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Res 10-32 Memorandum of Understanding Economic Development Solera Holdings Inc TOWN OF WESTLAKE RESOLUTION NO. 10-32 A RESOLUTION OF THE TOWN WESTLAKE, TEXAS, APPROVING A MEMORANDUM OF UNDERSTANDING BETWEEN THE TOWN OF WESTLAKE AND SOLERA HOLDINGS, INC., OR IT'S AFFILIATE, REGARDING ECONOMIC INCENTIVES AND PERFORMANCE REQUIREMENTS; AND FURTHER, AUTHORIZING THE TOWN MANAGER TO ENTER INTO AND EXECUTE AN ECONOMIC DEVELOPMENT AGREEMENT WITH SOLERA HOLDINGS, INC., OR IT'S AFFILIATE, PURSUANT TO STATE LAW, INCLUDING BUT NOT LIMITED TO, CHAPTER 380 OF THE TEXAS LOCAL GOVERNMENT CODE, AND CONSISTENT WITH THE TOWN'S ECONOMIC DEVELOPMENT POLICIES AND THE TERMS OF THE MEMORANDUM OF UNDERSTANDING APPROVED HEREBY. WHEREAS, The Town of Westlake, Texas (the "Town") actively pursues economic development opportunities that benefit the health, safety, and welfare of the taxpayers and citizens of the Town; and WHEREAS, The Town has approved economic development policies pursuant to state law and, in particular, Chapter 380 of the Texas Local Government Code; and WHEREAS, Town staff have been in active negotiations with Solera Holdings, Inc., which term includes any related affiliate or subsidiary ("Solera"), to locate certain business operations in the Town that will produce sales tax revenues to the Town; and WHEREAS, Westlake hereby approves a memorandum of understanding between the Town and Solera which is consistent with the Town's economic development policies adopted pursuant to state law and Chapter 380 of the Texas Local Government Code (the "MOU") and WHEREAS, The Town Council further authorizes the Town Manager to prepare and execute a complete economic development agreement that is consistent with the MOU (the "Agreement") NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF WESTLAKE, TEXAS: SECTION 1: That the findings stated above are found to be true and correct and are hereby incorporated in their entirety. SECTION 2: That the MOU, attached hereto as Exhibit "A", and incorporated herein, is hereby approved. Resolution 10-32 Page 1 of 2 SECTION 3: That the Town Manager is hereby authorized to enter into and execute an economic development agreement with Solera consistent with the MOU. SECTION 4: That should any section, provision, word, phrase or clause of Resolution be held invalid, unconstitutional or ineffective, the remainder of the Resolution shall remain in effect, it being the intent of the Town Council to have all remaining provisions held valid. SECTION 5: That this resolution shall become effective from and after its date of passage. PASSED AND APPROVED ON THIS 30TH DAY OF SEPTEMBER, 2010, BY A MAJORITY VOTE OF THE TOWN COUNCIL OF THE TOWN OF WESTLAKE, TEXAS,AT A DULY CALLED MEETING ON THE 29TH DAY OF SEPTEMBER, 2010. m Laura Wheat, Mayor h s Kelly Ed ' -ds, Town Secretary APPROVED AS TO FORM: L'( L&wrfTo<n Attorney Resolution 10-•32 Page 2 of 3 Town of Westlake September 16, 2010 Mitchell Greenhill,Vice President-Tax Solera Holdings,Inc. 15030 Avenue of Science, Suite 100 San Diego, CA 92128 Dear Mr. Greenhill: The Town of Westlake ("Westlake") is pleased to be able to work with you and Janice Peters to bring Solera to Westlake. Please accept this letter as our proposal, and Memorandum of Understanding ("MOU"), to make Solera a part of our very special community and, illustrate what sets Westlake apart from the competition. We hope that you will agree with world class partners like Fidelity Investments, First American Corporation, CorcLogic, Chrysler Financial, Deloitte University and many others that have chosen Westlake as their corporate home and community partner. Westlake has taken bold and dramatic steps over the last decade to become the most attractive corporate campus location in Texas. The reason our efforts have been so successful is simple: we offer competitive economic incentives; then we devote our efforts to delivering a unique environment and location. So whether it is to conduct business, live, or raise a family, Westlake is first among any community in America. CommunLtE Bene is Located less than 15 minutes from both the DFW Airport and Alliance Airport, Westlake offers the unique combination of rural feel and friendly, small town Texas, with the dynamic appeal of the DFW metroplex_ Westlake takes full advantage of both by offering a rich, family-style quality of life that is characterized by world class education opportunities; carefully master planned developments; and beautiful, protected open space that is enjoyed daily by residents and corporate employees. Whether it is to live, attend school, go to work, or just relax with friends, Westlake is an inviting master planned community protected from the noise and traffic which typically punctuates corporate life. Westlake affords the corporate employee or executive the luxury of two worlds: the convenience of a 5 minute drive to work and the ability to live and enjoy the wonderful quality of life of a small community. Additionally, adjacent communities such as Keller, Southlake, Trophy Club, Fort Worth, and Roanoke offer a wide variety of housing choices and price points for Solera's employees, all within a short commute. 