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RE 12-14-99.3 RESOLUTION NO. 121499.3 A RESOLUTION OF THE CITY OF COPPELL, TEXAS, APPROVING THE TERMS AND CONDITIONS OF A TAX ABATEMENT AGREEMENT BY AND AMONG THE CITY OF COPPELL, TEXAS, LINCOLN CBC K, LTD. AND MATSUSHITA AVIONICS SYSTEMS CORPORATION; AUTHORIZING ITS EXECUTION BY THE MAYOR; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City Council has been presented a proposed Tax Abatement Agreement by and among the City of Coppell, Texas, Lincoln CBC H, Ltd. and Matsushita Avionics Systems Corporation, a copy of which is attached hereto and incorporatext herein by reference; and WHEREAS, upon full review and consideration of the Agreement, and all matters related thereto, the City Council is of the opinion and finds that the terms and conditions thereof should be approved, and that the Mayor should be authorized to execute the Agreement on behalf of the City of Coppell, Texas; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF COPPELL, TEXAS, THAT: SECTION 1. The Agreement attached hereto having been reviewed by the City Council of the City of Coppell, Texas, and found to be acceptable and in the best interest of the City and its citizens, be, and the same is hereby, in all things approved, and the Mayor is hereby authorized to execute the Agreement on behalf of the City of Coppelt, Texas. SECTION 2. The City Council finds that the improvements proposed to be built upon the Premises described in the Agreement will enhance the economic vitality of the community through a combination of new capital investment, increased sales tax revenues, and the creation of additional job opportunities. SECTION 3. The tax abatement to be granted by the Agreement will not include inventory, and supplies. SECTION 4. The improvements proposed for the Premises will accomplish the tax abatement guidelines of the City of Coppell, Texas. 30257 I.DOC SECTION 5. The City Manager delivered to the presiding officer of the governing body of each taxing unit in which the property subject to the Agreement is located, a written notice that the City of Coppell, Texas, intends to enter into the Agreement. The notice given by the City Manager included a copy of the Agreement approved by this Resolution. SECTION 6. This Resolution and the Tax Abatement Agreement are hereby approved by the affirmative vote of the majority of the members of the City Council of the City of Coppell, Texas, at a regularly scheduled meeting of the City Council. SECTION 7. This Resolution shall become effective immediately from and after its passage. DULY RESOLVED AND ADOPTED by the City Council of the City of Coppell, Texas, on this the 14th day of December, 1999. CITY OF COPPELL, TEXAS CANDY SHEEHAN, MAYOR ATTEST: LIBBY BALL, CITY SECRETARY APPROVED AS TO FORM: ROBERT E. HAGER, CITY ATTORNEY (PGS/t~ 12/07/1999) STATE OF TEXAS § § TAX ABATEMENT AGREEMENT COUNTY OF DALLAS § This Tax Abatement Agreement (the "AGREEMENT") is entered into by and among the City of Coppell, Texas (the "CITY'), duly acting herein by and through its Mayor, Coppert Business Center II, Ltd. C'LINCOLN") and Matsushita Avionics Systems Corporation ("MAS") (LINCOLN and MAS sometimes collectively referred to herein as "OWNERS"), acting by and through its authorized officer. WITNESSETH: WHEREAS, the City Council of the City of Coppell, Texas, (the "CITY'), passed an Ordinance (the "ORDINANCE") establishing Tax Abatement Reinvestment Zone No. 16 (the "ZONE"), for commercial/industrial tax abatement, as authorized by the Property Redevelopment and Tax Abatement Act, Chapter 312 of the Texas Tax Code, as amended (the "TAX CODE"); and WltEREAS, the CITY has adopted guidelines for tax abatement (the "TAX ABATEMENT GU1DEIJNES"); and WHEREAS, the TAX ABATEMENT GUIDELINES contain appropriate guidelines and criteria governing tax abatement agreements to be entered into by the CITY as contemplated by the TAX CODE; and WlqEREAS, the CITY has adopted a resolution stating that it elects to be eligible to participate in tax abatement; and WHEREAS, in order to maintain and enhance the commercial and industrial economic and employment base of the Coppell area, it is in the best interests of the taxpayers for the CITY to enter into this AGREEMENT in accordance with said ORDINANCE, the TAX ABATEMENT GUIDELINES and the TAX CODE; and WHEREAS, OWNERS' development efforts described herein will create permanent new jobs in the CITY; and WBEREAS, the City Council finds that the contemplated use of the PREMISES (hereinafter defined), the contemplated improvements to the PREMISES thereto in the amount set forth in this AGREEMENT, and the other terms hereof are consistent with encouraging developmere of the ZONE in accordance with the purposes for its creation and/or in compliance with the TAX ABATEMENT GUIDELINES, the ORDINANCE adopted by the CITY, the TAX CODE and all other applicable laws; and WHEREAS, the City Council finds that the improvements sought are feasible and practicable and would be of benefit to the PREMISES (hereinafier defined) to be included in the ZONE and to the CITY alter expiration of this AGREEMENT; and TAX ABATEMENT AGREEMENT - Page 1 ss28161 :.