HomeMy WebLinkAboutResolution No. 2012-102
CITY OF THE COLONY, TEXAS
RESOLUTION NO. 2012- i}
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF THE
COLONY, TEXAS, APPROVING A FUNDING AGREEMENT BY AND
BETWEEN THE COLONY ECONOMIC DEVELOPMENT
CORPORATION, LMG VENTURES, LLC, AND TXFM, INC.,
PROVIDING A SEVERABILITY CLAUSE; AND PROVIDING FOR AN
EFFECTIVE DATE.
WHEREAS, The Colony Economic Development Corporation (hereinafter referred to
as the "EDC") is a Type A economic development corporation, created pursuant to Chapter 504
of the Texas Local Government Code, as amended; and
WHEREAS, the EDC desires to enter into a Funding Agreement, a copy of which is
attached hereto as Exhibit A, and is incorporated herein for all purposes, with LMG Ventures,
LLC, and TXFM, Inc., addressing the payment and reimbursement of certain Project Costs.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF THE COLONY, TEXAS, THAT:
SECTION 1. The findings set forth above are incorporated into the body of this Resolution
as if fully set forth herein.
SECTION 2. The City Council for the City of The Colony, Texas, hereby approves the
Funding Agreement a copy of which is attached hereto as Exhibit A and is incorporated herein
for all purposes.
SECTION 3. If any section, article paragraph, sentence, clause, phrase or word in this
Resolution, or application thereto to any persons or circumstances, is held invalid or
unconstitutional by a Court of competent jurisdiction, such holding shall not affect the validity of
the remaining portions of this Resolution; and the City Council hereby declares it would have
passed such remaining portions of this Resolution despite such invalidity, which remaining portions
shall remain in full force and effect.
SECTION 4. This Resolution shall become effective immediately upon passage.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF THE
COLONY, TEXAS, THIS THE 11day of DECEMBER, 2012.
J McCou ' ,Mayor
Cam' ~
fJ
ATTEST
n
Christie Wilson, City Secretary
APPROVED AS TO FORM:
Jeff Moore, City Attorney
1
City Manager's Fiscal Impact Statement
Funding Agreement with the City of The Colony, Texas; The Colony Economic
Development Corporation; LMG Ventures, LLC; and TXFM, Inc.
December 11, 2012
The fiscal impact of this Funding Agreement is described in the Economic Feasibility Study attached as
Exhibit E to the Final Project and Reinvestment Zone Financing Plan for Tax Increment Reinvestment
Zone Number One, City of The Colony, Texas, adopted by Ordinance 2011-129 on November 15, 2011.
Any costs associated with this measure for the first three years and thereafter will be offset by the
future tax revenue generated by the development.
Tro owell
Manager
1775.010\30979.1
Exhibit A
Funding Agreement
II
TYPE A ECONOMIC DEVELOPMENT FUNDING AGREEMENT
This TYPE A ECONOMIC DEVELOPMENT FUNDING AGREEMENT (this
"Agreement") is entered into among The Colony Economic Development Corporation (the
"Corporation"), and LMG Ventures, LLC ("LMG") and TXFM, Inc. ("TXFM") (LMG and
TXFM are sometimes referred to in the alternative as the "Applicable Taxpaye " and collectively
as the "Taxpayers") to be effective December 12, 2012 (the "Effective Date"). The Corporation
and the Taxpayers are individually referred to as a "Party" and collectively as the "Parties".
1. RECITALS
1.1 WHEREAS, words and phrases used in this Agreement that have their initial
letters capitalized shall have the meanings given to them in the introductory paragraph above, in
these RECITALS, and in Section 2 unless the context in which a word or phrase is used clearly
requires a different meaning;
1.2 WHEREAS, unless otherwise specified, all references in this Agreement to
"Section" mean a section of this Agreement, and all references to "Exhibit" mean the exhibits
attached to and made a part of this Agreement for all purposes;
1.3 WHEREAS, the Type A Performance Agreement and Bond Validation Final
Judgment authorize the Corporation to construct Private Improvements using the proceeds of
Bond Obligations and transfer to the Applicable Taxpayer completed Projects as a contribution
to the capital of the Applicable Taxpayer;
1.4 WHEREAS, the Type A Performance Agreement and Bond Validation Final
Judgment authorize the Corporation to construct Private Improvements using the proceeds of
Private Debt and transfer to the Applicable Taxpayer completed Projects as a contribution to the
capital of the Applicable Taxpayer;
1.5 WHEREAS, the Type A Performance Agreement provides that if for any given
year the balance in the Type A Reimbursement Account exceeds the amount required to pay
Debt Service Obligations for Bond Obligations, the excess will first be used to pay "shortfall
amounts" by which the Debt Service Obligations for Bond Obligations for prior years exceeded
the balance in the Type A Reimbursement Account for such prior years;
1.6 WHEREAS, the Type A Performance Agreement provides that if for any given
year the balance in the Type A Reimbursement Account exceeds the amount required to pay
Debt Service Obligations for Private Debt Obligations, the excess will first be used to pay
"shortfall amounts" by which the Debt Service Obligations for Private Debt Obligations for prior
years exceeded the balance in the Type A Reimbursement Account for such prior years;
