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HomeMy WebLinkAboutResolution No. 2011-077CITY OFT E COLONY, TEXAS SOLUTION NO. 2011-077 WHEREAS, The Colony Community Development Corporation (hereinafter referred to as the "Type B Corporation") is a Type B economic development corporation, created pursuant to Chapter 505 of the Texas Local Government Code, as amended; and. WHEREAS, on November 10, 2011, a notice describing the "projects" authorized by the Type B Performance Agreement was published in The Colony Courier-Leader, the newspaper of general circulation in the City of The Colony, Texas; and WHEREAS, on November 15, 2011, the Type B Corporation held a public hearing, as required by the ballot proposition submitted to the voters in connection with the adoption of the Type B sales and use tax (the "Ballot Proposition'"), and pursuant to Section 505.159(a) of the Texas Local Government Code, as amended; and WHEREAS, the City Council of the City of The Colony, Texas, finds and determines that the expenditure as specified in the Type B Performance Agreement, a copy of which is attached hereto as Exhibit A, will promote new or expanded business development, and otherwise meets the definition of "project," as that term is defined by Sections 501.101, 501.103, 505.152 of the Texas Local Government Code, as amended, and the definition of "cost," as that term is defined in Section 501.152 of the Texas Local Government Code, as amended; and WHEREAS, the City Council of the City of The Colony, Texas, hereby determines that the Resolution, and the attached Type B Performance Agreement comply with all of the applicable requirements of Chapters 501 through 505, Texas Local Government Code, as amended, the Texas Open Meetings Act, Chapter 551, Texas Government Code, as amended, and the ordinances and home-rule Charter of the City of The Colony, Texas; and WHEREAS, the City Council of the City of The Colony, Texas, hereby determines that this Resolution, and the attached Type B Performance Agreement comply with and are authorized by the Ballot Proposition; and WHEREAS, the City Council of the City of The Colony, Texas, hereby determines it is in the best interest of the City of The Colony, Texas, to adopt this Resolution approving and ratifying the attached Type B Performance Agreement and hereby finds that the Type B Performance Agreement benefits the Type B Corporation. 1 1775,0 1 412 3 95 3.17 NOW T F[1 I BE, IT RESOLVED BY THE CITY COUNCIL F THE CITY OF THE COLONY, TEXAS, THAT: SECTION 1. Each and every one of the recitals, findings, and determinations contained in the preamble to this Resolution, as well as each and every one of the recitals, findings, and determinations contained in the Type B Performance Agreement, a copy of which is attached hereto as Exhibit A, are incorporated into the body of this Resolution as if fully set forth herein and are hereby found and declared to be true and correct legislative findings and are adopted as part of this Resolution for all purposes. SECTION 2. The City Council of the City of The Colony, Texas, finds and determines that the project, and the Type B Performance Agreement will promote new and expanded business development, and is otherwise consistent with Sections 501.101, 501.103, 505.152 of the Texas Local Government Code, as amended. SECTION 3. The Type B Performance Agreement is hereby approved and ratified by the City Council. The City Council of the City of The Colony, Texas, hereby acknowledges, accepts and approves all obligations of the City set forth in the Type B Performance Agreement. SECTION 4. 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 5. This Resolution shall become effective immediately upon passage.. PASSED AND APPROVED BY THE CITY COUNCIL OF T CITY OF THE COLONY, TEXAS, THIS THE 151h day of Nove er, 2011. 1775.010\23953.17 T'A'PE B CORPORATION PERFORMANCE AGREEMENT This Type B Corporation Performance Agreement (this "Agreement") by and between LMG Ventures, LLC, a Texas limited liability company, and TXFM, Inc, a Texas corporation (collectively, the "Developer"), and The Colony Community Development Corporation, a Texas non-profit corporation (the "Type B Corporation"), is made and executed based on the following recitals, terms, and conditions to be effective November 15, 2011 (the "Effective Date"). The Developer and the Type B Corporation are each referred to as a "Party" and collectively as the "Parties." Words or phrases used in this Agreement that have their initial letters capitalized shall have the meanings given to them in Section 3 unless the context in which the words or phrases are used clearly requires a different meaning. RECITALS WHEREAS, by Resolution Not 94-30, adopted by the City Council of the City of The Colony, Texas (the "City Council" and the "City"), the City Council authorized the creation of the Type B Corporation; and WHEREAS, pursuant to the applicable procedures described in Chapters 501 through 505 of the Texas Local Government Code, as amended (the "Act"), at an election conducted on January 17, 1998, the voters within the City authorized the City to levy and collect on behalf of the Type B Corporation a one-half of one percent (0.5%) sales and use tax on taxable sales and services within the City for its corporate purposes, and said tax has been levied and is being collected; and WHEREAS, the Type B Corporation is a Type B economic development corporation operating pursuant to the Act and the Texas Non-Profit Corporation. Act as codified in the Texas Business Organizations Code, as amended; and WHEREAS, the Act authorizes the Type B Corporation to participate in economic development programs for the benefit of the City and its present and future citizens, and to enter into agreements to participate financially in economic development activities within and for the City and its citizens; and WHEREAS, the Act prohibits the provision of a direct incentive unless the Type B Corporation enters into a performance agreement providing, at a minimum: (a) a schedule of additional payroll or jobs to be created or retained by the Type B Corporation's investment; (b) a schedule of capital investments to be made as consideration for any direct incentives provided by the Type B Corporation; and (c) a provision specifying the terms and conditions upon which repayment must be made if the performance standards are not met; and WHEREAS, prior to the approval of this Agreement, the Developer completed the City's economic development incentives application; and Exhibit A Page I 1775.010123453.17 WHEREAS, the Financial Incentives comply with the City's policy statement on economic development incentives that requires a minimum of $1,000,000 capital investment and the creation of a minimum of 25 full time primary jobs, excluding retail jobs, within two years after commencement of operation; and WHEREAS, the Developer has applied to the Type B Corporation for Financial Incentives necessary for the Projects to be located within the Property, and WHEREAS, the Board has determined that the Financial Incentives provided to the Developer for the Projects are consistent with and meet the definitions of "project" and "costs" contained in the Act; and WHEREAS, the capital assets funded by the Financial Incentives will contribute to the production of income by the Developer and End Users; and WHEREAS, the Financial Incentives are not granted in exchange for goods or services provided by the Developer or any End User; and WHEREAS, the Financial Incentives are granted to induce the Developer and End Users to build and operate their business in the City and to obtain from the Developer and End Users their investment commitment to undertake business operations in the City; and