3 Village Circle,Suite 202♦Westlake,Texas 76262 Metro:817-430-0941 a Fax;817-434-1812•www.westiakee-tx.org Community Partnership Westlake greatly values the public-private partnerships that have been forged with our corporate stakeholders. One facet of that partnership is our willingness to enhance the reasons to move to Westlake with local financial incentives for select businesses. By executing this non-binding MOU, Westlake is prepared to enter into negotiations for an economic development agreement with Solera to offer the following: Sales and Use Tar Chapter 380 of the Texas Local Government Code ("Chapter 380") authorizes municipalities to administer programs, including programs for making loans and grants of public money and providing personnel and services of the municipality, to promote economic development. Westlake has significant experience using Chapter 380 in a manner that is both mutually rewarding and relatively simple to administer. As you are aware, Westlake has adopted the 4B sales tax (now called Type B) provision of the Economic Development Corporation Act of 1979, now codified in Chapters 501-505 of the Texas Local Government Code. This additional sales tax is specifically authorized to provide economic incentives to businesses such as Solera. In addition, Westlake voters have approved an additional %2 cent sales tax to reduce property taxes (formerly the 4A economic development sales tax, and referred to herein as the"PRT'). These two taxes, combined with the standard 1% sales tax collected by all Texas municipalities creates a 2% sales and use tax for Westlake. We propose that Westlake and Solera enter into negotiations for a Chapter 380 economic development agreement that provides meaningful incentives to Solera to grow its business and, if possible,relocate as much of your existing sales as possible to a Westlake point of sale. As such, Westlake will offer Solera a sales tax reimbursement agreement to extend for a period of three (3) years. Although the term of this agreement is to be three (3) years, it is intended that the agreement shall be extended on the mutual agreement of the parties and that Solera shall continue to reevaluate any opportunities to grow and relocate as much of its existing sales as possible to a Westlake point of sale as such growth and relocations shall be beneficial to both parties. You have concluded that the amount of Solera's taxable sales volume subject to Westlake sales and use taxes that Solera can commit to at this time would be $5,000,000 in the fust full year of operations. Westlake will agree to negotiate an economic development agreement, subject to Town Council approval, according to the following terms regarding the sharing of Westlake's municipal sales and use taxes collected and paid by Solera to the State of Texas Comptroller's Office as follows: • Year One- Westlake would agree to reimburse 25% of all sales tax collected in the first year provided the taxable sales revenues (calculated following the first full year of operation based on the Town's fiscal year, October 1 through September 30) are equal to or exceeds $5,000,000. Westlake would agree to reimburse 25% of all sales taxes collected on the taxable sales revenues in excess of$5,000,000 but less than$8,000,000. Page 2 of 4 The sales tax collected on the taxable sales revenues of $8,000,000, plus anything received over the$8,000,000, would be reimbursed at a rate of 50%. If the taxable sales revenues do not equal $5,000,000 in this fust full year of operation, then no reimbursement would occur. • Year Two- Westlake would agree to reimburse 25% of all sales tax collected in the second year provided the taxable sales revenues are equal to or exceeds $6,500,000. Westlake would agree to reimburse 25% of all sales taxes collected on the taxable sales revenues equal to or in excess of$6,500,000 but less than $8,000,000. Following the second year, Solera would need to generate $8,000,000 annually in revenues subject to Westlake sales and use taxes in order to receive a 50% reimbursement. The sales taxes on the entire $8,000,000, plus anything received over the $8,000,000, would be reimbursed at the 50% rate. Taxable sates revenues under $6,500,000 would not be subject to reimbursement. • Year Three- Westlake would agree to reimburse 50% of all sales tax collected in the third year provided the taxable sales revenues are equal to or exceeds $8,000,000. Following the third year, Solera would need to generate $8,000,000 annually in revenues subject to Westlake sales and use taxes in order to receive a 50% reimbursement. The sales taxes on the entire $8,000,000, plus anything received over the $8,000,000, would be reimbursed at the 50% rate. Taxable sales revenues under $8,000,000 would not be subject to reimbursement. Westlake proposes the term of the agreement to be three (3) years with provisions for extension based on the mutual agreement of the parties. The term will begin on the date of execution of the contract, Sales tax collected from Solera will be collected and accounted for in a manner that allows the Town and Solera to mutually verify receipts. In order to determine the eligible reimbursement on sales taxes received during the first partial fiscal year,the Town will account for all the sales tax received for each month beginning on the first date of receipt and ending with the last receipt from the Comptroller occurring before the end of the Town's fiscal year, September 31,2011. Solera will be eligible for a reimbursement in the first partial year provided the Town's sales tax collections are equal to or exceed 1/12 of the volume required under the terms for year one, multiplied by the number of months of receipt. It is the intent of the Town to work closely with Solera over the three years of this agreement to explore future opportunities to increase Solera's presence in Westlake and encourage Solera's growth and prosperity. Real Estate Westlake has an excellent working relationship with all commercial property owners in the town and will work closely with each in order to encourage a competitive real estate deal whether it is lease space or new construction. Additionally, Westlake utilizes a streamlined development process in which entitlements can be quickly reviewed and approved within the zoning already established in the various Planned Developments supporting commercial uses. In other words, Page 3 of 4 Westlake actually has what many other cities can only claim - a true "one stop shop" for expeditious development review and permitting. Westlake stands ready to immediately begin drafting documents in order to bring the Solera relocation to fruition. Westlake is very proud to be considered for the corporate relocation