Loading...
HomeMy WebLinkAbout2012-096-10/16/2012-APPROVING AN AGREEMENT BETWEEN THE CITY OF FORT COLLINS AND AVAGO TECHNOLOGIES WIRELESS (USA) MANUFA RESOLUTION 2012-096 OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROVING AN AGREEMENT BETWEEN THE CITY OF FORT COLLINS AND AVAGO TECHNOLOGIES WIRELESS (USA) MANUFACTURING, INC., TO PROVIDE BUSINESS INVESTMENT ASSISTANCE FOR PHASE TWO OF THE BUILDING FOUR RETROFIT WHEREAS, Avago Technologies Wireless (USA) Manufacturing, Inc., ("Avago") will be modifying a building located on its business campus by retrofitting approximately 12,160 square feet for use as a Fbar clean room facility (the "Project"); and WHEREAS, the Project will enable the City to better maintain and attract high-paying primary jobs in the City; and WHEREAS, Avago estimates that it will invest over $165 million in the Project; and WHEREAS, Avago anticipates that the Project will create approximately 135 jobs paying an annual average salary of$41,481 which would provide significant economic development benefit to the community at large; and WHEREAS, according to preliminary estimates, Avago will also pay City fees and taxes related to the construction of the Project in the approximate amount of$462,000; and WHEREAS, City staff has been working with Avago to discuss ways in which the City can provide financial assistance to the Project that will enhance the likelihood that the Project will be pursued to completion, will result in the creation of the expected new jobs and will continue in operation for a substantial period of time; and WHEREAS, City staff has prepared for City Council's consideration a proposed agreement between the City and Avago (the "Agreement"), which Agreement sets forth the terms and conditions upon which financial assistance will be provided to Avago by the City and is attached as Exhibit "A"; and WHEREAS, the Project is anticipated to increase annual property tax revenue for the City by approximately $1,258,100 in total over the ten-year term of the Agreement; and WHEREAS, the City Council has determined that providing financial assistance to the Project is in the best interests of the City and will serve the important public purposes of increasing employment in the City, stabilizing and improving the long term tax base of the City and providing additional economic development benefits to the City. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the City Council hereby finds that providing financial assistance to Avago, as described herein, is in the best interests of the City and serves the important public purposes of increasing employment within the City, stabilizing and improving the long-term tax base of the City, and promoting economic development within the City. Section 2. That the City Manager is hereby authorized to execute the Agreement on behalf of the City,in substantially the form contained in Exhibit"A"attached hereto and incorporated herein by this reference, provided as follows: a. That the City Manager shall modify the Agreement so as to: 1.distribute the payment of the Use Tax Rebates provided therein over several additional years during the term of the Agreement (without increasing the total amount of Use Tax Rebates paid); 2. expressly condition each rebate payment provided therein upon the continued maintenance of the jobs required to be added in Exhibit"D" to the Agreement (the Job Creation Performance Standards); 3. set the effective date of the Agreement to be June 8, 2012; and 4. include a general statement of intent that Avago will substantially retain its existing workforce in addition to the jobs created by the Project over the term of the Agreement; and b. That the City Manager may make such additional modifications and additions as he deems necessary or appropriate,in consultation with the City Attorney, in order to protect the interests of the City or to further the purposes of the Agreement or this Resolution. Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 16th day of October A.D. 2012. /1 e �P ....TCC a or ATTEST: SEAL m Pp• City Clerk ORP EXHIBIT A BUSINESS INVESTMENT AGREEMENT FOR ECONOMIC DEVELOPMENT RELATED TO AVAGO TECHNOLOGIES BUILDING 4 RETROFIT FOR NEW FBAR CLEAN ROOM FACILITY THIS AGREEMENT is entered into this day of , 2012, by and between the City of Fort Collins, Colorado, a home rule municipal corporation (the "City"), and Avago Technologies Wireless (USA) Manufacturing, Inc., a Delaware Corporation ("AVAGO"). RECITALS WHEREAS, AVAGO is the owner of property located at 4380 Ziegler Road in the City that is more fully described in Exhibit A and incorporated herein by this reference (the "Property"); and I WHEREAS, AVAGO has previously committed to redeveloping the Property by retrofitting the building on the Property known as Building 4 and identified on Exhibit A as BLDG 4 so as to include a new 10,000 square foot expansion wafer fabrication facility within that building to be completed in 2012, which is the subject of that certain Business Incentive Agreement For Economic Development Related to AVAGO Technologies Building 4 Retrofit authorized by the City Council in Resolution 2011-066, adopted by the Council on July 19, 2011 (the "New Wafer Fabrication Facility Agreement"); and WHEREAS, AVAGO has in addition committed to redeveloping the Property by retrofitting Building 4 to also include a new 12,160 square foot expansion Fbar Clean Room Facility within Building 4 to be fully completed and operational by the end of 2014 (the "Project"); and WHEREAS, the Project will consist of a construction expansion and remodel in addition to an investment in equipment; and WHEREAS, Project will enable the City to better maintain its place as the regional business center of Northern Colorado in the face of competing facilities that could otherwise draw significant employment opportunities out of the Fort Collins community; and WHEREAS, AVAGO estimates that the total investment in the Project will be more than $ 165 million (including both construction and equipment purchases) and that the completion of the Project will result in the creation of approximately 