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R-2012-175-2012-12-10RESOLUTION NO. R2012-175 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, AUTHORIZING A LOAN AGREEMENT BETWEEN THE PEARLAND ECONOMIC DEVELOPMENT CORPORATION AND DOVER ENERGY, INC. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: Section 1. That certain Loan Agreement by and between the Pearland Economic Development Corporation and Dover Energy, Inc., a copy of which is attached hereto as Exhibit "A" and made a part hereof for all purposes, is hereby authorized and approved. PASSED, APPROVED and ADOPTED this the 10th day of December, A.D., 2012. ATTEST: APPROVED AS TO FORM: DARRIN M. COKER CITY ATTORNEY .,---1, ci/ i TOM REID MAYOR THE STATE OF TEXAS COUNTIES OF BRAZORIA FORT BEND, AND HARRIS LOAN AGREEMENT Resolution No. R2012-175 Exhibit "A" Borrower: Lender: DOVER ENERGY, INC a Delaware Corporation 1585 Sawdust Road, Suite 210 The Woodland, Texas 77380 PEARLAND ECONOMIC DEVELOPMENT CORPORATION a Texas non-profit corporation 1200 Pearland Parkway, Suite 200 Pearland, Texas 77581 This LOAN AGREEMENT between DOVER. ENERGY, INC., a Delaware Corporation (hereinafter referred to as "Borrower"), and the PEARLAND ECONOMIC DEVELOPMENT CORPORATION, a Texas non-profit corporation, is made and executed on the following recitals, terms and conditions. WHEREAS, the Pearland Economic Development Corporation (hereinafter referred to as the "Lender") is a Type 13 economic development corporation, created pursuant to Chapter 505 of the Texas Local Government Code, as amended; and WHEREAS, Section 501.101 of the Texas Local Government Code, in pertinent part, defines the term "project" to mean "land, buildings, equipment, facilities, expenditures, targeted infrastructure, and improvements that are: (I) for the creation or retention of primary jobs; and (2) found by the board of directors to be required or suitable for the development, retention, or expansion of. (A) manufacturing and industrial facilities; (B) research and development facilities; (C) military facilities, including closed or realigned military bases; . (F) recycling facilities; ... (I) distribution centers (T) small warehouse facilities capable of serving as decentralized storage and distribution centers; (K) primary job training facilities for use by institutions of higher' education; or (L) regional or national corporate headquarters facilities"; and WHEREAS, Section 501.158 of the Texas Local Government Code prohibits the provision of a direct incentive unless Lender enters into an. Agreement with Borrower providing at a minimum a schedule of additional payroll or jobs to be created or retained by Lender's investment; a schedule of capital investments to be made as consideration for any direct incentives provided by Lender to Borrower; and a provision specifying the terms and conditions upon which repayment must be made should Borrower fail to meet the agreed to performance requirements specified in this Agreement; and WHEREAS, Borrower has applied to Lender for financial assistance necessary to operate an office, manufacturing and research & development facility generally located at the northeast corner of Spectrum and Hooper Roads, within the City of Pearland, Texas, including the loan and financial assistance described in this Agreement, and those which may be described on any exhibit or schedule attached to this Agreement, a copy of said application is attached hereto as Exhibit D; and WHEREAS, Borrower has agreed to locate a minimum of 185 Full -Time Employment Positions working at Borrower's office, manufacturing and research & development facility located on the Property; and WHEREAS, Borrower has agreed to make a minimum capital investment of twenty- three million eight hundred thousand and No/100 Dollars ($23,800,000.00) within the City of Pearland, Texas, and this amount includes the construction of a building for Borrower's office, manufacturing and research & development facility located on the. Property, which will be owned by Borrower; the cost of the real estate; and the cost of the business personal property to be located on the Property; and WHEREAS, Lender approved the provision of certain financial assistance to Borrower at its meeting held on November 29, 2012, which would provide Borrower the financial assistance necessary for Borrower to locate the office, manufacturing and research & development facilityon the Property; and WHEREAS, this loan and financial assistance from the Lender to Borrower, are referred to in this Agreement individually as the "Loan" and collectively as the "Loans;" and WHEREAS, Borrower understands and agrees that: (a) in granting, renewing, or extending this Loan, Lender is relying upon Borrower's representations, warranties, and agreements, as set forth and provided for in this Agreement; (b) the granting, renewing, or extending of this Loan by Lender at all times shall be subject to Lender's sole judgment and discretion; and (c) this Loan shallbe and shall remain subject to the terms and conditions as set forth in this Agreement; and WHEREAS, the Board of Directors of Lender have determined the Loan provided to Borrower is consistent and meets the definition