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HomeMy WebLinkAboutResolution No. 2010-007 RESOLUTION NO. 2010- QC7 ORIGINAL A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF THE COLONY, TEXAS, APPROVING THE ECONOMIC DEVELOPMENT AGREEMENT BY AND BETWEEN THE COLONY ECONOMIC DEVELOPMENT CORPORATION AND WRITE NOW! OFFICE PRODUCTS, INC. WHICH IS ATTACHED HERETO AND INCORPORATED HEREIN AS EXHIBIT A; AUTHORIZING THE MAYOR TO EXECUTE SAID AGREEMENT; AND PROVIDING AN EFFECTIVE DATE WHEREAS, the Bylaws of The Colony Economic Development Corporation, a Type A Economic Development Corporation as defined by state law, require that economic development grants in excess of one hundred thousand ($100,000.00) dollars be approved by the City Council; and WHEREAS, Write Now! Office Products, Inc., has applied for a grant of funds and The Colony Economic Development Corporation has determined, and finds that the relocation of the Company to the City will promote new and expanded business enterprises in the City and qualifies as a "project" under the Act; and WHEREAS, the City Council, after review of the Agreement, hereby approves the Economic Development Agreement by and between The Colony Economic Development Corporation and Write Now! Office Products, Inc. and hereby authorizes the Mayor to execute all documents, if any, related to said Agreement on behalf of the City of The Colony. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF THE COLONY, TEXAS THAT: Section 1. The City Council hereby approves the Economic Development Agreement by and between The Colony Economic Development Corporation and Write Now! Office Products, Inc., which is attached hereto and incorporated herein as Exhibit A. Section 2. The Mayor is hereby authorized to execute any and all documents necessary, if any, relative to the Economic Development Agreement. Section 3. This Resolution shall become effective immediately from and after its passage, as the law and charter in such cases provides. PASSED, APPROVED and EFFECTIVE this 19th day of January, 2010. J e McCo ~y, ayor ATTEST: Christie Wilson, City Secretary, ' APPROVE S TO FORM: 01 ^5~? Robert E. Hager, City/Attorney (REH/cdb)~ TM 40760.76.1113009 ORIGINA, STATE OF TEXAS § § ECONOMIC DEVELOPMENT AGREEMENT COUNTY OF DENTON § This Economic Development Agreement ("Agreement") is made by and between The Colony Economic Development Corporation ("TCEDC") and Write Now! Office Products, Inc. ("Company"), acting by and through their respective authorized officers. WITNESSETH: WHEREAS, the Company operates an office supply dealer business and desires to expand its operations in the City of The City of the Colony, Texas; and WHEREAS, Company has leased or intends to lease approximately 12,000 square feet of space in Building # 5 of The Cascades at The Colony, located at 5916 Stone Creek Drive, the City of The Colony, Texas 75056 (the "Improvements") for a period of at least five (5) years (the "Lease"), and intends to relocate its office supply dealer business to the Improvements; and WHEREAS, the Company had advised TCEDC that a contributing factor that would induce the Company to relocate to and occupy the Improvements would be an agreement by TCEDC to provide an economic development grant to defray a portion of the costs of relocation to the Improvements; and WHEREAS, TCEDC has adopted programs for promoting economic development; and WHEREAS, the Development Corporation Act, Chapters 501-505 of the Texas Local Government Code (the "Act"), authorizes TCEDC to provide economic development grants for expenditures to promote or develop new or expanded business enterprises and other projects as defined by the Act; and WHEREAS, the TCEDC Board of Directors has determined, and finds that the relocation of the Company to the City will promote new and expanded business enterprises in the City and qualifies as a "project" under the Act; and WHEREAS, TCEDC has determined that making economic development grants to Company in accordance with this Agreement will further the objectives of TCEDC and will benefit TCEDC and the inhabitants of the City; NOW THEREFORE, in consideration of the foregoing, and on the terms and conditions hereinafter set forth, and for other valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: TCEDC/Write Now! Office Products, Inc. Economic Development Agreement - Page 1 41474 Article I Definitions Wherever used in this Agreement, the following terms shall have the meanings ascribed to them: "Annual Maximum Property Tax Grant Amount" shall mean $500.00. "Capital Investment" shall mean the total capitalized cost of the Company for the relocation to the Improvements. "City" shall mean The City of The Colony, Texas. "Company" shall mean Write Now! Office Products, Inc. "Consummated" shall have the same meaning assigned by the Texas Tax Code. "Employment Positions" shall mean non-temporary, full-time Primary Jobs eligible for employee benefits that have been created, maintained and filled at the Improvements. In the event of voluntary or involuntary termination of an employee, which termination causes the number of