- \) WHEREAS, a copy of this AGREEMENT has been furnished, in the manner prescribed by the TAX CODE, to the presiding officers of the governing bodies of each of the taxing units in which the PREMISES is located; and WHEREAS, the CITY desires to enter into an agreement with MAS, the proposed owner of the TANGIB1,E PERSONAL PROPERTY within the Tax Abatement Reinvestment Zone for the abatement of taxes pursuant to Chapter 312 of the TAX CODE as mended; NOW, THEREFORE, in consideration of the mutual benefits and promises contained herein and for good and other valuable consideration, the adequacy and receipt of which is hereby acknowledged, including the expansion of primary employment, the attraction of major investment in the ZONE, which contributes to the economic development of Coppell and the enhancement of the tax base in the CITY, the parties agree as follows: GENERAL PROVISIONS 1. I,INCOLN is the owner of the real property described in Exhibit "A" attached hereto and made a part hereof for all purposes (the "PREMISES" hereinafier defined), which real property is located within the city limits of the CITY and within the ZONE. MAS is the Lessee or intends to lease the PREMISES and is or shall become the owner of TANGIBLE PERSONAL PROPERTY that will be located on the PREMISES. 2. The PREMISES are not in an improvement project financed by tax increment bonds. 3. This AGREEMENT is entered into subject to the rights of the holders of outstanding bonds of the CITY. 4. The PREMISES are not owned or leased by any member of the Coppell City Council or any member of the Coppell Planning and Zoning Commission, or any member of the goveming body of any taxing units joining in or adopting this AGREEMENT. TAX ABATEMENT AUTHORIZED 5. This AGREEMENT is authorized by the TAX CODE and in accordance with the City Tax Abatement Guidelines and Criteria, and approved by resolution of the City Council of the CITY authorizing the execution of this AGREEMENT. 6. Subject to the terms and conditions of this AGREEMENT, and provided the TAXABLE VALUE for the TANGIBLE PERSONAL PROPERTY is at least Two Million Five Hundred Thousand Dollars ($2,500,000) as of the FIRST YEAR OF ABATEMENT and as of January 1 of each year thereafter for a period of four (4) years, the CITY hereby grants MAS an abatement of filly percent (50%) of the TAXABLE VALUE of the TANGIBLE PERSONAL PROPERTY, provided however for any tax year during the term of this AGREEMENT that the TAXABLE VALUE of the TANGIBLE PERSONAL PROPERTY is Five Million Five Hundred Thousand Dollars ($5,500,000) or greater, the percentage of abatement for such year shall be seventy- TAX ABATEMENT AGREEMENT - Page 2 ss2g~6~ five percent (75%). The actual percentage of taxes subject to abatement for each year of this AGREEMENT will apply only to the TANGIBLE PERSONAL PROPERTY added to the PREMISES after this AGREEMENT is executed. 7. The period of tax abatement herein authorized shall be for a period of five (5) years. 8. During the period of tax abatement herein authorized, MAS shall be subject to all CITY taxation not abated, including but not limited to, sales tax and ad valorem taxation on land, inventory and supplies. DEFINITIONS 9. Wherever used in this AGREEMENT, the following terms shall have the meanings ascribed to them: A. The PREMISES shall mean the real property described in Exhibit "A" attached hereto and incorporated herein for all purposes including any IMPROVEMENTS but excluding TANGIBLE PERSONAL PROPERTY, inventory and supplies, which are added thereto subsequent to the execution of this AGREEMENT; B. The IMPROVEMENTS shall mean the contemplated improvements to be constructed on the PREMISES and as further described herein. C. TAXABLE VALUE means the appraised value as certified by the Appraisal District as of January 1 of a given year. D. The BASE YEAR TAXABLE VALUE shall mean the