1.7 WHEREAS, issuance by the Corporation of Bond Obligations is a legislative act
that may not be impaired by contract;
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1_8 WHEREAS, the Corporation is willing to authorize the Taxpayers to construct
Private Improvements using Private Funding and to repay the Qualified Costs of such Private
Improvements to the Applicable Taxpayer from Available Sales Tax Revenues as contributions
to the capital of the Applicable Taxpayer;
1.9 WHEREAS, for so long as Private Funding payable from Available Sales Tax
Revenues remains unpaid, the Corporation is willing to deposit Type A Sales Tax Revenues each
year into the Type A Reimbursement Account up to the amount required to pay Debt Service
Obligations for the Private Funding Obligations;
1.10 WHEREAS, the Parties intend that upon payment in full of all Private Debt and
Private Funding secured by or payable from Available Sales Tax Revenues, funds in the Type A
Reimbursement Account shall be used as provided in the Type A Performance Agreement;
1.11 WHEREAS, the purpose of this Agreement is to authorize the Taxpayers, at their
option and subject to the Project Finance Ceiling and Coverage Confirmation, to construct all or
any portion of the Private Improvements using Private Funding and, upon completion and
approval by the Corporation of the Qualified Costs for such Private Improvements, to be repaid
fi-om Available Sales Tax Revenues as Private Funding Obligations of the Corporation and as a
contribution to the capital of the Applicable Taxpayer;
1.12 WHEREAS, any Debt Service Obligations for Private Debt Obligations and
Private Funding Obligations shall be payable from time to time only after all Debt Service
Obligations for Bond Obligations have been fully satisfied on each payment date established by
the trust indenture for such Bond Obligations;
1.13 WHEREAS, the option to finance Private Improvements with Private Funding has
been bargained for to induce the Taxpayers to locate and operate their businesses within the
Zone and are intended to be contributions to the capital of the Taxpayers;
1.14 WHEREAS, Private Funding Obligations are not in exchange for or- as
consideration for any goods or services provided by the Taxpayers;
1.15 WHEREAS, the Parties intend that Private Funding Obligations will become a
permanent part of the Applicable Taxpayer's capital structure, will benefit the Applicable
Taxpayer in an amount commensurate with the value of the payments, and will be employed in
or contribute to the production of additional income by the Applicable Taxpayer;
1.16 WHEREAS, the Private Improvements financed with Private Funding are
intended to benefit the public at large in the form of increased jobs, sales tax revenues, and ad
valorem tax revenues and otherwise promote economic development within the Zone and the
City; and
1.17 WHEREAS, the rights of the Taxpayers under this Agreement are intended to be
in addition to the rights, duties, and obligations of the parties under the Development and
Performance Agreements.
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2. DEFINITIONS
2.1 "Act" means Chapters 501 through 504, Texas Local Government Code, as
amended.
2.2 "Agreement" means this Type A Economic Development Funding Agreement.
2.3 "Amortization Formula" means the amortization schedule set forth on Exhibit A,
which schedule is the basis for determining the annual Debt Service Obligation for Private Debt
Obligations and the annual Debt Service Obligation for Private Funding Obligations.
2.4 "Annual Payment CAP" means the maximum Debt Service Obligations payable
in any given year for each of the Private Debt Obligations and Private Funding Obligations based
on the Amortization Formula. If the maximum obligations are not paid in any given year, the
shortfall will be added to the Annual Payment CAP for the next year.
2.5 "Applicable Taxpayer" is defined in the introductory paragraph.
2.6 "Available Sales Tax Revenues" mean the percentages of Type A Sales Tax
Revenues deposited into the Type A Reimbursement Account in accordance with the Type A
Performance Agreement.
2.7 "Board" means the Board of Directors of Tax Increment Reinvestment Zone
Number One, City of The Colony, Texas.
2.8 "Bond Obligations" mean one or more series of bonds, notes, or other evidences
of indebtedness issued as public debt by the Corporation and secured in whole or in part by
Available Sales Tax Revenues.
2.9 "Bond Validation Final Jud rg Went" means the "Final Judgment" entered January
18, 2012, in Ex Parte City of The Colony filed by the City of The Colony, Texas, pursuant to
Chapter 1205, Texas Government Code, in the 53"d Judicial District Court of Travis County,
Texas, Cause No. 0-1-GV-11-001995.
2.10 "City" means the City of The Colony, Texas, a Texas home-rule municipality.
2.11 "Construction" is defined in Section 5.1.
2.12 "Corporation" is defined in the introductory paragraph.
2.13 "Coverage Confirmation" means the Applicable Taxpayer's certification to the
Corporation that Available Sales Tax Revenues projected fi•om new projects plus Available Sales
Tax Revenues for the most recent 12-month period equals at least 100% of the annual Debt
Service Obligations for projected and existing Bond Obligations, Private Debt Obligations, and
Private Funding Obligations.