Employment Positions to fall below the number of required Employment Positions pursuant to this Agreement, the Company shall not be in default provided the required number of Employment Positions is re-established within sixty (60) days of the employee termination. Two (2) or more part-time employees totaling thirty (30) hours or more per week may be substituted for one (1) full-time employee. "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 such party's Land 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 such party and such proceeding is not dismissed within ninety (90) days after the filing thereof. "Expiration Date" shall mean the sixth (6th) anniversary date of the Lease Inception Date, provided; however, the Expiration Date shall be automatically extended for any extension of the Lease term beyond the initial term of five (5) years. "Force Majeure" shall mean any contingency or cause beyond the reasonable control of a party including, without limitation, acts of God or the public enemy, war, riot, civil commotion, insurrection, government or de facto governmental action (unless caused by acts of omissions of the party), fires, explosions or floods, strikes, slowdowns or work stoppages. TCEDC/Write Now! Office Products, Inc. Economic Development Agreement - Page 2 41474 "Freeport Goods" shall have the same meaning as assigned by Section 11.251 of the Texas Tax Code and Article VIII, Section 1-j of the Texas Constitution and located on the Property. Freeport Goods does not include "Goods in Transit" as defined by Texas Tax Code, Section 11.253. "Goods in Transit" shall have the same meaning assigned by Texas Tax Code, Section 11.253. "Grant Period" shall mean a calendar year except the first Grant Period shall begin on the first day of the calendar month in which the Lease Inception Date occurs and continue through and include immediately following December 31. Thereafter, Grant Period shall mean consecutive calendar years. For example, assume the Lease Inception Date is January 15, 2010, then the first Grant Period would be Januaryl, 2010 through and including December 31, 2010. "Grants" shall collectively mean the Property Tax Grants, the Sales Tax Grants, the Lease Extension Grants, and the Relocation Grant. "Impositions" shall mean all taxes, assessments, use and occupancy taxes, charges, excises, license and permit fees, and other charges by public or governmental authority, general and special, ordinary and extraordinary, foreseen and unforeseen, which are or may be assessed, charged, levied, or imposed by any public or governmental authority on the Company and/or any of the respective owners of the Land with respect to any property or any business owned or controlled by Company and/or the respective owners of the Land within the City. "Improvements" shall mean approximately 12,000 square feet of space in Building # 5 of The Cascades at The Colony, located at 5916 Stone Creek Drive, the City of The Colony, Texas 75056. "Lease" shall mean the Company's initial lease of the Improvements for a period of at least five (5) years beginning the Lease Inception Date. "Lease Extension Grants" shall mean a maximum of five (5) economic development grants each equal to one hundred percent (100%) of 1/8 of the Sales and Use Tax for the applicable Grant Period for each additional twelve month period that the Company leases the Improvements beyond the Lease term of five (5) years. "Lease Inception Date" shall mean the commencement date of the Lease term for the Improvements, but no later than April 1, 2010. "Maximum Property Tax Grant Amount" shall mean the aggregate payment of Property Tax Grants in the amount of $2,500. TCEDC/Write Now! Office Products, Inc. Economic Development Agreement - Page 3 41474 "Maximum Sales Tax Grant Amount" shall mean the aggregate payment of Sales Tax Grants to the Company in the amount of $540,000. "Payment Request" shall mean a written request from the Company to the TCEDC for payment of the Relocation Grant, the annual Sales Tax Grant, or the Lease Extension Grant, as the case may be, accompanied by receipts and invoices for the moving costs incurred and paid by the Company to relocate to the Improvements, and the amount of Sales and Use Tax for the applicable Grant Period, as applicable, and such other evidence as may be reasonably requested by the TCEDC. "Primary Jobs" shall have the same meaning as assigned by Section 501.002(12) of the Texas Local Government Code and shall mean non-temporary, full-time Company employment positions eligible for employee benefits and located at the Improvements. "Property Tax Grant(s)" shall mean annual economic development grants to be provided by the TCEDC in an amount equal to one hundred percent (100%) of the ad valorem tax assessed by the City, Collin County, and the school district, against the Tangible Personal Property for a given tax year for a period of five (5) consecutive tax years beginning with the first full calendar year following the Lease Inception Date, to be paid as set forth herein. Each annual Property Tax Grant shall not exceed the Annual Property