of Solera. The terns and conditions of this proposed agreement would be subject to Town Council approval. We are confident that the financial incentives and assistance offered herein, combined with the quality of life that has attracted so many Fortune 500 companies to Westlake, represent an outstanding invitation to Solera. We are more than happy to visit personally with the site selection team and interface with potential property owners to help facilitate this transaction. I will gladly provide further information as necessary and look forward to hearing from you soon. If you agree to commence negotiation of a comprehensive economic development agreement containing the deal points contained in this MOU, please indicate by executing in the space below. Sincerely, (y ?Thomas E. Br r Town Manager AGREED: By: Mitchell Greenhill Vice President, Tax Solera Holdings,Inc Cc: Laura Wheat,Mayor Town of Westlake Janice Peters,Principal Hudson Peters Commercial Trent Petty,President Petty&Associates,Inc. L. Stanton Lowry Town Attorney Page 4 of ECONOMIC DEVELOPMENT PROGRAM AGREEMENT This ECONOMIC DEVELOPMENT PROGRAM AGREEMENT ("Amement") is entered into by and between the TOWN OF WESTLAKE, TEXAS (the "Town"), a general law municipal corporation organized under the laws of the State of Texas, and SOLERA HOLDINGS, INC. ("Solera"), a Delaware Corporation. The Town and Solera are collectively referred to as the "Parties". RECITALS The Town and Solera hereby agree that the following statements are true and correct and constitute the basis upon which the Town and Solera have entered into this Agreement: A. Solera owns, or is under contract to purchase, or has leased, approximately 14,971 square feet in a existing building located at 7 Village Circle, Suite 100, Westlake, Texas, establishing situs per State Comptroller regulations for sales and use tax remission purposes to the Town. Solera intends to continuously operate a sales and use tax generating business on the Land that is at least 14, 971 square feet in size (the "Required Improvements"). The Required Improvements will provide a valuable catalyst for further development in the Town and increased sales and use tax revenues to the Town. B. In order to maximize the economic benefits that the Required Improvements can bring to the Town, the Town and Solera desire to enter into this Agreement. C. In accordance with Resolution No. 06-19, adopted by the Town Council on May 8, 2006, attached hereto as Exhibit "A" and hereby made a part of this Agreement for all purposes, the Town has established an economic development incentive policy and program pursuant to which the Town will, on a case-by-case basis, offer economic incentive packages authorized by Chapter 380 of the Texas Local Government Code, Article III, Section 52-a of the Texas Constitution, and other applicable laws, that include monetary loans and grants of public money, as well as the provision of personnel and services of the Town, to businesses and entities that the Town Council determines will promote state or local economic development and stimulate business and commercial activity in the Town in return for verifiable commitments from such businesses or entities to cause specific infrastructure, employment and other public benefits to be made or invested in the Town(the "380 Program"). D. The Town Council has determined that by entering into this Agreement, the potential economic benefits that will accrue to the Town under the terms and Page 1 of 15 Economic Development Program Agreement conditions of this Agreement are consistent with the Town's economic development objectives and the 380 Program and that continuous operation of the Require Improvements will further the goals for positive growth in the Town. In addition, the Town Council has determined that the 380 Program is an appropriate means to achieve the construction and operation of the Required Improvements, which the Town Council has determined are necessary and desirable, and that the potential economic benefits that will accrue to the Town pursuant the terms and conditions of this Agreement are consistent with the Town's economic development objectives as outlined in the 380 Program. This Agreement is authorized by Chapter 380 of the Texas Local Government Code and the 380 Program. NOW, THEREFORE, in consideration of the mutual benefits and promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,the Parties agree as follows: AGREEMENT 1. INCORPORATION OF RECITALS. The Town Council has found at a duly-called and legally-noticed public meeting through the adoption of Town Resolution No. 10-32, attached hereto as Exhibit "B" and hereby made a part of this Agreement for all purposes, and the Town and Solera hereby agree, that the recitals set forth above are incorporated herein and true and correct and form the basis upon which the Parties have entered into this Agreement. 2. DEFINITIONS. In addition to terms defined in the body of this Agreement, the following terms shall have the definitions ascribed to them as follows: 380 Program has the meaning ascribed to it in Recital C. Affiliate means all entities, incorporated or otherwise, under common control with, controlled by or controlling Solera. For purposes of this definition, "control"means fifty percent(50%) or more of the ownership determined by either value or vote. Completion Date means the date as of which certificates of occupancy, whether final or temporary, have been issued by the Town. Completion Deadline means January 1, 2011. Effective Date has the meaning ascribed to it in Section 3. Land has the meaning ascribed to it in Recital A, and establishes situs per the State Comptroller for sales and use tax remission purposes to the Town. Page 2 of 15 Economic Development Program Agreement Program Grants means the annual economic development grants paid by the Town to Solera in accordance with this Agreement and as part of the 380 Program. Program Source Funds means an amount