2.14 "Debt Service Obligations" mean:
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2.14.1 with respect to Bond Obligations, all amounts required to be paid in
connection with such Bond Obligations including, but not limited to, principal, interest,
debt service or similar reserves (not to exceed an amount equal to one year's principal and
interest), capitalized interest, costs and expenses in connection with the issuance of such
Bond Obligations; and
2.14.2 with respect to Private Debt Obligations, all amounts required to be paid
in connection with such Private Debt Obligations based on the Amortization Formula
(but not exceeding the Annual Payment CAP for the Private Debt Obligations); and
2.14.3 with respect to Private Funding Obligations, all amounts required to be
paid to the Applicable Taxpayer as contributions to the capital of the Applicable
Taxpayer based on the Amortization Formula (but not exceeding the Annual Payment
CAP for the Private Funding Obligations).
2.15 "Development and Performance Agreements" mean, collectively, the Tax
Increment Agreement, the Type A Performance Agreement, the Type B Performance
Agreement, and the Economic Development Agreement.
2.16 "Economic Development Agreement" means the Economic Development
Agreement entered into among LMG, TXFM, and the City effective November 15, 2011.
2.17 "Effective Date" is defined in the introductory paragraph.
2.18 "Facility" is defined in the Project and Finance Plan.
2.19 "Local Development Corporation" means The Colony Local Development
Corporation, a Texas non-profit corporation.
I
2.20 "Local Development Funding Agreement" means the Funding Agreement entered
into among the City, the Board, the Local Development Corporation, LMG, and TXFM effective
December 11, 2012.
2.21 "LMG" is defined in the introductory paragraph.
2.22 "Party" and "Parties" are defined in the introductory paragraph.
2.23 "Private Debt" is defined in the Type A Performance Agreement to mean any
bonds, notes, loans, or other forms of indebtedness issued or obtained by an entity other than the
Corporation to pay Project Costs and secured by a collateral assignment of payments made from
Available Sales Tax Revenues.
2.24 "Private Debt Obligations" mean, with respect to Private Debt, all amounts paid to
the Applicable Taxpayer fi-om Available Sales Tax Revenues in connection with any Private
Debt.
2.25 "Private Funding" means funds advanced by or on behalf of the Applicable
Taxpayer to pay Project Costs for Private Improvements that are not otherwise paid from the
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proceeds of Bond Obligations or the proceeds of Private Debt Obligations, which advances are to
be repaid as contributions to capital of the Applicable Taxpayer from Available Sales Tax
Revenues.
2.26 "Private Funding Obligations" ions" mean, with respect to Private Funding, all amounts
paid to the Applicable Taxpayer as contributions to the capital of the Applicable Taxpayer from
Available Sales Tax Revenues in connection with any Private Funding used to finance Private
Improvements, including interest that is limited to the construction period of such Private
Improvements and that must be capitalized.
2.27 "Private Improvements" mean any Project to be owned or operated by the
Applicable Taxpayer.
2.28 "Project" is defined in the Type A Performance Agreement.
2.29 "Project and Finance Plan" means the Final Project and Reinvestment Zone
Financing Plan for Tax Increment Reinvestment Zone Number One, City of The Colony, Texas,
approved by the Board on November 14, 2011, and by Ordinance No. 2011-1929 approved by
the City Council of the City on November 15, 2011.
2.30 "Project Costs" are defined in the Type A Performance Agreement.
2.31 "Project Finance Ceiling" means: (i) $800,000,000 consisting of the total of the
following: (1) the aggregate principal amount of all TIF Obligations; (ii) the aggregate principal
amount of all Bond Obligations; (iii) the aggregate principal amount of all Type B Bonds issued
by the Type B Corporation; (iv) the aggregate principal amount of all Private Debt issued or
obtained pursuant to the Tax Increment Agreement, Type A Performance Agreement, or Type B
Performance Agreement; and (v) the aggregate principal amount of all Private Funding provided
pursuant to this Agreement, the Type B Community Development Funding Agreement, and the
Local Development Funding Agreement; and (vi) $1,100,000,000 (consisting of the total
amounts enumerated above) if a Super Retail Store is located within the Zone.
2.32 "Qualified Costs" are defined in the Project and Finance Plan.
2.33 "Super Retail Store" means a retail store that is in addition to the Facility and that
will generate at least $500,000,000 in total taxable sales during the first full calendar year after
the store is completed and open for business to the public.
2.34 "Tax Increment Agreement" means the Development and Tax Increment Payment
Agreement entered into among the City, the Board, the Local Development Corporation, LMG,
and TXFM effective November 15, 2011.
2.35 "Taxpayers" are defined in the introductory paragraph.
2.36 "Tenn" is defined in Section 4.
2.37 "TIF Obligations" are defined in the Local Development Funding Agreement.
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2.38 "Type A Performance Agreement" means the Type A Corporation Performance
Agreement among LMG, TXFM, and the Corporation effective November 15, 2011.
2.39 "Type A Reimbursement Account" is defined in the Type A Performance
Agreement.
2.40 "Type A Sales Tax Revenues" are defined in the Type A Performance Agreement.
2.41 "Type B Bonds" means bonds, notes, or other evidence of indebtedness issued by
the Type B Corporation pursuant to the Type B Performance Agreement.
2.42 "Type B Corporation" means The Colony Community Development Corporation,
a Texas non-profit corporation.