Tax Grant Amount. The aggregate payment of the Property Tax Grants shall not exceed the Maximum Property Tax Grant Amount. "Relocation Grant" shall mean an economic development grant equal to the actual costs paid and incurred by the Company for moving expenses to the Improvements not to exceed $20,000.00, to be paid as set forth herein. "Required Use" shall mean the Company's continuous lease and occupancy of the Improvements and the Company's continuous operation of its office supply dealer business at the Improvements. "Sales Tax Certificate" shall mean a report provided by the State of Texas to the City or the TCEDC in accordance with Texas Tax Code, Section 321.3022, (or other applicable provision of the Texas Tax Code) which lists the amount of Sales and Use Tax paid (including any refunds, credits or adjustments) received by the City from the State of Texas from the sale of Taxable Items by the Company Consummated at the Company's place of business at the Improvements for the applicable Grant Period, or if such report is not available, a certificate or other statement, containing the information required as set forth herein, in a form provided by the Company reasonably acceptable to the TCEDC setting forth the collection of Sales and Use Tax (including any refunds, credits or adjustments) by the Company received by the City from the State of Texas, for the sale of Taxable Items by the Company Consummated at the Company's place of business at the Improvements for the applicable Grant Period, which are to be used to determine TCEDC/Write Now! Office Products, Inc. Economic Development Agreement - Page 4 41474 eligibility of the Company for the Grants, together with such supporting documentation required herein, and as the City may reasonably request. "Sales Tax Grant" shall mean an annual economic development grant equal to one hundred percent (100 of the Sales and Use Tax for the applicable Grant Period not to exceed the Maximum Sales Tax Grant Amount, to be paid as set forth herein. "Sales and Use Tax" shall mean City's receipts from the State of Texas from the collection of the local sales tax collected by the State of Texas in the amount of one percent (1%) imposed by the City pursuant to Chapter 321, Texas Tax Code (it being expressly understood that the City's one percent (1%) sales and use tax receipts are being used only as a measurement for TCEDC participation through the use of general funds), as the result of the sale of Taxable Items by the Company Consummated at the Improvements in the City for the applicable Grant Period "Tangible Personal Property" shall have the same meaning assigned by Tax Code, Section 1.04 and shall mean all tangible personal property, equipment, fixtures, and machinery, but excluding inventory and supplies, owned or leased by the Company and located at the Improvements on January 1 of each applicable tax year. "Taxable Items" shall mean taxable services and taxable items as those terms are defined by the Texas Tax Code. "Taxable Value" shall mean the appraised value as certified by the appraisal district, or its successor, for a given year. "TCEDC" shall mean The Colony Economic Development Corporation. Article II Term The term of this Agreement shall begin on the last date of execution hereof (the "Effective Date") and continue until the Expiration Date, unless sooner terminated as provided herein. Article III Economic Development Grants 3.1 Property Tax Grants. (a) Subject to the Company's continued satisfaction of all the terms and conditions of this Agreement, and the Company's obligation to repay the Grants pursuant to Section 5.2 hereof, the TCEDC agrees to provide the Company with five (5) consecutive annual Property Tax Grants. The Property Tax Grants are to be paid on March 1 of each calendar year, (or the immediately TCEDC/Write Now! Office Products, Inc. Economic Development Agreement - Page 5 41474 following business day if March 1 is not a business day), beginning with March 1 of the first full calendar year following the Lease Inception Date, provided the Company has paid (prior to the delinquency date) the ad valorem taxes assessed against the Tangible Personal Property in full for the respective tax year (i.e., the tax year immediately preceding the year in which an Property Tax Grant is made; and such ad valorem taxes with respect to that immediately preceding tax year are used to determine the amount of each Property Tax Grant). Each annual Property Tax Grant shall not exceed the Annual Property Tax Grant Amount. The aggregate payment of the Property Tax Grants shall not exceed the Maximum Property Tax Grant Amount. (b) For illustration purposes only, assume that the Lease Inception Date is March 31, 2010 and ad valorem taxes assessed against the Tangible Personal Property for tax year 2011 is $500.00 then the first Property Tax Grant for the Tangible Personal Property would be for Tax Year 2011 in the amount of $500.00, and would be paid on March 1, 2012. For further illustration only assume the ad valorem taxes assessed against the Tangible Personal Property for tax year 2012 is $1,000.00 then the second of the five (5) Property Tax Grants would be for Tax Year 2012 in the amount of $500.00 (the 2012 property tax for the Tangible Personal Property for exceeded the Annual Maximum Property Tax Grant Amount), and would be paid on March 1, 2013. (b) Tax Protest. In the event the Company timely and properly protests or contests (including any motion to correct the appraisal roll) the Taxable Value and/or the taxation of the Tangible Personal Property, or any portion thereof, with the applicable appraisal district (or its successor) the obligation of the TCEDC to provide the annual Property Tax Grant with respect to the Tangible Personal Property or portion thereof, for such tax year shall be abated until a final determination has been made of such protest or contest. In the event a Company protest and/or contest results in a final determination that changes the appraised value and/or the Taxable Value of the Tangible Personal Property or the amount of ad valorem taxes assessed and due for the Tangible Personal Property, or portion thereof, after an annual Property Tax Grant has been paid for such Tangible Personal Property for such tax year, the annual Property Tax Grant for such tax year shall be adjusted (increased or decreased as the case may be) accordingly on the date of payment of the next annual Property Tax Grant payment date, or within thirty (30) business days after such determination in the event no further annual Property Tax Grant payments are due under the Agreement. (c) Refunds. In the event the TCEDC determines in its sole discretion that the amount of an annual Property Tax Grant paid by the TCEDC to the Company was incorrect, the Company shall, within thirty (30) days after receipt of written notification thereof from the City specifying the amount by which such annual Property Tax Grant exceeded the correct amount to which the Company was entitled (together with such records, reports and other information necessary to support such determination), pay such amount to the TCEDC. If the TCEDC determines that the amount by which such annual Property Tax Grant was less than the correct amount to which the Company was entitled (together with such records, reports and other information necessary to support such determination), the TCEDC shall, within thirty (30) days, pay the adjustment to the Company. TCEDC Write Now! Office Products, Inc. Economic Development Agreement - Page 6 41474 3.2 Sales Tax Grants. Subject to the continued satisfaction of all the terms and conditions of this Agreement by the Company and the obligation of the Company to repay the Grants pursuant to Section 5.2 hereof, the TCEDC agrees to provide Company with five (5) consecutive annual Sales Tax Grants. The annual Sales Tax Grants shall be paid within sixty (60) days after TCEDC receipt of a Payment Request following the end of each Grant Period. Each Payment Request for payment of the annual Sales Tax Grant shall be submitted to the TCEDC not later than thirty (30) days after the end of each calendar year. For illustration purposes, assume the Lease Inception Date is January 15, 2010, in which case the first Grant Period would begin January 1, 2010 and end December 31, 2010, and the first annual Sales Tax Grant would be paid within sixty (60) days after TCEDC receipt of the Payment Request following December 31, 2010. The amount of the first annual Sales Tax Grant shall be the amount of the Sales and Use Tax for the Grant Period from January 1, 2010 through and including December 31, 2010 not to exceed the Maximum Sales Tax Grant Amount. The payment of the annual Sales Tax Grants shall cease upon the payment of Maximum Sales Tax Grant Amount. 3.3 Lease Extension Grants. Subject to the continued satisfaction of all the terms and conditions of this Agreement by the Company and the obligation of the Company to repay the Grants pursuant to Section 5.2 hereof, the TCEDC agrees, for each additional period of twelve months that the Company extends the initial Lease term beyond five (5) years, to provide the Company with up to five (5) Lease Extension Grants. The Lease Extension Grants shall be paid within sixty (60) days after TCEDC receipt of a Payment Request following the end of each Grant Period beginning with the first Grant Period following the extension of the Lease term in accordance with this Section 3.3. Each Payment Request for payment of a Lease Extension Grant shall be submitted to the TCEDC not later than thirty (30) days after the end of the applicable calendar year. For illustration purposes, assume the Company extends the term of the Lease for one additional period of twelve (12) months, and that the Lease Inception Date is January 15, 2010, in which case the applicable Grant Period for the Lease Extension Grant would begin January 1, 2010 and end December 31, 2010, the first Lease Extension Grant would be paid within sixty (60) days after TCEDC receipt of the Payment Request following December 31, 2010. The amount of the Lease Extension Grant shall be the amount of the Sales and Use Tax for the Grant Period from January 1, 2015 through and including December 31, 2015 (or sooner date if the Lease terminates prior to the end of the calendar year). The Payment Request for any Lease Extension Grant shall include a copy of the fully executed Lease together with the amendment or extension thereof for the additional twelve month period for which the Lease Extension Grant payment is being requested. 