of "project" as that term is defined in Sections 501.101 and 501.103 of the Texas Local Government Code; and the definition of "cost" as that term is defined by Section 501.152 of the Texas Local Government Code; and WHEREAS, Borrower agrees and understands that Section 501.073(a) of the Texas Local Government Code requires the City Council of the City of Pearland, Texas, to approve all programs, and expenditures of the Lender, and accordingly this Agreement is not effective, and Loan Agreement Pearland Economic Development Corporation 12/3/2012 2:15:35 PM Page 2 of 25 Lender is under no obligation to provide the Loan and financial assistance authorized by this Agreement until City Council has approved this project and expenditure at a City Council meeting called and held for that purpose. NOW, THEREFORE, for and in consideration of the agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Lender and Borrower agree as follows: SECTION 1. FINDINGS INCORPORATED. The foregoing recitals are hereby incorporated into the body of this Agreement and shall be considered part of the mutual covenants, consideration and promises that bind the parties. SECTION2. TERM. This Agreement shall be effective as of the Effective Date, and shall continue thereafter until all obligations of Borrower to Lender have been performed in full and the parties terminate this Agreement in writing, or on December 31, 2021, unless terminated sooner under the provisions hereof. SECTION 3. DEFINITIONS. The following words shall have the following meanings when used in this Agreement. (a) Act. The word "Act" means Chapters 501 to 505 of the Texas Local Government Code, as amended. (b) Agreement. The word "Agreement" means this Loan Agreement, together with all exhibits and schedules attached to this Loan Agreement from time to time, if any. (c) Borrower. The word "Borrower" means Dover Energy, Inc., a Delaware corporation, whose address for the purposes of this Agreement is 1585 Sawdust Road, Suite 210, The Woodlands, Texas 77380. (d) City. The word "City" means the City of Pearland, Texas, a Texas home -rule municipality, whose address for the purposes of this Agreement is 3519 Liberty Drive, Pearland, Texas 77581. (e) Effective Date. The words "Effective` Date" mean the date of the later to execute this Agreement by and between Borrower and Lender. (t) Event of Default. The words "Event of Default" mean and include any of the Events of Default set forth below in the section entitled "Events of Default." Loan Agreement Pearland Economic Development Corporation 12/3/2012 2:15:35 PM Page 3 of 25 (g) Full -Time Employment Positions. The words "Full -Time Employment Position" or "Full -Time Employment Positions" mean and include a job requiring a minimum of Two Thousand (2,000) hours of work by one (1) person averaged over a twelve (12) month period for the borrower, with such hours also to include any vacation and sick leave, with health insurance benefits, and working a minimum of thirty (30) hours a week at the Property. The average annual salary of all "Full -Time Employment Positions" must be greater than $46,000.00, excluding employee benefits. (h) Indebtedness. The word "indebtedness" means and includes without limitation all Loans, together with all other obligations, debts and liabilities of Borrower to Lender, or any one or more of them, as well as all claims by Lender against Borrower, or any one or more of them; whether now or hereafter existing, voluntary or involuntary, due or not due, absolute or contingent, liquidated or unliquidated; whether Borrower may be liable corporately or jointly with others; whether Borrower may be obligated as a guarantor, surety, or otherwise; whether recovery upon such Indebtedness may be or hereafter may become otherwise unenforceable. (1) Lender. The word "Lender" means the Pearland Economic Development Corporation, a Type B economic development corporation, and a Texas non-profit corporation, its successors and assigns, whose corporate address for the purposes of this Agreement is 1200 Pearland Parkway, Suite 200, Pearland, Texas 77581. Telephone number is (281) 997-3000. Facsimile number is (281) 997-3016. (j) Loan. The word "Loan" or "Loans" means and includes any and all loans and financial accommodations from Lender to Borrower, whether now or hereafter existing, and however evidenced, including without limitation those loans and financial accommodations described in this Agreement and described on any exhibit or schedule attached to this Agreement. (k) Note. The word "Note" means the non-interest bearing Promissory Note of even date herewith, executed by and between the parties hereto in the principal amount of six hundred thirty thousand and no/100 Dollars ($630,000 00), or so much as shall be advanced, due upon demand and payable on or before December 31, 2021, attached hereto as Exhibit C of this Agreement. (1) (n►) Property. The word "Property" means the approximately 613,612 square feet or 14.087 acre tract or tracts of land situated in the James Hamilton Survey, Abstract No. 876 , City of Pearland, Harris County, Texas, more particularly described and or depicted in ExhibitA of this Agreement, which is attached hereto and