2.43 "Type B Community Development Funding Agreement" means the Funding
Agreement entered into among the Type B Corporation, LMG, and TXFM effective December
13, 2012.
2.44 "Type B Performance Agreement" means the Type B Corporation Performance
Agreement among LMG, TXFM, and the Type B Corporation effective November 15, 2011.
2.45 "TXFM" is defined in the introductory paragraph.
2.46 "Zone" means the Tax Increment Reinvestment Zone Number One, City of The
Colony, Texas,
3. FINDINGS INCORPORATED. The RECITALS set forth in Section 1 are true and
Correct, establish the intent of the Parties in entering into this Agreement, constitute
representations and warranties of the Parties, are incorporated into the body of this Agreement,
and shall be considered part of the mutual covenants, consideration, and promises that bind the
Parties.
4. TERM. This Agreement shall be effective on the Effective Date and shall continue for
the term of the Zone and for so long thereafter as may be necessary for the Parties to fully
perform their obligations under this Agreement.
5. CONSTRUCTION OF PROJECTS.
5.1 Construction. Subject to the Project Finance Ceiling and the Coverage
Confirmation, the Corporation authorizes the Taxpayers to use Private Funding to construct all or
any portion of the Projects previously approved by the Corporation and authorized by the Act
and the Development and Performance Agreements that are Private Improvements on a schedule
determined by the Taxpayers and consistent with the performance standards set forth in the
Development and Performance Agreements. The Applicable Taxpayer shall identify to the
Corporation, from time to time, the Private Improvements to be financed with Private Funding,
including an estimate of the amount of the Private Funding. All Private Improvements financed
with Private Funding shall be engineered, designed, constructed, installed, and inspected
(collectively referred to as "Construction") in accordance with all applicable laws, ordinances,
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rules, and regulation of all governmental authorities with jurisdiction over the Construction.
Upon the completion of each Private Improvements financed with Private Funding, the
Applicable Taxpayer shall present to the Corporation an accounting of the Qualified Costs paid
or incurred in the Construction for which the Applicable Taxpayer is seeking repayment from
Available Sales Tax Revenues. The Corporation shall have 30 days to review the accounting and
to object to any line item thereof, and if there are no objections within such 30-day period, the
accounting shall be deemed approved by the Corporation and eligible for repayment from
Available Sales Tax Revenues; provided, however, interest on Private Funding shall be limited
to the construction period of such Private Improvements.
5.2 Insurance. Engineers, architects, and contractors involved with Construction shall
be required to maintain in effect at all times during Construction general liability insurance
provided by insurers licensed to do business in Texas and providing coverages approved by the
Corporation (which approval shall not be unreasonably withheld) and naming the Corporation as
an additional insured. Evidence of such insurance coverage shall be provided to the Corporation
upon request, and no insurance shall be modified or cancelled without at least 30 days' prior
written notice to the Corporation.
5.3 Release and Indemnification. The Taxpayers, together- with the engineers,
architects, and contractors involved with Construction, shall release, and use commercially
reasonable efforts to cause their insurers to release, the Corporation (and its officials, officers,
and employees) from all claims which they or their insurers might have against the Corporation
arising from or in any way related to the Construction. In addition, the Taxpayers, together with
the engineers, architects, and contractors involved with the Construction, shall indemnify the
Corporation (and its officials, officers, and employees) from claims against them that arise from
or are in any way related to the Construction. This indemnification survives termination of this
Agreement; however, this indemnity terminates: (i) if the Corporation is in Default under this
Agreement; or (ii) if the Corporation fails to assert a claim of immunity that could otherwise be
asserted in accordance with state law in the absence of an indemnification; or (iii) with respect to
specific Construction if the claim arises more than two years after the specific Construction was
completed.
5.4 Books and Records. The Taxpayers shall at all times keep complete and accurate
books and records and shall allow any representative of the Corporation, at all reasonable times
and with at least three business days' prior notice, to examine and copy the books and records of
the Taxpayers that relate to this Agreement.
6. CONTRIBUTIONS TO CAPITAL.
6.1 Private Funding. Subject to the Project Finance Ceiling and Coverage
Confirmation, the Corporation authorizes the Taxpayers, at the option of the Taxpayers, to
finance the Construction of Private Improvements using Private Funding, and the Corporation
agrees to repay the Applicable Taxpayer for Qualified Costs from Available Sales Tax Revenues,
which repayments shall be Private Funding Obligations of the Corporation that constitute
contributions to the capital of the Applicable Taxpayer. Notwithstanding the foregoing, Debt
Service Obligations for Bond Obligations secured by Available Sales Tax Revenues will be paid
first before any Debt Service Obligations will be paid for Private Debt Obligations secured by
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Available Sales Tax Revenues and before and Debt Service Obligations will be paid for Private
Funding Obligations payable from Available Sales Tax Revenues.
6.2 Use of Type A Sales Tax Revenues.
6.2.1 For so long as any Private Debt Obligations secured by Available Sales
Tax Revenues or any Private Funding Obligations payable from Available Sales Tax
Revenues remain unpaid, the Corporation agrees to continue to deposit 90% of the Type
A Sales Tax Revenues into the Type A Reimbursement Account to pay such Private Debt
Obligations and Private Funding Obligations up to the amount each year required to pay
the respective Debt Service Obligations for all Private Debt Obligations and all Private
Funding Obligations.