3.4 Adiustments. In the event the Company files an amended sales and use tax return, or report with the State of Texas, or if additional Sales and Use Tax is due and owing, as determined or approved by the State of Texas, affecting Sales Tax Receipts for a previous Grant Period, any Grant payment for the Grant Period immediately following such State of Texas approved amendment shall be adjusted accordingly provided the TCEDC has received Sales and Use Tax attributed to such adjustment. As a condition precedent to payment of such adjustment, the Company shall provide the TCEDC with a TCEDC/Write Now! Office Products, Inc. Economic Development Agreement - Page 7 41474 copy of any such amended sales and use tax report or return, and the approval thereof by the State of Texas. 3.5 Refunds. In the event the State of Texas determines that the TCEDC erroneously received Sales and Use Tax, or that the amount of Sales and Use Tax paid to the TCEDC exceeds the correct amount of Sales and Use Tax for a Grant Period, for which the Company has received a Grant, the Company shall, within thirty (30) days after receipt of notification thereof from the TCEDC specifying the amount by which such Grant exceeded the amount to which the Company was entitled pursuant to such State of Texas determination, repay such amount to the TCEDC. As a condition precedent to payment of such refund, the TCEDC shall provide Company with a copy of such determination by the State of Texas. 3.6 Relocation Grant. Subject to the continued satisfaction of all the terms and conditions of this Agreement by the Company and the obligation of the Company to repay the Grants pursuant to Section 5.2 hereof, the TCEDC agrees to provide Company with the Relocation Grant to be paid within thirty (30) days after TCEDC receipt of a Payment Request following the Lease Inception Date. 3.7 Current Revenue. The Grants made hereunder shall be paid solely from lawful available funds that have been appropriated by TCEDC. Under no circumstances shall the obligations of TCEDC hereunder be deemed to create any debt within the meaning of any constitutional or statutory provision. Consequently, notwithstanding any other provision of this Agreement, TCEDC shall have no obligation or liability to pay any portion of the Grant unless the TCEDC appropriates funds to make such payment during the budget year in which the Grant is payable. Further, TCEDC shall not be obligated to pay any commercial bank, lender or similar institution for any loan or credit agreement made by Company. None of the obligations of the TCEDC under this Agreement shall be pledged or otherwise encumbered in favor of any commercial lender and/or similar financial institution. Article IV Conditions to Economic Development Grant The obligation of the TCEDC to pay the Grants hereunder shall be conditioned upon the continued compliance and satisfaction of the terms and conditions of the Agreement by the Company and each of the following conditions. 4.1 Payment Request. Company shall have submitted the applicable Payment Request. 4.2 Good Standing. Company shall not have an uncured breach or default of this Agreement. 4.3 Capital Investment. The Capital Investment shall be at least $50,000 equal as of the first anniversary of the Lease Inception Date. TCEDC/Write Now! Office Products, Inc. Economic Development Agreement - Page 8 41474 4.4 Employment Positions. During the term of this Agreement following the Lease Inception Date and continuing thereafter until the Expiration Date the Company shall create, fill and maintain at least fifteen (15) Employment Positions. 4.5 Required Use. During the term of this Agreement following the Lease Inception Date and continuing thereafter until the Expiration Date, the Company agrees to continuously lease and occupy the Improvements and shall not allow the operation of the Improvements in conformance with the Required Use to cease for more than thirty (30) days except in connection with, and to the extent of an event of a Force Majeure. 4.6 Lease. The Company shall have entered into the Lease on or before April 1, 2010; and provided a fully executed copy thereof to the TCEDC on or before May 1, 2010. 