WHEREAS, Financial Incentives are intended as contributions to capital to attract businesses to locate to and operate within the Property; and WHEREAS, the City expects the Financial Incentives to result in an indirect benefit to the community in the form of increased jobs, sales tax revenues, and ad valorem tax revenues; and WHEREAS, the Developer bargained for the Financial Incentives as part of a multi-state site selection process; and WHEREAS, the Board has made a finding that this Agreement will promote economic development within the City, and WHEREAS, the Projects and the funding of the Project Costs by the Type B Corporation are necessary to promote or develop new or expanded business enterprises; and WHEREAS, the Parties contemplate that the Type B Corporation will issue Bonds to finance Project Costs, subject to a Maximum Debt Limit; however, if the Type B Corporation does not issue Bonds to finance Project Costs, the Parties contemplate that the Developer will issue Private Debt to finance Project Costs, also subject to a Maximum Debt Limit; and WHEREAS, the Developer's use of the Financial Incentives is restricted to the funding of Projects as described in this Agreement and the Act; and Exhibit A Page 2 1775.010\23953.17 WHEREAS, the competitive bidding requirements of State law do not apply to the Type B Corporation or any of the Projects; and WHEREAS, to secure the Financial Incentives, the Developer or End Users will satisfy performance standards described in this Agreement, and as a result, the incentives will serve a legitimate public purpose and provide a clear public benefit in return; and WHEREAS, the predominant purpose of this Agreement is to accomplish a public purpose, namely the promotion and development of new and expanded business enterprises to provide and encourage employment and the pubic welfare and not to benefit private parties; and WHEREAS, the City has retained sufficient control over the Board and the Financial Incentives to ensure that the public purpose is accomplished and to protect the public°s investment; and WHEREAS, the provisions of this Agreement, including the performance standards and associated penalties ensure that a public purpose is satisfied and the City receives a benefit in return for the financing of Project Costs by the Type B Corporation; and WHEREAS, the liability of the Type B Corporation under this Agreement is limited to amounts deposited into the Type B Reimbursement Account; and WHEREAS, the Board hereby finds this Agreement benefits the Type B Corporation; and WHEREAS, on November 10, 2011, a notice describing the Projects was published in The Colony Courier-Leader, the newspaper of general circulation in the City; and WHEREAS, following the 60th day after publication of such notice, the Type B Corporation intends to undertake the Projects; and WHEREAS, on November 15, 2011, the Board approved this Agreement; and WHEREAS, the Developer agrees and understands that the Act requires the City Council to approve all programs and expenditures of the Type B Corporation, and accordingly this Agreement is not effective until the City Council has approved it at a City Council meeting called and held for that purpose; and WHEREAS, on November 15, 2011, the City Council held a meeting and adopted Resolution No. 2011-0177 approving and ratifying this Agreement, NOW THEREFORE, for and in consideration of the agreements contained herein, and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the Type B Corporation and the Developer agree as follows: SECTION 1. 3-11NIJIN S INCORPORATED. The foregoing recitals are hereby incorporated Exhibit A Page 3 1775.010123953.17 into the body of this Agreement and shall be considered part of the mutual covenants, consideration, and promises that bind the Parties. SECTION 2. TERM. This Agreement shall be effective as of the Effective Date of this Agreement, and shall terminate on the 75t1i anniversary of the date the City collects its first sales tax dollar from taxable sales occurring at the Facility. SECTION 3. DEFINITIONS. The following words shall have the following meanings when used in this Agreement, and capitalized terms in this Agreement that are not defined by this Section 3 or elsewhere in this Agreement shall have the meaning attributed to such terms in the Project and Finance Plan; "380 Incentive Program" is defined in the Project and Finance Plan. "Act" means Chapters 501 through 505, Texas Local Government Code, as amended. "Agreement" means this Type B Corporation Performance Agreement, together with all exhibits and schedules attached hereto from time to time. "Board" means the Board of Directors of the Type B Corporation. "Bonds" means bonds, notes, or other evidences of indebtedness issued by the Type B Corporation and secured by funds in the Type B Reimbursement Account. "Certificate" means a certificate substantially in the form attached herewith as Exhibit B. "City" means the City of The Colony, Texas, a Texas home-rule municipality. ""Cow" means Denton County, Texas. "Debt Service Obligations" icons" means, with respect to Bonds and Private Debt, all amounts required to be paid in connection with such Bonds and Private Debt including, but not limited to, principal, interest, debt service and similar reserves (such reserves not to exceed an amount equal to one year's principal and interest), and costs and expenses required in connection with any trust indenture. "Default" is defined in Section 8. "Developer" means LMG Ventures, LLC, a Texas limited liability company and TXFM, Inc, a Texas corporation, collectively, as well as all affiliates, successors, and assigns of LMG Ventures, LLC or TXFM, Inc. "Effective Date" means November 15, 2011. "End User" means a business entity that (1) obtains a Financial Incentive as a contribution to capital to attract the entity to locate and operate within the Property, and (2) becomes a Party to Exhibit A Page 4 1775.01 0\23953.17 this Agreement for limited purposes described in Section 11(a). "Facility" is defined in the Project and Finance Plan. "Einancial Incentives" mean Type B Sales Tax Revenues that are deposited into the Type B Reimbursement Account and used in accordance with the Act. "Full-Tune Equivalent Jobs" are defined in the Project and Finance Plan. "Interest" means three percent (3%) above the "prime commercial rate" as reported in the Wall Street Journal, and such rate (for purposes of this Agreement) shall change from time to time on the ISM day of the month following the date of any such change reported by the "Wall Street Journal. "Maximum Debt Limit" is defined in Section 6(b). "Part y" or "Parties" means individually or collectively, as the context indicates, the Type B Corporation, the Developer, and each End User. "Private Debt" means bonds, notes, loans, or other forms of indebtedness issued or obtained by an entity other than the Type B Corporation to pay Project Costs and secured by a collateral assignment of funds paid from the Type B Reimbursement Account. "Project" means one or more projects authorized by the Act to be undertaken and financed by the Type B Corporation, the intent being to liberally interpret the term to maximize the purposes for which Type B Sales Tax revenues may be used. A Project may include, to the extent permitted by law, but is not limited to, facilities that the Board determines will bring to the Property entertainment, tourism, .and convention uses, together with related stores, restaurants, and concessions, that will attract tourists, visitors, and shoppers from outside the City and the County such as a convention center, indoor and outdoor entertainment venues, sports facilities, theme parks, theme restaurants, theme retail, amusement parks, hotels, and