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Ord. 1447 2011-06-27ORDINANCE NO. 1447 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, FINDING THAT THE CITY HAS ESTABLISHED GUIDELINES AND CRITERIA FOR GRANTING TAX ABATEMENT PURSUANT TO RESOLUTION NO. R2011 -12; DESIGNATING AND DESCRIBING A REINVESTMENT ZONE (TO BE KNOWN AS REINVESTMENT ZONE #21), IN ACCORDANCE WITH THE PROPERTY REDEVELOPMENT AND TAX ABATEMENT ACT; FINDING THAT THE IMPROVEMENTS SOUGHT ARE FEASIBLE AND PRACTICAL AND WOULD BE A BENEFIT TO THE LAND TO BE INCLUDED IN THE ZONE AND THE MUNICIPALITY AFTER THE EXPIRATION OF THE TAX ABATEMENT AGREEMENT; AUTHORIZING THE CITY MANAGER TO SIGN TAX ABATEMENT AGREEMENTS WHEN APPROVED BY THE CITY COUNCIL; HAVING A SAVINGS CLAUSE AND A SEVERABILITY CLAUSE; AND AN EFFECTIVE DATE. WHEREAS, Chapter 312 of the Texas Tax Code (the "Property Redevelopment and Tax Abatement Act provides for the designation of a Reinvestment Zone or area; and WHEREAS, the City Council has, pursuant to Resolution No. R2011 -12, established Guidelines and Criteria for Granting Tax Abatement; and WHEREAS, a certain area of the City of Pearland meets the criteria and guidelines heretofore established by the City Council required for designation as a Reinvestment Zone; and WHEREAS, the City Council, on June 13 2011, held a public hearing on the designation of a Reinvestment Zone and finds that the improvements sought are feasible and practical and would be a benefit to the land to be included in the zone and to the municipality after the expiration of an agreement under the Property Redevelopment and Tax Abatement Act; now, therefore, ORDINANCE NO. 1447 BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: Section 1. That pursuant to the Property Redevelopment and Tax Abatement Act, the City Council of the City of Pearland, Texas, hereby designates as a Reinvestment Zone the area described in Exhibit "A" attached hereto and made a part hereof for all purposes, to be known as Reinvestment Zone #21. Section 2. That the area described in Exhibit AA@ is reasonably likely, as a result of this designation, to contribute to the retention or expansion of primary employment, or to attract major investment into the zone that would be a benefit to the property and that would contribute to the economic development of the City, and that the improvements sought are feasible and practical and would be a benefit to the land to be included into the zone and to the municipality after the expiration of a Tax Abatement Agreement as authorized by the Property Redevelopment and Tax Abatement Act. Section 3. That the designation of the Reinvestment Zone herein expires five (5) years from the effective date of this ordinance and may be renewed by a subsequent ordinance of the City Council for a period not to exceed an additional five (5) years. That expiration of the original designation shall not affect an agreement entered into under the provisions of this ordinance. Section 4. That the City Council hereby authorizes agreements in writing with the owner of any taxable real estate located within the designated Reinvestment Zone, subject to the requirements and optional provisions of the Property Redevelopment and Tax 2 ORDINANCE NO. 1447 Abatement Act and the conditions of the Guidelines and Criteria for Granting Tax Abatement heretofore adopted by the City Council. Section 5. That any agreement to be entered into under the provisions of this ordinance must be approved by the affirmative vote of a majority of the members of the City Council at a regularly scheduled meeting of the City Council. On approval by the City Council, the agreement may be executed by the City Manager. Section 6. Savings. All rights and remedies which have accrued in favor of the City under this Ordinance shall be and are preserved for the benefit of the City. Section 7. Severability. If any section, subsection, sentence, clause, phrase or portion of this Ordinance is for any reason held invalid, unconstitutional or otherwise unenforceable by any court of competent jurisdiction, such portion shall be deemed a separate, distinct, and independent provision and such holding shall not affect the validity of the remaining portions thereof. Section 8. Effective Date. This Ordinance shall become effective upon passage and approval of its second reading. 3 ORDINANCE NO. 1447 2011. ATTEST: PASSED and APPROVED ON FIRST READING this the 13 day of June, A.D., APPROVED AS TO FORM: DARRIN M. COKER CITY ATTORNEY cm :1 M. TOM REID MAYOR PASSED and APPROVED ON SECOND AND FINAL READING this the 27 day of June, A. D., 2011. ATTEST: 4 TOM REID MAYOR ORDINANCE NO. 1447 APPROVED AS TO FORM: DARRIN M. COKER CITY ATTORNEY 5 K ETH A. GRULLE1 X.:, 5478 P METES AND BOUNDS DESCRIPTION 11.9337 ACRES LOCATED IN THE JAMES HAMILTON SURVEY, A -876 HARRIS COUNTY, TEXAS Exhibit "A" Ordinance No. 1447 Being a tract or parcel of land containing 11.9337 acres of land or 519,832 square feet, located in the James Hamilton Survey, Abstract 876, Harris County, Texas, Said 11.9337 acre tract being out of and a part of a 36.166 acre tract of record in the name of SHT /Kirby, Ltd. In Harris County Clerk's File (H.C.C.F.) Number 20080049996, said 36.166 acre tract being out of and a part of Block "F" of the Allison- Richey Gulf Coast Homes Subdivision of record in Volume 3, Page 40 in the Map Records of Harris County, Texas; Said 11.9337 acre tract being more particularly described as follows (bearings based on said deed): BEGINNING at a 5/8 inch iron rod found at the northeast end of a Right -of -Way (R.O.W.) transition from the west R.O.W. line of Kirby Drive (width varies) to the north R.O.W. line of Spectrum Boulevard (100 feet wide), being on the east line of aforesaid 36.166 acre tract; THENCE, coincident aforesaid R.O.W. transition, South 42 Degrees 38 Minutes 32 Seconds West, a distance of 28.11 feet to a 5/8 inch iron rod with Gruller" cap set on the north R.O.W. line of aforesaid Spectrum Boulevard, being the northeast corner of a 1.3116 acre tract of record in the name of City of PearL'ind in H.C.C.F. Number 20100435869; THENCE, coincident the north line of aforesaid Spectrum Boulevard, South 87 Degrees 21 Minutes 30 Seconds West, a distance of 558.09 feet to a 5/8 inch iron rod with Gruller" cap set for the southwest corner of the herein described tract; THENCE, through and across aforesaid 36.166 acre tract the following two (2) courses: 1. North 02 Degrees 38 Minutes 00 Seconds West, a distance of 879.16 feet to a 5/8 inch iron rod with "Gruller cap set for the northwest comer of the herein described tract 2. North 87 Degrees 22 Minutes 00 Seconds East, a distance of 598.33 feet to a 5/8 inch iron rod with Gruller" cap set for the northeast corner of the herein described tract, on the west R.O.W. line of aforesaid Kirby Drive; THENCE, coincident the west R.O.W. line of aforesaid Kirby Drive the fallowing three (3) courses: 1. South 02 Degrees 16 Minutes 57 Seconds East, a distance of 613.59 feet to a 5/8 inch iron rod found; 2. South 14 Degrees 25 Minutes 00 Seconds West, a distance of 52.20 feet to a 5/8 inch iron with Gruller" cap set 3. South 02 Degrees 16 Minutes 57 Seconds East, a distance of 195.82 feet to the POINT OP BEGINNING and containing 11.9337 acres of land. r Surveying, LLC May 25, 2011 Job 36 -1109 ierHic r HARRIS COUNTY, TEXAS OCT 1 8 2011 COMMUNITY SERVICES DEPARTMENT TEXAS CITY OF PEARLAND Office of oWcCliaita M&tDFFICE David B. Turkel 8410 Lantern Point Drive Director Houston,Texas 77054 Nancy Powell Tel (713)578-2000 Economic Development Director Vote of the Court: Yes No Abstain Judge Emmett n a October 4, 2011 Comm. Lee 0 El Comm. Morman n n Judge Emmett and Commissioners Comm. Radack [J n Lee, Morman, Radack and Cagle Comm. Cagle n n AGENDA LETTER Please consider the following on the Commissioners Court Agenda for October 11, 2011: Approval of the Tax Abatement Agreement between Harris County and Merit Medical Systems, Inc., for construction of a new $8,575,000 medical device manufacturing facility located at 14646 Kirby Drive, Pearland, Texas 77047, in Precinct 1. The company commits to creating at least 221 permanent employment positions. City of Pearland held the requisite public hearing for the project and designated "City of Pearland Reinvestment Zone #21" on June 13, 2011. Pearland approved its own tax abatement agreement, as is required by state statute before Harris County may approve a tax abatement, on July 11, 2011. Sincerely, 4.0g/ (k-P--4"-j% 4-iDavid Turkel Director Community Services Department _R ll..y Presented to Commissioner's Court vs- o .5 Cell 0,1 4- DT/NP/jas OCT 1 1 2011 - 'l'7 APPROVE L} `' •Recorded Vol Page 642)✓,0, .5--97v 63,14 4 S /ie - Cop Le -j 1 ►�-,•,,, -F- e' hi - r o fptr' Harris County Tax Abatement Program Project Summary and Economic Analysis October 4 2011 Type of Project: New Construction Company Name: Merit Medical Systems, Inc. 1600 Merit Parkway South Jordan, Utah 84095 Project Location: 14646 Kirby Drive Pearland, Texas 77047 Precinct 1 - Commissioner El Franco Lee Key Map Page: 612-D PROJECT SUMMARY Summary of Action Requested at Present: Commissioners Court is asked to approve the Tax Abatement Agreement between Harris County and Merit Medical Systems, Inc., for construction of a new $8,575,000 medical device manufacturing facility located at 14646 Kirby Drive, Pearland, Texas 77047, in Precinct 1. The company commits to creating at least 221 new permanent employment positions. Previous Actions Taken: City of Pearland held the requisite public hearing for the project and designated"City of Pearland Reinvestment Zone#21" on June 13, 2011. Pearland approved its own tax abatement agreement, as is required by state statute before Harris County may approve a tax abatement, on July 11, 2011. Business Profile: Merit Medical Systems, Inc., headquartered in South Jordan, Utah, is a worldwide designer, developer, manufacturer, and marketer of medical devices used in an array of interventional and diagnostic procedures. Organized in July 1987 as a Utah corporation, Merit conducts operations through domestic and foreign subsidiaries. Its medical devices are used by physicians to diagnose and treat coronary artery disease and other non-vascular diseases. Development Plan: Merit management proposes to invest $8,575,000 in new construction of a medical device manufacturing facility in City of Pearland, to replace the company's aging facility in Angleton, Brazoria County, Texas. The new facility will be 100,000 square feet for research & development, and for manufacturing of extrusion products(catheters, sheaths, tubing). Merit senior management has evaluated competing sites outside Harris County for the project. The company already has operations in Utah, Virginia, and Massachusetts, and has significant manufacturing & distribution operations in Ireland, the Netherlands, China, and Mexico. Merit's business model entails aggressive negotiations for tax incentives whenever it considers where to locate a facility. The company currently is expanding its largest U.S. facility in South Jordan, Utah, where it still has ample room to relocate the Angleton operations, if the Harris County site were not selected. Management has provided information demonstrating that it would receive a tax increment financing package at the Utah location, and would also have access to research& development tax credits from the State of Utah. Competitive Site: South Jordan, Utah, where the company already owns property and has sufficient room to accommodate the proposed facility. Property Tax Record with Harris County: The company has no record of any taxes with the County. Environmental Issues: None reported by Harris County Pollution Control. Occupational & Safety Issues: None determined by Harris County Office of Economic Development. Terms of Abatement: 50% of ad valorem taxes on abatable investment each year, for taxes of Harris County, Flood Control, Hospital District, and Port Authority. Abatable Investment: Up to $8,575,000 in new real property. Length of Abatement: 10 years from January 1, 2011, through December 31, 2020. Variance: An "early start" variance is effective from the date the City of Pearland approved its tax abatement. A five year employment period is also requested, rather than the customary three years. Jobs: At least 221 permanent employment positions will be created at the facility. ECONOMIC BENEFITS ANALYSIS Economic Impact: The annual economic impact of new construction for the project is estimated to be $12.1 million and 646 direct and indirect.1 Fiscal Impact: • Average annual taxes abated during the Abatement period: $8,575. • Current annual revenue: $8,187. • Average annual revenue during the abatement period(100%taxable): $93,359. • Harris County's average annual revenue during the abatement period increases by $85,171.2 • After the abatement period,the annual revenue increases over current revenues by $75,722. 'Calculated by Greater Houston Partnership using Regional Input Output Model of U.S.Department of Commerce. 2 Total all County entities is$0.62998/$100 value. 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I. AUTHORIZATION The Agreement is authorized by: (a) the Texas Property Tax Code, Ch.312, as it exists on the effective date of the City of Pearland ("City") tax abatement agreement; (b) City Resolution No. R2011-12, dated January 24, 2011, establishing City property tax abatement program for properties designated in a City reinvestment zone (Exhibit A); (c) the requisite public hearing held by Pearland City Council on June 13, 2011; (d) City Ordinance No. 1447, creating Reinvestment Zone #21 ("Zone"), passed and approved June 27, 2011 (Exhibit A-1); (e) City Resolution No. R2011-79, authorizing a tax abatement agreement, passed, adopted, and approved July 11, 2011 (Exhibit A-2); (f) Guidelines and Criteria for Granting Tax Abatement in a Reinvestment Zone Created in Harris County, re-adopted by the Harris County Commissioners Court on November 24, 2009 (the "Guidelines"), effective January 2010 through December 2011 (Exhibit B), and (g) the Order of Commissioners Court authorizing this Agreement on behalf of the County. II. DEFINITIONS As used in the Agreement, the following terms shall have the meanings set forth below: a. "Abatement" means partial exemption from ad valorem taxes for certain new construction of real property located within the Zone designated for economic development purposes. b. "Application" refers to the signed application and construction budget dated March 28, 2011, submitted by Merit Medical Systems, Inc. (Exhibit C). c. "Effective Date" means January 1,2012. d. "HCAD"means Harris County Appraisal District. e. "Early Start Date" means July 11, 2011, the date the City authorized its own tax abatement agreement with City Resolution No. R2011-79. f. "Base Year Value" means the 2011 certified appraised value, as determined by HCAD for the property located in the Zone. g. "CSD" means Harris County Community Services Department Office of Economic Development, and its successors and assigns. h. "Construction" means material and substantial improvement of the property, representing a separate and distinct construction operation undertaken for the purpose of erecting the Real Property Improvements, as detailed in the Application. HCTAXABATEMENT.C ITY/COUNTY.9.20 1 1/DT/NP/j as i. "End of Construction Period" refers to December 31, 2013, two years from Effective Date of this Agreement, or when the medical supply manufacturing facility is available for use, whichever occurs first. j. "Eligible Property" means construction of a medical supply manufacturing facility in the Zone to the extent construction will occur after the Early Start Date but before the End of Construction Period. Eligible Property shall be as detailed in Real Property Improvements. The value of Eligible Property shall be the certified appraised value determined by HCAD each year. k. "Ineligible Property" means any construction commenced prior to the Early Start Date, or after the End of Construction Period. Ineligible Property also includes: renovations to existing facilities within the Zone; construction of new facilities other than the new medical supply manufacturing facility subject to a tax abatement; fixed-in-place business personal property; Real Property Improvements having an economic life less than 15 years; Real Property Improvements fully or partially exempt from ad valorem tax by virtue of local, state, or federal law; land; housing; vehicles; vessels; aircraft; hotels and accommodations; deferred maintenance investments; business personal property such as inventories, supplies, tools, furnishings; and/or any improvements not integral to the operation of the facility. The value of all Ineligible Property each year shall be the HCAD certified appraised value. 1. "Real Property Improvements" means construction of new Eligible Property by the Owner of the medical supply manufacturing facility (estimated 100,000 square feet) in the Zone after the Early Start Date and before the End of Construction Period. m. "TWC"means Texas Workforce Commission. n. "Permanent Employee" means an employee of the Owner who works a minimum of 2,000 hours per year exclusively within the Zone (excluding any contract employee, seasonal employee, full-time equivalent, or part-time employee), who receives medical benefits, whose employment is both permanent and full-time and is stated in the quarterly TWC report filed by the Owner while this Agreement is in effect. III. SUBJECT PROPERTY A. The subject property is a parcel containing 11.9337 acres situated in the James Hamilton Survey, Abstract 876, Harris County, Texas, as more fully described in the attached Legal Description of Property (Exhibit D). B. The Zone is an area within Harris County, Texas, also detailed in City Ordinance No. 1447 passed and approved June 27, 2011 (Exhibit A-1). C. In accordance with TEXAS TAX CODE ANN. §312.204, HCAD shall determine the Base Year Value of the Zone as of January 1, 2011. The Chief Appraiser of HCAD shall annually certify the appraised value of the Real Property Improvements located within the Zone. IV. REPRESENTATIONS AND AGREEMENTS BY OWNER A. Owner represents and warrants that it owns fee simple title to the real property located at 14646 Kirby Drive, Pearland, Texas 77047, within the boundaries of the Zone, at the time of execution of this Agreement and prior to commencement of Construction of the Real Property Improvements. B. Owner represents and warrants that the Real Property Improvements will be constructed within the boundaries of the Zone. 2 C. Owner commits that the Real Property Improvements described in the Application constitute Eligible Property under this Agreement and did not commence before the Early Start Date. D. Owner represents and warrants that it shall maintain Real Property Improvements in good repair and condition throughout the term of the Agreement. E. Owner represents and warrants that it shall invest at least $8,575,000 in the Real Property Improvements by the End of Construction Period, of which $8,575,000 may be subject to the abatement calculation at 50 percent, as further described in SECTION V. VALUE AND TERM OF ABATEMENT, and SECTION VI. TAXABILITY. F. Owner represents and warrants that the certified appraised value of the Real Property Improvements as determined by HCAD shall be at least $8,575,000on or before January 1, 2014. G. Owner represents and warrants that it shall create a total of 221 Permanent Employees on its payroll in the Zone, in accordance with the following schedule: • 200 Permanent Employees by December 31, 2014 (3 years from Effective Date); • 210 Permanent Employees by December 31,2015 (4 years from Effective Date); • 221 Permanent Employees by December 31, 2016 (5 years from Effective Date) and continuing through the remaining term of this contract. H. If at any time Owner fails to meet above-stated Zone-specific employment requirements for