of Town funds available for inclusion in a Program Grant that is payable in a given Program Year, from the Sales Tax Revenues which were received by the Town attributed to or derived from sales from the Land, Required Improvements, and any improvements located thereon during the Twelve-Month Period ending in the same Program Year in which the Program Grant for that Program Year is payable. Program Year means the first full year of operation based on the Town's fiscal year, October 1 through September 30 in which the Town is obligated pursuant to this Agreement to pay Solera a Program Grant, following the Completion Date (Program Year 1) and provided, however, that Solera will be eligible for a reimbursement in the first partial year provided the Town's sales tax collections are equal to or exceed 1/12 of the volume required under the terms for partial year one, multiplied by the number of months of receipt. Records has the meaning ascribed to it in Section 4.2. Renewal means provisions can be made for an extension based on the mutual agreement of the parties. Revenue means all sales, services and other receipts whatsoever of all business conducted in, on or from the Land, Required Improvements, and any improvements located thereon, whether cash or credit, including mail, telephone, telefax, telegraph, internet or catalogue orders received or filled at or from the Land, Required Improvements, and any improvements located thereon, deposits not refunded to purchasers, orders taken (although such orders may be filled elsewhere), and sales to employees. Sales will not include (i) any sums collected and paid for any sales or excise tax imposed by any duly constituted governmental authority, (ii) the exchange of merchandise purchased on and returned to the Land or (iii) the amount of returns to shippers and manufacturers. Sales means all taxable sales and services as defined by the Texas State Comptroller's Office that produce Sales Tax Revenues (defined below) and services and other receipts whatsoever of all business conducted in, on or from the Land, Required Improvements, and any improvements located thereon, whether cash or credit, including mail, telephone, telefax, telegraph, internet or catalogue orders received or filled at or from the Land, Required Improvements, and any improvements located thereon, deposits not refunded to purchasers, orders taken (although such orders may be filled elsewhere), sales to employees, sales through vending machines or other devices. Sales Tax Revenues means a one percent (1%) available sales and use tax, such as that presently in effect pursuant to Texas Tax Code §§ 321.101(a) and 321.103, as may be amended, resulting from sales and use taxes received by the Town and collected by Page 3 of 15 Economic Development Program Agreement Solera on Sales transacted on the Land, Required Improvements, and any improvements located thereon. Sales Tax Revenues also includes all revenues from(i)the %2% sales tax collected pursuant to Chapters 501-505 of the Texas Local Government Code, formerly known as Section 4B of Section 5190.6 of the Texas Revised Civil Statutes, and (ii) the 1/2% sales tax collected pursuant to Section 321 of the Texas Tax Code (which is commonly referred as to the "property tax reduction sales tax"). Notwithstanding anything to the contrary herein, in no event shall Sales Tax Revenues ever exceed a two percent (2%) sales tax imposed by the Town, even if the Town at any point in the future charges more than a two percent (2%) sales tax. If the Town's combined sales tax rate is ever decreased to the extent that the Town receives available sales tax revenues based on less than a two percent (2%) sales tax, then the meaning of Sales Tax Revenues shall automatically be adjusted to equal that lesser percentage. If the Town's sales tax rate is ever decreased as provided in the preceding sentence and the Town then subsequently adds a sales tax that increases such lower percentage and whose use is not controlled or regulated, in whole or in part, by another governmental entity or authority or otherwise dedicated to a specific use by the Town, then Sales Tax Revenues shall be computed to reflect that increased percentage up to a maximum aggregate of two percent (2%). Term has the meaning ascribed to it in Section 3. Twelve-Month Period means the period based on the Town's fiscal year, October 1 through September 30 of a given year. 3. TERM. This Agreement shall be effective as of January 1, 2012, following the execution by the Parties (the "Effective Date") and, unless terminated earlier in accordance with this Agreement, shall expire on the date as of which the Town has paid all Program Grants required following the Year Three Annual Sales Requirement (the "Term"). Provided, however, if Solera has fully satisfied this Agreement, is not in breach thereof, and has met the Year One Annual Sales Requirement, Year Two Annual Sales Requirement, and Year Three Annual Sales Requirement this Agreement may be renewed for an additional three (3) years on the terms and conditions agreeable to the parties (the "Renewal"). 4. SOLERAS' OBLIGATIONS AND COMMITMENTS. 4.1 Annual Sales Requirements. 4.1.1 Year One Annual Sales Requirement. From the Effective Date through September 30, 2012, in order to receive an annual Program Grant from the Town, Solera must have Sales equal to or in excess of Five Million Dollars ($5,000,000.00) ("Year One Annual Sales Requirement") subject to the pro rata payment conditions described in Section 2, definition of Program Year. Page 4 of 15 Economic Development Program Agreement 4.1.2 Year Two Annual Sales Requirement. From October 1, 2012, through September 30, 2013, in order to receive an annual Program Grant from the Town, Solera must have Sales equal to or in excess of Six Million Five Hundred Thousand Dollars ($6,500,000.00) ("Year Two Annual Sales Requirement"). 