other related uses including, but not limited to, retail stores and restaurants, as well as facilities that the Board determines will bring to the Property regional headquarters, warehouse, and distribution uses. "Project and. Finance Plan" means the Project and Finance Plan for Tax Increment Reinvestment Zone Number One, City of The Colony, Texas, adopted by the Board on November 15, 2011 and approved by the City Council on November 15, 2011, as amended. "Project Costs" mean all costs of Projects authorized by the Act to be paid from Type B Sales Tax Revenues including, but not limited to, the "costs" defined by Section 501.152 of the Act, "Pr_oerty" means the property described by metes and bounds on Exhibit A. "Qualified Costs" are defined in the Project and Finance Plan. "State Comptroller" means the Office of the Texas Comptroller of Public Accounts, or any Exhibit A Page 5 1775.010123953.17 successor agency. "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. "Type B Corporation" means The Colony Community Development Corporation, a Texas non- profit corporation. "Type B Reimbursement Account" means the special account created or to be created by the City or the Type B Corporation into which Type B Sales Tax Revenues are deposited in accordance with Sections 5 and 6 and from which Project Costs are reimbursed or paid. "Type B Sales Tax" means the one-half of one percent (0.5%0) sales and use tax on taxable sales and services within the City that, pursuant to the procedures prescribed in the Act, the voters within the City authorized for levy and collection on behalf of the Type B Corporation for its corporate purposes at an election conducted on January 17, 1998. "Type B Sales Tax Revenues" means the proceeds of the Type B Sales Tax that are actually received by the Type B Corporation, or by the City on behalf of the Type B Corporation from the State Comptroller, from the levy and collection of the Type B Sales Tax from and after the Effective Date on or with respect to taxable sales and transactions that occur only within the Property. SECTION 4. REVENUES, RIFPORTING; AND RECORDS. (a) Type BSales Tax Revenues. From and after the Effective Date, the Type B Corporation will pay the Type B Sales Tax Revenues to the City as received; or, if the City collects the Type B Sales Tax Revenues from the State Comptroller for the account of the Type B Corporation, the Type B Corporation will allow the City to withhold payment of the Type B Sales Tax Revenues to the Type B Corporation. The Type B Corporation will deposit or allow the City to deposit into the Type B Reimbursement Account the percentages of the Type B Sales Tax Revenues required by this Agreement (and specifically by Section 5 and Section 6 of this Agreement) to pay Project Costs or Debt Service Obligations on the Bonds. (b) Reporting. This Agreement entitles the Type B Corporation or the City to request sales and use tax information from the State Comptroller pursuant to Section 321.3022 of the Texas Tax Code, as amended. This designation allows the Type B Corporation or the City to obtain an "Area Report" from the State Comptroller that identifies sales and use tax information relating to the Property. The Type B Corporation agrees to request such information from the State Comptroller. The Developer agrees upon request to assist the Type B Corporation and the City in obtaining sufficient taxpayer information to request such reports. The Type B Corporation hereby agrees to keep this information "Confidential" consistent with Section 321.3022(f) of the Texas Tax Code. Exhibit A Page 6 1775.01©123953.17 (c) Audits and Monitoring. The City and the Type B Corporation reserve the right to conduct audits of the sales and use tax records of businesses located in the Property. The City and the Type B Corporation shall keep, or cause to be kept. (1) copies of the State Comptroller's monthly reports on sales and use tax, (2) proper and current books and accounts in which complete and accurate entries shall be made of the amount of taxes received by the City and the Type B Corporation from the State of Texas attributed to the Property; and (3) records of all other calculations, allocations, and payments that are required by this Agreement. Upon the request of the Developer, the City and the Type B Corporation shall provide copies of the above described records to the Developer. SECTION 5. REIMBURSEMENT OF PROJECT COSTS. (a) Commencing on the Effective Date and continuing for the term of this Agreement or until Bonds or Private Debt are issued, fifty percent (50%) of the Type B Sales Tax Revenues shall be deposited into the Type B Reimbursement Account in order for the Type B Corporation or the City to reimburse the Developer for Project Costs. Notwithstanding any provision in this Section 5, if Bonds or Private Debt are issued, the percentage of the Type B Sales Tax Revenues deposited into the Type B Reimbursement Account to pay Debt Service Obligations on Bonds the proceeds of which are used to pay Project Costs or reimburse the Developer for Project Costs financed with Private Debt is increased as provided in Sections 6(c) and 6(d). (b) The Type B Corporation or the City agrees to reimburse the Developer for Project Costs from Type B Sales Tax Revenues deposited into the Type B Reimbursement Account as provided in this Agreement. Neither the City nor the Type B Corporation shall take any actions the effect of which would be to reduce or adversely affect the Type B Sales Tax Revenues or the ability to reimburse the Developer for Project Costs from the Type B Reimbursement Account. (c) The Developer will present to the City Manager of the City not more frequent than once a month invoices evidencing expenditures for Project Costs (including supporting documentation and engineering certifications reasonably requested by the City Manager). The City Manager shall record the expenditures on the Certificate and shall approve or deny the expenditures as appropriate Project Costs within thirty (30) days. (d) The Type B Corporation shall reimburse the Developer for Project Costs (as recorded on the Certificate and approved by the City Manager) within thirty (30) days after the end of each month beginning the first month after the Facility opens for business to the public or within thirty (30) days after the City's receipt thereof from the Comptroller, whichever is later. The City Manager shall prepare and submit a monthly report to the Type B Corporation and the Developer no later than thirty (30) days after the end of each month detailing: (1) amounts reimbursed to the Developer for Project Costs from the Type B Reimbursement Account, and (2) identifying any expenditures recorded on the Certificate that were not approved by the City Manager. Under no circumstances shall the City or the Type B Corporation be obligated to reimburse the Developer except from the Type B Reimbursement Account. Exhibit A Page 7 1735.014!23953.17 (e) The Developer has fifteen (15) days to review each monthly report and notify the City Manager of any objections to expenditures denied by the City Manager. The Parties shall work cooperatively to resolve such objections within thirty (30) days after the notice of the objections is given. If the objections cannot be resolved within thirty (30) days, the Parties agree to submit the objections for dispute resolution pursuant to procedures approved by the Parties; and if such procedures cannot be agreed upon, the Parties may avail themselves of the remedies in Section 8. (f) Notwithstanding any other provision of this Section 5, the first costs to be paid from the Type B Reimbursement Account will be the actual administration costs for the Financial Incentives. SECTION 6, FINANCING