Permanent Employees, Owner agrees to remit to the Director of CSD the full amount of ad valorem taxes previously abated under this Agreement plus applicable interest and penalties, as detailed in SECTION VII. EVENT OF DEFAULT. I. Owner represents and warrants that at the time of execution of this Agreement, Owner is not indebted to the County for any delinquent ad valorem taxes or other obligations. J. Owner represents and warrants that the proposed medical supply manufacturing facility will comply with all state and federal laws designed to protect human health and welfare. Further, Owner agrees that construction of the Real Property Improvements and operation of the facility shall comply with all applicable federal, state, and local laws, rules and regulations, including those designated to protect the environment from environmental hazards and degradation. V. VALUE AND TERM OF AGREEMENT A. Owner shall construct the Real Property Improvements in conformity with this Agreement as set out in the Application. Upon completion of the Real Property Improvements, Owner shall use the facility as a medical supply manufacturing facility. Owner shall further maintain the Real Property Improvements in good repair and condition throughout the term of this Agreement. B. The term of the Abatement shall be for a period not to exceed 10 years beginning with the Effective Date of this Agreement. In no case shall the term of the Abatement, inclusive of Construction, exceed 10 years from the Effective Date. C. In no case shall the value of Eligible Property used in the abatement calculation exceed $8,575,000, and in no case shall the value to be abated in any year exceed $4,287,500, which is 50 percent of the minimum value increase. D. Each year the exemption will be computed by HCAD in the following manner: 3 • If Base Year Value decreases during the term of a tax abatement or if an additional exemption is granted by the state or federal government, then the maximum amount of abatable value to be used in abatement calculation ("the Cap") will be reduced each year at the same rate ("Adjusted Cap"). • The Cap shall initially be $8,575,000, shall not exceed the increased value requirement set out in this Agreement, and shall be adjusted annually. To determine the amount of the abatement each year,the Adjusted Cap shall be multiplied by 50 percent. • Current Property Value will be the current appraised value of all Eligible Property and existing property within the Zone for the year in which the Agreement is executed. • The Current Amount Eligible for Abatement is multiplied by 50 percent to determine the exemption amount each year, after adjusting the Cap, if applicable. E. Construction under this Agreement shall be considered complete when the new Real Property Improvements described in the Application are available for occupancy, or at the End of Construction Period, whichever occurs first. If Construction is incomplete two years after the Effective Date, then the Real Property Improvements shall be considered completed for the purpose of compliance monitoring under this Agreement. VI. TAXABILITY During the period this Agreement is in effect, ad valorem property taxes shall be payable on the HCAD- certified appraised value in the Zone as follows: (1) Base Year Value, Ineligible Property, and non-abatable property, shall be fully taxable at 100 percent; (2) Improvements to the Eligible Property in excess of the amount of Eligible Property to be abated, as calculated in SECTION V.VALUE AND TERM OF ABATEMENT,shall be fully taxable at 100 percent; (3) The Abatement shall apply only Eligible Property, which shall be abated in accordance with the percentage set forth in SECTION V. VALUE AND TERM OF ABATEMENT. The tax abatement applied to Eligible Property subject to the abatement calculation cannot exceed the amount by which the value of the property located in the Zone including the Eligible Property and existing property for the year in which the Agreement was executed, as listed on the appraisal roll for the year, exceeds the Base Year Value. VII. EVENT OF DEFAULT A. During the period covered by this Agreement, the County may declare a default hereunder upon the occurrence of any one or more of the following circumstances or events: 1. Failure by Owner to construct the Real Property Improvements specified in the Application by the End of Construction Period; or 2. Failure by Owner to invest at least $8,575,000 in the Real Property Improvements detailed in the Application; or 3. Failure by Owner to increase the certified appraised value of the Real Property Improvements as determined by HCAD by at least$8,575,000 on or before January 1, 2014; or 4. Failure by Owner to create at least 160 Permanent Employees by July 1, 2013; or 175 Permanent Employees by December 31, 2013; or 200 Permanent Employees by December 31, 4 2014; or 210 Permanent Employees by December 31, 2015; or 221 Permanent Employees by December 31,2016; 5. Failure by Owner to maintain at least 221 Permanent Employees on its payroll from December 31, 2016, throughout the entire duration of this Agreement. 6. Failure by Owner to comply with any of the terms of the Agreement; or 7. Failure by Owner to comply with TEXAS TAX CODE ANN. §22.01, as amended, requiring • annual rendition of all personal property with HCAD; or 8. Failure by Owner to pay ad valorem taxes owed to the County or to become delinquent in payment of such ad valorem taxes; or 9. Failure by the Owner to ensure that any third-party owning assets in the Zone pays taxes in a timely manner; or 10. Misrepresentation by Owner in the Application or in the Agreement; or 11. If the City declares the Owner to be in default with respect to any of the terms and conditions of the City tax abatement agreement approved July 11, 2011, and such default is not cured in accordance with the provisions of that agreement. B. In the event the County declares Owner to be in default of this Agreement, the Agreement shall terminate unless such default is cured in accordance with Subsection C below. If this Agreement is terminated, the County shall recapture all property taxes that have been abated as a result of this Agreement. Additionally, Owner agrees to pay the County the full amount of recapture owed plus interest at the rate of six percent (6 percent) per annum from the Effective Date. Interest shall be calculated on the basis of a year of 360 days and the actual days elapsed (including the first day but excluding the last day) occurring in the period for which such interest is payable, calculated on the per annum basis of a year of 365 or 366 days, as applicable, and the actual days elapsed (including the first day but excluding the last day). C. Owner is responsible for notifying the County of any default under this Agreement within 10 days of such default, and must cure such default within 60 days after receipt of said notification of default ("Cure Period"). If the County determines that Owner has failed to notify the County of any default of this Agreement as provided in this paragraph, the County shall terminate the Agreement immediately and all taxes previously abated by virtue of this Agreement will be recaptured from Owner. In such event, such taxes must be paid to the County, within 60 days from the date of termination. If the County does not receive full payment within said 60 days from Owner's receipt of a Notice of Termination from the County, as described in SECTION VIII. ADMINISTRATION, a penalty may be added, pursuant to the Texas Tax Code, equal to fifteen percent (15 percent) of the total amount of taxes abated under this Agreement. D. In the event Owner allows any ad valorem taxes owed to the County to become delinquent or fails to timely and properly follow the legal procedures for protest and/or contest, then this Agreement may be terminated by the County. In such event, all recaptured taxes, interest, and penalties that may be assessed under the terms of this Agreement, must be paid to the County by Owner within 60 days from the date of the Notice of Termination. E. In the event that a third-party that is not a party to this Agreement owns any assets in the Zone and00 allows any ad valorem taxes owed to the County to become delinquent or fails to timely and properly follow the legal procedures for protest and/or contest, then this Agreement may be terminated by the County, unless Owner pays all such delinquent taxes plus interest and penalties in a timely manner. In such event of termination, all recaptured taxes, interest, and penalties that may be assessed under this Agreement, must be paid to the County by Owner within 60 days from the date of the Notice of Termination. 5 F. In the event the Real Property Improvements are completed and Owner begins operation, but subsequently discontinues operation for any reason, for a period of 180 days during the term of the Agreement, or one year in the event of a natural disaster, then this Agreement shall terminate. In the event of termination pursuant to the provisions of this paragraph, the abatement of taxes under this Agreement for the calendar year during which the facility no longer is in operation shall terminate and there shall be full recapture with penalties and interest as set out herein. Further, Owner shall notify the County within 10 days of any discontinuation, stating the reason for the discontinuation and the projected length of discontinuation. Any taxes otherwise abated for the calendar year during which Owner no longer operates the subject facility must be paid directly to Harris County within 60 days from the date of discontinuation. VIII. ADMINISTRATION CSD shall administer this Agreement on behalf of the County and all political subdivisions on whose behalf it is entered. Owner shall allow employees or representatives of the County who have been designated by CSD to have access to the Zone during the term of this Agreement to inspect the facility to determine compliance with the terms and conditions of this Agreement. All inspections will be made only after giving 24 hours prior notice and will only be conducted in such manner as to not unreasonably interfere with the construction and/or operation of the subject facility. All inspections will be made with one or more representatives of Owner and in accordance with safety and security standards of Owner. Upon completion of the Real Property Improvements, CSD shall annually evaluate the facility to ensure compliance with the terms and provisions of this Agreement and shall report possible defaults to the Commissioners Court and the County Attorney. Owner shall annually submit to CSD and to HCAD, beginning on March 1st, in each year this Agreement is in effect, a January 1St count of Permanent Employee positions which shall correspond to employment counts reported in the Employer's Quarterly Report filed by Owner with TWC for the quarter ending on the previous December 31st, and separate notarized letter certifying: • (1) Number of jobs created in the Zone, and; (2) Owner's compliance with all environmental and worker safety requirements for the preceding year. This information will be used by CSD to determine eligibility for abatement and shall be subject to audit if requested by CSD. Failure by Owner to submit requested information will render Owner ineligible to receive any tax abatement. Owner shall comply with all federal, state, and local laws applicable to the facility in the Zone, and shall properly obtain and maintain all required permits and authorizations as may be required from federal and state regulatory agencies with respect to such facilities. HCAD shall annually determine both the abated value and the full taxable value in the appraisal records. The full exemption value listed in the HCAD records shall be used to compute the amount of abated taxes required to be recaptured and paid in the event this Agreement is terminated in a manner that results in recapture. Each year, Owner shall furnish the HCAD Chief Appraiser with such information outlined in Chapter 22, TEXAS TAX CODE, as may be necessary for the administration of the tax abatement specified herein. If the County terminates this, it shall provide Owner with written notice of such termination. If Owner believes that such termination was improper, Owner may file suit in the Harris County District Court appealing such termination within 60 days after receipt from the County of written notice of termination. If a suit is filed, Owner shall remit to the County within 60 days after receipt of demand for payment any additional or recaptured taxes as may be payable during the pendency of the litigation pursuant to the payment provisions of TEXAS TAX CODE A1m4. § 42.08. If the final determination of the appeal increases the tax liability of Owner above the amount of tax paid, Owner shall remit the additional tax to the County and other political 6 subdivisions that are parties to the Agreement, pursuant to TEXAS TAX CODE ANN. § 42.42. If the final determination of the appeal decreases tax liability of Owner, the County shall refund the difference between the amount of tax paid and the amount of tax for which Owner is liable pursuant to TEXAS TAX CODE ANN. § 42.43. IX. ASSIGNMENT Should Owner intend to sell, convey or lease the Real Property Improvements, Owner must request an assignment of this Agreement in writing from CSD. Consent of Commissioners Court shall not be unreasonably withheld. Any assignment shall provide that the assignee shall continue to operate the facility as a medical supply manufacturing facility and shall irrevocably and unconditionally assume all the duties and obligations of the assignor upon the same terms and conditions as set out in this Agreement. Any assignment of this Agreement shall be to an entity that shall continue to operate the facility as a medical supply manufacturing facility and shall maintain all commitments of this Agreement as to Permanent Employee positions and tax roll valuation for each remaining year on all associated Real Property Improvements. No assignment shall be approved if Owner or assignee is indebted to the County for delinquent ad valorem taxes or other obligations. X. RENDITION This Agreement is specifically conditioned upon Owner complying with TEXAS TAX CODE ANN. § 22.01,as amended, requiring annual rendition of all personal property with HCAD. XI.NOTICE Any notice required to be given under the provisions of this Agreement shall be in writing and shall be duly served when it shall have been deposited, enclosed in an envelope with the proper postage prepaid thereon, and duly registered or certified, return receipt requested, in a United States Post Office, addressed to the County and Owner at the following addresses. If mailed, any notice or communication shall be deemed to be received three (3) days after the date of deposit in the U.S. Mail. Unless otherwise provided in the Agreement, all notices shall be delivered to the following addresses: To Owner: Merit Medical Systems, Inc. 1600 West Merit Parkway South Jordan, UT 84095 Attention: Chief Financial Officer Merit medical Systems, Inc. 14646 Kirby Drive Pearland, Texas 77047 Attention: Chief Financial Officer To the County: Harris County Community Services Department 8410 Lantern Point Drive Houston, TX 77054 Attention: Office of Economic Development To HCAD: Office of the Chief Appraiser/Abatements Harris County Appraisal District P.O. Box 920975 Houston, TX 77292-0975 Any party may designate a different address by giving the other party 10 days written notice. 7 XV. DATE The County executes this Agreement by and through the Director of CSD acting pursuant to Order of the Harris County Commissioners Court, so authorizing. This Agreement shall not become enforceable until executed by all parties hereto. The Effective Date shall be January 1, 2012. The parties in multiple originals, each, have executed this Agreement having full force and effect. APPROVED AS TO FORM: VINCE RYAN HARRIS CO NTY Coun Attorney f By: � QJ By: DO A' P. RAY DA ►' URKEL Ass tant County Attorney Director, Community Services Department MERIT ME ► C SYSTE , INC. (a UT H C rpo :tion) By: Fred Lampropoulos, CEO Date: ATTEST: BY: K 4 S+ v► r r Fly c Printed Name and Tit e l (must be a co ora officer) Sign e Date: 1/6/9 9 XII. ALL-INCLUSIVE The parties agree that this Agreement contains all of the terms and conditions of the understanding of the parties relating to the subject matter hereof. All prior negotiations, discussions, correspondence and preliminary understandings between the parties and others relating hereto are superseded by the Agreement. XIII. APPLICABLE LAWS Each party to the Agreement understands and agrees that this Agreement shall be governed and construed according to the laws of the State of Texas. XIV. SEVERABILITY The parties agree that if any provision, section, subsection, sentence, clause, or phrase contained in this Agreement is for any reason held to be unconstitutional, void, or invalid, the remaining portions of this Agreement shall not be affected thereby and all provisions contained herein are deemed severable for that purpose. 8 Exhibit "A" Ordinance No. 1447 METES AND BOUNDS DESCRIPTION 11.9337 ACRES LOCATED IN THE JAMES HAMILTON SURVEY,A-876 HARRIS COUNTY,TEXAS Being a tract or parcel of land containing 11,9337 acres of land or 519,832 square feet,located in the James Hamilton Survey,Abstract 876, Harris County,Texas,Said 11.9337 acre tract being out of and a part of a 36.166 acre tract of record in the name of SHT/Kirby, Ltd. In Harris County Clerk's File (H.C.C.F.) Number 20080049996, said 36.166 acre tract being out of and a part of Block "F" of the Allison-Richey Gulf Coast Homes Subdivision of record in Volume 3,Page 40 in the Map Records of Harris County, Texas; Said 11.9337 acre tract being more particularly described as follows (bearings based on said deed): • BEGINNING at a 5/8 inch iron rod found at the northeast end of a Right-of-Way (R.O.W.) transition from the west R.O.W. line of Kirby Drive (width varies) to the north R.O.W. line of • Spectrum Boulevard(100 feet wide),being on the east line of aforesaid 36.166 acre tract; THENCE, coincident aforesaid R.O.W. transition, South 42 Degrees 38 Minutes 32 Seconds West,a distance of 28.11 feet to a 5/8 inch iron rod with "Gruller" cap set on. the north R.O.W. line of aforesaid Spectrum Boulevard,being the northeast corner of a 1.3116 acre tract of record in the name of City of Pearland in H.C.C.F.Number 20100435869; THENCE, coincident the north line of aforesaid Spectrum Boulevard,South 87 Degrees 21 Minutes 30 Seconds West, a distance of 558.09 feet to a 5/8 inch iron rod with "Gruller" cap set for the southwest corner of the herein described tract; THENCE,through and across aforesaid 36.166 acre tract the following two(2)courses: 1. North 02 Degrees 38 Minutes 00 Seconds West,a distance of 879.16 feet to a 5/8 inch iron rod with "Gruller" cap set for the northwest corner of the herein described tract; 2. North 87 Degrees 22 Minutes 00 Seconds East, a distance of 598.33 feet to a 5/8 inch iron rod with "Gruller" cap set for the northeast corner of the herein described tract,on the west R.O.W.line of aforesaid Kirby Drive; THENCE,coincident the west R.O.W.line of aforesaid Kirby Drive the following three(3) courses: _ `�';m,,, 1. South 02 Degrees 16 Minutes 57 Seconds East, a distance of 613.59 feet to a •• 0 r..,?6`,' 5/8 inch iron rod found;• �,.�.�s, 2. South 14 Degrees 25 Minutes 00 Seconds West, a distance of 52.20 feet to a KEkETRA,GRULLEr • 5/8 inch iron with"Gruller"cap set; 5478 : 3. South 02 Degrees 16 Minutes 57 Seconds East,a distance of 195.82 feet to the '��BSS1a,•r In ' gip BU sV' 44` POINT OF BEGINNING and containing 11.9337 acres of land. Surveying,LLC May 25,2011 Job 36-1109 ORDINANCE NO. 1447 PASSED and APPROVED ON FIRST READING this the 13th day of June, A.D., 2011. ) S----)i.a TOM REID MAYOR ATTEST: t ./ _J/U "�1.,i'I! d! AYr G L21- — G / / ' R SEA : TARP 5. .. ` 4jr•.M41xN� APPROVED AS TO FORM: 0 434.