4.1.3 Year Three Annual Sales Requirement. From October 1, 2013, through September 30, 2014, in order to receive an annual Program Grant from the Town, Solera must have Sales equal to or in excess of Eight Million ($$,000,000.00) ("Year Three Annual Sales Requirement"). 4.2. Audits and Records. The Town will have the right throughout the Term to audit the financial and business records of Solera that relate to Sales Tax Revenues and the Required Improvements and any other documents necessary to evaluate Solera's compliance with this Agreement (the "Records"). Solera shall make all Records available to the Town on the Land or at another location in the Town acceptable to both parties following reasonable advance notice by the Town and shall otherwise cooperate fully with the Town during any audit. However at the end of each Program Year, Solera shall also provide the Town in a timely manner reasonable and satisfactory evidence of all Sales Tax. Revenues paid for which Solera seeks a Program Grant pursuant to this Agreement. 4.3. Amended Returns. In the event that Solera files an amended sales and use tax return or report, or if additional sales and use tax is due and owing by Solera to the State, and, as a result, Sales Tax Revenues are increased or decreased during the term of this Agreement, then the Town should be notified promptly and the Program Grants payment due from the Town shall be increased or decreased accordingly for the Program Year immediately following the Town receiving the Sales Tax Revenues from the State attributable to such increase or decrease. This Section 4.3 shall survive the termination of this Agreement. 4.4 Refunds. In the event the State determines that the Town erroneously received Sales Tax Revenues, or that the amount of sales and use tax paid to the Town exceeds the correct amount of sales and use tax owed to the Town, and, as a result, a previous Program Grant paid to Solera exceeded the amount actually due to Solera (calculated based on the State's determination) (any such excess amount being referred to herein as an "Excess Grant"), then Solera shall, within thirty Page 5 of 15 Economic Development Program Agreement (30) days after receipt of a written notice from the Town specifying the amount of the Excess Grant, repay the amount of the Excess Grant to the Town. In lieu of repaying the amount of the Excess Grant to the Town, Solera may instruct the Town in writing to reduce the amount of the Grant payment for the Program Year immediately following Solera's receipt of the Town's written notice of the Excess Grant by the amount of the Excess Grant. As a condition precedent to Solera's obligation to refund the amount of an Excess Grant to the Town or authorize the Town to reduce the Program Grant payment, Solera shall have received a copy of the State's written determination, if any, or such other evidence to substantiate the amount of the Excess Grant as is acceptable to Solera in its reasonable discretion. Should Solera cause a refund to occur through its own action, Solera will notify the Town promptly upon receiving the determination of the refund request from the State and also provide a copy of the evidence to substantiate this refund request. 5. TOWN OBLIGATIONS. 5.1. Program Grants. 5.1.1. Year One Program Grant. Subject to the terms and conditions of this Agreement, provided that Solera generates at least Five Million Dollars ($5,000,000.00) of Sales that produce Sales Tax Revenues to the Town from the Land, Required Improvements, and any improvements located thereon, Solera will be entitled to, and the Town will remit, a Program Grant equal to twenty five percent (25%) of Sales Tax Revenues received by the Town. If Solera generates at least Eight Million Dollars ($8,000,000.00) of Sales that produce Sales Tax Revenues to the Town from the Land, Required Improvements, and any improvements located thereon, the Program Grant for those Sales in excess of Eight Million Dollars ($8,000,000.00) will result in a Program Grant from the Town to Solera equal to fifty percent (50%) of Sales Tax Revenues only for those sales over Eight Million Dollars ($8,000,000.00). 5.1.2. Year Two Program Grant. Subject to the terms and conditions of this Agreement, provided that Solera generates at least Six Million Five Hundred Thousand Dollars ($6,500,000.00) of Sales that produce Sales Tax Revenues to the Town from the Land, Required Improvements, and any improvements located thereon, Solera will be entitled to, and the Town will remit, a Program Grant equal to twenty five percent (25%) of Sales Tax Revenues received by the Town. If Solera generates at least Eight Million Dollars ($8,000,000.00) of Sales that produce Sales Tax Revenues to the Town from the Land, Required Improvements, and any other improvements Page 6 of 15 Economic Development Program Agreement located thereon, the Program Grant for those sales in excess of Eight Million Dollars ($8,000,000.00) will result in a Program Grant for the Town to Solera equal to fifty percent (50%) of Sales Tax Revenues only for those sales over Eight Million Dollars ($8,000,000.00). 5.1.3. Year Three Program Grant Subject to the terms and conditions of this Agreement, provided that Solera generates at least Eight Million Dollars ($8,000,000.00) of Sales that produce Sales Tax Revenues to the Town from the Land, Required Improvements, and improvements located thereon, Solera will be entitled to, and the Town will remit, a Program Grant equal to fifty percent (50%) of Sales Tax Revenues received by the Town. 5.2. Deadline for Payments and Source of Funds. The first Program Grant payable hereunder (in other words, the Program Grant payable for Program Year 1) shall be paid by the Town to Solera on or before March 1 of the year following the Program year in which the Sales Tax Revenues were generated by Solera at the Land, Required Improvements, and any improvements located thereon, and reported and paid by Solera to the State Comptroller's Department as required. Each subsequent annual Program Grant payment will be made