135 net new jobs earning salaries ranging from approximately $30,000 to $100,000 annually, and with an annual average salary of$41,481, and that will provide significant economic benefit to the community at large; and WHEREAS, the City's Economic Health Office has concluded that the Project will generate a substantial increase in tax revenue for the City, including approximately (i) $462,000 in construction use tax; and (ii) $1,258,200 in new personal property tax in the first ten years; and WHEREAS, according to the Economic Health Office, the Project will prevent high- paying primary jobs from leaving Fort Collins to other sites in Northern Colorado and elsewhere; and WHEREAS, according to the Economic Health Office, the Project will bring a type of worldwide cell phone process manufacturing to the City that has previously occurred primarily off-shore; and WHEREAS, AVAGO has requested that the City enter into a business investment agreement for economic development related to the Project; and WHEREAS, based on AVAGO's representations that the Project will (i) be a high quality Fbar clean room facility that will be owned and operated by AVAGO, (ii) generate new primary jobs, and (iii)have a reasonable expectation of long-term operations in the City; and WHEREAS, in order to encourage the Project, the City Council has determined, through the adoption of Resolution 2012-_on 2012, that it is in the best interests of the City to provide a package of financial assistance for the Project consisting of two components: the rebate of new City use tax revenues generated by the Project and the rebate of City personal property tax on new Eligible Equipment installed as part of the Project; and WHEREAS, the City Council has further determined, through the adoption of Resolution 2012-_ that providing the financial assistance described in this Agreement to AVAGO will serve the important public purposes of increasing employment in the City, stabilizing and improving the longterm tax base of the City, and providing additional economic development benefits to the City. NOW, THEREFORE, in consideration of the promises contained in this Agreement, and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows. SECTION 1. DEFINITIONS Application for Use Tax Rebate means the application process for a use tax rebate using City approved forms consistent with the form attached as Exhibit B. AVAGO means AVAGO Technologies Wireless (USA) Manufacturing, Inc., a Delaware Corporation. Building 4 means that building located at 4380 Ziegler Road, Building 4. 2 Certificate of Occupancy has the same meaning as set forth in the City of Fort Collins Land Use Code. Charter means the Home Rule Charter of the City. City means the City of Fort Collins, Colorado, a home rule municipal corporation. Code means the Code of the City of Fort Collins. County Assessor means the Larimer County Assessor. Development Agreement means that agreement required when plans, profiles and specification have been approved by the City pursuant to the Land Use Code. Eligible Equipment means new manufacturing equipment and electronic equipment that is installed or delivered to the Property and incorporated into the Project no later than December 31, 2014, and that is necessary for operation of the Fbar Clean Room Facility, including research and development equipment, manufacturing equipment, and general and test manufacturing equipment. Due to manufacturing flow and other space constraints, up to twenty percent (20%) of the Eligible Equipment by assessed value may be installed outside of the new Fbar Clean Room Facility; however, all Eligible Equipment must be identified at the time of purchase as, and be documented as necessary for the Fbar Clean Room Facility to the satisfaction of the City, and must be newly installed and located within AVAGO's facilities at 4380 Ziegler Road, in Fort Collins, Colorado within the time periods required in this Agreement. Fbar Clean Room Facility and Facility mean the approximately 12,160 square foot Fbar clean room facility to be developed, constructed and installed in Building 4 beginning in 2012 and to be fully completed and operational in 2014, to expand on existing clean room facilities located in Building 4. Land Use Code means the Fort Collins Land Use Code. Manufacturing Equipment Use Tax Rebate Program or Program means the program for generally available limited rebate of use taxes for manufacturing equipment, as described in Chapter 8 of the Code. New Wafer Fabrication Facility means that certain new 10,000 square foot expansion wafer fabrication facility to be completed by AVAGO in Building 4 in 2012, which is the subject of that certain Business Incentive Agreement For Economic Development Related to AVAGO Technologies Building 4 Retrofit authorized by the City Council in Resolution 2011-066, adopted by the Council on July 19, 2011. Project means AVAGO's retrofit of existing Building 4 by the development of an additional 12,160 square feet for use as an Fbar Clean Room Facility (separate and apart from the wafer fabrication facility that is the subject of the New Wafer Fabrication Facility Agreement and the 3 existing clean room operation located in Building 4) and other improvements that provide significant energy savings and represented on Exhibit A as Area of Work, pursuant to such building permit as may be issued by the City for the same, and shall include construction as well as acquisition and installation of the Eligible Equipment required to increase Fbar production to a rate of 12,000 wafers per month, including acquisition and installation of all Eligible Equipment as defined herein. Project Personal Property means the initial investments in Eligible Equipment and leasehold improvements made by AVAGO as part of the Project. Use Tax Rebate means the rebate of use taxes to AVAGO described in Section 3 of this Agreement. The Use Tax Rebate as described herein is intended to be in lieu of, and not a duplication of, the Manufacturing Equipment Use Tax Rebate Program, which Program AVAGO agrees it is not entitled to participate in for the Eligible Equipment. SECTION 2. REPRESENTATIONS AND COVENANTS 2.1. The City represents and covenants that: 2.1.1. The City is a home rule municipal corporation of the State of Colorado. 