PROTECT COSTS. (a) Debt. When the Developer desires to fund Project Costs with the proceeds of Bonds, the Developer shall deliver a written notice to the Board describing the Project Costs to be paid from the proceeds of the requested Bonds. The City Council and Board shall approve the Bond issuance (which approvals shall not unreasonably withheld) provided (1) the request and use of Bonds is consistent with the Act and the purposes of the Type B Corporation; (2) there are sufficient revenues from the Type B Reimbursement Account to pay Debt Service Obligations on the requested Bonds or the Parties have agreed upon a credit enhancement that will permit the Bonds to be issued; and (3) capitalized interest funded from Bonds will not exceed the period of construction for the Facility plus twelve months. If the Board and the City do not authorize the issuance of the requested Bonds within sixty (60) days after the notice is given, or if the requested Bonds are not or cannot be issued within six (6) months after the notice is given, and the request and use of Bonds is consistent with the Act and the purposes of the Type B Corporation, the Developer may withdraw its Bond request and issue Private Debt on terms acceptable to the Developer to pay the Project Costs for which the Type B Corporation failed, refused, or was unable to issue Bonds. (b) Maximum Debt Limit. If Bonds are issued by the Type B Corporation to pay Project Costs as requested by the Developer, the maximum aggregate principal amount of the Bonds shall be $155,300,000 (the "Maximum Debt Limit'"). If a Super Retail Store agrees to open within the Property, the Maximum Debt Limit will increase to $227,600,000. If the Developer issues Private Debt, the Maximum Debt Limit without a Super Retail Store shall be increased to $194,125,000, and the Maximum Debt Limit with a Super Retail Store shall be increased to $284,500,000. (c) Bonds. For so long as any Bonds remain outstanding, ninety percent (90%) of the Type B Sales Tax Revenues shall be deposited into the Type B Reimbursement Account for each year until the balance in the account for each year is sufficient to pay all Debt Service Obligations for each year on the outstanding Bonds and any "shortfall amounts" by which the Debt Service Obligations for any prior year exceeded the balance in the Type B Reimbursement Account for the year. If for any given year the balance in the Type B Reimbursement Account is sufficient to pay all Debt Service Obligations for the year on outstanding Bonds and any "shortfall amounts," then the percentage of the Type Exhibit A Page 8 1775.010123953.17 B Sales Tax Revenues that will be deposited into the Type B Reimbursement Account for the remainder of the year shall be reduced from ninety percent (90%) to fifty percent (50%). If all Bonds have been paid in full, the percentage of the Type B Sales Tax Revenues that will be deposited into the Type B Reimbursement Account shall be reduced from ninety percent (90%) to fifty percent (50%) unless additional Bonds are subsequently issued, in which case the percentage of the Type B Sales Tax Revenues deposited into the Type B Reimbursement Account shall be increased to ninety percent (90%) to pay all. Debt Service Obligations and "shortfall amounts" for the additional Bonds as described above in this Section 6(c). The provisions of this Section 6(c) are subject to, and do not affect the application of the provisions of Section 6(d). (d) Private Debt. For so long as any Private Debt remains outstanding, ninety percent (90%) of the Type B Sales Tax Revenues shall be deposited each year into the Type B Reimbursement Account until the balance in the account equals the amount the Developer is required to pay for Debt Service Obligations for Private Debt for the year and any "shortfall amounts" by which the Debt Service Obligations for any prior year exceeded the balance in the Type B Reimbursement Account for the year. If for any given year the balance in the Type B Reimbursement Account equals such amount, then the percentage of the Type B Sales Tax Revenues that will be deposited into the Type B. Reimbursement Account for the remainder of the year shall be reduced from ninety percent (90%) to fifty percent (50%). If all Private Debt and "shortfall amounts: have been paid in full, the percentage of the Type B Sales Tax Revenues that will be deposited into the Type B Reimbursement Account shall be reduced from ninety percent (90%) to fifty percent (50%) unless additional Private Debt is subsequently issued, in which case the percentage of the Type B Sales Tax Revenues deposited into the Type B Reimbursement Account shall be increased to ninety percent (90%) to pay an amount equal to all Debt Service Obligations for the additional Private Debt as described above in this Section 6(d). The Type B. Sales Tax Revenues deposited into the Type B. Reimbursement Account may, to the extent permitted by state law, be collaterally assigned to any lender of all or any Private Debt provided the proceeds from such Private Debt are used to pay Project Costs consistent with the Act and the purposes of the Type B Corporation. The provisions of this Section 6(d) are subject to, and do not affect the application of, the provisions of Section 6(c). (e) Account Balance Upon Termination. Any balance remaining in the Type B Reimbursement Account upon expiration of this Agreement that is not committed to pay Project Costs shall be the property of the Type B Corporation. SECTION 7. OBLIGATIONS € F THE DEVELOPER. (a) Completion of the Facility, The Facility shall be completed and open for business to the public no later than December 31, 2015, subject to "force majeure" delays and delays approved by the Type B Corporation. If the Facility is not completed and open for business by such date, an amount equal to $50,000 for each month that the Facility is late in opening shall: (i) FIRST, reduce the Maximum Debt Limit for Bonds and Private debt; and (ii) SECOND, after giving effect to such reductions, the remainder of such amount, if Exhibit A Page 9 1775.010\23953-17 any, shall be deducted from the 380 Incentive Program or from any other legally available funds owed by the Type B Corporation to the Developer, excluding funds required to pay Bonds. (b) Qualified Costs. At least $100,000,000 in Qualified Costs shall be expended to construct and open the Facility. The Developer agrees to submit to the Type B Corporation or the City by January 31, 2016, invoices, receipts, or other documentation acceptable to the Type B Corporation or the City evidencing expenditure of the required minimum amount of Qualified Costs. If less than the required amount of Qualified Costs is expended, the amount of the deficiency shall: (i) FIRST, reduce the Maximum Debt Limit for Bonds and Private debt; and (ii) SECOND, after giving effect to such reductions, the remainder of such amount, if any, shall be deducted from the 380 Incentive Program or from any other legally available funds owed by the Type B Corporation to the Developer, excluding funds required to pay Bonds. (c) Full-Time Equivalent Jobs. On January 1 of the first calendar year after the Facility is completed and open for business, the Facility will provide employment for a minimum of 850 Full-Time Equivalent Jobs. If the Facility does not provide the required minimum number of Full-Time Equivalent Jobs, an amount equal to $5,000 for each job that is not provided shall: (i) FIRST, reduce the Maximum Debt Limit for Bonds and Private debt; and (ii) SECOND, after giving effect to such reductions, the remainder of such amount, if any, shall be deducted from the 380 Incentive Program or from any other legally available funds owed by the Type B Corporation to the