by the Town to Solera on or before March 1 of the year following the Program year in which the Sales Tax Revenues were generated by Solera at the land, Required Improvements, and . any improvements located thereon, and reported and paid by Solera to the State Comptroller's Department as required. It is understood and agreed that all Program Grants paid pursuant to this Agreement shall come from currently available general revenues of the Town and not directly from Sales Tax Revenues. Solera understands and agrees that any revenues of the Town other than those dedicated for payment of a given annual Program Grant pursuant to this Agreement may be used by the Town for any lawful purpose that the Town deems necessary in the carrying out of its business as a home rule municipality and will not serve as the basis for calculating the amount of any future Program Grant or other obligation to Solera. 6. DEFAULT,TERMINATION AND FAILURE 13Y SOLERA TO MEET VARIOUS DEADLINES AND COMMITMENTS. 6.1. Failure to Complete Required Improvements. If Solera fails to meet the Year One Annual Sales Requirement, Year Two Annual Sales Requirement or Year Three Annual Sales Requirement, this Agreement shall automatically terminate without further obligations of the Parties. Page 7 of 15 Economic Development Program Agreement 6.2 Continuous Operation. If Solera fails to continuously operate a sales tax producing business on the Land during the terra of this Agreement, the Town shall have the right to terminate this Agreement by providing written notice to Solera without further obligation to Solera hereunder. 6.3. Failure to Pay Town Taxes. An event of default shall occur under this Agreement if any legally- imposed Town taxes owed on the Land by Solera or an Affiliate or arising on account of Solera' or an Affiliate's operations on the Land become delinquent and Solera or the Affiliate does not either pay such taxes or follow the legal procedures for protest and/or contest of any such taxes. In this event, the Town shall notify Solera in writing and Solera shall have sixty (60) calendar days to cure such default. If the default has not been fully cured by such time, the Town shall have the right to terminate this Agreement immediately by providing written notice to Solera and shall have all other rights and remedies that may be available to it under the law or in equity. 6.4. Violations of Town Code, State or Federal Law. An event of default shall occur under this Agreement if any written citation is issued to Solera or an Affiliate due to the occurrence of a violation of a material provision of the Town Code on the Land or on or within any improvements thereon (including, without limitation, any violation of the Town's Building or Fire Codes and any other Town Code violations related to the environmental condition of the Land; the environmental condition other land or waters which is attributable to operations on the Land; or to matters concerning the public health, safety or welfare) and such citation is not paid or the recipient of such citation does not properly follow the legal procedures for protest and/or contest of any such citation. An event of default shall occur under this Agreement if the Town is notified by a governmental agency or unit with appropriate jurisdiction that Solera or an Affiliate, or any successor in interest thereto, any third party with access to the Land pursuant to the express or implied permission of Solera or an Affiliate, or any a successor in interest thereto, or the Town (on account of the Required Improvements or the act or omission of any party other than the Town on or after the effective date of this Agreement) is in violation of any material state or federal law, rule or regulation on account of the Land, improvements on the Land or any operations thereon (including, without limitation, any violations related to the environmental condition of the Land; the environmental condition other land or waters which is attributable to operations on the Land; or to matters concerning the public health, safety or welfare). Upon the occurrence of such default, the Town shall notify Solera in writing and Solera shall have (i) thirty (30) calendar days to cure such default or (ii) if Solera has diligently pursued cure of the default but such default is not reasonably curable within thirty (30) calendar days, then such amount of time that the Town reasonably agrees is necessary to cure such default. If the default has not been Page 8 of 15 Economic Development Program Agreement fully cured by such time, the Town shall have the right to terminate this Agreement immediately by providing written notice to Solera and shall have all other rights and remedies that may be available to under the law or in equity. 6.5. Knowing Employment of Undocumented Workers. Solera acknowledges that effective September 1, 2007, the Town is required to comply with Chapter 2264 of the Texas Government Code, enacted by House Bill 1196 (80th Texas Legislature), which relates to restrictions on the use of certain public subsidies. Solera hereby certifies that Solera, and any branches, divisions, or departments of Solera, does not and will not knowingly employ an undocumented worker, as that term is defined by Section 2264.001(4) of the Texas Government Code. In the event that Solera, or any branch, division, or department of Solera, is convicted of a violation under 8 U.S.C. Section 1324a(l) (relating to federal criminal penalties and injunctions for a pattern or practice of employing unauthorized aliens): • if such conviction occurs during the Term of this Agreement, this Agreement shall terminate contemporaneously upon such conviction (subject to any appellate rights that may lawfully be available to and exercised by Solera) and Solera shall repay, within one hundred twenty (120) calendar days following receipt of written demand from the Town, the aggregate amount of the Program Grants received by Solera hereunder, if any,plus