2.1.2. There is no litigation or administrative proceeding pending or, to the knowledge of the City, threatened, seeking to question the authority of the City to enter into or perform this Agreement. 2.1.3. The City reasonably believes that it has the authority to enter into the Agreement, and, assuming such authority, the City Council has properly and regularly authorized the City to enter into the Agreement. 2.2. AVAGO represents and covenants that: 2.2.1. AVAGO is a corporation, duly organized and validly existing under the laws of the State of Colorado, is authorized to do business in the State of Colorado, is not in violation of any provisions of its organizational documents or, to its knowledge, the laws of the State of Colorado. 2.2.2. AVAGO has the power and legal right to enter into the Agreement and has duly authorized the execution, delivery and performance of this Agreement by proper action, which Agreement will be enforceable against AVAGO in accordance with its terms. 2.2.3. The consummation of transaction contemplated by this Agreement will not violate any provision of the governing documents of AVAGO or, to its knowledge, constitute a default or result in the breach of any term or provision of any contract or agreement to which AVAGO is a party or by which it is bound. 4 2.2.4. To its knowledge, there is no litigation, proceeding, or investigation contesting the power of authority of AVAGO with respect to the Project or this Agreement, and AVAGO is unaware of that any such litigation, proceeding, or investigation has been threatened. 2.2.5. AVAGO will submit a Site Plan to the City in accordance with all applicable procedures set forth in the Land Use Code. AVAGO will redevelop the Property with appropriate care and diligence and cause the Project to be constructed in a manner consistent with the Site Plan, as approved in accordance with the Land Use Code. 2.2.6. In redeveloping the Property and Building 4, AVAGO will comply with all applicable zoning and land use requirements and other applicable federal, state, county, and City statutes, rules, regulations and ordinances. 2.2.7. AVAGO intends to operate, or cause to operate, in Building 4 a new, high quality Fbar Clean Room Facility for a period of not less than ten years following the earlier date of the issuance of a Certificate of Occupancy or December 31, 2013. 2.2.8. AVAGO will cooperate with the City in taking reasonable actions to defend against any litigation brought by a third party concerning the Project or this Agreement. SECTION 3. PAYMENT AND REIMBURSEMENT OF USE TAXES 3.1. AVAGO shall pay to the City all use taxes due from AVAGO for its initial Eligible Equipment investment associated with the Project and retrofit of Building 4 to develop and equip the Fbar Clean Room Facility. 5 3.2. To the extent permitted by the constitution and laws of the State of Colorado and the Charter, including but not limited to, applicable prohibitions on multiple fiscal year obligations and the condition all obligations be contingent upon the appropriation of funds sufficient and intended therefore by the City Council of the City, in its sole discretion, the City agrees to rebate to AVAGO a portion of the use Taxes paid by AVAGO for Eligible Equipment for the Project as generally shown on the Estimated Payment Schedule attached hereto as Exhibit C and incorporated herein by this reference (the "Payment Schedule") under the terms and conditions set forth in paragraph 3.3 below and all subparagraphs thereunder (the "Use Tax Rebate"). If, as presently contemplated by the parties, the contingencies described in those paragraphs are satisfied, and subject to the legal limitations as noted above, the City will rebate to AVAGO up to one hundred percent (100%) of City use taxes paid for the Eligible Equipment for the period beginning the effective date of this Agreement and ending December 31, 2013, as described in Section 3.3, subject to a limit on the total use tax rebate amount for the Project, of Three Million Eight Hundred Eighty Two Thousand, Two Hundred Dollars ($3,882,200) (the "Maximum Use Tax Reimbursement'). 3.3. The Use Tax Rebates here under shall be conditioned upon the full and timely payment by AVAGO to the City of all use taxes due and owing from AVAGO. If this contingency has not been satisfied or is no longer satisfied as of the date set forth for payment of any Use Tax Rebate hereunder, no such Use Tax Rebate, or any subsequent Use Tax Rebate or other incentive payment provided in this Agreement, will be paid. AVAGO shall not be eligible for a rebate for any use tax paid on any Eligible Equipment unless it has accurately designated and identified the Eligible Equipment on a separate schedule as part of the use tax submission for such Eligible Equipment. Such separate schedule may not include equipment that is not Eligible Equipment associated with the Fbar Clean Room Facility as defined in this Agreement. 3.3.1. In order to be eligible for any Use Tax Rebate hereunder, AVAGO shall submit an Application for Use Tax Rebate no later than March 31, 2013, for rebate of City use taxes paid on Eligible Equipment between the effective date of this Agreement and December 31, 2012. Any such Application (and each such Application for Use Tax Rebate submitted pursuant to this Section 3.3) must identify each item of Eligible Equipment in a manner consistent with, and corresponding to, the manner in which such item of Eligible Equipment was designated and identified in connection with the payment of use taxes for said item. The City's Use Tax Rebate to AVAGO for 2012 use taxes hereunder will be due and payable no later than June 30, 2013 (the "First Payment"). 3.3.2. In the event AVAGO submits an Application for Use Tax Rebate for the rebate of City use taxes paid on Eligible Equipment during 2013, on or before March 31, 2014, the related Use Tax Rebate will be due and payable to AVAGO no later than June 30, 2014 (the "Second Payment"). 