Developer under this Agreement, excluding funds required to pay TIF Obligations. (d) Forfeiture of Project Costs. The reductions in the Maximum Debt Limit described in Sections 7(a) through 7(c), inclusive, shall constitute a permanent forfeiture of the right of the Developer to be paid or reimbursed for Project Costs in an amount equal to the debt limit reductions. If the failure to satisfy the performance standards described in Sections 7(a) through 7(c), inclusive, occurs after the Maximum Debt Limit is reached (and provided the reductions have not been deducted from the 380 Incentive Program or from any other legally available funds owed by the City to the Developer), then the amount of the reductions shall constitute a permanent forfeiture of the right of the Developer to be paid or reimbursed for future Project Costs. (e) Performance. The Developer agrees to perform and comply with all terms, conditions, and provisions set forth in this Agreement and in all other instruments and agreements between the Developer and the Type B Corporation, and any related agreements between the Developer and the Type B Corporation. (f) Certain Prohibited Economic Incentives. The Developer covenants and agrees and will cause each End User to covenant and agree that this Agreement does not violate Section 501.161 of the Texas Local Government Code, as amended. SECTION 8® DEFAULT; REMEDIES. Exhibit A Page 10 1775.01 0\23953.17 (a) If any Party fails to perform any material covenant required by this Agreement, any 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 performance, If the non- performing Party does not cure or remedy the failed performance 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. (b) In addition to the Defaults described in Section 8(a), the Developer and any End User shall be in Default under this Agreement if the Developer or End User becomes delinquent in the payment of any ad valorem taxes or sales taxes owed to the City and such delinquencies, including penalties and interest, are not paid in full within sixty (60) days after written notice of such delinquencies is given. If the Developer or an End User is in Default under this Section 8(b), the City may pursue any remedies available at law or in equity (excluding termination of this Agreement) including, but not limited to, exercise of the right of off-set against any amounts to which the Developer or End User is entitled under this Agreement. (c) If the Developer is in Default with respect to the performance standards described in Sections 7(a), 7(b), and 7(c) of this Agreement, the sole and exclusive remedy for such Default shall be the reductions in the Maximum Debt Limit set forth in such sections and the forfeiture of Project Costs set forth in Section 7(d). (d) Except as provided in Section 8(b) and Section 8(c), if the Developer or an End User is in Default under this Agreement, the sole and exclusive remedies of the other Parties is to enforce specific performance of this Agreement. (e) Pursuant to Section 501.157 of the Act, if a Default occurs in the payment of the principal of or the interest or premium on the Bonds or in the performance of any agreement contained in a proceeding, mortgage, or instrument, the payment or performance may be enforced by: (1) mandamus; or (2) the appointment of a receiver in equity with the power to: (A) charge and collect rents, purchase price payments, and loan payments; and (B) apply the revenue from the project in accordance with the resolution, mortgage, or instrument. (f) If the Type B Corporation is in Default, the Developer and End Users may: (1) enforce specific performance of this Agreement; and (ii) exercise those rights recorded against the Property to secure performance by the Type B Corporation under this Agreement, including, rights under any (1) covenants, conditions and restrictions; (2) easements; (3) transfer documents that include a determinable interest, reversion or other similar right; or (4) a deed of trust to secure performance. (g) Except as provided in Section 8(c), if the City or the Type B Corporation is in Default under this Agreement, the sole and exclusive remedies of the other Parties is to enforce specific performance of this Agreement. Exhibit A Page 11 1775.010123953.17 (h) No Default by any Party shall entitle any other party to terminate this Agreement. SECTION 9. REPRESENTATIONS OF THE TYPE B CORPORATION. (a) The Type B 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. (b) The Type B Corporation 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: has been duly authorized; will not, to the best of the Type B Corporation's knowledge, violate any applicable judgment, order, law, or regulation; and does not constitute a default under, or result in the creation of, any lien, charge, encumbrance, or security interest upon any of the Type B Corporation's assets under any agreement or instrument to which the Type B Corporation is a party, or by which the Type B Corporation or its assets may be bound or affected.. (c) This Agreement has been duly authorized, executed, and delivered by the Type B Corporation and constitutes a legal, valid, and binding obligation of the Type B Corporation enforceable in accordance with its terms. (d) The execution, delivery, and performance of this Agreement by the Type B Corporation do not require the consent or approval of any person or entity that has not already been obtained. SECTION 10. PRESENTATIONS OF THE DEVELOPER. (a) 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. (b) TXFM, Inc. is a Texas corporation duly authorized, created, and existing in good standing under the laws of the State of Texas. (c) The Developer 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: have been duly authorized; will not, to the best knowledge of the Developer, violate any judgment, order, law, or regulation applicable to the Developer; and do not constitute a default under, or result in the creation of, any lien, charge, encumbrance, or security interest upon any assets of the Developer under any agreement or instrument to which the Developer is a party, or by which the Developer or its assets may be bound or affected. (d) This Agreement has been duly authorized, executed, and delivered by the Developer and constitutes a legal, valid, and binding obligation of the Developer enforceable in accordance with its terms. (e) The execution, delivery, and performance of this Agreement by the Developer do not Exhibit A Page 12 1775.010\23953.17 require the consent or approval of any person or entity that has not already been obtained. SECTION 11. ADDITIONAL PROVISIONS. (a) Amendments. This Agreement constitutes the entire understanding and agreement of the Parties as to the matters set forth in this Agreement. Except as provided in this Section 11(a), no alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the Party or Parties sought to be charged or bound by the alteration or amendment. This Agreement shall be automatically amended to add as a Party each End User that executes a partial assignment of this Agreement for the sole and limited purposes of: (i) allowing such End User to receive Financial Incentives under this Agreement as a contribution to capital, (ii) Sections 5, 6, 7, and 8; and (iii) compliance with Section 1 I (o) regarding the employment of undocumented workers. 