--..--. ir esii"-- . DARRIN M. COKER CITY ATTORNEY PASSED and APPROVED ON SECOND AND FINAL READING this the 27th day of June, A. D., 2011. �dYrl f.."`# TOM REID MAYOR ATTEST: - +�Y, NG i- ' , T% C -f . + t 40 Y SE ETARY . • ;fir .... "rh xa` x•4.411 NNE• 4 ORDINANCE NO. 1447 BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: Section 1. That pursuant to the Property Redevelopment and Tax Abatement Act, the City Council of the City of Pearland,Texas, hereby designates as a Reinvestment Zone the area described in Exhibit"A" attached hereto and made a part hereof for all purposes, to be known as Reinvestment Zone#21. Section 2. That the area described in Exhibit AA@ is reasonably likely,as a result of this designation, to contribute to the retention or expansion of primary employment, or to attract major investment into the zone that would be a benefit to the property and that would contribute to the economic development of the City, and that the improvements sought are feasible and practical and would be a benefit to the land to be included into the zone and to the municipality after the expiration of a Tax Abatement Agreement as authorized by the Property Redevelopment and Tax Abatement Act. Section 3. That the designation of the Reinvestment Zone herein expires five (5) years from the effective date of this ordinance and may be renewed by a subsequent ordinance of the City Council for a period not to exceed an additional five (5)years. That expiration of the original designation shall not affect an agreement entered into under the provisions of this ordinance. Section 4. That the City Council hereby authorizes agreements in writing with the owner of any taxable real estate located within the designated Reinvestment Zone,subject to the requirements and optional provisions of the Property Redevelopment and Tax 2 RESOLUTION NO. R2011-12 ASSIGNMENT Section 8 The terms and conditions of an Agreement are binding upon the successors and assigns of all parties hereto. An Agreement may be transferred or assigned by the Company only upon written permission by the City in accordance with Resolution R2011-12, which permission shall not be unreasonably withheld. No assignment shall be approved if the assignor or assignee is indebted to the City for ad valorem taxes or other obligations. The Company, or any legal successor thereto or prior assignee thereof, may assign its rights and obligations under this Agreement, including by merger or operation of law, to any legal successor or any person or entity that acquires all or substantially all of its business and operations. In addition, with the prior written consent of the City, which consent shall not be unreasonably withheld or delayed, the Company, or any legal successor company thereto or prior assignee thereof, may assign its rights and obligations under this Agreement to any parent or wholly owned subsidiary that it currently has in place or later establishes, if it is constituted as a separate legally recognized business entity. Any such assignment will be made without additional consideration being payable to the City. An Agreement shall survive any sale, change of control or similar transaction involving the Company, any successor thereto or prior assignee thereof and no such transaction shall require the consent of the City. The Company shall provide the City written notice of any assignment, sale, change of control or similar transaction pursuant to this section as soon as possible and in no event not later than thirty (30) calendar days following such event. SUNSET PROVISION Section 9 These Guidelines and Criteria are effective upon the date of their adoption and will remain in force for two (2) years, at which time all reinvestment zones and tax abatement contracts created pursuant to its provisions will be reviewed by the City Council to determine whether the goals have been achieved. Based on that review, the Guidelines and Criteria will be modified, renewed or eliminated providing that such actions shall not affect existing Abatement Agreements. 16 RESOLUTION NO. R2011-12 (c) In the event a Company allows its ad valorem taxes owed to any taxing jurisdiction to become delinquent and fails to timely and properly follow the legal procedures for protest and/or contest of any such ad valorem taxes then the Agreement shall be in default. In the event that the Company defaults in this manner and has not cured such default within sixty (60) days of said default, the abatement may be modified or terminated by the City. If ,at its discretion, the City modifies or terminates an Agreement because a Company allows its ad valorem taxes owed to any taxing jurisdiction to become delinquent and fails to timely and properly follow the legal procedures for protest and/or contest of any such ad valorem taxes the City may, at its discretion require that the Company immediately repay the part or the entirety of any amounts abated under this Agreement plus interest, at the rate of 4% plus prime as published in the Wall Street Journal, per year, compounded annually from January 1of the year following the execution of the Agreement to the date of repayment. (d) In the event a Company shall move the Employment Positions or Improvements outlined in a Agreement from the Premises during the term of the Agreement then all abatements of tax previously earned under this Agreement may be refundable to the City by the Company and the Agreement may terminate at the discretion of the City. After notice, the Company shall have thirty (30) days to pay outstanding damages to the City for failure to meet any of the requirements in this Section. If the Company does not make payment to the City during the Thirty (30) day period this Agreement may terminate at the discretion of the City (e) No party shall be required to perform any obligation under an Agreement or be liable or responsible for any loss or damage resulting from its failure to perform so long as performance is delayed by force majeure or acts of God, including but not limited to strikes, lockouts or labor shortages, embargo, riot, war, revolution, terrorism, rebellion, insurrection, flood, natural disaster, or interruption of utilities from external causes. 14 RESOLUTION NO. R2011-12 (4) Require an Applicant to annually furnish any information necessary for the City's evaluation of Applicant's compliance with the terms of the agreement; and (5) Provide for recapturing property tax revenues that are lost if the owner fails to make the Improvements or comply with annual compliance reporting requirements. (b) If the City Council fails to adopt the Agreement, the City shall notify the applicant of the disapproval, such notification to be in writing and to be sent within 60 days of the City Council's decision. (c) An approved tax Abatement Agreement shall be executed by the City Manager within 60 days after the applicant has forwarded all necessary information and documentation to the City. (d) No later than 90 days after a reinvestment zone has been designated or a tax Abatement Agreement has been executed or July 1, whichever occurs first, the City Manager or his designee shall deliver a report to the Comptroller of the State of Texas and the Chief Appraiser of Appraisal District with jurisdiction over the reinvestment zone, briefly describing the terms of the zone or the agreement and including a copy of the agreement (e) Annual Abatement Filings. The Company may be required to make additional filings with the appropriate County Appraisal District, or other state or local offices or agencies, annually or from time to time, in order for the Agreement to have full force, effect and applicability. These filings shall be the responsibility of the Company and in no way shall the City, it's elected officials, officers, employees or assigns, including the Pearland Economic Development Corporation, be responsible for the timely filing of any form or documents, except those set forth by law, on behalf of the Company. These filings may include, but are not limited to, the "Application for Property Tax Abatement Exemption" Comptroller Form No. 50-116 which must be filed with the appropriate County Appraisal District between January 1st and April 30th for property owned as of January 1st of the year in which the abatement is to be applied. Failure of the Company to meet 12 RESOLUTION NO. R2011-12 include, but not be limited to, an estimate of the economic effect of the creation of the zone, the abatement of taxes, and the proposed benefit to the affected jurisdiction and the property to be included in the zone. (e) The City Council shall not establish a reinvestment zone for the purpose of abatement if it finds that the request for the abatement was filed after the announcement or the commencement of construction, alteration, or installation of Improvements related to a proposed Modernization, Expansion, or new Premises. (f) Variance. Requests for variance from the provisions of Section 2 must be made in writing to the City Manager of the City, or his designee, provided, however, the total duration of abatement shall in no instance exceed ten years. The applicant shall include in the variance request a complete description of the circumstances the applicant believes supports the requested variance. Approval of a request for variance requires a three-fourths (3/4) vote of the City Council. PUBLIC HEARING Section 4 (a) Should any party be able to show cause in the public hearing why the granting of a tax abatement will have a substantial adverse effect on the City, that showing shall be reason for the City Council to deny designation of the reinvestment zone, the granting of Abatement, or both. (b) Neither a reinvestment zone nor Abatement Agreement shall be authorized if it is determined that: (1) There would be a substantial adverse affect on the provision of government service or tax base; (2) The applicant has insufficient financial capacity; (3) Planned or potential use of the property would constitute a hazard to public safety, health, morals, and/or violation of other applicable codes or laws. 10 RESOLUTION NO. R2011-12 reinvestment zone. If the period of construction exceeds two years, the Premises shall be considered completed for purposes of abatement and in no case shall the period of abatement inclusive of construction and completion exceed ten years. If it is determined that the abatement period would better benefit the City and the applicant by deferring the commencement date beyond the January 1st following the City's authorization of the abatement, the City may defer the commencement date of the abatement period to a future date certain. The deferral of the commencement date will not allow the duration of the abatement period to extend beyond ten (10) years. Tax Code 312.007(b). If a project includes facility replacement, the abated value shall be the value of the new unit(s) less the value of the old unit(s). (i) Economic Qualification. In order to be eligible for designation as a reinvestment zone and receive tax abatement, the planned improvement: (1) Must be reasonably expected to increase the value of the property in the amount of$500,000 or more; (2) Must be expected to retain or create employment positions for at least 10 people on a permanent basis in the City; and (3) Must not be expected to solely or primarily have the effect of transferring employment from one part of the City to another part of the City; and (4) Must be necessary because capacity cannot be provided efficiently utilizing existing improved property. (j) Taxability. From the execution of the Agreement until its termination, taxes shall be payable as follows; (1) The value of ineligible property as provided herein shall be fully taxable; (2) The Base Value of Premises, as determined herein, shall be fully taxable; and, 8 RESOLUTION NO. R2011-12 (z) "Tangible Personal Property" means (i) personal property that can be seen, weighed, measured, felt, or otherwise perceived by the senses, (ii) that is owned for its role in contributing directly to the business's ability to generate profit but does not include, office furniture and fixtures such as laptop computers, desktop computers, printers, chairs, desks, decorations, reprographics devices, and other similar office appurtenances which may indirectly contribute to the business' ability to generate a profit. Tangible Personal Property also does not include: intangibles which shall include a document or other perceptible object that constitutes evidence of a valuable interest, claim, or right and has negligible or no intrinsic value, inventory and/or supplies and Tangible Personal Property that was located in the reinvestment zone prior to execution of the Agreement with the City or located in the reinvestment zone subsequent to the execution of the Agreement with the City but not specifically identified in the Agreement. ABATEMENT AUTHORIZED Section 2 (a) Eligible Premises. Premises may be eligible for abatement if it is a: Hotel and Convention Premises, Manufacturing Premises , Office Premises, Research Premises , Distribution Center Premises, Headquarters Premises, Regional Service Premises , Regional Entertainment Premises or Other Basic Industry. (b) Creation of New Value. Abatement may only be granted for the additional value of eligible property and Improvements incorporated into the Premises subsequent to and specified in an Abatement Agreement between the City and the property owner, lessee or member of an affiliated group which includes the property owner and the lessee in which a controlling interest (more than 50%) is owned by a common owner, subject to such limitations as the City Council may require. (c) New and Existing Facilities at the Premises. Abatement may be granted for new facilities and improvements to existing facilities at the Premises for purposes of Modernization or Expansion. 6 RESOLUTION NO. R2011-12 (m) "Funding Conditions" means capital improvements and job creation conditions outlined in the Agreement. The capital improvements conditions shall specifically set forth value of the Improvements which must be made by the Improvement Completion Date. The job creation conditions shall specifically set forth the number and quality of Employment Positions. (n) "Hotel and Convention Premises" means buildings and structures, including machinery and equipment, the primary purpose of which is to provide a destination conference facility with 250 or more hotel rooms and more than 25,000 square feet of contiguous conference space. This shall also include facilities with 25,000 square feet or more of contiguous conference space without the requirement of a related hotel. (o) "Improvement Completion Date" means the date upon which the Fixed Improvements and Fixed Equipment shall be substantially completed by the Company. (p) "Manufacturing Premises" means buildings and structures, including machinery and equipment, the primary purpose of which is or will be the ' manufacture of tangible goods or materials or the processing of such goods or materials by physical or chemical change. (q) "Modernization" means the replacement and upgrading of existing facilities which increases the productive input or output, updates the technology or substantially lowers the unit cost of the operation. Modernization may result from the construction, alteration or installation of building, structures, fixed machinery or equipment. Modernization shall not be for the purpose of reconditioning, refurbishing or repairing including scheduled and periodic maintenance of real property or Tangible Personal Property. (r) "New Premises" means a property previously undeveloped which is placed into service by means other than or in conjunction with Expansion or Modernization. 4 RESOLUTION NO. R2011-12 WHEREAS, the abatement of ad valorem property taxes levied by the City, when offered to attract primary jobs in industries which bring job creation and capital investment from outside a community instead of merely circulating dollars within a community, has been shown to be an effective method of enhancing and diversifying an area's economy; and WHEREAS, effective September 1, 1987, Texas law requires any eligible taxing jurisdiction to establish Guidelines and Criteria as to eligibility for tax Abatement Agreements prior to granting of any future tax abatement, said Guidelines and Criteria to be unchanged for a two year period unless amended by a three-quarters vote of the City Council; and Now, therefore, be it resolved that the City Council of the City does hereby propose for consideration and adoption these Guidelines and Criteria for granting tax abatement in reinvestment zones in the City, as amended. DEFINITIONS Section 1 (a) "Abatement" means the full or partial exemption from ad valorem taxes of certain real property in a reinvestment zone designated by the City for economic development purposes. (b) "Abatement Agreement" and "Agreement" mean a contractual agreement between a property owner and/or lessee and the City for the purposes of permitting abatement of a portion of ad valorem property taxes assessed to the Premises and Improvements as defined herein and otherwise owed to the City. (c) "Base Value of Premises" means the assessed value of property located at the Premises at the time of execution of the Agreement, which shall consist of the assessed value of the Premises as of January 1 immediately preceding the execution of the agreement plus the agreed upon value of Improvements made thereafter, but before the execution of the Agreement. (d) "Deferred Maintenance" means labor and materials necessary for continued operations which are scheduled or periodic in nature. 2 RESOLUTION NO. R2011-79 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO ENTER INTO A TAX ABATEMENT AGREEMENT WITH MERIT MEDICAL SYSTEM, INC. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: Section 1. That certain Tax Abatement Agreement by and between the City of Pearland and Merit Medical System, Inc., a copy of which is attached hereto as Exhibit"A" and made a part hereof for all purposes, is hereby authorized and approved. Section 2. That the City Manager or his designee is hereby authorized to execute and the City Secretary to attest a Tax Abatement Agreement with Merit Medical System, Inc. PASSED, APPROVED and ADOPTED this the 11th day of July, A.D., 2011. GYw 26-1:4e TOM REID MAYOR ATTEST: .445g4\ w #4.>i 4,..... ` `r%s Y NSG EC L�/ � , TARP 15',: -)\ r/ APPROVED AS TO FORM: "'°��""'"""`""(v, �0 --''------- NG IEM DOAN DEPUTY CITY ATTORNEY EXHIBIT A-2 THE STATE OF TEXAS COUNTIES OF BRAZORIA, FORT BEND, AND HARRIS TAX ABATEMENT AGREEMENT This Tax Abatement Agreement ("Agreement") is entered into by and between the City of Pearland, Texas, a home rule city and Municipal Corporation of Brazoria, Fort Bend, and Harris Counties, Texas, duly acting by and through its City Manager ("the City'), and Merit Medical Systems, Inc., a Utah corporation ("the Company"), duly acting by and through Kent Stanger its Chief Financial Officer. WITNESSETH : WHEREAS, on the 11th day of July, 2011 the City Council of the City passed Ordinance No. 2011-79 establishing Reinvestment Zone #21 in the City for general business tax abatement, as authorized by Chapter 312, Tax Code, V.A.T.S. as amended ("Code"); and WHEREAS, the City previously adopted Resolution No. R2011-12, establishing appropriate guidelines and criteria for governing reinvestment zones and tax abatement agreements to be entered into by the City as contemplated by the Code; and WHEREAS, the City's objective is to maintain and/or enhance the general business economic and employment base of the Pearland area for the long term interest and benefit of the City, in accordance with Resolution No. R2011-12 and the Code; and WHEREAS, the contemplated use of the Premises, as hereinafter defined, and the contemplated improvements to the Premises in the amount as set forth in this Agreement and the other terms hereof are consistent with encouraging development of said Reinvestment Zone in accordance with the purposes for its creation and are in compliance with Resolution No R2011-12 and the guidelines and criteria adopted by the City and all applicable law; and WHEREAS, the Improvements, as defined below, constitute a major investment within the Reinvestment Zone that will substantially increase the appraised value of property within the zone and will contribute to the retention or expansion of primary and secondary employment within the City; and 1 • capital investment made at the Premises, annually for a period of three (3) years beginning January 1, 2012 and ending December 31, 2014; 2) Seventy five percent (75%) of the taxes assessed upon the increased value of the Fixed Machinery and Equipment and Fixed Improvements set forth below exclusive of future or other capital investment made at the Premises, annually for a period of three (3) years beginning January 1, 2015 and ending December 31, 2017; and 3) Fifty percent (50%) of the taxes assessed upon the increased value of the Fixed Machinery and Equipment and Fixed Improvements set forth below exclusive of future or other capital investment made at the Premises, annually for a period of four (4) years beginning January 1, 2018 and ending December 31, 2021. 