6 3.3.3. In'the event AVAGO submits a verified statement identifying any items of Eligible Equipment that have been received and installed as part of the Project by AVAGO, but have not yet been finally commissioned and accepted by AVAGO (the "Carryover Eligible Equipment') on or before December 31, 2014, and then AVAGO submits an Application for Use Tax Rebate for the rebate of City use taxes paid on the Carryover Eligible Equipment on or before March 31, 2015, the related Use Tax Rebate for use taxes that have been paid on the Carryover Eligible Equipment will be due and payable no later than June 30, 2015 (the "Final Payment'). No prepaid use taxes for Eligible Equipment not yet delivered to and installed as part of the Project as of the end of 2014 shall be eligible for rebate hereunder. 3.3.4. In the event that the City determines that AVAGO is not in full compliance with the job creation performance standards set forth in Exhibit D, attached hereto and incorporated herein by this reference, the City may reduce the amount of any Use Tax Rebate paid during the period of such non-compliance by the percentage of shortfall from the job creation target then applicable. 3.4. The City, in its sole discretion, may pre-pay all or any portion of the Use Tax Rebate, without penalty. 3.5. AVAGO assumes the entire risk that the Project will be unable to begin operations and and pay use tax on Eligible Equipment by December 31, 2014, so as to qualify for the Maximum Use Tax Reimbursement, and further assumes all risk associated with legal contingencies limiting the Cityy's obligation to make any payments in future fiscal years and conditioning all future fiscal year obligations on the City's discretionary appropriation of funds therefor. 3.6. It is not the parties' intent that AVAGO be paid or entitled to any interest or penalty on use taxes paid by AVAGO, or any penalty or interest on Use Tax Rebate payments delayed or withheld by the City. 3.7. In addition to limit of the Maximum Use Tax Reimbursement, the parties further acknowledge and agree that the Use Tax Rebate for any Eligible Equipment will not at any time be allowed to exceed the amount of City use tax actually paid to the City on such Eligible Equipment. AVAGO further acknowledges and agrees that the City is in no way responsible for the amount of City use tax actually paid or collected for the Eligible Equipment or any other equipment or corporeal property of AVAGO. 7 3.8. The parties agree that the provisions of this Agreement do not constitute an indebtedness of the City within the meaning of any constitutional or statutory limitation or provision. The commitment of the City to pay the Use Tax Rebate under this Agreement is from year to year only and does not constitute a mandatory payment obligation of the City in any fiscal year beyond the present fiscal year. This Agreement does not directly or indirectly obligate the City to make any payment of a Use Tax Rebate beyond those for which funds have been appropriated as of the date of this Agreement. The City Manager (or any other officer or employee at the time charged with the responsibility of formulating budget proposals) shall make a good faith effort to include in the budget proposals and appropriation ordinances proposed to the City Council, in each year prior to expiration of this Agreement, amounts sufficient to meet the City's commitments hereunder, subject to the conditions and contingencies set forth herein. Notwithstanding the foregoing, the parties expressly acknowledge that the decision as to whether to appropriate such amounts is in the discretion of the City Council. SECTION 4. PAYMENT AND REBATE OF PERSONAL PROPERTY TAXES 4.1. AVAGO shall pay to the City all personal property taxes due from AVAGO Project Personal Property associated with the Project and retrofit of Building 4 to develop and equip the Fbar Clean Room Facility. 4.2. To the extent permitted by the constitution and laws of the State of Colorado and the Charter, including but not limited to, applicable prohibitions on multiple fiscal year obligations and the condition all obligations be contingent upon the appropriation of funds sufficient and intended therefore by the City Council of the City, in its sole discretion, the City agrees to rebate to AVAGO a portion of the City personal property taxes paid for the Project Personal Property under the terms and conditions set forth in paragraph 4.3 below (the "Personal Property Tax Rebate'). If, as presently contemplated by the parties, the contingencies described in paragraph 4.3 are satisfied as to each of the ten payments provided for therein, and subject to the legal limitations as noted above, the City will rebate to AVAGO up to the amount shown on the Payment Schedule,defined below, of City personal property taxes actually paid for the Project Personal Property in the increments and for the time periods described therein, subject to a limit on the total amount of Personal Property Tax Rebate to be paid by the City of Six Hundred Twenty Nine Thousand One Hundred Dollars ($629,100 in total, and a limit on each annual payment of One Hundred Fifty Seven Thousand, Seven Hundred Dollars ($157,700). 4.3. The payments of Personal Property Tax Rebates referenced in paragraph 4.2 above will be made by the City to AVAGO as follows: 8 4.3.1. AVAGO has supplied a 10 year schedule of estimated personal property taxes to be, paid in calendar years 2015 through 2024 for the Project Personal Property ("Payment Schedule') associated with the Project as described in this Agreement, attached hereto and incorporated herein by this reference as Exhibit C. This Payment Schedule also provides the basis for a schedule of personal property tax rebate payments. 