incorporated herein for all purposes. Related Documents. The words "Related Documents" mean and include without limitation all promissory notes, loan agreements, and all other instruments and documents, whether now or hereafter existing, executed in connection with Borrower's Loan Agreement Pearland Economic Development Corporation 12/3/2012 2:15:35 PM Page 4 of 25 Indebtedness to Lender. (n) Term. The word "Term" means the term of this Agreement as specified in Section 2 of this Agreement. SECTION 4. AFFIRMATIVE COVENANTS OF BORROWER. Borrower covenants and agrees with Lender that, while this Agreement is in effect, Borrower shall comply with the following terms and conditions: (a) Certificate of Occupancy. Borrower covenants and agrees to obtain or cause to be obtained a Final Certificate of Occupancy from the City for a minimum of 150,000 square feet facility located on the Property by April 1, 2014. (b) Operate Office, Manufacturing and Research & Development Facility. Borrower covenants and agrees by July 1, 2014 and during the Term of this Agreement, to maintain and operate a minimum of 150,000 square feet office, manufacturing and research & development facility located on the Property. (c) Annual Compliance Verification. Period. Borrower covenants and agrees that within 60 days of January 1 of the year following the issuance of Final Certificate of Occupancy to Borrower and for each subsequent year covered by this Agreement, Borrower shall deliver to Lender an annual compliance verification signed by a duly authorized representative of Borrower that shall certify a minimum number of Full -Time Employment Positions, and shall disclose and certify the wage, and hours worked for all Full -Time Employment Positions (the "Annual Compliance Verification"). The Borrower covenants and agrees during the Term of this Agreement, there will be a total of seven (7) Annual Compliance Verifications due and submitted to the Lender within 60 days of January 1 of each year, covering jobs created and maintained during the Term of this Agreement. All Annual Compliance Verifications shall be in the form substantially similar to the form attached hereto as Exhibit B of this Agreement, and shall provide back-up data for the Full -Time Employment Position numbers provided. This backup data will include the Annual Employment Compliance Verification Detail and also may include quarterly IRS 941 returns, or Texas Workforce Commission Employer Quarterly Reports. This back-up data will only be permitted to be reviewed by PEDC at the Company's offices upon prior notice to Borrower and PEDC shall not retain a copy of any specific wage or social security information. (d) Job Creation and Retention. Borrower covenants and agrees by September 1, 2014, and during the Term of this Agreement Borrower or related entity of Borrower, will employ a minimum of one hundred eighty-five (185) Full -Time Employment Positions working at the Property. Borrower covenants and agrees to maintain the Full -Time Employment Positions specified in Table 4-1 of this Agreement during the Term of this Agreement. Page 5 of 25 Loan Agreement Pearland Economic Development Corporation 12/3/2012 2:15:35 PM Minimum Number of Full -Time Employment Positions. During the Term of this Agreement, Borrower covenants and agrees to provide to Lender annually an Annual Compliance Verifications indicating a minimum 185 Full -Time Employment Positions working at the Property. Table 4-1: (e) Real and Business Personal Property Located on the Property. Borrower covenants and agrees the Property shall have an increased taxable value of the improvements and business personal property (over the base Tax Year 2012) of at least six million and No/100 Dollars ($6,000,000.00), as evaluated by the Harris County Central Appraisal District on January 1, 2014, and shall maintain the increased taxable value at the same minimum level for the Term of this Agreement. (f) Additional Assurances. Borrower agrees to make, execute and deliver to Lender such other promissory notes, instruments, documents and other agreements as Lender or its attorneys may reasonably request to evidence the Loan. (g) Performance. Borrower agrees to perform and comply with all terms, conditions, and provisions set forth in this Agreement and in all other instruments and agreements between Borrower and Lender. SECTION 5. AFFIRMATIVE COVENANTS OF LENDER. Lender covenants and agrees with Borrower that, while this Agreement is in effect, Lender shall comply with the following terms and conditions: (a) Financial Assistance. Lender covenants and agrees to provide to Borrower a disbursement of Loan proceeds in the amount of: Six hundred thirty thousand and No/100 Dollars ($630,000.00) within sixty (60) days following the submission of a final certificate of occupancy consistent with Section 4(a) of this Agreement (b) Performance. Lender agrees to perform and comply with all terms, conditions, and provisions set forth in this Agreement and in all other instruments and agreements Page 6 of 25 Loan Agreement Pearland Economic Development Corporation 12/3/2012 2:1 5: 35 PM between Borrower and Lender SECTION 6. CESSATION OF DISBURSEMENT OF FINANCIAL ASSISTANCE. If