Simple Interest at a rate of four percent (4%)per annum; or • if such conviction occurs after expiration or termination of this Agreement, subject to any appellate rights that may lawfully be available to and exercised by Solera,Solera shall repay, within one hundred twenty (120) calendar days following receipt of written demand from the Town, the aggregate amount of the Program Grants received by Solera hereunder, if any,plus Simple Interest at a rate of four percent (4110)per annum. For the purposes of Section 6.5, "Simple Interest" is defined as a rate of interest applied to the aggregate amount of the Program Grants. This Section 6.5 does not apply to convictions of any subsidiary or affiliate entity of Solera., by any franchisees of Solera, or by a person or entity with whom Solera contracts. Notwithstanding anything to the contrary herein, this Section 6.5 shall survive the expiration or termination of this Agreement. 6.6. General Breach. Page 9 of 15 Economic Development Program Agreement Unless stated elsewhere in this Agreement, Solera shall be in default under this Agreement if Solera breaches any term or condition of this Agreement. In the event that such breach remains uncured after thirty (30) calendar days following receipt of written notice from the Town referencing this Agreement (or, if Solera has diligently and continuously attempted to cure following receipt of such written notice but reasonably requires more than thirty (30) calendar days to cure, then such additional amount of time as is reasonably necessary to effect cure, as determined by both parties mutually and in good faith), the Town shall have the right to terminate this Agreement immediately by providing written notice to Solera. 7. NO INDEPENDENT CONTRACTOR OR AGENCY RELATIONSHIP. It is expressly understood and agreed that Solera shall not operate as an independent contractor or as an agent, representative or employee of the Town. Solera shall have the exclusive right to control all details and day-to-day operations relative to the Required Improvements, Land and any improvements thereon and shall be solely responsible for the acts and omissions of its officers, agents, servants, employees, contractors, subcontractors, licensees and invitees. Solera acknowledges that the doctrine of respondeat superior will not apply as between the Town and Solera, its officers, agents, servants, employees, contractors, subcontractors, licensees, and invitees. Solera further agrees that nothing in this Agreement will be construed as the creation of a partnership or joint enterprise between the Town and Solera. 8. INDEMNIFICATION. SOLERA, AT NO COST TO THE TOWN, AGREES TO DEFEND, INDEMNIFY AND HOLD THE TOWN, ITS OFFICERS, AGENTS SERVANTS AND EMPLOYEES, HARMLESS AGAINST ANYAND ALL CLAIMS, LAWSUITS, ACTIONS, COSTS AND EXPENSES OF ANY KIND, INCLUDING, BUT NOT LIMITED TO, THOSE FOR PROPERTY DAMAGE OR LOSS (INCLUDING ALLEGED DAMAGE OR LOSS TO SOLERA'BUSINESS AND ANY RESULTING LOST PROFITS) AND/OR PERSONAL INJURY, INCLUDING DEATH, THAT MAY RELATE TO, ARISE OUT OF OR BE OCCASIONED BY (i) SOLERA' BREACH OF ANY OF THE TERMS OR PROVISIONS OF THIS AGREEMENT, OR (ii)ANY ACT OR OMISSION OR INTENTIONAL MISCONDUCT OF SOLERA, ITS OFFICERS, AGENTS, ASSOCIATES, EMPLOYEES, CONTRACTORS (OTHER THAN THE TOWN, OR ITS EMPLOYEES, OFFICERS, AGENTS, ASSOCIATES, CONTRACTORS OR SUBCONTRACTS), OR SUBCONTRACTORS DUE OR RELATED TO OR ARISING FROM THE REQUIRED IMPROVEMENTS AND ANY OPERATIONS AND ACTIVITIES ON THE LAND OR OTHERWISE TO THE PERFORMANCE OF THIS AGREEMENT. Page 10 of 15 Economic Development Program Agreement 9. NOTICES. All written notices called for or required by this Agreement shall be addressed to the following, or such other party or address as either party designates in writing, by certified mail, postage prepaid, or by hand delivery: Town: Solera: Town of Westlake Solera Holdings Inc. Attn: Town Manager Attn: General Counsel 3 Village Circle, Suite 202 7 Village Circle, Suite 100 Westlake, Texas 76262 Westlake, Texas 76262 With Copies to (which shall not constitute notice): Boyle &Lowry,L.L.P. Attn: L. Stanton Lowry 4201 Wingren Dr., Suite 108 Irving, Texas 75062 10. ASSIGNMENT AND SUCCESSORS. Solera may at any time assign, transfer or otherwise convey any of its rights or obligations under this Agreement to an Affiliate without the approval of the Town so long as Solera, the Affiliate and the Town first execute an agreement under which the Affiliate agrees to assume and be bound by all covenants and obligations of Solera under this Agreement. Solera may also assign its rights and obligations under this agreement to a financial institution or other lender for purposes of granting a security interest in the Required Improvements and/or Land, provided that such financial institution or other lender first executes a written agreement with the Town governing the rights and obligations of the Town, Solera and the financial institution or other lender with respect to such security interest. Otherwise, Solera may not assign, transfer or otherwise convey any of its rights or obligations under this Agreement to any other person or entity without the prior consent of the Town Council, which consent shall not be unreasonably withheld, conditioned on (i) the prior approval of the assignee or successor and a finding by the Town Council that the proposed assignee or successor is financially capable of meeting the terms and conditions of this Agreement and(ii)prior execution by the proposed assignee or successor of a written agreement with the Town under which the proposed assignee or successor agrees to assume and be bound by all covenants and obligations of Solera under this Agreement. Any attempted assignment without the Town Council's prior consent shall constitute a breach and be grounds for termination of this Agreement and following receipt of written notice from the Town to Solera. Any lawful assignee or successor in interest of Solera of all rights under this Agreement shall be deemed "Solera" for all purposes under this Agreement. Page 11 of 15 Economic Development Program Agreement It. COMPLIANCE WITH LAWS ORDINANCES RULES AND REGULATIONS. This Agreement will be subject to all applicable federal, state and local laws, ordinances, rules and regulations, including, but not limited to, all provisions of the Town's Charter, codes,and ordinances, as amended. 