total assessed taxable value for the PREMISES for the year in which the Tax Abatement Agreement is executed (1999). E. The FIRST YEAR OF ABATEMENT shall mean January 1 of the calendar year immediately following the issuance of a certificate of occupancy for the IMPROVEMENTS. F. TANGIBLE PERSONAL PROPERTY shall mean tangible personal property, equipment and fixtures other than inventory or supplies added to the PREMISES subsequent to the execution of this AGREEMENT. G. An EVENT OF BANKRUPTCY OR INSOLVENCY shall mean the dissolution or termination of a party's existence as a going business, insolvency, appointment of receiver for any part of a party's property and such appointment is not terminated within ninety (90) days after such appointment is initially made, any general assignment for the benefit of creditors, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against any party and such proceeding is not dismissed within ninety (90) days after the filing thereof. TAX ABATEMENT AGREEMENT - Page 3 SS28161 IMPROVEMENTS 10. LINCOLN owns the real property described in Exhibit "A" and agrees to lease to MAS an office/warehouse facility consisting of at least 18,000 square feet (and other ancillary facilities such as reasonably required parking and landscaping more fully described in the submittals filed with the CITY from time to time in order to obtain a building permit) (the "IMPROVEMENTS"). MAS agrees to lease the PREMISES and to locate TANGIBLE PERSONAL PROPERTY on the PREMISES with a TAXABLE VALUE of at least Two Million Five Hundred Thousand Dollars ($2,500,000) the FIRST YEAR OF TAX ABATEMENT and as of January 1 of each calendar year thereafter for a period of four years. Nothing in this AGREEMENT shall obligate MAS to lease the PREMISES and/or to locate TANGIBLE PERSONAL PROPERTY on the PREMISES, but said actions are a condition precedent to tax abatement pursuant to this AGREEMENT. ADDITION OF TANGIBLE PERSONAL PROPERTY 11. As a condition precedent to the initiation of tax abatement pursuant to this AGREEMENT, MAS will diligently and faithfully, in good and workmanlike manner, locate TANGIBLE PERSONAL PROPERTY on the PREMISES on or before December 31, 2000, as good and valuable consideration for this AGREEMENT. 12. OWNERS agree to maintain the IMPROVEMENTS during the term of this AGREEMENT in accordance with all applicable state and local laws, codes, and regulations. OWNERS agree that the IMPROVEMENTS shall be used only as an office/warehouse facility for a period of five (5) years commencing on the date a certificate of occupancy is issued for the IMPROVEMENTS. 13. The CITY, its agents and employees shall have the right of access to the PREMISES during construction to inspect the IMPROVEMENTS at reasonable times and with reasonable notice to OWNERS, and in accordance with OWNERS visitor access and security policies, in order to insure that the construction of the IMPROVEMENTS are in accordance with this AGREEMENT and all applicable state and local laws and regulations (or valid waiver thereof). GENERAL REQUIREMENTS 14. Construction plans if'any for the IMPROVEMENTS constructed on the PREMISES will be filed with the CITY, which shall be deemed to be incorporated by reference herein and made a part hereof for all purposes. 15. After the TANGIBLE PERSONAL PROPERTY is located on the PREMISES, MAS shall certify in writing to the CITY the market value of such TANGIBLE PERSONAL PROPERTY. OWNERS shall each annually certify to the CITY in writing that such party is in compliance with each term of the AGREEMENT. 16. The PREMISES shall be used in the manner (i) that is consistent with the CITY' s Comprehensive Zoning Ordinance, as amended, and (ii) that, during the period taxes are abated TAX ABATEMENT AGREEMENT - Page 4 SS2S161 hereunder, is consistent with the general purposes of encouraging development or redevelopment within the ZONE. 17. MAS agrees to lease the PREMISES for a period of at least five (5) years commencing on the date a certificate of occupancy is issued for the IMPROVEMENTS. DEFAULT: RECAPTURE OF TAX REVENUE 18. In the event LINCOLN or MAS fails in performance of any of the following conditions: (i) has any delinquent ad valorem or State sales taxes owed to the CITY (provided such party retains its right to timely and properly protest such taxes or assessment); (ii) upon the occurrence of any "Event of Bankruptcy or Insolvency"; or (iii) breaches any of the terms and conditions of this AGREEMENT, then such party, after the expiration of the notice and