6.2.2 If in any given year Available Sales Tax Revenues are sufficient to pay
Debt Service Obligations for Bond Obligations, then 90% of the Type A Sales Tax
Revenues shall continue to be deposited into the Type A Reimbursement Account as
required by Section 6.2.1, and the resulting Available Sales Tax Revenues shall then be
used first to pay all Debt Service Obligations for Private Funding payable from Available
Sales Tax Revenues and second to pay all Debt Service Obligations for Private Debt
secured by Available Sales Tax Revenues. Debt Service Obligations for Private Funding
and Debt Service Obligations for Private Debt will each be amortized over an 18-year
period as described in the Amortization Formula and illustrated in the example attached
as Exhibit B. The Annual Payment CAP equals the amount payable each year from
Available Sales Tax Revenues for Debt Service Obligations for Private Funding and Debt
Service Obligations for Private Debt and equals the sum of all Debt Service Obligations
for Private Funding and Debt Service Obligations for Private Debt.
6.2.3 If in any given year all Debt Service Obligations for Bond Obligations
have been paid and all Debt Service Obligations for Private Funding and Private Debt
have been paid up to the Annual Payment CAP, then for the remainder of such year 50%
of the Type A Sales Tax Revenue received by the Corporation shall be deposited into the
Corporation's general fund and 50% shall be deposited into the Type A Reimbursement
Account and used by the Corporation (i) first to retire Private Funding Obligations paid
by TXFM for the warehouse, distribution, and corporate headquarters portions of the
Facility, (ii) next to retire additional Private Funding Obligations for Project Costs
authorized by the Act (in the order incurred), (iii) next to retire Private Debt Obligations
for Project Costs authorized by the Act (in the order incurred), (iv) next to pay Project
Costs authorized by the Act (in the order incurred), and (v) last to retire Bond Obligations
(in the order incurred).
6.2.4 When all Bond Obligations, all Private Funding Obligations, and all
Private Debt Obligations have been paid in full, 50% of the Type A Sales Tax Revenues
shall be deposited into the Corporation's general fund and 50% shall continue to be
deposited into the Type A Reimbursement Account and used by the Corporation to pay
Project Costs in accordance with the Type A Performance Agreement. Notwithstanding
the foregoing, however, if at any time additional Bond Obligations, additional Private
Funding Obligations, or additional Private Debt Obligations are issued or incurred, 90%
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of the Type A Sales Tax Revenues shall again be deposited into the Type A
Reimbursement Account as Available Sales Tax Revenues, and such Available Sales Tax
Revenues shall be used for the purposes and in the priorities described in this Section 6.
6.3 To the extent the Applicable Taxpayer elects to finance the Construction of
Private Improvements with Private Funding, then the Corporation releases NFM Services, LLC,
from all obligations to make advances required for such Private Improvements under those
certain Amended and Restated Construction Management Agreements among NFM Services,
LLC, and the Corporation effective November 20, 2012 (collectively, the "CMAs"). For so long
as the Corporation is obligated to pay Debt Service Obligations for Private Funding Obligations
or Debt Service Obligations for Private Debt Obligations, in the event of a conflict between this
Agreement and the CMAs, this Agreement shall control.
6.4 The flow of funds from the Type A Reimbursement Account with respect to the
payment of Debt Service Obligations for Bond Obligations, Private Funding Obligations, and
Private Debt Obligations is illustrated, in principal, on Exhibit C.
7 DEFAULT; REMEDIES.
7.1 If a Party fails to perform any material obligation required by this Agreement, the
other Party may give written Notice of such failure to the non-performing Party, which Notice
shall describe in reasonable detail the nature of the failed obligation. If the non-performing Party
does not cure or remedy the failed obligation within a reasonable period of time after the Notice
is given (taking into consideration the nature of the failed performance; but in no event more
than thirty (30) days after the Notice is given), then the non-performing Party shall be in
"Default" under this Agreement.
7.2 If the Taxpayers are in Default under this Agreement, the sole and exclusive
remedy of the Corporation is to enforce specific performance of this Agreement.
7.3 Except as provided by the applicable trust indenture and the related TIF
Obligations, if the Corporation is in Default, the sole and exclusive remedy of the Applicable
Taxpayer is to enforce specific performance of this Agreement.
7.4 No Default by any Party shall entitle any other Party to terminate this Agreement.
8 REPRESENTATIONS OF THE CORPORATION.
8.1 The Corporation is duly authorized, created, and existing in good standing under
the laws of the State of Texas and is qualified and authorized to implement and conduct the
functions and actions contemplated by this Agreement.
8.2 The Corporation has the power, authority, and legal right to enter into and
perfonn its obligations under this Agreement, and the execution, delivery, and performance of
those obligations: (1) has been duly authorized; (2) will not, to the best of the Corporation's
knowledge, violate any applicable judgment, order, law, or regulation; and (3) does not
constitute a default under, or result in the creation of, any monetary lien, charge, encumbrance,
or security interest upon any of the Corporation's assets under any agreement or instrument to
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which the Corporation is a party, or by which the Corporation or its assets may be bound or
affected.