4. FUNDING CONDITIONS: The Company must meet all of the following abatement Capital Improvement and Job Creation conditions ("Funding Conditions"), or Company shall be subject to liquidated damages and/or repayment of abated taxes in accordance with this Agreement: a. Capital Improvements: The Company shall construct various improvements on the Premises, which when complete shall have a minimum investment value of eight million seven hundred fifty thousand ($8,750,000) for the real property and/or improvements ("Fixed Improvements") and three million five hundred thousand ($3,500,000) in other "Ineligible Property" which shall be substantially complete on or before April 1, 2013 (the "Improvement Completion Date"); provided, that • the Company shall have such additional time to complete the Improvements as may be required in the event of "force majeure" (as set forth herein) if the Company is diligently and faithfully pursuing completion of the Improvements. The date of completion of the Improvements shall be defined as the date a Final Certificate of Occupancy is issued by the City. b. Job Creation: The Company shall create a total of 221 "Employment Positions", as defined herein, in accordance with the following schedule: 1) Employment Positions 160 total by July 1, 2013; 2) Employment Positions 175 total by December 31, 2013; 3) Employment Positions 200 total by December 31, 2014; 3 thereafter, from the date a Final Certificate of Occupancy is issued until the expiration of this Agreement, continuously operate and maintain the Premises and limit the use of said Premises to that use which is consistent with the terms of this Agreement and the general purpose of encouraging development or redevelopment of the Reinvestment Zone during the period that this Agreement is in effect. 7. ANNUAL COMPLIANCE VERIFICATIONS: No later than 90days after December 31, 2012, and continuing every year thereafter through 2021, the Company shall deliver to the City an Annual Compliance Verification, in the form of Exhibit "C" attached hereto, signed by a duly authorized representative of the Company certifying the following information: a. the number Employment Positions created and maintained by the Company on the Premises, the general description the Employment Positions existing as of December 31st of the preceding year and the • wage information for all Employment Positions; and b. the appraised value, as determined by the Central Appraisal District, of the Improvements as defined herein, supporting evidence that the Improvements were constructed or installed on or before the Improvements Completion Date and a general description of the Improvements existing as of December 31st of the preceding year There shall be a total of ten (10) Annual Compliance Verifications submitted to the City in years 2012 through 2021. Each Annual Compliance Verification shall include specific back-up information supporting the Employment Position data. Furthermore, all Annual Improvement Compliance Verifications shall consist of a certified copy of the appraised value of the Improvements as shown by the Central Appraisal District supported by all correspondence, renditions, appeals or contests and settlement of appraised value and shall provide appropriate back-up data for the Improvements exclusive of other investments made at the Premises. 8. CERTIFICATION OF GOOD STANDING/DELINQUENT TAXES: By execution of this Agreement, the Company certifies that the company is in good standing under the laws of the State in which it was formed or organized, and has provided the City evidence of such. In addition, the Company certifies that the company owes no delinquent taxes to any taxing unit of the State of Texas, the City or any other local tax levying political subdivision with jurisdiction to levy taxes in or on the operations and property of the Company at the Premises. 5 Funding Conditions of this Agreement for the preceding year. If the Company fails to timely provide an Annual Compliance Verification or provides an Annual Compliance Verification that demonstrates Company failed to meet a Funding Condition target(s) for that year, then the City may, at its sole discretion and in addition to all other remedies for the recapture of lost tax revenue provided herein, require the Company to pay liquidated damages up to the amount of the abatement received for the year in which the Company did not meet the Funding Conditions. b. General Provisions Related to Liquidated Damages: Liquidated damages provided for herein shall be construed in accordance with Section 312.205, Tax Code, V.A.T.S., as amended, and shall include all taxes which otherwise would have been paid to the City without the benefit of abatement (but without the addition of penalty; interest will be charged at the statutory rate for delinquent taxes as determined by Section 33.01 of the Tax Code) and shall become a debt to the City and shall be due, owing and paid to the City as liquidated damages subject to the expiration of any cure period or the termination date, whichever is applicable. The City shall retain all remedies for the recapture and collection of the lost tax revenue as provided generally in the Tax Code for the collection of delinquent property taxes and in accordance with Resolution No. R2011- 12. 12. DEFAULTS AND REMEDIES: a. Each of the following acts or omissions of the Company or occurrences shall constitute an act of default under this agreement: 1) The Company fails to meet the Capital Improvements Funding Conditions by the Improvement Completion Date. 2) The Company fails to provide or submit Annual Compliance Verification Report(s) as required by this Agreement. 3) The Company fails to meet any Capital Improvement or Job Creation Funding Conditions of this Agreement. 4) The Company allows its ad valorem taxes owed to any taxing jurisdiction to become delinquent, and fails to timely and properly follow the legal procedures for protest and/or contest of any such ad valorem taxes. 7 d. The Company shall provide the City with thirty (30) days written notice before any of the Employment Positions or Improvements are moved from the Premises, but only if such movement would result in the Company maintaining Employment Positions or Improvements on the Premises below the amounts required by this Agreement. Provided, however, such notice shall not be required with respect to (i) Employment Positions that are replaced by new Employment Positions that meet the requirements of this Agreement (ii) Improvements which are replaced with Improvements of similar value, or (iii) Improvements which are being removed in connection with repairs to such Improvements provided upon completion of such repairs such Improvements shall be returned to the Premises. Except as provided in clauses (i) through (iii) of this subsection d , in the event the Company shall move from the Premises any of the Employment Positions or Improvements which would result in the Company maintaining Employment Positions or Improvements below the Funding Condition amounts required by this Agreement , the City in its sole discretion, may, subject to the notice and cure rights set forth in Section 12.c. above, terminate this Agreement and require the Company to immediately refund . to the City any amounts abated under this Agreement for the year in which the Company defaulted and failed to meet the Funding Conditions ("Default Year"), as well as any amounts abated in the year prior to the Default Year plus interest at the rate of 8% per year, compounded annually from January 1 of the year prior to the Default Year the date of payment of the refunded taxes. e. If after the Company is no longer able to pay its bills as they come due, it files for protection from its creditors by any chapter of the bankruptcy code the City may, at its discretion, pursue the abated taxes as a creditor in the bankruptcy for unpaid property taxes subject to any and all tax liens applicable thereto. 13. CITY AUDIT RIGHTS: a. Duty to Maintain Records. The Company shall maintain adequate records to support its compliance with the terms of this Agreement. The Company shall also maintain such records as are deemed necessary by the City and auditors of City, or such other persons or entities designated by City, to ensure proper accounting for all costs and performances related to this Agreement. b. Records Retention. The Company shall maintain and retain for a period of four (4) years after the submission of the final Annual Compliance Verification report, or until full and final resolution of all audit 9 private business records of the Company and shall not be disclosed or made available to the general public. e. Location and Reimbursement. Any audit authorized herein shall be conducted at the Company's Premises in the City during normal business hours and at City's expense, provided all costs incurred by City in conducting any such audit shall be reimbursed by the Company in the event such audit reveals an aggregate discrepancy of five percent (5%) or more of the Company's reporting of compliance as required by this Agreement. If any audit or examination reveals that the Company's reports for the audited period are not accurate for such period, the Company shall reimburse the City in accordance with Section 11 of this Agreement. f. Corrective Action Plan. If an audit reveals any discrepancies or inadequacies which must be remedied in order to maintain compliance with this Agreement, applicable laws, regulations, the Company's responsibilities or performance standards, the Company agrees that within thirty (30) calendar days after the Company's receipt of the audit findings, to propose and submit to the City a corrective action plan to correct such • discrepancies or inadequacies subject to the approval of the City. The Company further agrees, at the sole cost of the Company, to complete the corrective action approved by the City within thirty (30) calendar days after the City approves the Company's corrective action plan. g. Reports. The Company shall provide to the City periodic status reports in accordance with the City's audit procedures regarding the Company's resolution of any audit-related compliance activity for which the Company is responsible. 14. REPORTS AND BRIEFINGS: In a manner consistent with the need to protect privacy and the intellectual property of the Company and third parties, the Company will provide periodic briefings as reasonably requested by the City on the general activities, economic impact and progress of the new project development and business operations in Texas. 15. USE AND RETENTION OF CITY CRAFTSMEN, TRADES AND SUPPLIERS: Although not an event of default or a condition to this Agreement, the City requests that the Company satisfies its need for additional employees from City of Pearland, Texas, residents and purchase all materials, supplies and services necessary to affect the occupancy of the property from City of Pearland merchants and businesses. 11 independent contractors and not as agents, employees, partners, joint ventures, or representatives of the other party. Neither party can make representations or commitments that bind the other party. The Company is not a "governmental body" by virtue of this Agreement or the City's granting of an abatement. c. Limitation of Liability. In no event will either party be liable to the other party for any indirect, special, punitive, exemplary, incidental or consequential damages. This limitation will apply regardless of whether or not the other party has been advised of the possibility of such damages. d. Term. The term of this Agreement commences on the Effective Date of the Agreement and continues until December 31, 2021 unless terminated earlier pursuant to the terms of this Agreement. e. Termination for Cause. Either party may terminate this Agreement for Cause upon thirty (30) days prior written notice to the other party. "Cause" is any failure to perform a material obligation under this Agreement within the specified time; including Company's failure to comply with any Funding Conditions contained herein. The sole remedy for any termination for Cause (and for the "cause" giving rise to the termination) shall be that each party is relieved of its obligation to perform hereunder, however, following termination by the City, the Company will continue to be obligated to the City for liquidated damages and/or repayment of abated taxes in accordance with applicable provisions of this Agreement. f. Dispute Resolution and Applicable Law. 1) Informal Meetings. The parties' representatives will meet as needed to implement the terms of this Agreement and will make a good faith attempt to informally resolve any disputes. 2) Applicable Law and Venue. This Agreement is made and entered into in the state of Texas, and this Agreement and all disputes arising out of or relating thereto shall be governed by the laws of the state of Texas, without regard to any otherwise applicable conflict of law rules or requirements. The Company agrees that any action, suit, litigation or other proceeding (collectively "litigation") arising out of or in any way relating to this Agreement, or the matters referred to therein, shall be commenced exclusively in the State of Texas in any court with proper jurisdiction to hear this matter closest to the City Hall of 13 become bound by any of the covenants, agreements or obligations hereunder of each of the parties hereto. f. Successors and Assigns/Notice. The terms and conditions of this Agreement are binding upon the successors and assigns of all parties hereto. This Agreement may be transferred or assigned by the Company only upon written permission by the City in accordance with Resolution R2006-121, which permission shall not be unreasonably withheld. No assignment shall be approved if the assignor or assignee is indebted to the City for ad valorem taxes or other obligations. The Company, or any legal successor thereto or prior assignee thereof, may assign its rights and obligations under this Agreement, including by merger or operation of law, to any legal successor or any person or entity that acquires all or substantially all of its business and operations. In addition, with the prior written consent of the City, which consent shall not be unreasonably withheld or delayed, the Company, or any legal successor company thereto or prior assignee thereof, may assign its rights and obligations under this Agreement to any parent or wholly owned subsidiary that it currently has in place or later establishes, if it is constituted as a separate legally recognized business entity. Any such assignment will be made without additional consideration being payable to the City. This Agreement shall survive any sale, change of control or similar transaction involving the Company, any successor thereto or prior assignee thereof and no such transaction shall require the consent of the City. The Company shall provide the City written notice of any assignment, sale, change of control or similar transaction pursuant to this section as soon as possible and in no event not later than thirty (30) calendar days following such event. g. Force Majeure. Neither party shall be required to perform any obligation under this Agreement or be liable or responsible for any loss or damage resulting from its failure to perform so long as performance is delayed by force majeure or acts of God, including but not limited to strikes, lockouts or labor shortages, embargo, riot, war, revolution, terrorism, rebellion, insurrection, flood, natural disaster, interruption of utilities from external causes civil commotion, inclement weather, fire or other casualty, court injunction, shortages of labor or materials or any other causes of any kind which are beyond the reasonable control of said party. h. Notice. All notices, requests, demands and other communications will be in writing and will be deemed given and received (i) on the date of delivery when delivered by hand or via electronic mail, (ii) on the following business day when sent by confirmed simultaneous telecopy and (iii) on 15 Witness our hands this 9-ffiLday of gO" . ATTEST: CITY BY By: • rg T, Bill Eise i:eary City Manager %v. `NAl■-• Val.. 'ON APPROVED AS TO FORM: By Darrin M. Coker City Attorney MERIT MEDICAL SYSTEMS, INC. By: 4 -14 nt Stanger Chief Financial Officer FitlighMe.t4TAX *Alta foot 1 *IWO skie CM,idet*Orip3 ionimiate 4,7„ L +1414 MAI mama_ 17 Exhibit "A" PREMISES Property Description • l te t 1• w r 74 ■Oa a _r w I _ 17 r .r r" .. •.P S- r7 r 075 W . •777 71 .` -7 77 Y.MI=` �7217 77 777 77.11- 777 7 777 17717 7 0.70 77 70 777 maw.77 117 0757 se•••rr L '""1771 777 0101777'571 1777 MO 07105 07911117 117.31 77 1117.270 11/17 7 71.1•07 54077 577 r .Tr —.rj+ MMUC — .1 777 WC r L'om1 , 77. m7 1 7 •-� . .SL1OG 775 r mT .7=.°'r.*"..rtir: . .- 87 7 L 1 0/ ] 1,_ wan,- .++v. w- 777 r.r ra-'-er_ .F® - J a. 770.7777 777 77 17177 7 7117.7 70 ( \ S''''------C\ .. • , •� I w 4 r •..w 775. ..r fm.4• 57 �v 7770.Li 7 `If 5 � m 5 ,n 9e a,n .. .1I•... , v. . .1 it, ' ., a—7.17 7.75 7 7" .-� . ,w.w .v, ^ ir • ear <a -- 17 07••• e�-. ._r w SLIN/7 i •51.117 ftar .- ' 17.0r7 777 77 71 t / ' � LOf JO 7, 75 r • • �ra,n mr7w I I 1 � r° --, .: „ r . -1-w —.., A.. 11 s --r _711\1:. .- -"A' PLAT OF SURVEY BOUNDARY AND TOPOGRAPHY OF 11.9337 ACRES (519,832 sq. It.) BEING OUT OF AND A PART OF' A 36.166 ACRE TRACT o H.C.C.F. No. 20080049996 iFrEry LOCATED IN BLOCK "F” S r"7 —..—..— ALLISON-RICHEY GULF COAST "m�" :..,7=._,= HOME SUBDIVISION 1010711/17 °�` _."1--,.T„� VOL 3, PG. 40 H.C.M.R. g ;R a.m< �,r LOCATED IN THE Mee JAMES HAMILTON SURVEY, A-876 Ma SWIM. FR or F°: " ..�='4 'Ou M.• 1,.. HARRIS COUNTY, TEXAS di 71_ ,d _r.w.ar m mr_ ac.,rn5 "•,•;,r•. ..r r• quay:. .zg' / n A.k r m."m.u. •7 7 w7 7 r w w_... _ 1 ... \�'aw�.K S '.L.C'l�PIIIIBIMIOL Lae NW= Yee ete mms••"" isr� — '44'.7100' eaina.i�u q a� I am m-ao-si,d gm morn.. ;Noe ry.+Prr w 7.7 7» w 15a ri P•".:Sri,av-,w me Sri,w-,a5 I tan.ra,.