12. GOVERNMENTAL POWERS. It is understood that by execution of this Agreement, the Town does not waive or surrender any of it governmental powers or immunities that are outside of the terms, obligations, and conditions of this Agreement. 13. NO WAIVER. The failure of either parry to insist upon the performance of any term or provision of this Agreement or to exercise any right granted hereunder shall not constitute a waiver of that party's right to insist upon appropriate performance or to assert any such right on any future occasion. 14. VENUE AND JURISDICTION. If any action, whether real or asserted, at law or in equity, arises on the basis of any provision of this Agreement, venue for such action shall lie in state courts located in Tarrant County, Texas or the United States District Court for the Northern District of Texas—Fort Worth Division. This Agreement shall be construed in accordance with the laws of the State of Texas. 15. NO THIRD PARTY RIGHTS. The provisions and conditions of this Agreement are solely for the benefit of the Town and Solera, and any lawful assign or successor of Solera, and are not intended to create any rights, contractual or otherwise,to any other person or entity. 16. FORCE MAJEURE. It is expressly understood and agreed by the Parties to this Agreement that if the performance of any obligations hereunder is delayed by reason of war, civil commotion, acts of God, inclement weather, or other circumstances which are reasonably beyond the control or knowledge of the party obligated or permitted under the terms of this Agreement to do or perform the same, regardless of whether any such circumstance is similar to any of those enumerated or not, the party so obligated or permitted shall be excused from doing or performing the same during such period of delay, so that the time period applicable to such requirement shall be extended for a period of time equal to the period such party was delayed. Notwithstanding anything to the contrary herein, it is specifically understood and agreed that Solera' failure to obtain adequate financing to Page 12 of 15 Economic Development Program Agreement complete the Required Improvements by the Completion Deadline shall not be deemed to be an event of force majeure and that this Section 16 shall not operate to extend the Completion Deadline in such an event. 17. INTERPRETATION. In the event of any dispute over the meaning or application of any provision of this Agreement, this Agreement shall be interpreted fairly and reasonably, and neither more strongly for or against any party, regardless of the actual drafter of this Agreement. 18. SEVERABILITY CLAUSE. It is hereby declared to be the intention of the Parties that sections, paragraphs, clauses and phrases of this Agreement are severable, and if any phrase, clause, sentence, paragraph or section of this Agreement shall be declared unconstitutional or illegal by the valid judgment or decree of any court of competent jurisdiction, such unconstitutionality or illegality shall not affect any of the remaining phrases, clauses, sentences, paragraphs or sections of this Agreement since the same would have been executed by the Parties without the incorporation in this Agreement of any such unconstitutional phrase, clause, sentence, paragraph or section. It is the intent of the Parties to provide the economic incentives contained in this Agreement by all lawful means. 19. CAPTIONS. Captions and headings used in this Agreement are for reference purposes only and shall not be deemed a part of this Agreement. 20. ENTIRETY OF AGREEMENT. This Agreement, including any exhibits attached hereto and any documents incorporated herein by reference, contains the entire understanding and agreement between the Town and Solera, and any lawful assign and successor of Solera, as to the matters contained herein. Any prior or contemporaneous oral or written agreement is hereby declared null and void to the extent in conflict with any provision of this Agreement. Notwithstanding anything to the contrary herein, this Agreement shall not be amended unless executed in writing by both parties and approved by the Town Council of the Town in an open meeting held in accordance with Chapter 551 of the Texas Government Code. 21. COUNTERPARTS. This Agreement may be executed in multiple counterparts, each of which shall be considered an original, but all of which shall constitute one instrument. Page 13 of 15 Economic Development Program Agreement EXECUTED as of the last date indicated below: TOWN OF WESTLAKE: SOLERA HOLDINGS,INC.: r i .f By: By: Thomas E. r Jago Brady Town Manager Gef eral Counsel Date: " !D r� Date: / 'l - APPROVED AS TO FORM AND LEGALITY: By: �� A6j lrl i.5,0 at L. Stanton Lowry Town Attorney I,tRoyle-Lowry\West LakeW-agreementAwl-agr"on dev Solera Holidings,Inc.01-12-11.DOC Page 14 of 15 Economic Development Program Agreement EXHIBITS "A"—Town of Westlake Resolution No. 06-19 "B"—Town of Westlake Resolution No. 10-32 Page 15 of 15 Economic Development Program Agreement By: `c MARY LOUISE NICHOLSON COUNTY CLERK 100 West Weatherford Fort Worth, TX 76196-0401 R-yY , t • * r{ ..•- PHONE (817) 884-1195 TOWN OF WESTLAKE 1500 SOLANA BLVD. BLDG 7, SUITE 7200 WESTLAKE, TX 76262 Submitter: TOWN OF WESTLAKE DO NOT DESTROY WARNING - THIS IS PART OF THE OFFICIAL RECORD. Filed For Registration: 2/25/2019 10:20 AM Instrument#: D219035388 RESOL 22 PGS $96.00 D219035388 ANY PROVISION WHICH RESTRICTS THE SALE, RENTAL OR USE OF THE DESCRIBED REAL PROPERTY BECAUSE OF COLOR OR RACE IS INVALID AND UNENFORCEABLE UNDER FEDERAL LAW.