Lender has made any commitment to make any Loan to Borrower, whether under this Agreement or under any other agreement, Lender shall have no obligation to disburse Loan proceeds specified in Section 5(a) of this Agreement if•. (i) Borrower becomes insolvent, files a petition in bankruptcy or similar proceedings, or is adjudged bankrupt; or (ii) an Event of Default occurs. SECTION 7. EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: (a) Certificate of Occupancy. Failure of Borrower to obtain or cause to be obtained a Final Certificate of Occupancy from the City for a minimum of 150,000 square feet office, manufacturing and research & development facility located on the Property consistent with Section 4(a) of this Agreement is an Event of Default. (b) Operate Office, Manufacturing and Research & Development Facility. Failure of Borrower to operate a minimum of 150,000 square foot office, manufacturing and research & development facility on the Property consistent with ` Section 4(b) of this Agreement is an Event of Default. (c) Annual Compliance Verification. Failure of Borrower to submit the Annual Compliance Verifications consistent with Section 4(c) of this Agreement is an Event of Default. (d) Job Creation and Retention. Failure of Borrower to employ and maintain a minimum of ninety-five percent (95%) of the Full -Time Employment Positions working at the Property for which funds have been advanced consistent with Section 4(d) of this Agreement is an Event of Default. (e) Real and Business Personal Property Located on the Property. Failure of Borrower to maintain at least six million and No/100 Dollars ($6,000,000.00), of increased taxable improvements real property and business personal property value over base Tax Year 2012 for the term of this Agreement consistent with Section 4() of this Agreement is an Event of Default. (0 (g) Financial Assistance. Failure of Lender to disburse Loan proceeds to Borrower for Financial Assistance consistent with Section 5(a) of this Agreement is an Event of Default. False Statements. Any written warranty, representation or statement made or furnished to Page 7 of 25 Loan Agreement Pearland Economic Development Corporation 121312012 2:15:35 PM the Lender by Borrower under this Agreement or any document(s) related hereto furnished to the Lender by Borrower is/are false or misleading in any material respect, either now or at the time made or furnished, and Borrower fails to cure same within thirty (30) days after written notice from the Lender describing the violation, or if such violation cannot be cured within such thirty (30) day period in the exercise of all due diligence, then if Borrower fails to commence such cure within such thirty (30) day period or fails to continuously thereafter diligently prosecute the cure of such violation, or if Borrower obtains actual knowledge that any such warranty, representation or statement has become false or misleading after the time that it was made, and Borrower fails to provide written notice to the Lender of the false or misleading nature of such warranty, representation or statement within ten (10) days after Borrower learns of its false or misleading nature. (h) Insolvency. The dissolution or termination of Borrower's existence as a going business or concern, Borrower's insolvency, appointment of receiver for any part of Borrower's property, any assignment of all or substantially all of the assets of Borrower for the benefit of creditors of Borrower, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower unless, in the case of involuntary proceedings, such proceedings are discharged within sixty (60) days after filing. Other Defaults. Failure of Borrower or Lender to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in any Related Documents, or failure of Borrower or Lender to comply with or to perform any other term, obligation, covenant or condition contained in any other agreement between the Lender and Borrower, and Borrower or Lender fails to cure such failure within thirty (30) days after written notice from the Lender or Borrower, as the case may be, describing such failure, or if such failure cannot be cured within such thirty (30) day period in the exercise of all due diligence, then if Borrower or Lender fails to commence such cure within such thirty (30) day period or fails to continuously thereafter diligently prosecute the cure of such failure. (i) SECTION 8. EFFECT OF AN EVENT OF DEFAULT. Upon and event of Default under Section 7 of this Agreement, the non -defaulting party shall give written notice to the other party of any default, and the defaulting party shall have thirty (30) days to cure said default. Should said default remain uncured as of the last day of the applicable cure period and the non -defaulting party is not otherwise in default, the non -defaulting party shall have the right to immediately terminate this Agreement, enforce specific performance as appropriate, or maintain a cause of action for damages caused by the event(s) of default. In the event Borrower defaults and is unable or unwilling to cure said default within the prescribed time period, the financial assistance provided pursuant to Section 5(a) of this