4.3.2. At its option, AVAGO may, no later than December 31, 2014, submit one updated 10 year schedule of estimated personal property taxes to be paid in calendar years 2015 through 2024 for Project Personal Property installed during the Project ("Revised Payment Schedule"), subject to the City's review and written approval, in its reasonable discretion. If a Revised Payment Schedule has been approved, it shall upon approval become the operative schedule for the purposes of this Agreement, and shall thenceforth replace the Payment Schedule originally attached hereto. If no such Revised Payment Schedule is submitted and approved by December 31, 2014, then no revision to the Payment Schedule shall be made, except as otherwise provided in this Agreement. 4.3.3. The annual Personal Property Tax Rebate contemplated by this Section will be paid by December 31 of each year, with the first such annual payment scheduled for 2015 as set forth in the Payment Schedule. 4.3.4. AVAGO expressly agrees that no portion of the Personal Property Tax Rebate will be paid if, at the time specified for payment, the City determines that AVAGO has not received a Certificate of Occupancy for the Project on or before December 31, 2013, and thereafter continuously operated the Fbar Clean Room Facility as described in this Agreement. 4.3.5. The City may reduce the amount of any Personal Property Tax Rebate paid during any period non-compliance with any of the, following requirements, by the percentage of shortfall from full compliance with each such requirement: (a) AVAGO shall have actually paid to the City personal property taxes equal to or greater than two (2) times the combined total of all Personal Property Tax Rebates scheduled to be paid by the City to AVAGO for that year under the New Wafer Fabrication Facility Agreement and this Agreement; (b) AVAGO shall have actually paid to the City since the effective date of the New Wafer Fabrication Facility Agreement total personal property taxes equal to or greater than two (2) times the combined total of all Personal Property Tax Rebates actually paid to date, including the then pending Personal Property Tax Rebate, under the New Wafer Fabrication Facility Agreement and this Agreement,; and 9 (c) AVAGO shall have met the most recent job creation target applicable as described in Exhibit D. 4.4. The City reserves the right to modify the Payment Schedule in the event that material change to the City's mill levy or personal property tax assessment methodology would make the Payment Schedule provided herein inconsistent with the parties' intent that the Personal Property Tax Rebate not exceed fifty percent (50%) of the amount of personal property tax actually collected by the City for the Eligible Equipment installed and operating as part of the Facility. 4.5. The parties agree that the City may, at its option, require AVAGO to make available to the City all documents that verify the purchase of Project Personal Property installed in Building 4, or in the Fbar Clean Room Facility whether or not as part of the Project, including the County Assessor's certification of value. The City agrees that, except as otherwise provided by law or applicable court order, such documents constitute privileged information and confidential financial data within the meaning of the Colorado Open Records Act, and, to the extent permitted by law, the City shall deny the right of inspection of such documents to any third party without the consent of AVAGO. 4.6. The City, in its sole discretion, may pre-pay all or any portion of the Personal Property Tax Rebate, without penalty. 4.7. AVAGO assumes the entire risk that the Project will be unable to begin and maintain operations at the levels sufficient to generate the level of personal property tax identified above, and the risk that all or any portion of the Personal Property Tax Rebate may be forfeited unless the requirements of this Agreement have been satisfied. AVAGO further assumes all risk associated with legal contingencies limiting the City's obligation to make any payments in future fiscal years and conditioning all future fiscal year obligations on the City's discretionary appropriation of funds therefor. 4.8. It is not the parties' intent that AVAGO be paid or entitled to any interest or penalty on personal property taxes paid, or any penalty or interest on Personal Property Tax Rebate payments delayed or withheld by the City. 10 4.9. The parties agree that the provisions of this Agreement do not constitute an indebtedness of the City within the meaning of any constitutional or statutory limitation or provision. The commitment of the City to pay the Personal Property Tax Rebate described in this Agreement is from year to year only and does not constitute a mandatory payment obligation of the City in any fiscal year beyond the present fiscal year. This Agreement does not directly or indirectly obligate the City to make any payment of any Personal Property Tax Rebate beyond those for which funds have been appropriated as of the date this Agreement. The City Manager (or any other officer or employee at the time charged with the responsibility of formulating budget proposals) shall make a good faith effort to include in the budget proposals and appropriation ordinances proposed to the City Council, in each year prior to expiration of this Agreement, amounts sufficient to meet the City's commitments hereunder, subject to the conditions and contingencies set forth herein. Notwithstanding the foregoing, the parties expressly acknowledge that the decision as to whether to appropriate such amounts is in the discretion of the City Council. SECTION 5. CITY'S RIGHT TO WITHHOLD OR OFFSET PAYMENTS 5.1. AVAGO agrees to comply with all City codes, ordinances, resolutions and regulations, and to pay all taxes, fees and expenses due to the City under the Code, the City's Land Use Code or this Agreement, subject to any variances or modifications of standards that may be granted to AVAGO under the Code or the City's Land Use Code, and to comply with the terms and conditions of the Development Agreement. If AVAGO is in violation of the provisions of the Code, the City's Land Use Code, this Agreement or the Development Agreement, the City will provide written notice to the Developer of such violation, and allow the AVAGO a period of ninety (90) days in which to cure such violation. The City may thereafter withhold any payment of Use Tax Rebate or Personal Property Tax Rebate due to AVAGO under this Agreement until such time as the violations are cured or abated. 