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. (b) Applicable Law and 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. (c) Assignment in Whole or in Part. The Developer has the right to assign this Agreement in whole, including all obligations, rights, title, and interests of the Developer under this Agreement, and to assign this Agreement in part, with respect to any obligations of the Developer under this Agreement, to any affiliate (i.e., an entity that controls, is controlled by, or is under common control with the Developer) without the consent of the Type B Corporation. The Developer has the right to assign this Agreement in whole, including all obligations, rights, title, and interests of the Developer under this Agreement, and to assign this Agreement in part with respect to any obligations of the Developer under this Agreement, to any other person or entity with the written consent of the City (which consent shall not be unreasonably withheld, and which consent shall be deemed to have been given if the City does not respond to a request for consent within sixty (60) days after the request is made). All assignments shall be in writing executed by the Developer and the assignee and shall obligate the assignee to be bound by this Agreement to the extent this Agreement applies or relates to the obligations, rights, title, or interests being assigned. A copy of each assignment shall be provided to the Type B Corporation within thirty (30) days after execution. From and after such assignments, the Type B Corporation agrees to look solely to the assignee for the performance of all obligations assigned to the assignee and agrees that the Developer shall be released from subsequently performing the assigned obligations and from any liability that results from the assignee's failure to perform the assigned obligations. An assignment to an End User shall include information about the End User for purposes of the notice provisions of this Agreement. The Type B Corporation may not assign this Agreement, except to the City, in whole or in part, or any of its respective rights, title, or interest under this Agreement. An End User may not assign, in whole or in part, any of its rights, title, or interests in this Exhibit A Page 13 1775.010123953.17 Agreement without the prior written consent of the Developer. (d) Assignment of Certain Rights. (1) Notwithstanding the provisions of Section 11(c), the Developer has the right to assign this Agreement, in part with respect to any rights of the Developer to be reimbursed or paid for Project Costs as provided in this Agreement, to any person or entity without the consent of the Type B Corporation, All assignments shall be in writing executed by the Developer and the assignee and shall obligate the assignee to be bound by this Agreement to the extent this Agreement applies or relates to the rights being assigned. A copy of each assignment shall be provided to the Type B Corporation within 30 days after execution. From and after such assignment, the Type B Corporation agrees to look solely to the assignee for any performance related to the assigned rights and agrees that the Developer shall be released from such performance and from any liability that results from the assignee's failure with regard to such performance. An assignment to an End User shall include information about the End User for purposes of notice under this Agreement. The partial assignments of rights authorized by this Section 1 I(d), when considered together with other similar assignments of rights by the Developer under separate incentive agreements between the Developer and the City or The Colony Economic Development Corporation, shall not involve more than a total of five different End Users, and thereafter all partial assignments of rights shall require the written consent of the City (which consent shall not be unreasonably withheld and which consent shall be deemed to have been given if the City does not respond to a request for consent within sixty (60) days after the request is made), A simultaneous assignment to the same End User of rights under this Agreement and rights under any other agreement that provides economic development incentives to the Developer that are related to the development of the Property and that involve the City or The Colony Economic Development Corporation shall be considered a single assignment for purposes of applying the five-assignment limit imposed by this Section 11(d)(1). (2) To the extent permitted by law, the Developer and any End User that is a Party shall have the right to collaterally assign, pledge, or encumber, in whole or in part, to any lender as security for any loan to the Developer or End User in connection with development within the Property, all right, title, and interest of the Developer or End User to receive any Financial Incentives under this Agreement. Such collateral assignments (i) shall not require the consent of the Type B Corporation, (ii) shall require notice to the Type B Corporation together with full contact information for such lenders, (iii) shall not create any liability for any lender under this Agreement by reason of such collateral assignment unless the lender agrees, in writing, to be bound by this Agreement; and (iv) may give lenders the right, but not the obligation, to cure any failure of the Developer or End User to perform under this Agreement. No collateral assignment shall relieve the Developer or End User from any obligations or liabilities under this Agreement. Exhibit A Page 14 1775.0 1 O123953.17 (e) Binding Obligation. This Agreement shall become a binding obligation on the signatories upon execution by all signatories hereto or to any assignment hereof, including a partial assignment executed by an End User. (f) Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this Agreement. (g) 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 Mate of Texas. (h) 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. (i) 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. (j) Notices. Any notice or other communication required or permitted by this Agreement (a "Notice") is effective when in writing (1) 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 the Developer: LMG Ventures, LLC: c/o Mark Murray Glast, Phillips & Murray 14801 Quorum Drive, Suite 500 Dallas, TX 75254 TXFM, Inc.: c/o Mark Murray Glast, Phillips & Murray 14801 Quorum. Drive, Suite 500 Dallas, TX 75254 With a copy to: Glast, Phillips & Murray: c/o Thomas Rosen 14801 Quorum Drive, Suite 500 Dallas, TX 75254 Exhibit A Page 15 1775.010\23953,17 Shupe Ventura Lindelow & Olson, PLLC. c/o Misty Ventura 9406 Biscayne Blvd. Dallas, T 75218 To the Type B Corporation; The Colony Community Development Corporation c/o Keri Samford 6800 Main Street The Colony, Texas 75056 With a copy to. Brown and Hofineister, LLP: c/o Jeff Moore 740 East Campbell Road, Suite 800 Richardson, TX 75081 (k) 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 extend 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. (1) Singular and Plural. Where the context permits, words used in this Agreement 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. (m) Time is of the Essence. Time is of the essence in the performance of this Agreement. (n) Execution of Agreement. The Board shall authorize the Board's President to execute this Agreement on behalf of the Type B Corporation. (o) Exemption from Public Bid Requirements. The Type B Corporation is not required by State law to comply with the competitive bidding requirements applicable to the City. (p) Undocumented Workers. The Developer certifies (and shall cause each End User and each assignee 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 any of their respective obligations under this Agreement. If during the Term of this Agreement, the Developer, an End User, or an assignee is convicted of a violation under 8 U.S.C. § 1324a(f), the Developer, End User, or assignee that is convicted shall repay the amount of the public subsidy provided under this Agreement as required by law. Pursuant to Section Exhibit A Page 16 1775.0 2264.1011, 