Agreement, shall become immediately due and payable by Borrower to Lender based upon the following schedule: (1) Effective Date through the fourth (4th) year anniversary of the Annual Compliance Verification Period repay 100% of financial assistance provided pursuant to Section 5(a) of this Agreement; Page 8 of 25 Loan Agreement Pearland Economic Development Corporation 12/3/2012 2:15:35 PM (2) through the fifth (5th) year anniversary of the Annual Compliance Verification Period repay 85% of financial assistance provided pursuant to Section 5(a) of this Agreement; (3) through the seventh (7th) year anniversary of the Annual Compliance Verification Period repay 75% of financial assistance provided pursuant to Section 5(a) of this Agreement; SECTION 9. LOAN FORGIVENESS. Notwithstanding the provisions hereof and the obligations contained in the Note executed incident hereto as Exhibit C of this Agreement, any advance hereunder shall be forgiven and not be payable to Lender upon completion of Section 4 of this Agreement. However, any Loan advance, not previously forgiven under the foregoing, shall not be forgiven in an Event of Default under Section 7 and Section 8 of this Agreement, and shall become immediately due and payable in accordance with this Agreement and the Note. SECTION 10. INDEMNIFICATION. Borrower shall indemnify, save, and hold harmless Lender, its directors, officers, agents, attorneys, and employees (collectively, the "Indemnitees") from and against: (i) any and all claims, demands, actions or causes of action that are asserted against any Indemnitee if the claim, demand, action or cause of action directly or indirectly relates to tortious interference with contract or business interference, or wrongful or negligent use of Lender's loan advances by Borrower or its agents and employees; (ii) any administrative or investigative proceeding by any governmental authority directly or indirectly related, to a claim, demand, action or cause of action in which Lender is a disinterested party; (iii) any claim, demand, action or cause of action which directly or indirectly contests or challenges the legal authority of Lender or Borrower to enter into this Agreement; and (iv) any and all liabilities, losses, costs, or expenses (including reasonable attorneys' fees and disbursements) that any Indemnitee suffers or incurs as a result of any of the foregoing; provided, however, that Borrower shall have no obligation under this Section to Lender with respect to any of the foregoing arising out of the gross negligence or willful misconduct of Lender or the breach by Lender of this Agreement. If any claim, demand, action or cause of action is asserted against any Indemnitee, such Indemnitee shall promptly notify Borrower, but the failure to so promptly notify Borrower shall not affect Borrower's obligations under this Section unless such failure materially prejudices Borrower's right to participate in the contest of such claim, demand, action or cause of action, as hereinafter provided. If requested by Borrower in writing, as so long as no Default or Event of Default shall have occurred and be continuing, such Indemnitee shall in good faith contest the validity, applicability and amount of such claim, demand, action or cause of action and shall permit Borrower to participate in such contest Any Indemnitee that proposes to settle or compromise any claim, demand, action, cause of action or proceeding for which Borrower may be liable for payment of indemnity hereunder shall Page 9 of 25 Loan Agreement Pearland Economic Development Corporation 12/312012 2:15:35 PM give Borrower written notice of the terms of such proposed settlement or compromise reasonably in advance of settling or compromising such claim or proceeding and shall obtain Borrower's concurrence thereto. SECTION 11. BORROWER'S REPRESENTATIONS. By execution hereof, the signators warrant and represent that they have the requisite authority to execute this Agreement and the Related Documents and that the representations made herein, and in the Related Documents, are true and accurate in all respects. SECTION 12. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement: (a) Amendments. This Agreement, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the party or parties sought tobe charged or bound by the alteration or amendment. (b) Applicable Law and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas, and all obligations of the parties created hereunder are performable in Brazoria County, Texas. Venue for any action arising under this Agreement shall lie in the state district courts of Brazoria County, Texas. Audit. With prior written notice by Lender, Borrower shall furnish Lender a copy of the annual audited financial statements for Borrower's parent entity, Dover Corporation, and Borrower's records, documents, agreements and other instruments relevant to the performance of this Agreement, for reviw at Borrower's office at the Property solely for the following purposes: (i) to ensure Borrower's compliance with the affirmative covenants set forth in Section 4 of this Agreement; and (ii) to determine the existence of an Event of Default set forth in Section 7 of this Agreement. The