8.3 This Agreement has been duly authorized, executed, and delivered by the
Corporation and constitutes a legal, valid, and binding obligation of the Corporation enforceable
in accordance with its terms.
8.4 The execution, delivery, and performance of this Agreement by the Corporation
do not require the consent or approval of any person or entity other than the City, and the City's
consent and approval have been obtained.
9 REPRESENTATIONS OF TXFM.
9.1 TxFM, Inc. is a Texas corporation duly authorized, created, and existing in good
standing under the laws of the State of Texas.
9.2 TXFM has the power, authority, and legal right to enter into and perform its
obligations under this Agreement, and the execution, delivery, and performance of those
obligations: (1) have been duly authorized; (2) will not, to the best knowledge of TXFM, violate
any judgment, order, law, or regulation applicable to TXFM; and (3) do not constitute a default
under, or result in the creation of, any monetary lien, charge, encumbrance, or security interest
upon any assets of TXFM under any agreement or instrument to which TXFM is a party, or by
which TXFM or its assets may be bound or affected.
9.3 This Agreement has been duly authorized, executed, and delivered by TXFM and
constitutes a legal, valid, and binding obligation of TXFM enforceable in accordance with its
terms.
9.4 The execution, delivery, and performance of this Agreement by TXFM do not
require the consent or approval of any person or entity that has not already been obtained.
10 REPRESENTATIONS OF LMG.
10.1 LMG Ventures, LLC, is a Texas limited liability company duly authorized,
created, and existing in good standing under the laws of the State of Texas.
10.2 LMG has the power, authority, and legal right to enter into and perform its
obligations under this Agreement, and the execution, delivery, and perfonmance of those
obligations: (1) have been duly authorized; (2) will not, to the best knowledge of LMG, violate
any judgment, order, law, or regulation applicable to LMG; and (3) do not constitute a default
under, or result in the creation of, any monetary lien, charge, encumbrance, or security interest
upon any assets of LMG under any agreement or instrument to which LMG is a party, or by
which LMG or its assets may be bound or affected.
10.3 This Agreement has been duly authorized, executed, and delivered by LMG and
constitutes a legal, valid, and binding obligation of LMG enforceable in accordance with its
terms.
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10.4 The execution, delivery, and performance of this Agreement by LMG do not
require the consent or approval of any person or entity that has not already been obtained.
11 NOTICES. Any notice or other communication required or permitted by this Agreement
(a "Notice") is effective when in writing (i) and personally delivered by any nationally
recognized delivery service such as FedEx or UPS, or (ii) three (3) days after the Notice is
deposited with the U.S. Postal Service, postage prepaid, certified with return receipt requested,
and addressed as follows or, in the case of a change of address, as provided in a Notice
notifying the other Party of such address change.
To TXFM: TxFM, Inc.
Attn: Doug Hamlin
700S.72 nd Street
Omaha, NE 68114
To LMG: LMG Ventures, LLC
Attn: Doug Hamlin
700S . 72nd Street
Omaha, NE 68114
With a copy to: Glast, Phillips & Murray
Attn: Thomas Rosen
14801 Quorum Drive, Suite 500
Dallas, TX 75254
Shupe Ventura Lindelow & Olson, PLLC
Attn: Misty Ventura
9406 Biscayne Blvd.
Dallas, TX 75218
To the Corporation: The Colony Economic Development Corporation
Attn: Keri Samford
6800 Main Street
The Colony, Texas 75056
With a copy to: Brown and Hofineister, LLP
Attn: Jeff Moore
740 East Campbell Road, Suite 800
Richardson, TX 75081
12 ASSIGNMENT. The Taxpayers have the right to assign this Agreement, in whole or in
part, and any of their obligations, right, title, or interest in or to this Agreement, to the same
extent and in the same manner provided to the "Developer" under the Type A Performance
Agreement. The Corporation may not assign this Agreement or any of its obligations, right, title,
or interest in or to this Agreement without the prior written consent of the Taxpayers.
Type A Corporation Funding Agreement
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1775.010\30829.6
13 ADDITIONAL PROVISIONS.
13.1 Term. This Agreement shall begin on the Effective Date and continue for the
term of the Type A Performance Agreement.
13.2 Applicability. The rights granted to Taxpayers by this Agreement may be made
applicable to future taxpayers upon approval by the Parties to this Agreement, which approval
shall not be unreasonably withheld or delayed, and upon the written agreement of such future
taxpayers to be bound by this Agreement.
13.3 Amendments. No alteration of or amendment to this Agreement shall be effective
unless given in writing and signed by the Party sought to be charged or bound by the alteration or
amendment. No course of dealing on the part of any Party, or failure or delay by any Party with
respect to the exercise of any right, power, or privilege under this Agreement, shall operate as a
waiver thereof.
13.4 Applicable Law; Venue. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, and all obligations of the Parties created
hereunder are performable in Denton County, Texas. Venue for any action arising under this
Agreement shall lie in the state district courts of Denton County, Texas.