-,l• APPLICATION FOR TAX ABATEMENT IN TEE CITY OF PEARLANI) It is recommended that this application be filed at least 90 days prior to.the beginning of construction or the installation of equipment. The filing of this document acknowledges familiarity and conformance with Guidelines and Criteria for Granting Tax Abatement in a Reinvestment Zone Created in the City of Pearland. This application will become part of the agreement and any knowingly false representations will be grounds for the City to void the agreement. Original copy of this request should be submitted to the Pearland Economic Development Corp. President, 1200 Pearland Parkway, Suite 200, Pearland, Texas 77581, 281.997.3000, www.pearlandedc.com. Please attach exhibits and additional information. Applicant Information Name of Business: Merit Medical Systems,Inc. Date:March 28,2011 Address: 1600 Merit Parkway City:South Jordan State: UT Zip: 84095 Contact Person: Greg A Fredde Title: VP—Government Affairs Phone: 801-230-3365 Fax: 801-253-1688 Email: gfredde @merit.com NAICS Codes for primary business operations: 33911 Federal Tax ID Number: 87-0447695 Does the Business file a consolidated tax return under a different tax ID number? ❑ Yes X No If yes,please also provide that tax ID number: Texas Tax ID Number: 87-0447695 Is the contact person listed above authorized to obligate the Business? ❑Yes X No • If no,please provide the name and title of a company officer authorized to obligate the Business: Kent Stanger,Chief Financial Officer • • Project Information Location and legal description of the area to be designated as reinvestment zone(Provide map showing site and metes and bounds description in attachment A5): TRS 27,27 '/2 28,28 '//Allison Richey Gulf Coast Homes Sec F ABST 876 D White. OR; TRS 22 %a,27,27 Vs Allison Richey Gulf Coast Homes Sec F ABST 876 D White Type of Business Project: X New Location ❑ Modernization of Existing Pearland Facility ❑ Expansion of Pearland Facility Type of Facility: X Manufacturing ❑ Reg.Distribution Center ❑ Regional Service ❑ Reg.Entertainment Center ❑ Other Basic Industry Briefly describe the proposed project for which assistance is being sought. (Include project facility size,infrastructure improvements,proposed products/services,any new markets,etc.) Merit Medical Systems,Inc.is considering the construction of a new facility at a yet to be determined location in Texas to replace its aging facility located in Angleton,Texas.The facility will be responsible for the research, development,and manufacturing of extrusion-related products including catheters,sheaths,tubing,and other extruded product.In addition,the new facility will become and R&D center for the company and focus of the development of new projects with a significant engineering knowledge base. The investment will consist of a new 90,000—100,000 square foot,tilt-up facility located on no less than ten acres of land.The anticipated investment for the land and facility will be approximately$10-12 million.In addition,new and existing machinery and equipment will be relocated from the existing facility resulting in an additional increase in taxable value of approximately$3-5 million. The project will result in the immediate transfer of 160 jobs from the Angleton facility,growing to at least 221 new positions within five years.The anticipated annual payroll in Year 1 will be approximately$5.2 million, growing to$83 million by Year 5.This does not include health benefits,company health savings account contributions,nor 401k contributions. Has any part of the project started? ❑Yes X No If yes,please explain. Identify the Business'competitors. If any of these competitors have Pearland locations,please explain the nature of the competition(e.g.competitive business segment,estimated market share,etc.)and explain what impact the proposed project may have on the Pearland competitor. Merit competes in several global markets,including diagnostic and interventional cardiology,interventional radiology,vascular surgery,interventional nephrology,cardio thoracic surgery,interventional gastroenterology and pu irnonology,anesthesiology and pain management. These markets encompass a large number of suppliers of varying sizes. In the interventional cardiology and radiology markets,as well as the gastroenterology and pulmonology markets,Merit competes with large international,multi-divisional medical supply companies such as Cordis Corporation Oohnson&Johnson),Boston Scientific Corporation,Medtronic,C.R.Bard,Abbott,Teleflex, Cook and Terumo. Medium-size companies we compete with include AngioDynamics,Vascular Solutions,B. Braun,Olympus,Navilyst,Edwards Lifescience,and ICU Medical. The primary competitive embolo therapy product has been non-spherical polyvinyl alcohol(or"PVA") particles,a product introduced into the market more than 20 years ago. Currently,the primary products with which Merit's microspheres competes are spherical PVA,sold by Boston Scientific Corporation, Biocompatibles and Terumo Corporation;Embozene sold by CeloNova Biosciences,Inc.;gel foam,sold by Pfizer Inc.;and non-spherical(particle)PVA,sold by Boston Scientific and Cook Incorporated. Merit's principal competitors in UFE are Biocompatibles,Boston Scientific,Cook,Cordis Corporation,a Johnson& Johnson company,Pfizer and Terumo,as well as companies selling or developing non-embolotherapy solutions for UFE. Project Jobs • List the jobs that will be created and/or retained as the result of this project.(A retained job is an existing job that would be eliminated or moved to another location if the project does not proceed in Pearland.)For jobs to be created,include the starting and final hourly wage rate.For retained jobs,include the current hourly wage rate. Is the hourly wage rate based on a 40 hour work week,52 weeks per year? X Yes ❑ No If no please explain: Full-Time CREATED Jobs (Add additional rows as needed) Number of Wage at End of Job Title/Classification CREATED Starting Wage Year Three Jobs Engineering 19 22.75 26.16 Maintenance 6 25.98 29.88 Labeling' 1 12.11 13.92 Purchasing 1 18.14 20.86 Operations 7 50.23 57.77 Planning 3 20.95 24.09 Production Supervisor 4 22.38 25.74 Production 69 10.38 11.93 Extrusion 31 12.13 13.95 Materials 3 7.90 9.08 Extrusion Supervisor 1 32.89 37.82 Quality 5 16.49 18.97 Documentation 2 19.57 22.50 QA Inspectors 3 10.67 12.27 QA Engineers 1 35.02 40.27 Accounting 2 . 19.86 22.84 ODD 1 19.50 22.42 MIS 1 22.60 25.99 Total CREATED Jobs 160 14.46 16.63 The project will immediately create 160 new positions within the City of Pearland.The number of positions will grow to 221 by Year 5.The average starting wages listed above are estimates and do not include other W-2 income including bonuses,stock options,and contributions to employees health savings accounts.As a result, the averages are very conservative. In addition,over the next five years,the facility will be retooled to focus on higher margin,more technologically advanced products.This effort will result in greater emphasis on professional level positions including engineering,operations,and extrusion. Merit currently has a diverse workforce in Texas.Approximately 50%of Merit's existing workforce is non- Caucasian.This includes:Hispanic(60);Black(44);Asian(5);and Pacific Islander(1).Moreover,only 12%of Merit's current workforce is male.The average tenure of the workforce is in excess of 15 years which provides stability and speaks to the loyalty Merit employees have to the Company. Merit's workforce is drawn from a number of surrounding communities,including Pearland.These communities include:Angleton(92);Lake Jackson(33);Clute(26);Freeport(22);Brazoria(11);Alvin(6); Rosharon(6);West Columbia(5);Danbury(5);Houston(5);Sweeny(4);Pearland(4);and Manvel(2). Merit Angleton has had a long term commitment to develop and promote our personnel.All positions are posted within and employees are encouraged to seek advancement.The primary development tool is one on one training and tnentoring.Employees are frequently given the opportunity to learn new areas of our operations.In addition employees are often given the opportunity to utilize outside development programs. Merit Medical Systems,Inc.is a growing company which will continue to invest in facilities,projects,and employees.With the establishment of a facility in Pearland-and with the capacity which will be built into the project-Merit will continue to develop,acquire,and transfer new product into the facility.This will provide . greater opportunity for employees and additional tax resources to the surrounding community.In it nearly 25 year history,Merit has grown every year. In the first quarter of 2011,Merit's core business grew by almost 17%. Economic Development and total$4.3 million over ten year.In 2006,Local taxing jurisdictions approved an economic development area around Merit's Utah campus which totals$12.5 million over 15 years. In addition,Merit is considering tax incentives to build a new facilities on Merit's existing 20 acre property in Angleton,Texas. • Construction Estimates Commencement Date: 9/1/2011 If Modernization N/A Construction Man Years: 12 mnths Estimated Economic Life of Existing Plant in years: N/A Completion Date: 9/1/2012 Added Economic Life from Modernization in years: N/A Peak Construction Jobs: U/K ESTIMATED VALUE OF NEW ACTUAL APPRAISED VALUE ON SITE VALUE ADDED Land $1,115,150 Land $1,115,150 • (est.) Building and Improvements $0 Building and Improvements $8,750,000 Fixed Equipment $0 Fixed Equipment 45:906;600— O Personal Property&Inventory $0 Personal Property&Inventory- $3,500,000 Total of Pre-existing Value $0 Total of New Value Added $18,365,150 Total Value of Pre-existing and New Value $1,115,150 Project Budget AMOUNTS BUDGETED Use of Funds Cost Source Commitment Status Land Acquisition $2,000,000 In-place financing Available Site Preparation $250,000 In-place financing Available Cost of Utilities to Site $100,000 In-place financing Available Building Acquisition $ Building Construction $8,750,000 In-place financing Available Building Remodeling $ Machinery&Equip. $3,000,000 In-place financing Available Computer Hardware $ Computer Software $ Furniture&Fixtures $250,000 In-place financing Available Working Capital $ Moving Expenses $250,000 In-place financing Available Job Training $ TOTAL $14,600,000 Does the Business plan to lease the facility? ❑ Yes X No If yes,please provide the Annual Base Rent Payment(lease paymenr minus property taxes,insurance,and operating/maintenance expenses)and the length of the lease agreemenr. Financial assistance is need-based,please explain why assistance is needed: Certification & Release of Information I hereby give permission to the City of Pearland and the Pearland Economic Development Corporation(PEDC)to research the Business'history,make credit checks,contact the Business'financial institutions,insurance carriers,and perform other related activities necessary for reasonable evaluation of this application. I understand that all information submitted to the City and PEDC related to this application is subject to Texas Public Information Act. I understand this application is subject to final approval by the City of Pearland City Council and the Project may not be initiated until final approval is secured. I understand that the City reserves the right to negotiate the financial assistance.Furthermore,I am aware that tax abatement is not available until an agreement is executed within a reasonable time period following approval. I certify the Business has not,within the last five years,been cited or convicted for violating any state or federal statutes, rules,and regulations,including environmental,worker safety and immigration regulations,or,if such violations have occurred,that there were mitigating circumstances or such violations did not seriously affect public health or safety or the environment. I hereby certify that all representations,warranties,or statements made or furnished to the City and PEDC in connection with this application are true and correct in all material respect.I understand that it is a violation under Texas law to engage in deception and knowingly make,or cause to be made,directly or indirectly,a false statement in writing for the purpose of procuring economic development assistance. For the Bus'. ss: "3/rr Signature - l to —42-4Name and 11- i a(typed or printed) fl C E A R N D NOMIC DEVELOPMENT CORPORATION CITY OF PEARLAND TAX ABATEMENT ANNUAL INVESTMENT AND EMPLOYMENT COMPLIANCE VERIFICATION Verification should be submitted to the Pearland Economic Development Corporation President, 1200 Pearland Parkway,Suite 200,Pearland,Texas 77581,281.997.3000,www.pearlandedc.com. Please attach exhibits and additional information. Company Information Name of Business: Date: Address: City: State: Zip: . Contact Person: Tide: Phone: Fax: Email: Annual Compliance Verification Please check the box that applies: ❑ First Time Filing ❑ Subsequent Filing If subsequent,date last compliance submitted: Report Covers Period: Begin Date: End Date: This is compliance of . 1 Attachments Please attach the following documents: Al Employment Verification A2 Certified copy of the appraised and settled value of the Improvements as shown by the appropriate Central Appraisal District supported by all correspondence, renditions, appeals or contests and settlement of appraised value and shall provide appropriate back-up data for the Improvements exclusive of other investments made at the Premises. A3 Business Personal Property Rendition of Taxable Property Form Certification I certify the appraised value of the improvements as defined in our agreement with the City of Pearland. I certify the Business has not, within the reporting period, been cited or convicted for violating any state or federal statutes,rules,and regulations,including environmental,worker safety and immigration regulations Under penalty of perjury,I declare that the information in this document and any attachments are true and correct to the best of my knowledge and belief. For the Business: Signature Date Name and Title(typed or printed) 3 CpUHT� HARRIS COUNTY, TEXAS COMMISSIONERS COURT: do Community Services Dept. ED EMMETT 8410 Lantern Point Drive COUNTY JUDGE Houston,Texas 77054 EL FRANCO LEE (713)578-2000 COMMISSIONER,PRECINCT 1 JACK MORMAN COMMISSIONER,PRECINCT 2 STEVE RADACK COMMISSIONER,PRECINCT 3 JERRY EVERSOLE COMMISSIONER,PRECINCT 4 GUIDELINES & CRITERIA FOR GRANTING TAX ABATEMENT IN A REINVESTMENT ZONE CREATED IN HARRIS COUNTY Whereas, the creation and retention of job opportunities that bring new wealth is the highest civic priority; and Whereas, new jobs and investment will benefit the area economy, provide needed opportunities, strengthen the real estate market and generate tax revenue to support local services; and Whereas, the communities within Harris County must compete with other localities across the nation currently offering tax inducements to attract jobs and investments; and • Whereas, any tax incentives offered in Harris County would reduce needed tax revenue unless strictly limited in application to those new and existing industries that bring new wealth to the community; and Whereas, any tax incentives should not have a substantial adverse effect on the competitive position of existing companies operating in Harris County; and Whereas, tax incentives should not be used to attract those industries that have demonstrated a lack of commitment to protecting our environment, but should be used to encourage projects designed to protect our environment; and Whereas, the abatement of property taxes, when offered to attract primary jobs in industries which bring in money from outside a community instead of merely re- circulating dollars within a community, has been shown to be an effective method of enhancing and diversifying an area's economy; and Whereas, Texas law requires any eligible taxing jurisdiction to establish Guidelines and Criteria as to eligibility for tax abatements prior to granting any tax abatement, said Guidelines and Criteria to be unchanged for a two-year period unless amended by a three-quarters vote; and Whereas, to assure a common, coordinated effort to promote our communities' economic development, any such Guidelines and Criteria should be adopted only through the cooperation of municipalities, taxing jurisdictions, and Harris County; and HARRIS COUNTY GUIDELINES&CRITERIA FOR GRANTING TAX ABATEMENTS EXHIBIT B Whereas, Harris County Commissioners Court has approved the circulation of Guidelines and Criteria to affected taxing jurisdictions for consideration as a common policy for all jurisdictions choosing to participate in tax abatement agreements; Now, therefore, be it resolved that Harris County does hereby adopt these Guidelines and Criteria for granting tax abatements within reinvestment zones created in Harris County. SECTION 1 DEFINITIONS (a) "Abatement" means partial exemption from ad valorem taxes of certain real property (including fixed-in-place machinery & equipment) in a reinvestment zone designated for economic development purposes. (b) "Eligible Jurisdiction" means Harris County ("the County") and any municipality or other taxing jurisdiction eligible to abate its taxes according to Texas law that levies ad valorem taxes upon and provides services to property located within the proposed or existing reinvestment zone. (c) "Agreement" means a contractual agreement between a property owner and/or lessee and an eligible jurisdiction for the purposes of tax abatement. (d) "Base Year Value" means the appraised value in the reinvestment zone on January 1 preceding the effective date of the tax abatement agreement, plus the agreed upon value of eligible property improvements made after January 1 but before the effective date of the agreement, or the sales price, if the property was conveyed subsequent to January 1, whichever is greater. (e) "Competitively-Sited Project" means a project where the applicant has completed a written evaluation of competing locations for expansion, relocation, or new operations, including identification of specific sites in those locations. (f) "Economic Life" means the number of years a property improvement is expected to be in service in a reinvestment zone. (g) "Employee" means a person whose employment is both permanent and fulltime, who works for and is an employee of the Owner or an employee of a Contractor, who works a minimum of 1,750 hours per year exclusively within the reinvestment zone, who receives industry-standard benefits, and whose employment is reflected in the Owner's (and Contractor's, if applicable) quarterly report filed with the Texas Workforce Commission("TWC"); but excluding any direct contract (seasonal, part- time, and full-time equivalent). (h) "Expansion" means the addition of buildings, structures, fixed machinery or equipment for purposes of increasing production capacity. (i) "Facility" means property improvements completed or in the process of construction which together comprise an integral whole. HARRIS COUNTY GUIDELINES&CRITERIA FOR GRANTING TAX ABATEMENTS PAGE 2 OF 12 a) "Manufacturing Facility" means buildings and structures, including fixed-in-place machinery and equipment, the primary purpose of which is or will be the manufacture of tangible goods or materials or the processing of such goods or materials by physical or chemical change. (k) "New Facility" means a property, previously undeveloped, which is placed into service by means other than or in conjunction with expansion or modernization. (I) "Other Basic Industry Facility" means buildings and structures including fixed machinery and equipment not elsewhere described, used or to be used for the production of products or services which primarily serve a market in the creation of new permanent employment and bring in new wealth. (m)"Regional Distribution Center Facility" means buildings and structures, including fixed machinery and equipment, used or to be used primarily to receive, store, service or distribute goods or materials owned by the facility operator where a majority of the goods or services are distributed to points at least 100 miles from any part of the County. (n) "Regional Entertainment Facility" means buildings and structures, including fixed machinery and equipment, used or to be used to provide entertainment through the admission of the general public where the majority of users reside at least 100 miles from any part of the County. (o) "Regional Service Facility" means buildings and structures, including fixed machinery and equipment, used or to be used to service goods where a majority of the goods being serviced originate at least 100 miles from any