEMENT AOREEMENT CITY OF ROUND ROMPLAZA/IIMH
THE CITY OF ROUND ROCK,TEXAS,
a Texasrc Rule Municipality
pt
_ , ill ,t, ,..v.
By: --_ '
Alan McGraw, Mayor
Date: June 11,2015
Attest:
of/ / _rt V `,
SaraWhite, City Clerk
APPR ED.ASATO FOKM:
Stephan;. Sheets,City Attorney
ki
Acknowledgment
State of Texas
County of Williamson
This instrument was acknowledged 'before me on this the 11th day of June, 2015 by Alan
McGraw, as Mayor of the City of Round Rock,Texas,
IA
ZL44t3E# BB?ufLAI ii o ,, Allik, din
....,, ,,, Notary Puhi : State of ex
v.,-,,,,....0 p tion
.
PROPERT r`TAX ABATEMENT AGREEMENT C '`1 OF ROUND ROCKJLAWAIHMH
12
2015 La Frontera Plaza, Ltd.,
a Texas limited partnership
By: 2015 La Frontera Plaza GP, L[ a Texas
limited liability company
By:
Steven Ici-Younlunan,Manager
Date: June /0, 2015
Acknowledoment
State of Texas
County of 1 "\
This instrument was acknowledged before me on this the la day of June, 2015 by
Steven A. Younkman, Manager of 2015 La Frontera Plaza GP, LLC, a Texas limited liability'
company, general partner of 2015 La Frontera Plaza, Ltd , a Texas limited partnership, on behalf
of said limited partnership.
v(-)
/ARA.CA491
SARI DON C HAM at E$ I Notary Public, State of Texas
Notary Pub€1c,State of Texas
My COMiTitcsion Explra 1
May 17, 20)6
PROPERTY TAX ABATEMENT AGREEMENT CITY OF ROUND ROCK/PLAZA/I-1MM
13
Houghton Mifflin Harcourt Publishing
Company,
a Massachusetts corporation
,------Th ./.- y?
Name: NF 1 D C 5 ' 'LL. S,
Its: , -?.,...L 5`f T
3
Acknowledgment
State of .5
County of iItic: s
This instrument was acknowledged before me on this the /0 day of June, 2015 by
atxia :A.c.\\•, s, as ti 's -- Y:t t4-ezke of Houghton 'Mifflin Harcourt Publishing Company, a
Massachusetts corporation,on behalf of said corporation.
J ai-L t ..4 6 :+l Cam..•.-
Notary Public, State of .0 s
07:;
i Notary Pub(:c.State of Texas
v. k 4: M Commission Expires
v
F ��*` May I?i 'MIL_��fei{f115)4. F[
.o-fid
PROPERTY TX.f ABATEMENT AGREEMENT CITY OFRQL DROCKJPLAZAI,JFIMH
14
EXHIBIT A
PROPERTY DESCRIPTION
Lot 1, Block 0, AMENDING PLAT OF LOTS 1 AND 3, BLOCK G, LA FRONTERA
SECTION iiiB, subdivision in Williamson County, Texas, according to the map or plat thereof
recorded in Cabinet V, Slide 145 of the Plat Records of Williamson County, Texas.
PROPERTY TAX ABATEMENT AGREEMENT CITY OF ROUND ROCK/PL AZAIHMH
15
EXHIBIT B
PERSONAL PROPERTY DESCRIPTION
Customary furniture, fixtures and equipment for general, administrative and executive office
purposes incidental to Tenant's current business,including, without limitation, the following:
Office Furniture—Desks, Tables and Chairs
2. Modular Furniture Panels,Desktops and Chairs
3. Conference Room Furniture—Tables, Credenzas and Chairs
4. Telephone System
5. Video conferencing Equipment
6. Wireless System
7. Servers and Racks
8. PC Computers
9. Laptop Computers
10. Printers and Copiers
PROPERTY TAX ABATEMENT AGREEMENT CITY OF ROUND ROCKIPLAW-IMH
EXHIBIT "C"
TO THEPROPERTY TAX ABATEMENT AGREEMENT
JOB COMPLIANCE AFFIDAVIT
Before me, the undersigned authority, on this day personally appeared
(name) , known to me to be the person whose name
is subscribed below and after having been duly sworn, on his/her oath stated as follows:
1. "My name is . I am over the age of 21 years and am
capable of making this affidavit. The facts stated in this affidavit are within my personal
knowledge and are true and correct.
2. "1 rn the (title) of Houghton Mifflin Harcourt and I
am duly authorized to make this affidavit.
3 "As of December 31, 201_, Houghton Mifflin Harcourt had the following job positions
and salaries:
Employee ID No. Job Position or Title Annual Salary
$
$
$
$
$
$
$
$
$
PROPERTY TAX ABATEMENT AGREEMENT CITY OF ROUND ROCKPLAZAMMH
17
2015050602 Page 18 of 18
S
TOTAL JOBS AVG. SALARY $
4. "in addition to the salary, all full time jobs included industry- standard employee benefits.
Dated this day of , 201
(Printed name)
(Title)
SUBSCRIBED AND SWORN TO before me on this the day of ,201_.
Notary Public, State of Texas
2015050602
Electronically Recorded
OFFICIAL PUBLIC RECORDS
Ajaiwu
Nancy E. Rister, County Clerk
6/18/2015 8:11 AM
Pages: 18 Fee: $89.00
Williamson County Texas
PROPERTY TAX ABATEMENT AGREEMENT CITY OF ROUND ROCK/NJ:LAMM ti
18