13.5 Binding _Obligation. This Agreement shall become a binding obligation of the
Parties upon execution by all Parties.
13.6 Construction. This Agreement is a contract made under, and shall be construed in
accordance with and governed by, the laws of the United States of America and the State of
Texas.
13.7 Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original and all of which shall constitute one and the same
document.
13.8 Force Maieure. If the performance by any Party of its obligations under this
Agreement is delayed due to unexpected circumstances beyond the reasonable control of such
Party, then such Party shall be excused from performance during the period that such
circumstances continue so long as such Party is diligently and continuously seeking to eliminate
the circumstances or otherwise resume performance in spite of such circumstances.
13.9 Severability. If a court finds any provision of this Agreement to be invalid or
unenforceable as to any person or circumstance, such finding shall not render the provision
invalid or unenforceable as to any other persons or circumstances. To the extent feasible, any
provision found to be invalid or unenforceable shall be deemed to be modified to be valid and
enforceable; however, if the provision cannot be so modified, it shall be stricken from this
Agreement, and all other provisions of this Agreement shall remain valid and enforceable and
unaffected by the stricken provision.
Type A Corporation Funding Agreement
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1775.010\30829.6
13.10 Singular and Plural. Where the context permits, words used in the singular also
include the plural and vice versa, and the definitions of such words in the singular also apply
to such words when used in the plural and vice versa.
13.11 Time of the Essence. Time is of the essence in the performance of this
Agreement.
13.12 Execution of Agreement. The Board of Directors of the Corporation shall
authorize the execution of this Agreement on behalf of the Corporation.
13.13 Exemption from Public Bid Requirements. The Corporation is not required by
State law to comply with the competitive bidding requirements applicable to the City.
13.14 Undocumented Workers. The Taxpayers certify (and shall cause each permitted
assignee under Section 12 to certify) that it does not and will not knowingly employ an
undocumented worker (in accordance with Chapter 2264 of the Texas Government Code, as
amended) in connection with the performance of its obligations under this Agreement. If during
the Term of this Agreement, the Taxpayers or any permitted assignee is convicted of a violation
under 8 U.S.C. § 1324a(o, the Applicable Taxpayer or the assignee that is convicted shall repay
the amount of the public subsidy provided under this Agreement as required by law. Pursuant to
Section 2264.101, Texas Government Code, a business is not liable for a violation of Chapter
2264 by a subsidiary, affiliate, or franchisee of the business, or by a person with whom the
business contracts.
IN WITNESS WHEREOF, the Parties have executed this Agreement to be effective as of
the 12th day of December, 2012.
CORPORATION:
The Colony Economic Development Corporation
a Texas non-profit corporation
By:
Torn Tvardzikpresident
Type A Corporation Funding Agreement
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1775.010\30829.6
LMG Ventures, LLC,
a Texas limited il' co y
By:
Jef
TXFM, Inc.,
a Texas corpora '
By:
Jef L' d
Type A Corporation Funding Agreement
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1775.010\30829.6
Exhibit A
Amortization Formula
Years Applicable
Percentage
Year 1 5.967%
Year 2 2.718%
Year 3 3.125%
Year 4 3.568%
Year 5 4.054%
Year 6 4.498%
Year 7 4.920%
Year 8 5.385%
Year 9 5.901%
Year 10 6.254%
Year 11 6.573%
Year 12 6.794%
Year 13 7.020%
Year 14 7.253%
Year 15 7.491%
Year 16 7.736%
Year 17 7.986%
Year 18 2.75%
To calculate the Annual Payment CAP for a particular year, multiply the original principal
amount of the Private Debt Obligation or Private Funding Obligation by the percentage
applicable to the year. Year 1 is the first year of repayment for Private Debt Obligations and
Private Funding Obligations. Year 1 for Private Funding Obligations in connection with the
construction of the Facility will be calendar year 2016.