part of the County. (p) "Research Facility" means building and structures, including fixed machinery and equipment, used or to be used primarily for research or experimentation to improve or develop new tangible goods or materials or to improve or develop the production processes thereto. (q) "Research & Development Facility" means buildings and structures, including fixed-in-place machinery and equipment, used or to be used entirely for research or experimentation to improve or develop current technology in biomedicine, electronics or pre-commercial emerging industries. SECTION 2 ABATEMENT AUTHORIZED (a) Authorized Facility. A facility may be eligible for abatement if it is a: Manufacturing Facility, Research Facility, Regional Distribution Center Facility, Regional Service Facility, Regional Entertainment Facility, Research and Development Facility or Other Basic Industry Facility. HARRIS COUNTY GUIDELINES&CRITERIA FOR GRANTING TAX ABATEMENTS PAGE 3 OF 12 (b) Creation of New Value. Abatement may only be granted for the additional value of eligible real property (including fixed-in-place machinery and equipment) listed in an agreement between the County and the property owner and lessee (if applicable), subject to such limitations as Commissioners Court and the Texas Property Tax Code may require. (c) Eligible Property. An abatement may be extended to the value of buildings, structures, fixed machinery and equipment, site improvements plus that office space and related fixed improvements necessary to the operation and administration of the facility. The value of all property shall be the Certified Appraised Value for each year, as finally determined by the Harris County Appraisal District ("HCAD"). (d) Ineligible Property. The following types of property shall be fully taxable and ineligible for abatement: land; inventories; supplies; tools; furnishings, and other forms of movable personal property; vehicles; vessels; aircraft; housing; hotel accommodations; deferred maintenance investments; property to be rented or leased (except as provided in "Leased Facilities," below); property with an economic life of less than 15 years; property owned or used by the State of Texas or its political subdivisions or by any organization owned, operated or directed by a political subdivision of the State of Texas, or any property exempted by local, state or federal law. When such exempted property includes manufacturing machinery and equipment listed in the Investment Budget (as required in "Application"), then the value of such property may not be included toward the achievement of investment or valuation thresholds set out in the Agreement. (e) Leased Facility. If a leased facility is granted a tax abatement, then the Agreement shall be executed with both the lessor(owner) and the lessee. (I) Value and Term of Abatement. A tax abatement shall be granted in accordance with the terms of a tax abatement agreement, as follows: 1. Projects are eligible for abatement of new value, subject to an abatement cap: to be calculated as $1,000,000 per job created/retained times the number of such jobs as required in a tax abatement agreement. Such cap shall not exceed the increased value requirement as set out in the Agreement, and will be adjusted annually. To determine the amount of the abatement each year, the Adjusted Cap shall be multiplied by up to 50 percent, up to a total of 10 years. Under no circumstance will any facility receive the benefit of a tax abatement for more than 10 years. The value of eligible property must remain greater than or equal to the contractually- defined minimum value requirement. 2. No tax abatement shall be given in any year in which the facility fails to meet the contractually-defined minimum value requirement. 3. No tax abatement shall be given in any year in which the facility fails to meet the contractually-defined employment creation and retention requirement. HARRIS COUNTY GUIDELINES&CRITERIA FOR GRANTING TAX ABATEMENTS PAGE 4 OF 12 4. The Agreement shall set out in detail the exact method to be used in computing the tax abatement in each year. (g) Basic Qualifications for Tax Abatement. To be eligible for designation as a reinvestment zone and receive tax abatement the planned improvement: 1. must be shown to increase the appraised value of the property at least $1,000,000 upon completion of the contractually-defined construction period; 2. must be shown to directly create or prevent the loss of permanent full-time employment for at least 25 people within the reinvestment zone upon completion of the contractually-defined employment period; 3. must be competitively-sited; and 4. must be shown not to solely or primarily have the effect of transferring employment from one part of the County to another. (h) Taxability. From execution to expiration of Agreement, taxes shall be payable as follows: 1. value of ineligible property in the reinvestment zone shall be fully taxable; 2. non-abatable real property in the reinvestment zone shall be fully taxable each year; 3. additional value of new eligible property shall be taxable in the manner described in"Value and Term of Abatement;" 4. if Base Year Value decreases during the term of a tax abatement or if an additional exemption is granted by the state or federal government, then the maximum amount of abatable value to be used in abatement calculation ("the Cap") will be reduced each year at the same rate; and 5. each year the exemption will be computed by HCAD in the following manner: • Current Property Value will be the current appraised value of all Eligible property and existing property within the reinvestment zone for the year in which the Abatement Agreement is executed. • Base Year Value will be subtracted from the Current Property Value, the result to be called "Current Amount Eligible for Abatement," provided the result is greater than or equal to the value of Eligible property. In no case may this amount exceed the lower of the Cap (see (h)4.) or the Adjusted Cap (see (f)1.). • Current Amount Eligible for Abatement is multiplied by up to 50% to determine the amount of exemption in each year, after adjustment is made to the Cap, if applicable. HARRIS COUNTY GUIDELINES&CRITERIA FOR GRANTING TAX ABATEMENTS PAGE 5 OF 12 (i) Environmental and Worker Safety Qualification. In determining whether to grant a tax abatement, consideration will be given to compliance with all state and federal laws designed to protect human health, welfare and the environment ("environmental laws") that are applicable to all facilities in the State of Texas owned or operated by the owner of the facility or lessee, its parent, subsidiaries and, if a joint venture or partnership, every member of the joint venture or partnership ("applicants"). Consideration may also be given to compliance with environmental and worker safety laws by applicants at other facilities within the United States. (j) Leadership in Energy and Environmental Design (LEED®) Tax Abatement: If the owner of new commercial construction has registered with the U.S. Green Building Council ("USGBC") seeking LEED Certification, then the County Community Services Department ("CSD") may recommend approval of a partial tax abatement for the incremental investment associated with obtaining such certification. The Agreement shall be effective up to 10 years, at a percentage based upon the level of certification actually obtained after completion of construction: • LEED Certification Level and"Imputed LEED-Related Value Increment:" 1. Certified(Basic) Level 1.0% 2. Silver Level 2.5% 3. Gold Level 5.0% 4. Platinum Level 10% • The minimum value increase requirement derived from the "Imputed LEED- Related Value Increment"to meet the eligibility test is $100,000. • • This type of tax abatement may be sought by an applicant of the County's standard economic development tax abatement, or as a stand-along tax abatement. When an applicant seeks only a LEED Certification Tax Abatement, no job creation target or competitive siting will be required in order to qualify. The investment requirement will be at least $1 million for a commercial structure with Platinum LEED Certification, and at least $10 million for a commercial with the Basic Certification (assumes percentages from preceding table and minimum value increase of$100,000). • Applicant must be registered with USGBC seeking LEED Certification, prior to submitting its application to the County. • The application for a LEED Certification Tax Abatement must be submitted to the County prior to commencing construction of the applicable new development. A non-refundable application fee of$1,000 specifically for "LEED Certification Tax Abatement," made payable to Harris County, must be provided to the County with an application. HARRIS COUNTY GUIDELINES&CRITERIA FOR GRANTING TAX ABATEMENTS PAGE 6 OF 12 • The Agreement shall become effective in the year the application is approved by Commissioners Court and effective up to 10 years. However, the tax abatement benefit (i.e., partial exemption of value from ad valorem taxes) shall not commence until construction of the project is completed and LEED Certification is obtained by the applicant. The value of the tax abatement shall be calculated on the appraised value after LEED Certification is obtained. • The value of the tax abatement may be increased by up to $1,000 in the final year of the Agreement, at the County's discretion. (k) Additional Incentive for Locating New Project in HUD-Designated Low Income Target Area in the County. Construction of a new eligible facility in a "HUD- Designated Low-Income Target Area" within the County, as determined on the application date, may enable CSD to recommend that Commissioners Court approve an additional tax abatement up to 10%. • A qualifying project must nevertheless meet the three basic requirements to for an economic development tax abatement: (1) creation of at least $1 million in new tax roll value, (2) creation of at least 25 new permanent full-time jobs, and (3) competitive siting. • A specific "Target Area Project Site Incentive" provision must be contained in the Agreement approved by Commissioners Court and cannot be added at a later date. (1) Additional Incentive for Full-Time Permanent Job Creation for Residents of HUD-Designated Low Income Target Areas in the County. Construction of a new eligible facility resulting in creation of jobs for residents of"HUD-Designated Low- Income Target Areas" within the County, as determined on application date, may enable CSD to recommend that Commissioners Court approve an additional tax abatement, per the following table: 1. 10 jobs (up to 24) 2.0% increase in tax abatement 2. 25 jobs (up to 49) 5.0% increase in tax abatement 3. 50 jobs (up to 99) 10% increase in tax abatement 4. 100 jobs (or more) 20% increase in tax abatement. • A qualifying project must nevertheless meet the three basic requirements to for an economic development tax abatement: (1) creation of at least $1 million in new tax roll value, (2) creation of at least 25 new permanent full-time jobs, and (3) competitive siting. • Compliance shall be monitored annually based on W-2s and other pertinent employee-specific data to be required/requested from employer as needed. A specific "Target Area Employment Incentive" provision must be contained in the Agreement approved by Commissioners Court and cannot be added at a later date. HARRIS COUNTY GUIDELINES&CRITERIA FOR GRANTING TAX ABATEMENTS PAGE 7 OF 12 SECTION 3 APPLICATION (a) Timely application: Any current or potential owner or lessee of taxable property in the County may request a tax abatement by filing a completed application with the CSD prior to any public expression of a siting decision or any commitment (legal or financial)to the proposed project. (b) A complete application package for consideration of a tax abatement shall consist of: • a completed Harris County Application form; • a non-refundable check in the amount of$1,000 payable to Harris County. • a completed narrative prepared in accordance with the template provided with the County Application and its instructions; • an "Investment Budget" detailing components and costs of the real property improvements and fixed-in-place improvements for which tax abatement is requested, including type, number, economic life, and eligibility for a tax exemption granted by the Texas Commission on Environmental Quality ("TCEQ") , if known; • a map and legal description of the property; • a time schedule for undertaking and completing the proposed improvements; • a ten-year environmental and worker safety compliance history for all facilities located within the State of Texas and owned in whole or in part by applicants, as defined in"Environmental and Worker Safety Qualification;" • a copy of the evaluation of competing locations; • information pertaining to the reasons that the requested tax abatement is necessary to ensure that the proposed project is built in the County (i.e., documentation supporting assertion that "but for" a tax abatement, the stated project could not be constructed in the County); • copies of the immediately preceding 4 quarterly reports filed with the TWC, documenting the current number of permanent full-time employees, and full- time Contractor employees, if any, at the time the application is submitted; • financial and other information, as the County deems appropriate for evaluating the financial capacity and other factors of the applicant; • certification prepared by County Tax Assessor-Collector stating that all tax accounts within the County are paid on a current basis; • for a leased facility, the applicant shall provide with the application the name and address of the lessor and a draft copy of the proposed lease, or option HARRIS COUNTY GUIDELINES&CRITERIA FOR GRANTING TAX ABATEMENTS PAGE 8 OF 12 contract. In the event a lease or option contract has already been executed with owner of site, the document must include a provision whereby abatement applicant may terminate such contract without penalty or loss of earnest money, in the event that the County does not grant a tax abatement. (c) Upon receipt of a completed application, CSD shall determine whether a project qualifies for a tax abatement under these guidelines and criteria. If CSD determines that it qualifies, then the department shall schedule a public hearing, request creation of a reinvestment zone, and request approval of a tax abatement agreement, in accordance with the Tax Code. (d) The County shall not establish a reinvestment zone or enter into a tax abatement agreement if it finds that an application was received after a project commenced construction or installation of improvements. Property eligible for abatement includes only new improvements commencing after approval of an agreement with the County. SECTION 4 PUBLIC HEARING & APPROVAL (a) The Commissioners Court may not adopt a resolution designating a reinvestment zone for the purposes of considering approval of a tax abatement Agreement until it has held a public hearing at which interested persons are entitled to speak and present evidence for or against the designation. Notice of the hearing shall be clearly identified on the Commissioners Court agenda at least 13 days prior to the public hearing. (b) At the public hearing, interested persons shall be entitled to speak and present written materials for or against the approval of the proposed project or Agreement. (c) Any variance to these guidelines must be approved by a vote of at least three-fourths (3/4) of the Commissioners Court. (d) In order to enter into a tax abatement agreement, Commissioners Court must find that the terms of the proposed agreement conform to these Guidelines and Criteria and that: 1. there will be no substantial adverse effect on the provision of the jurisdictions' service or tax base; and 2. the planned use of the property will not constitute a hazard to public safety, health or morals. SECTION 5 AGREEMENT After approval the County shall formally pass a resolution and execute an Agreement with the owner of the facility (or lessee, where applicable) as required which shall include: HARRIS COUNTY GUIDELINES&CRITERIA FOR GRANTING TAX ABATEMENTS PAGE 9 OF 12 (a) estimated value to be abated; (b) percent of value to be abated each year as provided in"Abatement Authorized"; (c) the commencement date and the termination date of abatement; (d) the proposed use of the facility; nature of construction, time schedule, survey, property description and improvement list; (e) contractual obligations in the event of default, violation of terms or conditions, delinquent taxes, recapture, administration and assignment as provided in "Abatement Authorized," "Recapture," "Administration," and "Assignment," or other provisions that may be required for uniformity or by state law; (f) amount of investment, increase in appraised value and number of jobs involved, as provided in"Abatement Authorized;" (g) a requirement that the applicant annually submit to HCAD and CSD, a January employee count for the abated facility which corresponds to employee counts reported in the facility Employer's Quarterly Report to the TWC for the quarter most recently ended at calendar year-end, and a separate notarized letter certifying the number of jobs created or retained as a direct result of the abated improvements and the number of employees in other facilities located within Harris County and the compliance with the environmental and worker safety requirements in the Agreement for the preceding calendar year, for as of January 1. Submission shall be used to determine abatement eligibility and shall be subject to audit if requested by the governing body. Failure to submit will result in the ineligibility to receive an abatement; and (h) a requirement that the owner or lessee will (a) obtain and maintain all required permits and other authorizations from the United States Environmental Protection Agency and the TCEQ for the construction and operation of its facility and for the storage, transport and disposal of solid waste; and (b) seek a permit from the TCEQ for all grandfathered units on the site of the abated facility by filing with the TCEQ, within three years of receiving the abatement, a technically complete application for such a permit. Such Agreement normally shall be executed within 60 days after the applicant has forwarded all necessary information and documentation to the County. SECTION 6 RECAPTURE (a) If the facility is completed and begins producing product or service, but subsequently discontinues producing product or service for any reason for a period of 180 days while the Agreement is active, or one year in the event of natural disaster, then the Agreement shall terminate and so shall the abatement of the taxes for the calendar year during which the facility no longer produces. The taxes otherwise abated for that HARRIS COUNTY GUIDELINES&CRITERIA FOR GRANTING TAX ABATEMENTS PAGE 10 OF 12 calendar year shall be paid to the County within 60 days from the date of termination. The company or individual shall notify the County in writing at the address stated in the Agreement within 10 days from any discontinuation, stating the reason for the discontinuation and the projected length of the discontinuation. If the County determines that such requirement has not been complied with, the Agreement may be terminated immediately and all taxes previously abated by virtue of the Agreement may be recaptured and paid within 60 days of the termination. (b) If the company is in default according to the terms and conditions of its Agreement, the company or individual shall notify the County in writing at the address stated in the Agreement within 10 days from the default, and cure such default within 60 days from the date of the default ("Cure Period"). If the County determines that such requirement has not been complied with, the Agreement may be terminated immediately and all taxes previously abated by