5.2. In addition to the foregoing, the City, at its option, may, after the notice and after the expiration of the cure period if such violations have not been cured or abated, apply any Use Tax Rebate or Personal Property Tax Rebate that would otherwise be payable to AVAGO under this Agreement to any unpaid amounts theretofore due and payable to the City by AVAGO under this Agreement, the Code, the Land Use Code, or the Development Agreement, in which event AVAGO will be credited with the full amount of any such payments. SECTION 6. RECORDS AND AUDITS 6.1. AVAGO must keep true, accurate and complete records of all equipment installed and operated in Building 4 and identifying and document all equipment and Project Personal Property installed or operated in the Fbar Clean Room Facility, whether or not as part of the Project, which records will be available for inspection by the City without unreasonable delay and without City expense. AVAGO agrees that the City has the right, through its duly 11 authorized agents or representatives, to examine all such records upon ten (10) days notice at all reasonable times, for the purpose of determining the accuracy and propriety of the financial representations which have been made by AVAGO as well as the right to inspect and inventory the Project Personal Property in or associated with the Fbar Clean Room Facility in order to confirm that the same is in place and in use as required in connection with any rebate hereunder. This right of review and inspection terminates upon termination of the later of the City's payments of Use Tax Rebate as provided in Section 3 of this Agreement and the payments of Personal Property Tax Revenues as provided in Section 4 of this Agreement. In the event that the City becomes the custodian of any such records which may contain trade secrets or confidential or proprietary information, and are so marked, the City will, to the extent permitted by law, protect the confidentiality of such information and deny any request for inspection of such records. 6.2. The City will keep, or cause to be kept, true, accurate and complete records of all calculations relating to the Use Tax Rebate; the Personal Property Tax Rebate and such other calculations, allocations and payments required by this Agreement, and will make such records available for inspection by AVAGO upon ten (10) days notice at all reasonable times, to the extent permitted by law. SECTION 7. RESTRICTIONS ON ASSIGNMENT 7.1. The qualifications of AVAGO to accomplish the objectives of the City hereunder are of particular concern to the City. Therefore, no voluntary or involuntary successor in interest of AVAGO shall acquire any rights or powers under this Agreement except as expressly set forth herein and AVAGO will not assign all or any part of this Agreement, except either: 7.1.1. with the prior written approval of the City Council, in its sole discretion; or 7.1.2. as collateral to a lender in connection with the financing of the Project. 7.2. AVAGO must notify the City within fifteen (15) days of any and all changes whatsoever in the identity of the parties in control of AVAGO, or the degree thereof, of which it or any of its officers have been notified or otherwise have knowledge or information. SECTION 8. EVENTS OF DEFAULT; REMEDIES 8.1. Default or an event of default by AVAGO mean one or more of the following events: 8.1.1. Any representation or warranty made in this Agreement by AVAGO was materially inaccurate when made or shall prove to be materially inaccurate; 12 8.1.2. AVAGO assigns or attempts to assign this Agreement in violation of Section 7 of this Agreement; or 8.1.3. AVAGO fails to substantially observe or perform any other material covenant, obligation or agreement required under this Agreement. 8.2. In order to exercise any remedy for default hereunder, upon the occurrence of any event of default, the City shall provide written notice to AVAGO. AVAGO must immediately proceed to cure or remedy such default, and in any event, such default shall be cured within thirty (30) days after receipt of the notice, or such longer time as the City and AVAGO agree in writing. Upon the failure of AVAGO to so cure any such default, the City shall have all remedies available to it, in law or in equity, excluding specific performance. 8.3. Default or an event of default by the City shall mean one or more of the following events: 8.3.1. Any, representation or warranty made in this Agreement by the City was materially inaccurate when made or shall prove to be materially inaccurate; or 8.3.2. perform arty nonmonetary, material covenant, obligation or agreement required of it under this Agreement. 8.4. Upon the occurrence of any event of default, AVAGO will provide written notice to the City. The City must immediately proceed to cure or remedy such default, and in any event, such default shall be cured within thirty (30) days after receipt of the notice, or such longer time as the City and AVAGO agree in writing. Upon the failure of the City to so cure any such default, AVAGO will have all remedies available to it, in law or in equity excluding specific performance. 13 SECTION 9. NOTICES 9.1. All notices required or permitted hereunder shall be in writing and shall be effective upon mailing, deposited in the United States Mail, postage prepaid, and addressed to the intended recipient as follows. Any party can change its address by written notice to the other given in accordance with this paragraph. 9.1.1. City of Fort Collins: City of Fort Collins Attention: City Manager 300 LaPorte Avenue, PO Box 580 Fort Collins, CO 80522-0580 9.1.2. With a.copy to: City of Fort Collins Attention: City Attorney 300 LaPorte Avenue, PO Box 580 Fort Collins, CO 80522-0580 - 9.1.3. AVAGO: AVAGO Technologies Attention: General Counsel 350 W. Trimble Road San Jose, California 95131 9.1.4. With a copy to: Steve Wolley AVAGO Technologies 4380 Ziegler Rd. Fort Collins, CO 80525 SECTION 10. MISCELLANEOUS 10.1. Binding Effect. This Agreement inures to the benefit of and is binding upon the City and AVAGO and AVAGO's assignees which are permitted pursuant to Section 7 of this Agreement. 