Type A Corporation Funding Agreement
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1775.010\30829.6
Exhibit B
Example Illustrating Amortization Formula Calculations
Year 1 1 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 ZO 21 12
1 f- 0 f 1 1 f 1 et 1 1 1 1 1 MLgj 1 I
1 1 OMEN= III
NFMSALES - - 620 856 916 980 1,049 1,112 1,101 1,285 1,375 1,471 1,515 1,560 1,607 1,655 1,705 1,756 1,809 1,863 1,919 1,977
PhaseI Sales - - 709 188 297 306 315 325 334 338 341 344 348 351 355 358 362 365 369 373 377 380
TOTAL INCENTIVES (TIF, 4A, 48) - - 39 24 16 27 29 31 32 34 36 37 38 39 40 41 42 44 45 46 47
I: 10% to City 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 I 1 1 1
PUBLIC DEBT SERIACE (TI F, 4A; 4B)
Z 10%taCity 10 12 12 12 12 12 11 12 12 IZ 12 IZ 12 12 11 11 11 11 11
1 i I 1 1 1 1 1 2 1 2 2 1 Z 2 1 1 0
AMORTIZATION OF NFM INVESTMENT (AF, 4A, 4B) - - - 19 6 7 8 10 11 13 14 16 17 18 19 10 20 21 20 13 4
3:50150 to City - - - 4 2 2 1 2 2 2 2 2 2 1 2 2 1 3 4 8 14 17
Total Incentives to City - - - 7 4 4 4 5 5 5 5 6 6 6 6 6 6 6 7 11 15 18
Memo: Check
I 1 1 r f I I 1 1 I I o 1 1 1 1 e I
1 1 I
TIF NFM(NVESTMENTAMORTIZATION SCHEDULE - $mm Total
NFM INVESTMENT Balance - BoY - 46 93 93 84 83 81 79 76 72 67 61 55 48 41 33 25 17 8
NFM Investment 93 46 47 - - - -
Amortization 93
- - 9 1 (1 1 3 (4 5 S 6 7 7 8 (8 8 9 (8)
NFM INVESTMENT Balance - EoY 46 93 93 84 83 81 79 76 72 67 61 55 48 41 33 25 17 g
Amortization 16 100.00% 9.820% 1.187% 1.896% 2.66730 3.514% 4.287% 5.022% 5.832% 6.730% 7.346% 7.901% 8.28636 8.681% 9.085% 9.501% 8.244% 0.000% 0.000% 0.000%
4A NFM INVESTMENT AMORTIZATION SCHEDULE - Smm Total
NFMINVESTMENTBalance - BoY - 40 81 81 77 74 72 69 66 62 58 54 49 44 38 33 27 21 15 9 2
NFM Investment 81 40 41 - -
Amortization (81) - - - (5) (2) (3) (3) (3) (4) (4) (4) (51 (5) (5) (6) (6) (6) (6) (6) (6) (2)
NFM INVESTMENT Balance -EoY 40 81 81 77 74 72 69 66 61 58 54 49 44 38 33 27 21 ]5 9 2 -
Amortization % 100.00% 5.9674% 2 ?18% 312546 3568,16 4.054% 4.498% 4.92036 5.385% 5.901% 6.254% 6.573% 6794% 7.020% 7.253% 7491% 7.736% 7.986% 2.757% 0.00016
48 NFM INVESTMENT AMORTIZA17ONSCHEDULE -$mm Total
NFMINVESTMENTBalance - BoY 40 81 81 77 74 72 69 66 62 58 54 49 44 38 33 27 21 15 9 1
NFM Investment 81 40 41 - - -
Amortization (81 - - - (5) (2) (31 (3) (3) (4) (4) (4) (5) (5) (5) (6) (5) (6) (6) (6) (6) (2)
NFM INVESTMENT Balance - EoY 40 81 81 77 74 72 69 66 62 58 54 49 44 38 33 27 11 15 9 2 - -
Amortization % 100.00% 5.9675, 1.718% 3.125% 3.568% 4.054% 4.498% 4.910% 5.385% 5.901% 6.254% 6.573% 6.794% 7.020?> 7.253 % 7.491'. 7736% 7.986% 2.757% 0.000%
Type A Corporation Funding Agreement
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1775.010\30829.6
DRAFT December 8, 2012
Exhibit C
Type A Sales Tax Revenues - Flow of Funds
Debt service shortfalls
paid from insurance
proceeds
to pas Debt Service
Obligatinns for 1st to repay
«hile Bond Obligations. Il5U D Bond insurer
Obligations for private
Private Debt Obligations, iniproeenients
or Prh ate Funding
Obligations secured by or ES('ESS for am
payable from Available given .'ear
Sales Tax Res enuec are -
outstanding. 90G of Type ...1st to pay Private Funding
A Snles Tax posited }+il! Obligations in the order incurred. and
A
be ' deposited in the Te ii ill Mlor lls 2nd to pap Pricate Debt Obligations in
to pay Debt Service paid front t -o the order incurred (subject to the
Reimbursement Account Obligations for Bond Project Finance Ceiling( up to the
Obligations tadditionalFp Amma! Payment Cap based on the
secured by assessment Amortization Formula
re, enue) for public
improvements I
Annual Payment CAP
shortfalls are carrier(
5 0 r of the Tepe A Sales Tax fol, and
Revenues to the Type A Sit of the Type A
- W Sales Tax Revenues to
N 'hen all Boni Obllgattotts, Corporation the Tape A Corporation
Private Funding Obligations E\C'ESS, then for
and Private Debt Obligations 50 of the Type A Sales Tax the remainder- of
have been paid in full f unless Revenues to the Tvpe A the pear
additional obligations are Rehinburu meet Account and Sill, of the Tope A Sales Tax Revenue
issued or Incurred) used by the Type A Corporation to the Type A Reimbursement
to pap Project Costs in Account and used by the Type A
accordance arith the Tvpe A Corporation to iLay: 1st - Pro ate
Performance Agreement Funding Obligations for the
--rehouse, distribution, and
headquarters portions of the Facility;
2nd - additional Prh ate Funding
Obligations authorizer) b.) the Act in
the order Incurred; 3rd - Private Debt
Obhrations authorized by the Act in
the order incurred: 4th • Project Costs
authorized by the Act in the order
incurred; and 9th - Bond Obligations
in the order incurred
Page 17
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