4.7 Sales Tax Certificate. As a condition to the payment of each annual Sales Tax Grant and Lease Extension Grant, as the case may be, TCEDC shall have received a Sales Tax Certificate for the applicable Grant Period for which payment of a Sales Tax Grant or Lease Extension Grant is requested. Beginning February 1, of the calendar year immediately following the first Grant Period and continuing on February 1, of each calendar year thereafter that this Agreement is in effect, the Company shall provide the TCEDC with a Sales Tax Certificate for the applicable Grant Period. The TCEDC shall have no duty to calculate the Sales Tax Receipts or determine the entitlement of the Company to any Grant, or pay any annual Sales Tax Grant or Lease Extension Grant, as the case may be, during the term of this Agreement until such time as Company has provided the TCEDC a Sales Tax Certificate for the applicable Grant Period. The TCEDC may but is not required to provide Company with a form for the Sales Tax Certificate required herein. At the request of the TCEDC, the Company shall provide such additional documentation as may be reasonably requested by TCEDC to evidence, support and establish the Sales and Use Tax paid and collected (including sales and use tax paid directly to the State of Texas pursuant to a direct payment permit) by Company for the sale of Taxable Items by Company Consummated at the Company's place of business at the Improvements and received by City from the State of Texas. The Sales Tax Certificate shall at a minimum contain, include or be accompanied by the following: (a) A schedule detailing the amount of the Sales and Use Tax collected and paid to the State of Texas as a result of the sale of Taxable Items by Company Consummated at the Company's place of business at the Improvements for the applicable Grant Period; (b) A copy of all sales and use tax returns and reports, sales and use tax prepayment returns, direct payment permits and reports, including amended sales and use tax returns or reports, filed by Company for the applicable Grant Period showing the Sales and Use Tax collected (including sales and use tax paid directly to the State of Texas pursuant to a direct payment certificate) by Company for the TCEDC/Write Now! Office Products, Inc. Economic Development Agreement - Page 9 41474 sale of Taxable Items Consummated at the Company's place of business at the Improvements; (c) A copy of all direct payment and self-assessment returns, including amended returns, filed by Company for the applicable Grant Period showing the Sales and Use Tax paid for the sale of Taxable Items by Company Consummated at the Company's place of business at the Improvements; (d) Information concerning any refund or credit received by Company of the Sales or Use Taxes paid or collected by Company (including any sales and use tax paid directly to the State of Texas pursuant to a direct payment permit) which has previously been reported by Company as Sales and Use Tax paid or collected; (e) A schedule detailing the total sales of Taxable Items by Company Consummated at the Company's place of business at the Improvements for the previous ending Grant Period. TCEDC agrees to the extent allowed by law to maintain the confidentiality of the Sales Tax Certificate. Article V Termination 5.1 This Agreement shall terminate upon any one or more of the following: (a) by written agreement of the parties; (b) Expiration Date; (c) by either party in the event the other party breaches any of the terms or conditions of this Agreement and such breach is not cured within thirty (30) days after written notice thereof, (d) by TCEDC if Company suffers an Event of Bankruptcy or Insolvency; (e) by TCEDC if any Impositions owed to the City by Company shall become delinquent (provided, however the Company retains the right to timely and properly protest and contest any such Impositions); and (f) by TCEDC if any subsequent Federal or State legislation or any decision of a court of competent jurisdiction declares or renders this Agreement invalid, illegal or unenforceable. 5.2 In the event the Agreement is terminated by TCEDC pursuant to Section 5.1(c), (d), (e), or (f) the Company shall immediately repay to TCEDC the total amount of the Grant paid to the Company as of the date of termination, plus interest at the rate of interest periodically announced by the Wall Street Journal as the prime or base commercial lending rate, or if the Wall Street Journal shall ever cease to exist or cease to announce a prime or base lending rate, then at the annual rate of interest from time to TCEDC/Write Now! Office Products, Inc. Economic Development Agreement - Page 10 41474 time announced by Citibank, N.A. (or by any other New York money center bank selected by TCEDC) as its prime or base commercial lending rate, from the Effective Date until paid. The payment obligation of Company set forth in this section 5.2 shall survive termination. 5.3 Right of Offset. The TCEDC may at its option, offset any amounts due and payable under this Agreement against any debt (including taxes) lawfully due to the City and/or the TCEDC from the Company, regardless of whether the amount due arises pursuant to the terms of this Agreement or otherwise and regardless of whether or not the debt due the City and/or the TCEDC has been reduced to judgment by a court. Article VI Miscellaneous 6.1 Binding Agreement. The terms and conditions of this Agreement are binding upon the successors and assigns of all parties hereto. This Agreement may not be assigned without the prior written consent of TCEDC. 