virtue of the Agreement may be recaptured, together with interest at 6% per annum calculated from the effective date of the Agreement and paid within 60 days of the termination. If the County does not receive full payment within said 60 days, a penalty may be added, equal to 15% of the total amount abated. (c) If the company allows its ad valorem taxes owed the County to become delinquent and fails to timely and properly follow the legal procedures for its protest and/or contest, the Agreement then may be terminated, and all taxes previously abated by the Agreement may be recaptured and paid within 60 days of the termination, and penalties and interest may be assessed as set out in herein. SECTION 7 ADMINISTRATION (a) HCAD annually shall determine an assessment of the real and personal property comprising the reinvestment zone. Each year, the company or individual receiving a tax abatement shall furnish the HCAD and CSD with such information as may be necessary for the abatement. After value has been established, the HCAD shall notify the affected taxing jurisdictions of the certified appraised value. (b) The Agreement shall stipulate that employees and/or designated representatives of the County will have access to the reinvestment zone during the term of the abatement to inspect the facility to determine if the terms and conditions of the Agreement are being met. All inspections will be made only after giving 24 hours prior notice and will only be conducted in such manner as to not unreasonably interfere with the construction and/or operation of the facility. All inspections will be made with one or more representatives of the company or individual and in accordance with the facility's safety standards. (c) Upon completion of construction, CSD annually shall evaluate each facility receiving an abatement to ensure compliance with its Agreement and report violations to the County Attorney, the Commissioners Court, and affected taxing jurisdictions. HARRIS COUNTY GUIDELINES&CRITERIA FOR GRANTING TAX ABATEMENTS PAGE 11 OF 12 SECTION 8 ASSIGNMENT A tax abatement Agreement may be assigned to a new owner or lessee of a facility with the written consent of the Commissioners Court, which consent shall not be unreasonably withheld. Any assignment shall provide that the assignee shall irrevocably and unconditionally assume all the duties and obligations of the assignor upon the same terms and conditions as set out in the Agreement. Any assignment shall be to an owner that continues the same improvements or repairs to the property (except to the extent such improvements or repairs have been completed), and continues the same use of the facility as stated in the original Agreement with the initial applicant. No assignment shall be approved if the assignor or the assignee is indebted to the County for past due ad valorem taxes or other obligations. SECTION 9 NON-COMPETE AGREEMENTS A tax abatement shall not be granted for projects whose competitive siting consists only of counties that have agreed with the County to forego the use of tax incentives to compete for such projects. SECTION 10 SUNSET PROVISION These Guidelines and Criteria are effective January 1, 2010, and will remain in force until December 31, 2011, at which time all tax abatement contracts created pursuant to these provisions will be reviewed by the County to determine whether the goals have been achieved. Based on that review, the Guidelines and Criteria will be modified, renewed, or eliminated. Re-adopted by Harris County Commissioners Court November 24, 2009 HARRIS COUNTY GUIDELINES&CRITERIA FOR GRANTING TAx ABATEMENTS PAGE 12 OF 12 Application for Tax Abatement -Harris County, Texas- Prior to any public expression of a decision or any commitment (legal or financial) to the proposed project by applicant, a completed original of this application,including supporting documentation of competitive siting, narrative impact statement, geld o S1000.00 nonlicution fee lnvn-refundnblet must be submitted to Harris County Community Services Department, Economic Development Division,8410 Lantern Point Dr.,Houston,TX 77054. This application will become part of the Tax Abatement Agreement and any knowingly false representations win be grounds for terminating the application and/or voiding the agreement. The County will forward copies to other taxing jurisdictions,as may be required by Texas statute. PART I-APPLICANT INFORMATION Application Date 3 / 28 / 2011 Company Name: Merit Medical Systems,Inc. Headquarters Address: 1600 Merit Parkway City: So.Jordan State: UT Zip: 84095 Local Address: 1111 S.Velasco,Angleton,TX Zip: 77515 Annual Sales: $296.8 million Local Phone Number: 801-230-3365 State of Incorporation: Utah Years in Harris County: 0 Local Fax Number: E-mail: gfredde@merit.com Total Employees Worldwide: 2,233 Texas: 224 Harris County at Present: 0 *Attach description ofApplicant Company including briefhistory.corporate structure.financial statement.&annual report.ifincorporated in what stare corporation designated with copy ofkgal documents showing incorporation information. PART II-PROJECT INFORMATION Location Address: Kirby Dr.&Spectrum Blvd. City: Pearland Zip: 77047 Key Map# Legal Description*: TRS 27,27'A 28,28 %Allison Richey Gulf Coast Horrid County: Harris School District: Houston ISD College District Houston Tax Acct.Numbers: 045-180-000-0001 NAICS#: 33911 •Attach plat survey,with a metes&bounds description.iption.for project site. Project Description: o New Construction ❑Expansion Attach stat<emtent Jbliy explaining project,describe existing she and all proposed inproremrents.provide complete detailed pine lteni) 17nveestnentScheduleBudget'desalting improvements for which abatement is requested Section A-Economic Development Type of Facility: FA Manufacturing ❑Regional Distribution ['Regional Service Center ❑Regional Entertainment ❑Research&Development ❑Other Basic Industries Describe product or service to be provided and to what purpose: Merit Medical Systems,Inc.is considering the construction of a new facility:a new 90,000— 100,000 square foot,ten acres of land,$10-12 million. 'For regionalfad/lties,provide market studies,business plans,or other materials demonstrating that the facility Is intended to serve a primer,market which lies at least 100 odic,outside of Harris County, Section B-Variance Is the applicant seeking a variance to Guidelines? ❑Yes o No If"yes"attach letter requesting and justifying the variance,with supplemental information. Application-Page 1 of 4 EXHIBIT C sal% • PART III-ECONOMIC INFORMATION Construction Estimate: Start Date July / 1 /2011 Contract Amount$ 8-10 million Completion Date July / 1 /2012 Peak Construction Jobs TBD Construction Man-Years TBD If Modernization: Estimated current economic life of structure NA years Added economic life from modernization NA years Permanent Job Creation/Retention of existing permanent jobs in Harris County: • Current employment: 0 • Jobs to be Retained: NA • Jobs to be created after 3 years from contract inception 200 at Jan 1,20 15 Estimated Appraised Value On Site Land I in provern en Total ts Value on January 1 preceding abatement(Per Harris County Appraisal District Records and Account Number) $1,115,1504 $0 $1,115,150 Estimated value of new abatable investment; Building $8,750,000 $8,750,000 Estimated value of new abatable fixed and in place $5,000,000 $5,000,000 Machinery and Equipment Estimated value not subject to abatement(e.g, Inventog) $ 3,500,000 $3,500,000 Estimated value of property subject to ad valorem tax at end of abatement $17,250,000 $ 18,365,150 -— Company Rearesentative Authorized For Contact: Authorized Company Official: Name: Greg A Fredde Authorized Signature: Title: VP-Government Affairs Name: kf 5+4,03e Telephone#: 801-230-3365 Title: e. (\ E-mail: gfredde@merit.com Telephone It: 1()\-1.b3-110k) E-mail: 4.11 e Application-Page 2 of 4 1« 4 _ _ .i MERIT MEDICAL SYSTEMS. INC. 1600 WEST MERIT PARKWAY SOUTH JORDAN.UTAH 84095 Wednesday, May 11, 2011 PHONE 801.253.1600 FAX 8G I-253!GB8 warov ment corn Nancy Powell Economic Development Director Harris County Community Services Department Office of Economic Development 8410 Lantern Point Drive Houston, Texas 77054 Dear Ms. Powell: Thank you for considering Merit Medical Systems, Inc.'s recent Application for Tax Abatement for Harris County, Texas. We look forward to the opportunity to invest in Harris County and provide additional employment opportunities. The purpose of this letter is to clarify Merit's ongoing efforts to identify locations in which we can secure the most favorable environment for future investment and growth. With current U.S. operations in Utah, Virginia, and Massachusetts, Merit has a number of places to locate future operations. Moreover, Merit currently operates significant international manufacturing and distribution operations in Galway, Ireland; Maastricht, The Netherlands; Tijuana, Mexico; and Beijing, China. Merit Medical Systems, Inc. has made a decision to vacate its current manufacturing facility located in Angleton, Texas. This decision will require the investment of approximately $17 - $18 million in a new facility, machinery and equipment. In addition, the new facility will provide approximately 160 new jobs immediately, growing to 221 jobs within five years. The only question yet to be answered is where the new facility—and the 160 jobs—will be located. For nearly ten years, Merit has aggressively negotiated with local and state taxing authorities to establish tax abatements and incentives. This strategy has resulted in increased capital which is available for reinvestment in communities in which we have operations. These positive, mutual relationships have been forged not only from Merit's stellar performance but on a basis of mutual trust. Merit is a publicly held company whose reputation is well known not only in the medical device industry but throughout the business community in general. Our investment in communities in which we live and work is significant and undeniable. Merit is respectfully requesting that Harris County—and other local jurisdictions consider a short-term tax abatement because, frankly,the cost structure in Texas is significantly higher than in other jurisdictions in which we operate. Moreover,under Merit's existing agreements with the State of Utah and the City of South Jordan, any relocation or expansion of facilities to accommodate the Angleton operation would be eligible for incentives and abatements. Merit currently has under construction a new 260,000squarefoot facility in South Jordan, Utah which will provide flexibility,growth,or consolidation capacity for Merit's worldwide operations.The facility will be on-line by the middle of next year. First,let me help put in perspective the cost differential between locating the operation in Texas versus Utah. The estimated property tax rate in the City of Pearland is 2.650581. By comparison,the property tax rate in Utah is 1.2986, or less than half of the rate in Pearland. In addition,the State of Utah does not impose a tax on inventory. In short,for every$1 million in both real and personal property and inventory,Merit would be assessed an annual tax of$53,011 in real and personal property and inventory taxes,compared to only $12,986 in property taxes in Utah,pre-incentives in both Texas and Utah. Moreover,Utah has one of the most aggressive research&development tax credits in the country.The State of Texas recently repealed their state R&D tax credit.Hence,for every • $1 million qualified as R&D expense,Merit receives a Utah credit of$142,000. Finally,other expenses,including employee healthcare,utility costs, and unemployment insurance,are almost twice as much in Texas when compared to similar services in Utah. While we recognize that the State of Texas does not impose an individual income tax, this provides little to no benefit directly to Merit. Please allow me to be more specific on how Merit's existing incentives and abatements in Utah are direct competition to our decision to build a new facility in Texas versus Utah. Merit currently enjoys two specific and one general economic development incentives. The direct incentives include: 1)a 10-year,$4.36 million State of Utah Economic Development Tax Incentive Fund(EDTIF)award(2010); and 2) a 15-year, $12.65 million South Jordan City RDA economic development area(EDA)(2006).Both agreements are job creation and investment based. That is,they are not specifically project based. As a result,the relocation of the Angleton facility to Utah would count towards those contract milestones and Merit would benefit under the existing contract. 2010 EDTIF Incentives: On April 9,2010,an Economic Development Tax Increment Financing Agreement(EDTIF)was executed between the State of Utah and Merit. Under the agreement,Merit committed to create 392 new,full-time positions,including 2 - A I i 221 qualified positions over the ten-year term. In addition,Merit is committed to invest $11 million in real and personal property over the period. In return,the State of Utah will, for the period January 1,2010—December 31,2019, rebate to Merit 30%on incremental state sales and use taxes, corporate income taxes,and 25%of employee withholding taxes generated above the base year of 2009.The total rebate will not exceed $4,360,000. Relocation of the Texas operation to Utah—and the required investment in facilities, machinery and equipment,and job growth—would not only count towards meeting the milestones contained in the agreement but would also result in direct rebates to Merit. Based on anticipated investment and job creation, if Merit chooses to relocate the Angleton operation to Utah,Merit would receive approximately$580,000 in EDTIF rebates over the term of the agreement. 2006 EDA Incentives: In 2006,an Economic Development Area(EDA)was created around Merit's South Jordan facilities. An agreement was executed between the South Jordan City Redevelopment Agency(RDA)and Merit.Under the agreement,Merit committed to create 500 new, full-time positions over the 15-year term.In addition, Merit committed to invest$147.8 million in real and personal property over the period. In return,the South Jordan City RDA will,for the period January 1,2007—December 31, 2021,rebate to Merit 65% of the incremental property taxes generated from the project area over the base year of 2005.The total rebate will not exceed $12,652,890. • Again,the relocation of the Texas operation to Utah will not only count towards meeting the milestones contained in the agreement but will also result in direct rebates to Merit. Based on the anticipated investment,Merit would receive approximately$1.5 million in rebates over the remaining term of the agreement. The indirect incentive is a newly created"Technology and Life Science Economic Development Act"(2011 —HB 496). HB 496: The Technology and Life Science Economic Development Act was passed by the Utah Legislature during its annual 2011 general session. The legislation creates a refundable tax credit for investment by life science companies which have 50%of their employees located in Utah. The refundable credit is for 100%of the incremental increases in state sales and use,corporate income,and employee withholding taxes for a period of three years. Based on the anticipated investment,if Merit chooses to relocate the Angleton operation to Utah,Merit would receive approximately$750,000 in rebates over the rebates under our EDTIF award. In summary,if Merit relocates the Angleton operation to Utah,we anticipate receiving incentives and rebates totaling approximately$2.83 million over the next 12 years. These 3 • f incentives are in place and eligible for use without any additional action by state or local governments.Moreover, the total operating cost differential between Texas and Utah is many times that total amount. You may ask yourself, "Why is Merit considering building a new facility in Texas if it is so financially advantageous to transfer the operation to Utah?"The answer is simple. Merit's Texas workforce is among the company's most knowledgeable, efficient,and technically trained. To replicate this workforce in Utah would be a time-consuming process. Moreover,the products that are manufactured in Texas are among the company's fastest growing. The relocation of the operation would risk this growth in the short term. Merit has worked hard to develop a business strategy which will allow us to continue to operate in the State of Texas. We have met with state and local officials in an attempt to identify incentives or abatements which make operation in Texas sustainable long-term. Merit is ready to make significant investments in Texas both in infrastructure and job creation IF agreement can be reached regarding the required abatements. Failure to meet an agreement will likely mean that the business model we have developed will be unsustainable and will require the relocation—and loss of 160 jobs—to Utah. Let me be frank: Without approval of the tax abatements by Harris County and the City of Pearland,along with the financial assistance from the Pearland Economic Development Corporation,Merit cannot,and will not continue to operate a facility in the State of Texas. • We are confident that with this explanation of the in-place incentives in Utah,Harris County will recognize the competitive nature of Merit's decision to build a new facility. It is our sincere hope and desire that Harris County will recognize the investment Merit can make in Texas and approve the Application for Tax Abatement. We look forward to your favorable response. Sincerely Fred P.Lampropoulos Chairman&CEO Merit Medical Systems,Inc. 4 3 ij JACOBSExN MERIT MEDICAL SYSTEMS,Inc. 3 PRODUCT1ON/WAREHOUSE FACILITY,HOUSTON,TX-CONTROL ESTIMATE-27-May 2011 CONTROL ESTIMATE.SUMMARY-SYSTEM FORMAT Based On Design Development Drawings Area 125.685 GSF 3 Ef1a1111011(•Tr Y foto -- I.,. COST ® DESCRIPTION Ealn ma S:y:lam[dal$ r�!Immcntn tM4,,,� TYPE rXu1m- ®® Int41 .6.6.6.6 IM-_ 1-FOOTING AND FOUNDATION 1111.111111111 . OMEN Earthwork REI Excavate 2.5 II building pad 94.000 fl incknle 5 It confer 0.l01 TOY t•�'t! 711,3,74 Inalatl5 ft or relaat IN for b..iNm• ad 001x171 J 71.7:9 7CY 1G n) :N5 120 REI IIIIIIIIIIII Concrete, Batrarlg concrete fog G' P650 condole s0 6' 51.590 3.i. 309.750 _. .. -.. TAB/Irc.Rebar . 750 [!.784 715110.1.001 ® NEIIMIIIIMEIIIIIIIIII B•• .anted m3.30'41660'de 0 25 sew., 111:111111•1111=11111•1111111 Truck*el wu+s ®11MINEECI11111111111701 ■ 113 WSF _ 6 10,OL IASr Inc Rotor AS/Inc Mona,' IF 1°79 4.550 !API Inc.Rob.' �00_ Truck wail 4.0 race beam. 3 ��a� 'ruck well MAW pe1aJ0-AYLO• EA "ri 1,500 Inc.Rebat ® Trunlnr a FA 75dJ r.p 1,500 TASI Ise Re6ar _ SUBTOTAL SYSTEM I 533,952 8.95 SF 14 2•STRUCTURE 14 CenereL TAB/Inr:.Reb8r 15 Exterior 34'hx25'wf 6'coos Olt up wane will 2'umapal 10100 YJSt I t 25 459,000 7151 100.x.665 18 LgllhxeiOh?concrete on 650141 deck 5' 31315 SF 3,00 111.245 3 MUNE= Structural Steel 31215 H®a- Sm.cwral owl 7 5 16$151- +40 ?.3:2.60 1,960,299 71.14.6-4.0 71x14001 31,315 2.15 86.565 ®®�- Metal decking reel - 7.65 231175 . ® I4isc.Ibl.eSUf Modals -- ..Iiiiiiii ©�O- Guardlf4.11.v.12 ® Intl 774.D0 17 MG 1 UN-5 1011 ©112 7,500 00 15,600 Uni31rU1•M 5 tram = ® = ■ - UM-strunle1,.17:sterne 0.2515$5' ��®11111111111112:1- till ®l111 SUBTOTAL SYSTEMS_ 2.3'7357 1617 SF 3•EXTERIOR CLOSURE in0_-Slorahonl A Window. ._ __ - KI00_ Wmdaw. _ a I7'!® .-,'.,! 3 ®111011•113111_ SNn4wA 7nPa5 oindows ""® .• 11311111131111111111111111111111 Storrontdnmf I'" I ® _ ,1a.2M 1000 _ la�_Exterior Dews 1-. - Sectorial evemead dears i .•: t-_n n••ut t.-7 12-173- 15.665 Orxm.W DSer Other finishes®rIraa� Palm •of 14.40.67' 14.1210 Sr I+s 411..000• �'i©0- Pant sealants'bu.k5• °7j"7 `r.1 725�J°°1°- m©�- Joint sealants:VRnical• not.1015 I J.'w LT 4 00 IIIIIIIIIMVI- 11:31oa_ c....,1,0!,-,."4.'�_ P I SI 2503 71.757 trilmimir SUBTOTAL SYSTEM 3 052055 2.12 SF jJ. 4-ROOFING.1st.SYSTEM �. _. ® ��Roof 5 sbm WI P?G,aas•A'N!.1 aryl. 457.315 Wu hlnchM 1'.6141-il a u1.1 _ 1.'lr)0 1?