10.2. No Third Party Beneficiaries. The City is not obligated or liable under the terms of this Agreement to any person or entity not a party hereto except any assignee permitted pursuant to Section 7 of this Agreement. Further, the City is not bound by any contracts or conditions that AVAGO may negotiate with third parties related to the Project. 10.3. Interpretation, Jurisdiction and Venue. This Agreement is being executed and delivered and is intended to be performed in the State of Colorado, and the laws of Colorado govern the validity, construction, enforcement and interpretation of this Agreement. Exclusive jurisdiction and venue for resolution of any dispute arising hereunder will be in the Larimer County, Colorado District Court. 14 10.4. Entire Agreement. This Agreement embodies the whole agreement of the parties concerning financial assistance by the City for the Project. Although it is anticipated there will be at least one other agreement governing general development issues related to the Project, there are no promises, terms, conditions, or obligations other than those contained herein exist with respect to the financial assistance package. This Agreement supersedes all provisions, communications, representations, or agreement, either verbal or written, between the parties with respect to the financial assistance package. 10.5. Waiver of Breach. A written waiver by either party to this Agreement of the breach of any term or provision of this Agreement will not operate or be construed as a waiver or ariy subsequent breach by another party. 10.6. Article and Section Captions.The captions of the articles and sections of this Agreement are set forth only for the convenience and reference of the parties and are not intended in any way to define, limit, or describe the scope or intent of this Agreement. 10.7. City and AVAGO Not Partners. Notwithstanding any language in this Agreement, the City is not a member, partner, or joint venturer of AVAGO, and the City shall not be responsible for any debt or liability of AVAGO or its contractors or agents. AVAGO is not responsible for any debt or liability of the City or their contractors or agents. 10.8. Severability. If any portion or portions of this Agreement are determined to be illegal or unenforceable, the remainder of this Agreement will not be affected thereby and will remain in full force and effect as if such illegal or unenforceable portion or portions did not exist. If all or any portion of the payments required by the terms of this Agreement are determined, by a court of competent jurisdiction in a final non-appealable judgment, to be contrary to public policy or otherwise precluded, and if the decision of such court clearly indicates how the payments may be made differently and in a manner that is legal, valid and enforceable, then the Parties will utilize their reasonable, best, good faith efforts to promptly restructure and/or amend this Agreement in accordance with such court decision, or to enter into a, new agreement, to assure, to the extent legally permissible, that all payments are made to AVAGO as contemplated by this Agreement. 10.9. Originals. This Agreement may be simultaneously executed in any number of counterparts, each of which will be deemed original but all of which constitute one and the same Agreement. 10.10. Joint Draft. The parties agree they drafted this Agreement jointly with each having the advice of legal counsel and an equal opportunity to contribute to its content. 15 C IN WITNESS WHEREOF, the City and AVAGO have executed this Agreement as of the date first above written. CITY OF FORT COLLINS, COLORADO a municipal corporation By: Darin A. Atteberry, City Manager Attest: City Clerk Approved as to form: Deputy City Attorney AVAGO TECHONOLOGIES WIRELESS (USA) MANUFACTURING INC. a Delaware corporation By: Name and title State of ) )ss. County of ) The foregoing was acknowledged before me this day of 2012, by as Avago Technologies Wireless (USA) Manufacturing Inc., a Delaware corporation. Witness my hand and official seal. My commission expires: Notary Public 16 EXHIBIT A PROPERTY DESCRIPTION: LOT 2, PRESTON-KELLEY 2ND SUBDIVISION, AS PER THE PLAT THEREOF RECORDED OCTOBER 28, 1999 AT RECEPTION NO. 99093260, COUNTY OF LARIMER, STATE OF COLORADO. A TRACT OF LAND BEING PART OF PRESTON-KELLEY SUBDIVISION AND BEING LOCATED IN THE SOUTHWEST QUATER OF SECTION 33. TOWNSHIP 7 NORTH, RANGE 68 WEST OF THE 6TH PRINCIPAL MERIDIAN, CITY OF FORT COLLINS, COUNTY OF LARIMER, STATE OF COLORADO, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BASIS OF BEARINGS:THE WEST LINE OF THE SOUTHWEST QUARTER OF SECTION 33, BEING MONUMENTED AT THE SOUTHWEST CORNER BY A LARIMER COUNTY BRASS CAP, AND AT THE WEST QUARTER CORNER BY A ALUMINUM CAP STAMPED (LS 17497) WITH A LINE BETWEEN ASSUMED TO BEAR SOUTH 00*00*11" WEST, AND WITH ALL BEARINGS HEREIN RELATIVE THERETO. COMMENCING AT THE WEST QUARTER CORNER OF SAID SECTION 33, THENCE ALONG THE WEST LINE OF SAID SOUTHWEST QUARTER SOUTH 00'00'11" WEST 381.60 FEET, THENCE DEPARTING SAID WEST LINE, NORTH 89'50'11"" EAST 50.00 FEET TO A POINT ON THE EAST RIGHT OF WAY FOR SOUTH COUNTY ROAD 9 (AKA: ZIEGLER ROAD) SAID POINT ALSO BEING THE NORTHWEST CORNER OF LOT 2. PRESTON-KELLEY 2ND SUBDIVISION, AND THE POINT OF BEGINNING. THENCE ALONG THE NORTH LINE OF SAID LOT 2 THE FOLLOWING THREE (3) COURSES: 1) NORTH 89'50'11" EAST 1152.66 FEET; 2) SOUTH 45'09'49" EAST 70.71 FEET; 3) NORTH 89'50'11" EAST 150.25 FEET TO THE NORTHEAST CORNER OF LOT 2 , ALSO BEING THE NORTHWEST CORNER OF LOT 1, SAID PRESTON-KELLEY 2ND SUBDIVISION, THENCE ALONG THE WEST LINE OF SAID LOT 1 AND THE EAST LINE OF SAID LOT 2. THE FOLLOWING EIGHTEEN (18) COURSES: 1) SOUTH 00'09'49' EAST 510.80 FEET; 2) NORTH 90'00'00- EAST 206.87 FEET; 3) SOUTH 00'15'16" WEST 197.99 FEET; 4) SOUTH 38'46'40" EAST 43.84 FEET; 5) SOUTH 00'19'44" WEST 34.65 FEET; 6) SOUTH 89*35*37" EAST 56.33 FEET; 7) SOUTH 00'19'44" WEST 74.32 FEET; 8) SOUTH 89'38'43" EAST 73.00 FEET; 9) SOUTH 