cure periods described below, shall be in default of this AGREEMENT. As liquidated damages in the event of such default, MAS shall, within thirty (30) days after demand, pay to the CITY all taxes which otherwise would have been paid to the CITY without benefit of a tax abatement with interest at the statutory rate for delinquent taxes as detennined by Section 33.01 of the TAX CODE as amended but without penalty. The parties acknowledge that actual damages in the event of default termination would be speculative and difficult to determine. The parties further agree that any property tax revenue lost, including interest as a result of this AGREEMENT, shall be recoverable against MAS, its successors and assigns and shall constitute a tax lien on the TANGIBLE PERSONAL PROPERTY, and shall become due, owing and shall be paid to the CITY within thirty (30) days after termination. 19. Upon breach by LINCOLN or MAS of any obligations under this AGREEMENT, the CITY shall notify such defaulting party in writing, with a copy to the non-defaulting party. The defaulting party shall have thirty (30) days from receipt of the notice in which to cure any such default. If the default cannot reasonably be cured within a thirty (30) day period, and such defaulting party has diligently pursued such remedies as shall be reasonably necessary to cure such default, then the CITY may extend the period in which the violation must be cured. The non-defaulting party shall have the same right to cure any such default as the defaulting party. 20. If the defaulting party fails to cure the default within the time provided as specified above or, as such time period may be extended, then the CITY at its sole option shall have the right to terminate this AGREEMENT by written notice to such defaulting party. 21. Upon termination of this AGREEMENT by CITY, all tax revenue abated as a result of this AGREEMENT shall become a debt to the CITY as liquidated damages, and shall become due and payable not later than thirty (30) days after a notice of termination is made. The CITY shall have all remedies for the collection of the abated taxes provided generally in the TAX CODE for the collection of delinquent property tax. The CITY at its sole discretion has the option to provide a repayment schedule. The computation of tax revenue abated for the purposes of the AGREEMENT shall be based upon the full TAXABLE VALUE without tax abatement for the years in which tax abatement hereunder was received by MAS with respect to the TANGIBLE PERSONAL PROPERTY as determined by the Appraisal District, multiplied by the tax rate of the years in TAX ABATEMENT AGREEMENT - Page 5 SS28161 question, as calculated by the City Tax Assessor-Collector. The liquidated damages shall incur penalties as provided for delinquent taxes and shall commence to accrue after expiration of the thirty (30) day payment period. ANNUAL APPLICATION FOR TAX EXEMPTION; RENDITION 22. It shall be the responsibility of MAS, pursuant to the TAX CODE, to file an annual exemption application form with the Chief Appraiser for each Appraisal District in which the eligible taxable property has sims. A copy of the exemption application shall be submitted to the CITY. 23. MAS shall annually render the values of the TANGIBLE PERSONAL PROPERTY to the Appraisal District and provide a copy of the same to the CITY. SUCCESSORS AND ASSIGNS 24. This AGREEMENT shall be binding on and inure to the benefit of the parties to it and their respective heirs, executors, administrators, legal representatives, successors, and assigns. This AGREEMENT may not be assigned without the consent of the CITY. NOTICE 25. All notices required by this AGREEMENT shall be addressed to the foliowingo or other such other party or address as either party designates in writing, by certified mail, postage prepaid or by hand delivery: If intended for MAS, to: Matsushita Avionics System Corp. Attn: Tan Hubly 22333 29th Drive SE Bothell, Washington 98021 If intended for LINCOLN, to: Coppell Business Center II, LTD. Attn: Thomas H. Kuhlmann and Michael A. Peinado 3300 Lincoln Plaza 500 N. Akard Street Dallas, Texas 75201-3394 TAX ABATEMENT AGREEMENT - Page 6 ss2s~6~ If intended for CITY, to: City of Coppell, Texas City Manager P. O. Box 478 Coppell, Texas 75019 CITY COUNCIL AUTHORIZATION 26. This AGREEMENT was authorized by resolution of the City Council approved by its Council meeting authorizing the Mayor to execute this AGREEMENT on behalf of the Crib. SEVERABILTY 27. In the event any