•000 3 --- - ---- SUBTOTAL SYSTEM 4 411,319 2.77 21' 40 - 42. 45 S•INTERIOR FINSHES Y•llwerk .. �pU A,g55aclu.almin,wlf•roe •oori desk Ivunibo77M1•a.N.oaman 01 0.25 7167+ �� FuInwlatlels 1111 - spro 0m91n0Ulalkln 0.f0 4,760 .._-. FYgtrd7h!y 2.00 0 Doors&Hardware MUNI Man as Ea 1.100.00 49,000 ._..._ .. Part man doors 2.2 Ea 2,100.00 49,400 InI-•ont hP M 044 overhead d. 1 1 E 17,00000 _ ®a�OrywaWendt ful Fuming 6 3.97 ITs1 PI® ulterorfun w4hlmutaaon l.W t2,+24 II INN Coen.00m...a. 4 933 t 3 rag 07.212 Interior pannier lNll,'*2ulaao.l 69.190 6.60 367.41:1 Building try Flooring Carpet 'h.1w 0.75 00.081. Sow mat 90 5200 4.550 5,1 NO 7.00 35.002 ____ t Sealrsdca0clelx 62.4: 0.65 40.560. _. - t VCT 71.993 2,00 49.960 .. 3Yapended Calll.ye 1 CI.an mom c.ninge 10,782 1S0 50.565 1 Acaustic© lmgs 55,025 200 111552 ..• 2. 1 Hard cmimgs 13160 3.7= 0.525 ....._-_... Tike m©111111111111- Flo.,we ®® 900 29•177 MIIIIIIIIIIII 31,021 Pa _ S 0.14 ,Tat �- . ®U�- 2".00 16125 - WSIIS 107,178 055 . 50,197 !IEEE S• tallies 9s 12 442 045 0.057 4 ©111A111111111 • LoCkms ®' E 1277..0- $ 1 IA.iW3Um�6.RCwI11Y9 1250.65® 8Is®- ._."' .. _. .M,.._.�..... SUNI VI Al hYtiIEMS 10.15 SF • 6•CONVEYING SYSTEMS 2 • 15 JACQBSEN MERIT MEDICAL SYSTEMS,Inc. PRODUCTION/WAREHOUSE FACILITY,HOUSTON,TX-CONTROL ESTIMATE-27-May 2011 7� CONTROL ESTIMATE SUMMARY-SYSTEM FORMAT Rased nn Design Development Drawings A+ee= t25,OB5 GSF Eslaral[Oal[•1r 11+r ITe _ .- _- Fsilra - can Sy01em COST CSl CCSCilI(r(IG+1 .,a,,fi; IiLr r IC,,.+ 17!01 Sy.um tahLl Camm.,M1 W0. Nwan00r TYPE. Cw.h* Y L urMa,a . e 02 6 1'i•et:el vat:: 1 E3 B0.000 90.0E0 _. 2-tee n 0.04 P.r __1'AL ST31EM0 _ .ea eo_ - 11 87 p4 7-SPECIALSYSTEMS1EQU1P61ENT 5U6T0 00 7 'ewek E:p•lprn.nl ..� _ ---- Texas wnhaad Dear 86 7-~-_1 Or.::r moil or! �_.-._._..__._- n Fa d 11 10.020 . 87 7 Comeclal _ _ ____ ._._ -_ -....__ Oaner lumlahad e0 7 I u ( .f'.u° _...- - - _ F a -. 0 �- N0 ! tore Sprinklers Escel Fin P1cla15a3 00 7 1 F!e Pumi. ._ 1 L'^ _.. •t,rt:a) 45.0:0 91 7 1 Hullimi.Tr -i., __...___1,. '-- ,w,.,u 294 250.+ro C acl l,. 4etcaa SUBTOTAL SYSTEM T 311,170 240 59 .__. w 0.1 a b.MECHANICAL daKharrcal STa1e n I = 86 I B I Vochat kato ( 1,131.-_r r t 1 8`J3.090.. _.- 90 0 1 1.6a.1ra,r.al 7 1 1.. ,t-1. r.r r --.IS 10 7.11,0110 ID 97 A t 00405 arnsal i..,l.n it+r.0 .,._ �_4C Si ...- IE U!1 1025.3ED- •ps 9-ELECTRIC SUBTOTAL SYSTEM b 2.046,360. 21.10 SE Ip0 9 JElenkkal -- !t rii 1375.11]5 *01 a 1 EloCm0al system .--!'_•,,.r `0 Iii 102 9 t- Electrical ryslem•genenler•IJe saley 1.5':"� t r0 125 6095 - - 107 SUBTOTAL SYSTEM 0 1,601020 1200 4F • Iw 10•CITEWO11K I - 105 10 Landaupe i 104 10 I b 49.500 6 Ienthcepe 316,262 5F 0.70 222.762 107 10 1 i Ir9ali0n 6 landscape•Samoa loposn 2.027 CF 0.90 10.910 109 10 1 Inigali00 6 uldsca0a••impel 101,01a 1,921 CV 25 00 48.171 • 104 10 1 kri0a1.cnJ lands.l9e(penis _ 319252 SF 015 47.7.10 110 10 EarinwnrA 12 .�A:rns 2.50000 2RL;0 _ Ft1 .._- 111 10 1 Lo ool*o seolon clock 7000 Acres 4.00 6.900 P.81 i 112 l0 1 0*0.2alet.l0li1srwdFlockpie 10.00 50AW .RE1 117 t0 1 Eaer.ate teler6on pond at 611 deep and herd off 5.000 ICY AEI III 10 1 Eaavale al roadways end Parking Iola 11009011 0 111021 4.015 TOY 9.00 30.675 on _-. - 115 10 1 Install 8'lima on roadways 6 poison,'lots 1 t u 400 LI .17 222 TCY a 00 19.145 or: - t EA 20.00000 70.03 4 118 10 1 Fac grading_ - 321,720 Sr O t0 32,474 0400 1 1 7 10 f 1 FtM yradiry_ .. 116 10 Piped Ullliliee .._ 119 10 S1one ai2ni`� 120 10 I 6'neat drain. 1x00 l 20.00 44000 MI I 22.00 .... 29.6000 - 1 • 121 10 1 12-HOPE to it M REL. 10'le ir SDF 35 Pty 500 LF 25.00 . 7120,6000N .. 122 10 I �1 0319 10 13117 776.'1 123 10 I IS'HOPE pp. 455 I.F 33.00 10.915 REI II 124 10 I 18'HOPE D9r1 -.. RLI 277 OF 38 00 __ 10526 125 10 1 30'HOPE 0151 1,030 II. 6111.1u 4a.tao KI 126 t0 1 30'HOSE Prpe P£1 127 10 4r HOPE goo 300 OF 0200 19100 50 I F -.. 05.00 3.250 _ TICt 129 10 9 C. h basin rare 35 SA t 500 00 52,500 REI 129 10 1 SIo,mmanholes S E(, 1800,00 0.000 AEI 130 10 I Slam 100' 1 EA 70 nom 20.000 0101 _ 131 10 1 ,12.21 uwtm 132 10 1 a 0.00 0 by Owner c! 100 FCA A 177 10 t Cioan outs 250.00 ..REI 134 10 Sower .__ _. 2 - RE7 -- 135 10 1 4 SOR 26pioe ... 370 LF 29.00 6.400 _ 500 LF 35.00 17.SW nC-I 1?a ,n 1 I 6SOR 26➢GQ 4 EA 2.90000 .11200 11FI 177 to 1 7,•i Adea 1 EA 1.00000 I.D00 REI . 179 10 1 Tie in lo existing'motor/Ml -,� 0 EA 090 0 _ _ by avow _ - 1]s 90 1 _ 1,.Iic COH .._.- 1 EA 2.600.00 2,500 .REI 4 140 10 1 1i llanc nlnnd O mad 0 141 10 Weer RE) 600 I.I 22 00 ...._...13.000 142 10 1 I4'g2 I FA 1.60000 1,600 143 l0 t 19'x2 T56V .�. REI 164 10 1 2'Wale Molar 1 FA L900.rA 2+900 - 201 F F 29 00 tl,tlW ..MtC! 144 10 1 Y ScnaWM 40 rope 0.00 0 b7 ryas.. 146 10 1 PemW6 COH Of FA REl 147 ID I I Tu1141001710 n.ad _, 1 FA _2500.00 2.500, -- 149 ,0 Fire Line I _ by owner 1 149 10 t keercpaloenlal loo�naWfrton 61....21la br 11121"w - FA 010 EF 3e.w 30Jen RFI ISO ID I F,,.H[Amu On•Ie 11F.1 151 10 1 Fee Hyd!ants -, 5 FA 3.000.00 15.000, ..__REI 162 10 1 t6',5'75651 1 FA 7.80000 .-7.8181 .._ 1 FA 20,16W 0U 2'.l.ua0 Ort 157 10 1 M Cpmtnnw Au wens.d 1!re lack. +• _ OS00 RLI -..•4 154 10 1 9'BallrrewvavenMr 1 FA - 160 10 the Caner... V� 72927 IAS 151 10 Ealrld00 •ocvlD t . LF �dT_SF 29.637• 1AS 157 10 1 SidevOlts 0.Fd17 ---. TAB 156 10 1 evTC.1a'1Cr d hnlwwrr• - 1,605 51 .-..- 2695 50 450 17519 TAO 150 10 I 6'Chien p.a rns . I 1600 t0 1 Light polo bases 10 So 500.00 S.U!10 v 101 70 1 9'Crinuele paving ___- ri,3fb Sr 2.90 .130.440 rAS. . I . , J JACOBSEN MERIT MEDICAL SYSTEMS,Inc. PRODUCTION/WAREHOUSE FACILITY,HOUSTON,TX-CONTROL ESTIMATE-27-May 2011 CONTROL ESTIMATE SUMMARY-SYSTEM FORMAT Based On Design Development Drawings c10MATe I NTL.a2 Yy fma Area- 125.085 GSF u.n System COST CF.sumale n.w. Hunter Tv PC C.S.da +!=='LIt;F'I t:''tl Li-dryly LINT tins c it. TOrI S}vtem TrAaiw Comments 162 t0 1 •?"i' St 770 147271 T•r 7 169 10 1 ...,nt,i.Oar 7,t•dk a•:.r,lu,.,]c.te4 ro:. ..O. r. 11,-f4r 5= 0.99 :5,300 _ 164 SUB TOTAL SYSTEM 10 1,7715,165,. 11.00 SF 105 11-OFF-SITE IMPROVEMENTS IGn It 1 ..,_---Itlnn. 1 I 167 _ _ SUBTOTAL SYSTEM 11 _,___ 0 000 SF 1411 12-GENERAL CONDITIONS 4 160 12 _(lanai al Mandan..s _ 110 L2 1 rtrl,•!JI C..•,.f 1v.•' e t;- y t.'• :.1.1! 4F2,01:1 171 12 t N:istiirl f.': 1r 0 _ 172 - SUBTOTAL SYSTEM 12 412,073 3.80 97 173 13-TESTING and INSPECTIONS 4 174 13 Testing 175 13 1 Testing 6 special,nspee6on 7 is 1 0 Ev t%.nat 176 SUBTOTAL SYSTEM 13 0 0.00 SF 177 16-UNDEFINID WORK gll 179 19 179 1 jAddiliand Undefined Work 1---._i_ I SIIBTOIAL.SYSTEM 7 0 0.00 SF 190 20•PERMITS/FEESI BONOSI ETC. - 181 20 BuiWitlO Parma I w 0 LOT I 44.IS4 0 By Ou1 102 20 Han Cheek Fee 0 LOT 26 700 0 -07 Corm �j� 103 20 State Surcharge Fee 0 LOT 442,00 —�!■ 154 20 Si,t,y Sealer Cann action 700 .__ 7 LOT 0.00 0 tat 50 E anaa,Sava.r anima Taco 0 LOT 0.00 0 166 20 SWIM Sower I:n•act Fee 0 LOT 0.00 0 187 20 Water Connac,on roe 0 LOT 0.00 0 ..... ..... 169 20 Temp Power Feed 0 LOT 0.00 0 169 20 tn.patl Tee 0 LOT 0.00 0 • 190 20 Flood Inca^-t Fe. 0 TOT 000 C 161 20 EPA Sit.Parma 0.00 C 192 20 General Liabibt Insurance MEIMII 12622.693 30,316 153 20 F•eea PL/PO Intwanes 0 0 0 r` 194' 20 Builders Rah Insurance 0 LOT 000 0 195 20 Dodders Pak O.ductable 0 Ea 000 0 196 20 CIA ProlesswnaIL.W.ryinsurance 0 101 000 0 107 20 CIA Professional Liab4Iy 3 Year tat 0 1.01 000 0 • 199 20 _.....__. Payment 7 Pertarn..nca Bons• 0 LOT I 000 0 199 20 -....... I,uc.eipal So.Improvement Bond 0 SF 0,00 0 1 50% a vL1a! 02.211 200 20 Subcontractor Bordntg .• .. 2711 7n D..rnn..nrl.en F.. n M?m .,e n 0 _ 202 20 Contuctor's Fee 1051: 11.774,35. 217820! 203 20 Conlrectal.Fe.on Owner firmed 010chanl.n 1.00': in above 0 . Rack System 204 20 P1 Constr rcbon Services Sava/alien nee 0 1.5 U 0 .. -.--... .. 205 20 CM Sal:arhnn Fee 0.2517, ftl. , 11 777,+5e 29.438 - 206 - SUBTOTAL SYSTEM 20 345,76) 2.70 57 4 207 21-NE FEES.REIMBURSABLES.etc 206 21 Arch4ad Design Fan 0 LOT 000 0 209 21 Struetutst E,.oinwar Design Fn. 0 101 0110 0 210 21 Meehancal Engtneo Devon Fee 0 LOT 000 0 - ....... 211 21 ElecUieai Engine./Design Fee 0 1.01 000 0 212 21 C.7 Engines,Neils,Fee 0 LOT 000 0 213 21 Gectechnical Enginour Fee 0 LOT 000 0 ..-. - ...... 214 21 Landscape Archilect Design Tao 0 LOI C.00 0 - 215 21 _ Topographical Maps•ALTA Su 0 1.01 0 00 0 216 ?+ WE RMn•barosbks 0 LOT 000 0 217 2 t 04 Paek.n.Documents Pnntin0 0 LOT 0.00 0 • 219 2t Como Documents Printing _ 0 L01 0.00 0 219 •- SUBTOTAL SYSTEM 21 0 GOO SF 220 - 22•CONTINGENCY , u 221 22 --Coeliny.ncy I 222 22 L r'novarri's Cnn•in enty 500%I 12.021015 601.001 rL1 5U8TOTAL STOTCM Xi , 001,801 4 N 91- �/� 224 �,y0 25w -_�� PROJCCT TOTAL I 1 12,022,099 12,022,099 10901 57 • -ail .y 1 OWNER COST TOTAL - - �i Al 2 TwaunOA Fhr•rial Inspection n I C ad non n By Oaoa: 3 Raiding Permit 0 LS 44,154 0 By Osier 4 ' Plan Check Fee 0 LS 70.700 0 By Owner �.ra 0 Slaw Suatru1e 70., 0 L5 442 0_ , .. BY-092161. ,1,■ a Coy Inroad Fees 0 LS IOU 0 BY Onset ems• 7 What Onnor Coate 0 LS 100 0 Dr Owner 8 Landscaping , 9 Landscaping 6 lnigalion 0 SF 3 00 0 . ,.. .. 10 C0.rial Corrodes 0 IC 6000n nA O t 1 owNER COST TOTAL 0 Outs ii— 12 OWNER COST TOTAL - - 12121 SF L'il JACOBSEN MERIT MEDICAL SYSTEMS,Inc. PRODUCTIONIWAREHOUSE FACILITY,HOUSTON,TX-CONTROL ESTIMATE-27-May 2011 CONTROL ESTIMATE SUMMARY•SYSTEM FORMAT Dosed On Design DOwlepmant Drawings utnuc DAlt mb.n ruq aora —_� --- Are9,= 125.065 GSF A., System COST I CSI I pFSCRtvTION Cti'm'Ir Sy'11nm Tatnh Catartxnts Number TYPE Cake ` L_:!m'ry(u!a( U:gar•,-.: 1 ri F..l 1 PROJECT COST TOTAL rr 2 CONSTRUCTION COST TOTAL l t_ I 'L':-'"t OWNER COST TOTAL l I :~ I 4 PROJECT COST TUTALIII 12.522.09 100.91 SF IPROJECT COST TOT AI I 1.2,622.699 12.622.699 100.51 SF CLARIFICATIONS: • • • 4 41 �!J r METES AND BOUNDS DESCRIPTION 11.9337 ACRES LOCATED IN THE JAMES HAMILTON SURVEY,A-876 HARRIS COUNTY,TEXAS Being a tract or parcel of land containing 11.9337 acres of land or 519,832 square feet, located in the James Hamilton Survey,Abstract 876, Harris County,Texas, Said 11.9337 acre tract being out of and a part of a 36.166 acre tract of record in the name of SHT/Kirby, Ltd. In Harris County Clerk's File (H.C.C.F.) Number 20080049996, said 36.166 acre tract being out of and a part of Block "F" of the Allison-Richey Gulf Coast Homes Subdivision of record in Volume 3,Page 40 in the Map Records of Harris County, Texas; Said 11.9337 acre tract being more particularly described as follows (bearings based on said deed): BEGINNING at a 5/8 inch iron rod found at the northeast end of a Right-of-Way (R.O.W.) transition from the west R.O.W. line of Kirby Drive (width varies) to the north R.O.W. line of Spectrum Boulevard(100 feet wide),being on the east line of aforesaid 36.166 acre tract; THENCE, coincident aforesaid R.O.W. transition, South 42 Degrees 38 Minutes 32 Seconds West,a distance of 28.11 feet to a 5/8 inch iron rod with "Gruller" cap set on the north R.O.W. line of aforesaid Spectrum Boulevard, being the northeast corner of a 1.3116 acre tract of record in the name of City of Pearland in H.C.C.F.Number 20100435869; THENCE, coincident the north line of aforesaid Spectrum Boulevard, South 87 Degrees 21 Minutes 30 Seconds West, a distance of 558.09 feet to a 5/8 inch iron rod with "Gruller" cap set for the southwest corner of the herein described tract; THENCE,through and across aforesaid 36.166 acre tract the following two (2)courses: 1. North 02 Degrees 38 Minutes 00 Seconds West, a distance of 879.16 feet to a 5/8 inch iron rod with "Gruller " cap set for the northwest corner of the herein described tract; 2. North 87 Degrees 22 Minutes 00 Seconds East, a distance of 598.33 feet to a 5/8 inch iron rod'with "Gruller" cap set for the northeast corner of the herein described tract,on the west R.O.W.line of aforesaid Kirby Drive; THENCE,coincident the west R.O.W.line of aforesaid Kirby Drive the following three(3) courses: 1. South 02 Degrees 16 Minutes 57 Seconds East, a distance of 613.59 feet to a .clr.. 5/8 inch iron rod found; 'q`.0��ST�4•;` `y /,.... Q` \ 2. South 14 Degrees 25 Minutes 00 Seconds West, a distance of 52.20 feet to a KENNETH A. GRUL.LE; 5/8 inch iron with"Gruller"cap set; tres sea 6 0 s S ?� 3. South 02 Degrees 16 Minutes 57 Seconds East,a distance of 195.82 feet to the 19,'!7 3.. •.-o o POINT OF BEGINNING and containing 11.9337 acres of land. •r Surveying,LLC May 25,2011 Job 36-1109 EXHIBIT D ...an c....]w OW UI .. wow`. .-..s" ".e a..]..V.co. 5. ...,,,........55.5.........::l0.1........0 7115u...10.•4.0. • • _.........X.T.-/-------- ' 2 .. • 11.107 AO. Tr u.:—.r --s.. i?i.T.i � ":17".`724:- x..� ^ '74.'.1'"n w w.w. .'°•m •}�„' NBT2�'OdB:"Y.S1 /_• •••• / ur.Iw...lad en..x...1: (Pr I ..,� / "' ... i a: f�x..w.x.,. _......a a:. ,...,. .ro N.a ea.] aasm a..... L.,t,/, .., .../.1 •--,.� v,n.o, •}'.„ . "w."zws��]I a... 74 10 w .w.. .. 7717 it r \ M . w w \ •,r 7 . x . 'r 0` .. nr, ,.. •w , I TIME. .....w.w , . - / '- ill'i II 11.9557 ACRE." F : .,: (si9.s5z SQ.R.� L .. .. . I. 701'70 0. . . / I LO7 77 • • 3.t I :N 1 ... T61 ... :.F •v • w 4 ... 7 . I ga .-1, .+r- }� ' •ir— •Ids• . .. .. .., .•, .r... ... mr]."3. m,],in I r_'-." ••• . . 1.. - ..i 558.09 ..1▪ 1 — • a«• 3:4{.-.y • 100!�1�1�6/ • y1. w. ■ —ny p y I I s / PLAT OF SURVEY BOUNDARY AND TOPOGRAPHY OF 11.9337 ACRES (519,832 sq. ft.) BEING OUT OF AND A PART OF A 36.166 ACRE TRACT H.C.C.F. No. 20080049996 'FrFND LOCATED IN BLOCK "F" ALLISON-RICHEY GULF COAST • ' •'^"' t _E,=c= HOME SUBDIVISION =a,�n T VOL. 3, PG. 40 H.C.M.R. e AONAL 4.70.1 LOCATED IN THE JAMES HAMILTON SURVEY, A-876 II o.. M14 .,,,, F:'""',. :�,],.'.,.:Px`.. `^°,".`"^. HARRIS COUNTY. TEXAS • _ +•�'"".,r..an..ar,.,,d M w..,.,� .."a rr'✓l•�y��p� C��y��p��{�ry //�] OF gladieY V WWLMMN.,.e.ee ,„...�y v was r .elf.*I, , OOWI{{M O O 'SE w.x: [Nur MM l O,104(2 arvAr1ax . r m..n ar.,n..byby •°;f0 '!yi. LC. O,v ur O1x ..N. 7.. ~u" No sure, '•o.1 .,w.ut 5.16 ' A'''JI•811'•6 =MI.WWII WOW 'VO.ua 4' lau.007.1•310-2 Ia - •y wnu 1c v.1 1. .4.`,..r............].+r w].,. i"1�'Qr : ]ow w.(7171 w-n] 1 0.w.s-1109 Presented to Commissioner's Court OCT 1 1I1 2011 THE STATE OF TEXAS § APPROVE L I r''1 COUNTY OF HARRIS § Recorded Vol Page The Commissioners Court of Harris County, Texas, convened at a meeting of said Court at the Harris County Administration Building in the City of Houston, Texas, on the day of OCT 1 1 2f31 , 2011 , with the following member's present,to-wit: Edward Emmett County Judge El Franco Lee Commissioner, Precinct No. 1 Jack Morman Commissioner,Precinct No. 2 Steve Radack Commissioner, Precinct No. 3 '. Jack Cagle Commissioner, Precinct No. 4 and the following members absent, to-wit: j N)p , constituting a quorum, when among other business, the following was transacted: ORDER AUTHORIZING EXECUTION OF TAX ABATEMENT AGREEMENT BETWEEN HARRIS COUNTYAND MERIT MEDICAL SYSTEMS, INC. FOR PROPERTY LOCATED IN THE "CITY OF PEARLAND REINVESTMENT ZONE#21" ("THE ZONE") Commissioner lip introduced an order and made a motion that the same be adopted. Commissioner rA 09 ,,,r\r, r� seconded the motion for adoption of the order. The motion, carrying with it the adoption of the order,prevailed by the following vote: Yes No Abstain Judge Emmett ❑ ❑ Comm. Lee ❑ ❑ Comm. Morman ❑ ❑ Comm. Radack ❑ ❑ Cow■w,F.Jack Cagle ❑ ❑ The County Judge thereupon announced that the motion had duly and lawfully carried and that the order had been duly and lawfully adopted. The order thus adopted follows: RECITALS: The City of Pearland, authorized by Section 312 of the Texas Tax Code, adopted City Resolution No. R2011-12 on January 24, 2011, establishing guidelines and criteria for a property tax abatement program; and The City of Pearland, as required by Section 312 of the Texas Tax Code, held a public hearing on June 13, 2011, to consider granting a tax abatement to the Owner for a new medical supply manufacturing facility within the Zone; and On June 13, 2011, pursuant to the aforementioned state law and city ordinance, the City of Pearland adopted Ordinance No. 1447, designating 11.9337-acres of land located at 14646 Kirby Drive, Pearland, TX 77047, as the Zone; and On July 11, 2011, the City of Pearland adopted Resolution No. R2011-79, authorizing a tax abatement agreement with the Owner; and Chapter 312 of the Texas Tax Code provides that if ad valorem taxes on property located in the taxing jurisdiction of a municipality are abated under an agreement as provided in Chapter 312, the governing body of each taxing unit may execute a written agreement with the owner of the property after the date the municipal agreement is executed. Further, it is the policy of Harris County to encourage the redevelopment of areas wherein creation and retention of jobs and new real property investment will benefit the area economy, provide needed opportunities, strengthen the real estate market and generate tax revenue to support local services; and The Zone is an area generally described as 11.9337 acres situated in the James Hamilton Survey, Abstract 876, in the City of Pearland, and within the boundaries of Harris County, Harris County Flood Control District, Harris County Hospital District, and Port of Houston Authority of Harris County; and Merit Medical Systems agrees to create a total of at least 221 permanent employees on its payroll in the Zone in accordance with the schedule detailed in the Tax Abatement Agreement; and Merit Medical Systems agrees to construct new real property improvements in the Zone resulting in tax roll value increase of at least $8,575,000 by January 1, 2014. In no case shall the value of the new real property improvements used in the tax abatement calculation exceed $8,575,000 and in no case shall the value to be abated in any year exceed $4,287,500, which is 50% of the minimum value increase. Commissioners Court further finds that the terms of the tax abatement agreement with the Owner and the property subject to this agreement satisfy the Guidelines and Criteria for Granting Tax Abatement in a Reinvestment Zone Created in Harris County, as re-adopted by Commissioners Court on November 24, 2009 (effective January 1, 2010, through December 31, 2011), and that: (1) there will be no substantial adverse effect on the County's tax base or provision of services, and (2) the planned use of the property does not constitute a hazard to public safety, health or morals. The Commissioners Court of Harris County desires to approve this tax abatement with the Owner based on the aforesaid representations. NOW, THEREFORE, BE IT ORDERED BY THE HARRIS COUNTY COMMISSIONERS COURT OF HARRIS COUNTY, TEXAS THAT: Section 1. The recitals set forth in this order are true and correct. Section 2. This Tax Abatement Agreement is approved under the Guidelines and Criteria for Granting Tax Abatement in a Reinvestment Zone Created in Harris County. Section 3. The Director of Harris County Community Services Department is hereby authorized to execute this Tax Abatement Agreement on behalf of Harris County, Harris County Hospital District, Harris County Flood Control District, and the Port of Houston 2 Authority, to abate a portion of the increase in the certified appraised value of the property described in this Agreement, per the records of Harris County Appraisal District, for a period of 10 years beginning January 1, 2012. Section 4. The Clerk of Commissioners Court must transmit a copy of this Order and, upon execution by Harris County, any agreement entered into pursuant to the authorization provided herein, to the Harris County Appraisal District, to the Assessor/Collector of Taxes for Harris County, to the City of Pearland, to Houston Independent School District, and to Houston Community College, with a request that such taxing units notify the Tax Assessor/Collector and the Harris County Community Services Department of any agreements by those entities to abate taxes on property located within the Zone, and transmit "Information Only" copies to the Harris County Flood Control District, Harris County Hospital District, the Port of Houston Authority, and the Texas Comptroller of Public Accounts. 3