6.2 Limitation on Liability. It is acknowledged and agreed by the parties that the terms hereof are not intended to and shall not be deemed to create a partnership or joint venture among the parties. It is understood and agreed between the parties that Company, in satisfying the conditions of this Agreement, has acted independently and TCEDC assumes no responsibilities or liabilities to third parties in connection with these actions. Company agrees to indemnify and hold harmless TCEDC and the City from all such claims, suits, and causes of actions, liabilities and expenses, including reasonable attorney's fees, of any nature whatsoever arising out of the Company's breach of this Agreement. 6.3 Authorization. Each party represents that it has full capacity and authority to grant all rights and assume all obligations that is granted and assumed under this Agreement. 6.4 Notice. Any notice required or permitted to be delivered hereunder shall be deemed received three (3) days thereafter sent by United States Mail, postage prepaid, certified mail, return receipt requested, addressed to the party at the address set forth below or on the day actually received as set by courier or otherwise hand delivered. TCEDC/Write Now! Office Products, Inc. Economic Development Agreement - Page 11 41474 If Intended for TCEDC, to: With a copy to: Attn: Keri Samford Attn: Peter G. Smith Director, Economic Development Nichols, Jackson, Dillard, Hager The Colony Economic & Smith, L.L.P. Development Corporation 1800 Lincoln Plaza 6800 Main Street 500 North Akard The Colony, Texas 75056 Dallas, Texas 75201 Fax: 972.624.2275 Fax: 214.965.0010 If intended for Company, to: Attn: Derek J. Hartsfield, President Write Now! Office Products. Inc. 3214 Beltline Road Farmers Branch, Texas 75234 Fax: 214.217.8818 6.5 Entire Agreement. This Agreement is the entire Agreement between the parties with respect to the subject matter covered in this Agreement. There is no other collateral oral or written Agreement between the parties that in any manner relates to the subject matter of this Agreement. 6.6 Governing Law. The Agreement shall be governed by the laws of the State of Texas; and venue for any action concerning this Agreement shall be in the State District Court of Denton County, Texas. The parties agree to submit to the personal and subject matter jurisdiction of said court. 6.7 Legal Construction. In the event 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 other provisions, and it is the intention of the parties to this Agreement that in lieu of each provision that is found to be illegal, invalid, or unenforceable, a provision be added to this Agreement which is legal, valid and enforceable and is as similar in terms as possible to the provision found to be illegal, invalid or unenforceable. 6.8 Recitals. The recitals to this Agreement are incorporated herein. 6.9 Counterparts. This Agreement may be executed in counterparts. Each of the counterparts shall be deemed an original instrument, but all of the counterparts shall constitute one and the same instrument. 6.10 Exhibits. All exhibits to this Agreement are incorporated herein by reference for all purposes wherever reference is made to the same. TCEDC/Write Now! Office Products, Inc. Economic Development Agreement - Page 12 41474 6.11 Survival of Covenants. Any of the representations, warranties, covenants, and obligations of the parties, as well as any rights and benefits of the parties, pertaining to a period of time following the termination of this Agreement shall survive termination. 6.12 Employment of Undocumented Workers. During the term of this Agreement the Company agrees not to knowingly employ any undocumented workers and if convicted of a violation under 8 U.S.C. Section 1324a (f), the Company shall repay the amount of the Grants and any other funds received by the Company from the TCEDC as of the date of such violation within 120 business days after the date the Company is notified by the TCEDC of such violation, plus interest at the rate periodically announced by the Wall Street Journal as the prime or base commercial lending rate, or if the Wall Street Journal shall ever cease to exist or cease to announce a prime or base lending rate, then at the annual rate of interest from time to time announced by Citibank, N.A. (or by any other New York money center bank selected by the TCEDC) as its prime or base commercial lending rate, from the date of such notice until paid. 6.13 Condition Precedent. This Agreement is subject to and conditioned upon the: (i) the Company entering into the Lease on or before April 1, 2010; and (ii) the Company providing the TCEDC with a fully executed copy of the Lease on or before May 1, 2010. (Signature page to follow) TCEDC/Write Now! Office Products, Inc. Economic Development Agreement - Page 13 41474 Executed on this day of , 2010. VTHE COLONY ECONOMIC DEVELOPMENT CORPORATION By: T dm Tvardzik, President APPROVED BY: THE CITY OF THE COLONY By: G Joe Mec rry, Mayor Executed on this day of , 2010. WRITE NOW! OFFICE PRODUCTS, INC. By: Derek J. artsfield, President TCEDC/Write Now! Office Products, Inc. Economic Development Agreement - Page 14 41474