section, subsection, paragraph, sentence, phrase or word herein is held invalid, illegal or unconstitutional, the balance of this AGREEMENT shall stand, shall be enforceable and shall be read as if the parties intended at all times to delete said invalid section, subsection, paragraph, sentence, phrase or word. APPLICABLE LAW 28. This AGREEMENT shall be construed under the laws of the State of Texas. Venue for any action under this AGREEMENT shall be the State District Court of Dallas County, Texas. This AGREEMENT is performable in Dallas County, Texas. COUNTERPARTS 29. This AGREEMENT may be executed in any number of counterparts, each of which shall be deemed an original and constitute one and the same instrument. ENTIRE AGREEMENT 30. 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 the matters in this AGREEMENT, and except as otherwise provided herein cannot be modified without written agreement of the parties to be attached to and made a part of this AGREEMENT. 31. The provisions of this AGREEMENT are hereby declared covenants running with the PREMISES and are fully binding on all successors, heirs, and assigns of OWNERS who acquire any right, title, or interest in or to the property, or any part thereof. Any person who acquires any right, title, or interest in or to the property, or any part hereof; thereby agrees and covenants to abide by and fully perform the provisions of this AGREEMENT with respect to the right, title or interest in such property. TAX ABATEMENT AGREEMENT - Page 7 ss28161 RECORDATION OF AGREEMENT 32. A certified copy of this AGREEMENT shall be recorded in the Deed Records of Dallas County, Texas. INCORPORATION OF RECITALS 33. The determinations redted and declared in the preambles to this AGREEMENT are hereby incorporated herein as part of this AGREEMENT. 34. All exhibits to this AGREEMENT are incorporated herein by reference for all purposes wherever reference is made to the same. EXECUTED in duplicate originals this the 15th day of December, 1999. CITY OF COPPELL, TEXAS: By: CANDY SHEEHAN, MAYOR ATTEST: By: LIBBY BALL, CITY SECRETARY AGREED AS TO FORM: By: PETER G. SMITH, CITY ATTORNEY TAX ABATEMENT AGREEMENT - Page 8 ss2s161 EXECUTED in duplicate originals this the 29th day of October, 1999. MATSUSHITA AVIONICS SYSTEMS CORPORATION By: Name: Title: EXECUTED in duplicate originals this the 11th day of November, 1999. Coppell Business Center II, LTD. By: Lincoln CBC II, LTD., General Partner By: Name: Title: TAX ABATEMENT AGREEMENT - Page 9 ss28161 CITY' S ACKNOWLEDGMENT STATE OF TEXAS § COUNTY OF DALLAS § This Instrument was acknowledged before me on the 15th day of December, 1999, by Candy Sheehan, Mayor of the City of Coppell, Texas, a Texas municipality, on behalf municipality. Libby Ball Notary Public, State of Texas My Commission Expires: 6-11-00 TAX ABATEMENT AGREEMENT - Page 10 ss28161 MAS' ACKNOWI,EDGMENT STATE OF TEXAS § COUNTY OF DALLAS § This instrument was acknowledged before me on the 29th day of October, 1999, by Takash Mizuma being the President of Matsushita Avionics Systems Corporation, on behalf of said corporation. Julie C. Mudge Notary Public, State of Washington My Commission Expires: 10-09-02 TAX ABATEMENT AGREEMENT - Page 11 ss28161 REAL PROPERTY OWNER'S ACKNOWLEDGMENT STATE OF TEXAS § COUNTY OF DALLAS § This instrument was acknowledged before me on the 11th day of November, 1999 by Stephen G. Seitz being the Vice President of Coppell Business Center II, Ltd., on behalf of said corporation. Connie L. Witt Notary Public, State of Texas My Commission Expires: 8-25-01 TAX ABATEMENT AGREEMENT - Page 12 ss2sx6~ E~.BIT A .Legal Description of the L~nd Being a tra~t of land situated in the Cordella Bogam Surety, Abstr~t No. 56, in the City of Coppetl. IZ)~n County. Texa~ md being part ofTrmzt 2 a 39.7248 ~ ~a~ct of l~d as der~cn~cl by Special Warranty ~ to MCDLF H~lding coml~ny as Volume 90150, P~ge 15i I, Deed Recor~ D~ll~ County, TeXlks, m~l ir,~nI ~ of Notthhit¢ 635 Bu~ne~ Pttk, City of Coi:~B, DBII~s County, Texas,, ~x. ont~ng t~ ~¢ p~t thet~f r~.onl~ in Voh. m~ 85056, P~ge B58 of the ~ Rec~,xh of Dallas CounW, T~xas, and b~ing more p~ticuIgly de~cr~cl ~ follo~x. BEGINNING at a ~ inch ~ Lr~n r~I ~ plsk~; yeBow ap roped 'l.lalff ~. 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ST.~TE OF TEX~S COU~ OF I hPre~y cedify this instrument was flied on the date and tim~ ~t~mped hereon by me and wPs duly rccord~-d in khe vot~me a~ I~EC S~ !~99 r'~ COUNTY CLER~ Daltas Ceun~. T~ · ~55 PARKWAy BLttD ' "":: 0 BOX 478 '-: ..._.. :. IX ]'3019 . . ~.'