00'21'35" WEST 276.48 FEET; 10) NORTH 89'27'02" WEST 132.76 FEET; 11) SOUTH 39'23'29" WEST 95.28 FEET: 12) NORTH 89'40'59," WEST 47.66 FEET; 13) SOUTH 00'23'51" WEST 180.46 FEET; 14) NORTH 90'00'00" WEST 64.17 FEET; 15) SOUTH 00'08'54" WEST 135.19 FEET; 16) SOUTH 87'12'54" WEST 86.71 FEET; 17) SOUTH 22'02'40" WEST 345.23 FEET; 18) SOUTH 00'01'49" EAST 262.22 FEET TO A POINT ON THE NORTH RIGHT OF WAY LINE FOR HARMONY ROAD AS DESCRIBED AT BOOK 1814 PAGE 777 OF THE CLERK AND RECORDERS OFFICE OF LARIMER COUNTY. THENCE ALONG SAID NORTH RIGHT OF WAY LINE THE FOLLOWING FOUR (4) COURSES, 1) SOUTH 89'58'11" WEST 533.97 FEET, THENCE 2) NORTH 87'50'49" WEST 131.20 FEET TO THE BEGINNING OF A CURVE, THENCE 3) WESTERLY 502.23 FEET ALONG THE ARC OF A CURVE, CONCAVE TO THE SOUTH, SAID CURVE HAVING A RADIUS OF 5,510.00 FEET, A CENTRAL ANGLE OF 4'57'11", AND BEING SUBTENDED BY A CHORD BEARING SOUTH 87'29'41" WEST 502.10 FEET, THENCE 4) NORTH 47'42'49" WEST 34.67 FEET TO A POINT ON THE AFOREMENTIONED EAST RIGHT OF WAY FOR SOUTH COUNTY ROAD 9, THENCE ALONG SAID EAST RIGHT OF WAY LINE NORTH 00'00'11" EAST 2143.51 FEET TO THE POINT OF BEGINNING. SAID DESCRIBED PARCEL CONTAINS 70.101 ACRES, MORE OR LESS, AND IS SUBJECT TO ALL EASEMENTS AND RIGHTS OF WAY OF RECORD OR EXISTING. .17 EXHIBIT B City of Fort Collins Economic Development - Use Tax Rebate Application 2010 Company Name phone Number Mailing Address Fort Collins License Number Contact Person The following information is mandatory for the rebate process. All financial information contained in this application will be confidential. Project Information: Date Project Operations began in Fort Collins Briefly describe project operations? Square footage of Project facility Square footage of entire Fort Collins facility 2008 property tax valuation 2008 personal property tax valuation 2009 property tax valuation 2009 personal property tax valuation Who is your natural gas provider? Annual Gas Consumption Employee:Information: Number of full time equivalent employees as of January 1,2010 Median Annual Wage Number of full time equivalent employees as of December 31,2010 Median Annual Wage Number of temp.,seasonal&contract employees as of 12/31/10 Median Annual Wage Rebate Information: purchase price of Eligible Equipment purchased in 2010: Amount of rebate requested: I hereby authorize the City to review ant consider sales arm use her words,verNor records,contract and other information availaae regarding the company's eligibility for a rebate tamer this program. I further authorize the City to release to the public mlemn&ion contained in this application,as well as information regaining any rebates iswetl to the company under this rebate program. I certify that the company requesting this rebate is in compliance with all Fotlerel,State arm local laws and regulations for the manufacturing facility located in Fort Collins. I also certify that the company is current with all City of Fort Collins contractual,payment and sales and use tax obligations. I declare under penalty of perjury that this claim(including any accompanying schedules and statemems)has bean examined by me and to the best of my knowledge and belief is true and made in good faith for the stated purpose. Further,I represent and warrant that/have the necessary authority to execute this application on behalf of the company,and to make the above certffkadons,authorizations,and declaration. A claim by an age&must be accompa&ed by power of attorney. Sipnature&Taxpayer Title Data 18 EXHIBIT C Avago Project Beta Investment R&D Wafer Fab Mfg Equipment 135,953,000 'Subject to Use Tax and Personal Property Tax General&Test Mfg Equipment 8,452,000 'Subject to Use Tax and Person)Property Tax leashold Improvements 12,545,D00 'Subject to Personal Property tax Only Real Property 7,455,000 'Not subject to any tax but a cost associated with the project Total Investment 164,405,000 Estimated labor 15,000,000 'labor number 6 included in the above equipment numbers,but is deducted for the Use Tax as it is not subject to Use Tax year Taxes are Paid 2012 2013 2014 2015 2016 1017 2019 2019 2020 2021 2022 2023 2024 LOU Estimated that 20%of the Use Tax is payable in 2013 and 80%in 2014 Totals Use Tax Collected 776,430 3,105,720 3,982,150 Use Tax Rebate Paid 776,430 3,105,720 3,882,150 Personal Property Tax Pewnal Property Collected 315,496 201,814 107,278 94,101 92,274 9Q067 .92,027 89,837 87,041 84,240 1,258,175 Persontal Property Rebate Paid 157,748 100,907 53,639 47,051 46,137 47,033 46,014 44,918 43,520 42,120 629,087 Total Taxes Paid 776,430 3,105,720 315,496 201,814 107,278 94,101 92,274 94,067 92,027 89,837 87,041 94,240 5,140,325 Total Taxes Rebated 776,430 3,105,720 157,748 100,907 53,639 47,051 46,137 47,033 46,014 44,918 43,520 42,120 4,511,237 EXHIBIT D Job Creation Performance Standards As requested by the City, a condition of receipt of any Use Tax Rebate payment and any Personal Property Tax Rebate payment provided in the Business Investment Agreement for Economic Development Related to Avago Technologies Building 4 Retrofit for New Fbar Clean Room Facility, AVAGO must comply with each of the following: 1. Reporting Requirements: AVAGO must comply with all reporting requirements that are or would be imposed in connection with State of Colorado Strategic Fund participation (earmarked by the Economic Development Commission, "Project Beta," dated March 8, 2012). If requested by the City in order to determine or confirm job creation performance as required hereunder, AVAGO shall provide to the City related data, records or verification of the same. 2. Job Creation Requirements: AVAGO must create net new permanent full-time equivalent jobs in Fort Collins in the numbers and no later than December 31 of the specified calendar years as set forth below(the "job creation targets"). Net new cumulative job creation is to be measured against the April 29, 2012 baseline of net permanent full-time jobs in Fort Collins: Avago Project Beta Projected Jobs Year Cumulative Jobs Anticipated Salaries 2013 Not less than 20 2014 Not less than 100 2015 Not less than 135 Total 135 $5.6M 20