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. (q) Exhibits. The following exhibits are attached hereto and incorporated herein for all purposes: Exhibit A - Metes and Bounds Description of the Property Exhibit B - Form of Certificate [The Remainder of this Page Intentionally Lett Blank] Exhibit A Page 17 1775.010~23953.17 IN WITNESS WHEREOF, the Parties have executed this Agreement to he effective as of the Effective Date. Rage 18 1775.010123953.1"7 Type B Corporation: The Colony Community Development Corporation a Texas non-profit corporation f ✓ f f p, By: t awrence, President ATTEST: ~ - : W-",At~ Lisa Leary, Sect to The Colony Community elopment Corporation Page 19 1775,0 M23953.17 Exhibit A Metes and Bounds Description of the Property METES AND BOUNDS DESCRIPTION TRACT I BEING a 5.02 acre tract of land situated in the B.B.B. & C.R. Survey, Abstract No. 173, City of The Colony, Denton County, Texas, and being part of a tract of land described as Tract II as conveyed by deed to Maharishi Global Development Fund, as recorded in Volume 4555, Page 281, Official Public Records, Denton County, Texas. said 5.02 acre tract of land being more particularly described by metes and bounds as follows. BEGINNING at a found 518 inch iron rod with KHA cap for corner, being the intersection of the south right-of-way line of State Highway 121 (a variable width R.O.W.) and the southwest right- of-way line of Plano Parkway (a 100 foot R.O.W.), and being the beginning of a non-tangent curve to the left having a radius of 1050.00 feet, a central angle of 50°34"13" and a long chord which bears South 64°2.3'31 " East, 896.96 feet; THENCE southeasterly, along said southwest right-of-way line of Plano Parkway and said non- tangent curve to the left, an are distance of 926.75 feet to a point for corner, being in the north line of a tract of land conveyed by deed to CB/Tittle, Ltd., as recorded in Instrument No. 99- R0007181, Official Public Records, Denton County, Texas; THENCE South 89°58"40" West, leaving said southwest right-of=way line and following along said north line of CB/Tittle tract, at a distance of 1009.25 feet passing the northeast corner of a tract of land described as Tract F3, as conveyed by deed to Castle Hills Property Company, as recorded in Instrument No. 2006-153339, Official Public Records, Denton County, Texas, and continuing with the north line of said Castle Hills Property Company tract, for a total distance of 1210.45 feet to a point for comer; THENCE North 00°25'18" West, with the northernmost east line of said Castle Hills Property Company tract, at a distance of 97.47 feet passing the northernmost corner, and continuing with said south right-of-way line of State Highway 121, for a total distance of 226.47 feet to a point for comer; THENCE continuing with said south right-of-way line of State Highway 121 as follows: North 63°32'06" East, for a distance of 130.52 feet to a point for comer; North 60°22'33" East, for a distance of 80.86 feet to a point for corner; South 29°13'03" East, for a distance of 50.00 feet to a point for corner; North 60°47'38" East, for a distance of 219.64 feet to the POINT OF BEGINNING and CONTAINING 218,740 square feet or 5.02 acres of land, more or less. Exhibit A Page 20 1775.010123953,17 METES AND BOUNDS DESCRIPTION TRACT 2 BEING a 377.68 acre tract of land situated in the Thomas A. West Survey, Abstract No. 1344, the B.B.B. & C.R. Survey, Abstract No. 173, the B.B.B. & C.R. Survey, Abstract No. 174 and the M.D.T. Hallmark Survey, Abstract No. 570, City of The Colony, Denton County, Texas, being part of a tract of land described as Tract I as conveyed by deed to Maharishi Global Development Fund, as recorded in Volume 4555, Page 281, Official Public Records, Denton County, Texas, being part of a called 122.8106 acre tract of land conveyed by Correction Deeds to Crow-Billingsley UMF Plano, Ltd., as recorded in Instrument No. 2004-44212, 2004-44213, 2004-44214 and 2004-44218, Official Public Records, Denton County, Texas, and being a part of McKamy Road (an unrecorded right-of-way) SAVE AND EXCEPT those certain tracts of land conveyed in deeds recorded in Volume 5366, Page 977, Instrument No. 2006-49955, 2006- 49957 and 2006-75193, Official Public Records, Denton County, Texas. Said remaining 377.68 acre tract of land being more particularly described by metes and bounds as follows: BEGINNING at a found TxDot brass cap in concrete for the northeast corner of said 377.68 acre tract, being the intersection of the south right-of-way line of Sam Rayburn Tollway (State Highway 121) (a variable width R.O.W.) and the west right-of-way line of Burlington Northern Railroad (a 100 foot R.O.W. at this point); THENCE continuing with said west right-of-way line of Burlington Northern Railroad as follows:. THENCE South 06°59'58" East, for a distance of 832.17 feet to a point for corner, being the beginning of a tangent curve to the right having a radius of 3703.75 feet, a central angle of 13°04'33" and a long chord which bears South 00°2742" East, 843.42 feet; THENCE southeasterly, along said curve to the right, an arc distance of 845.26 feet to a point for corner; THENCE South 06°04'35" West, for a distance of 2524.64 feet to a point for corner; THENCE North 83'17'00" West, for a distance of 190.16 feet to a point for corner; THENCE South 00°51'51" East, for a distance of 970.10 feet to a point for corner; THENCE South 89°03'50°" West, for a distance of 31.58 feet to a point for corner; THENCE South 01°14'37" East, for a distance of 448.38 feet to a point for corner, being the northeast corner of a tract of land conveyed by deed to Frankford Road Investors No. 1, as recorded in Instrument No. 2006-49957, Official Public Records, Denton County, Texas; THENCE North 87°06'22" West, leaving said west right-of-way line and following along the north line of said Frankford Road Investors No. 1, for a distance of 1240.48 feet to a point for Exhibit A Page 21 1775.010123953.17 comer, being in the northerly right-of-way line of Plano Parkway (a 100 foot R.O.W.), and being the beginning of a non-tangent curve to the left having a radius of 1130.00 feet, a central angle of 103°16'58" and a long chord which bears North 38°43'34" West, 1772.16 feet; THENCE continuing with said northerly right-of-way line of Plano Road as follows: THENCE northwesterly, along said non-tangent curve to the left, an are distance of 2036.97 feet to a point for comer; THENCE South 89°38'05" West, for a distance of 647.23 feet to a point for corner, being the beginning of a non-tangent curve to the right having a radius of 950.00 feet, a central angle of 40°05'36" and a long chord which bears North 70°19'29" West, 651.29 feet; THENCE northwesterly, along said non-tangent curve to the right, an arc distance of 664.77 feet to a point for comer, being the beginning of a reverse curve to the left having a radius of 1050.00 feet, a central angle of 40'14'10" and a long chord which bears North 70°21'30" West, 722.31 feet, THENCE northwesterly, along said reverse curve to the left, an are distance of 737.37 feet to a point for comer; THENCE South 89°31'25" West, for a distance of 623.83 feet to a point for corner, being the beginning of a tangent curve to the right having a radius of 950.00 feet, a central angle of 52°49'04" and a long chord which bears North 64°04'03" West, 845.07 feet, THENCE northwesterly, along said curve to the right, an arc distance of 875.75 feet to a point for comer, being the most southerly point of a corner-clip with said south right-of-way line of Sam Rayburn Tollway (State Highway 121); THENCE North 08°46'31" East, along said corner-clip, for a distance of 26.03 feet to a point for corner, being in said south right-of-way line of Sam Rayburn Tollway (State Highway 121); THENCE continuing with said south right-of-way line of Sam Rayburn Tollway (State Highway 121) as follows: THENCE North 60°47'38" East, for a distance of 203.71 feet to a point for comer; THENCE North 58°17'36" East, for a distance of 252.11 feet to a point for corner; THENCE North 55°47'40" East, for a distance of 105.11 feet to a point for comer; THENCE North 58° 17'42" East, for a distarce of 248.62 feet to a point for comer; Exhibit A. Page 22 1775.010423353.17 THENCE North 6047'38" East, for a distance of 263.85 feet to a point for corner, THENCE North 76°30'51" East, for a distance of 92.27 feet to a point for comer; THENCE North 65°56'12" East, for a distance of 100.40 feet to a point for comer; THENCE North 64,113'39" East, for a distance of 100.18 feet to a point for corner; THENCE North 60°16'36" East, for a distance of 39.88 feet to a point for corner; THENCE South 74°12'01" East, for a distance of 70.70 feet to a point for corner; THENCE North 60°47'38" East, for a distance of 64.12 feet to a point for corner; THENCE North 15 "47'17" East, for a distance of 73.27 feet to a point for comer; THENCE North 59°04'32" East, for a distance of 94.25 feet to a point for comer; THENCE North 55°39'04" East, for a distance of 100.40 feet to a point for comer; THENCE North 47°37'54" East, for a distance of 114.18 feet to a point for comer; THENCE North 60°47'38" East, for a distance of 3800.00 feet to a point for comer; THENCE North 65°20'10" East, for a distance of 189.41 feet to a point for corner; THENCE North 61 °56'23" East, for a distance of 100.02 feet to a point for corner; THENCE North 63°39'23" East, for a distance of 100.12 feet to a point for corner; THENCE North 64°4753" East, for a distance of 100.24 feet to a point for comer; THENCE North 669016" East, for a distance of 201.00 feet to a point for comer; THENCE North 65°56' 12" East, for a distance of 100.40 feet to a point for corner; THENCE North 66°30'16" East, for a distance of 100.50 feet to a point for corner; THENCE North 63°05'04" East, for a distance of 100.08 feet to a point for comer; THENCE North 64°13'39" East, for a distance of 100.18 feet to a point for corner; THENCE North 83°05'27" East, for a distance of 69.58 feet to a point for corner; THENCE North 60°39'18" East, for a distance of 33.81 feet to the POINT OF Exhibit A Page 23 1775.01(1123953.17 BEGINNING and CONTAINING 16,451,919 square feet or 377.68 acres of land, more or less. METES AND BOUNDS DESCRIPTION TRACT 3 BEING a 51.11 acre tract of land situated in the R.P. Hardin Survey, Abstract No. 611 and the B.B.B. & C.R. Survey, Abstract No. 174, City of The Colony, Denton County, Texas, and being all of a called 27.073 acre tract of land conveyed by deed to Sealy Spring Creek Partners, L.P., as recorded in Instrument No. 2007-83136 and all of a called 23.990 acre tract of land conveyed by deed to Whiteford Limited Partners, as recorded in Instrument No. 2004-132215 Official Public Records, Denton County, Texas. Said 51.11 acre tract of land being more particularly described by metes and bounds as follows: BEGINNING at a found TxDot brass cap in concrete for the northeast corner of said Sealy Spring Creek Partners tract, being the intersection of the south right-of-way line of Sam Rayburn Tollway (State Highway 121) (a variable width R.O.W.) and the west right-of-way line of West Spring Creek Parkway (a' 160 foot R.O.W.); THENCE South 29°24'43" East, along said west right-of-way line of West Spring Creek Parkway, for a distance of 265.52 feet to a point for corner, being the beginning of a non-tangent curve to the right having a radius of 970.00 feet, a central angle of 29°13'42" and a long chord which bears South 14°53'13" East, 489.48 feet; THENCE southeasterly, along said west right-of-way line and said non-tangent curve to the right, an arc distance of 494.83 feet to a point for comer; THENCE South 00°22'42" East, continuing along said west right-of-way line, for a distance of 476.17 feet to a point for corner, being the northeast corner of said Whiteford Limited Partners tract; THENCE South 00°23'35" East, continuing along said west right-of-way line, for a distance of 864.92 feet to a point for comer, being the northeast comer of Lot 1, Block A, Dings Ridge Addition, Phase Three, an addition to the City of Plano, as recorded in Cabinet X, Page 450, Plat Records, Denton County, Texas; THENCE South 89°40'20" West, leaving said west right-of-way line, and following along the south line of said Whiteford Limited Partners tract and the north line of said Block A, Dings Ridge Addition, Phase Three, being a common line, for a distance of 1199.93 feet to a point for corner, being the northwest corner of Lot 23 of said Block A, Dings Ridge Addition, Phase Three, being in the east right-of-way line of Burlington Northern Railroad (a 100 foot R.O.W. at this point), and being the beginning of a non-tangent curve to the left having a radius of 3487.75 feet, a central angle of 8°31'36" and a long chord which bears North 01°45'21" West, 518.57 feet; THENCE northwesterly, leaving said common line, and following along said east right-of-way Exhibit A Page 24 1775.010123953.17 line of Burlington Northern Railroad and said non-tangent curve to the left, an are distance of 519.05 feet to a point for corner; THENCE North 06°4329" West, continuing along said cast right-of-way line, for a distance of 345.89 feet to a point for corner, being the northwest comer of said Whiteford Limited Partners tract; THENCE North 07°03'01" West, continuing along said east right-of-way line, for a distance of 628.03 feet to a point for corner, being in said south right-of-way line of Sam Rayburn Tollway, THENCE North 60°45'58" East, leaving said east right-of-way line and following along said south right-of-way line of Sam Rayburn Tollway, for a distance of 254.35 feet to a point for corner; THENCE North 63°19'02" East, continuing along said south right-of-way line, for a distance of 585.96 feet to a point for corner; THENCE North 60°52'09" East, continuing along said south right-of way line, for a distance of 369.37 feet to the POINT OF BEGINNING and CONTAINING 2,226,193 square feet or 51.11 acres of land, more or less. Exhibit A. Page 25 1775.010%23953.17 Exhibit B Form of Certificate LMG Ventures, LLC, a Texas limited liability company, and TXFM, Inc, a Texas corporation (collectively, the "Developer") hereby certifies the following in connection with the Type B Performance Agreement (the "Agreement"). Capitalized terms used and not defined in this Certificate shall have the meanings given such terms in the Agreement. I. Schedule A attached hereto reflects: (i) amounts paid by the Developer for Project Costs authorized by the Agreement and the Act; (ii) Interest that has accrued on unreimbursed amounts; and (iii) payments made to the Developer, including Interest. 2. Amounts recorded by the Developer on Schedule A are eligible for reimbursement from Type B Sales Tax Revenues authorized by the Agreement and the Act. 3. Amounts approved by the City Manager of the City for disbursement on Schedule A are supported by copies of invoices or statements delivered to the City and the Type B Corporation. 4. No additional approvals are required before reimbursement may be made. Reimbursements shall first be applied to accrued Interest and then to other Project Costs on a first in first out basis. LMG Ventures, LLC, a Texas limited liability company By: , [TITLE] TXFM, Inc., a Texas corporation By: , [TITLE] IN WITNESS WHEREOF, this Certificate has been executed by the City Manager of the City of The Colony, Texas, this day of , 20 CITY OF THE COLONY, TEXAS By: Exhibit A Page 20 1775.01012395117 SCHEDULE A Exhibit A Page 27 1775.0 12395117 ® ~ r