Borrower shall maintain such records as are reasonably deemed necessary by the Lender and auditors of Lender, or such other persons or entities designated by Lender, to ensure proper accounting, for all costs, performances, sales tax information, and number of jobs created or retained related to this Agreement. The Borrower shall grant access to all paper and electronic records, books, documents, accounting procedures, practices or any other items relevant to the performance of this Agreement to Lender, or such other persons or entities designated by Lender for the purposes of inspecting, auditing, or copying such books and records. All records, books, documents, accounting procedures, practices or any other items relevant to the performance of this Agreement shall be subject to examination or audit by Lender, or such other persons or entities designated by Lender in accordance with all applicable state and federal laws, regulations or directives. The Borrower will direct any subcontractor with whom it has established a contractual relationship to discharge (c) Page 10 of 25 Loan Agreement Pearland Economic Development Corporation 12/3/2012 2:15: 35 PM Borrower's obligations to likewise permit access to, inspection of, and reproduction of all books and records of Borrower's subcontractor(s) which pertain to this Agreement. (d) Binding Obligation. This Agreement shall become a binding obligation on the signatories upon execution by all signatories hereto. Borrower warrants and represents that the individual or individuals executing this Agreement on behalf of Borrower has full authority to execute this Agreement and bind Borrower to the same. Lender warrants and represents that the individual executing this Agreement on its behalf has full authority to execute this Agreement and bind it to the same. (e) Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of the Agreement. (f) Certain Prohibited Economic Incentives. Borrower covenants and agrees that this Agreement does not violate Section 501.161 of the Act, as amended. (g) Community Involvement. Although not an Event of Default or condition of any advance hereunder, Borrower agrees to actively participate in community and charitable organizations and/or activities, the purpose of which are to improve the quality of life in the City of Pearland, Texas, and to actively encourage its employees to be involved in such organization and/or activities. (h) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall constitute one and the same document. (i) Employee Hiring, Materials and Supplies Purchase. Although not an Event of Default or a condition to this Agreement, Lender requests that Borrower satisfies its need for all 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. (j)Force Majeure. It is expressly understood and agreed by the parties to this Agreement that if the performance of any obligations hereunder is delayed by reason of war, civil commotion, acts of God, inclement weather, fire or other casualty, or court injunction, the party so obligated or permitted shall be excused from doing or performing the same during such period of delay, so that the time period applicable to such obligation or requirement shall be extended for a period of time equal to the period such party was delayed. (k) Notices. All notices required to be given under this Agreement shall be given in writing and shall be effective when actually delivered or when deposited in the United States mail, first class, postage prepaid, addressed to the party to whom the notice is to be given at the address shown on Page I of this Agreement. Any party may change its address for Page 11 of 25 Loan Agreement Pearland Economic Development Corporation 12/3/2012 2:15:35 PM notices under this Agreement by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Borrower agrees to keep Lender informed at all times of Borrower's current address. (1) Severability. If a court of competent jurisdiction finds any provision of this Agreement to be invalid or unenforceable as to any person or circumstance, such finding shall not render that provision invalid or unenforceable as to any other persons or circumstances. If feasible, any such offending provision shall be deemed to be modified to be within the limits of enforceability or validity; however, if the offending provision cannot be so modified, it shall be stricken and all other provisions of this Agreement in all other respects shall remain valid and enforceable. (m) Successors and Assigns. This Agreement is with Borrower, and shall not survive any sale of substantially all of the assets or stock of Borrower, merger in which the shares of Borrower's capital stock are not converted into a majority of the voting stock of the surviving entity, change, of control or similar transaction involving Borrower, without the written consent of the Lender, which consent shall not be unreasonably withheld. The Borrower shall provide the Lender written notice of any sale, merger, change of control or similar transaction described above as soon as possible, and in no event not later than thirty (30) days following such event. (n) Survival. All warranties, representations, and covenants made by Borrower in this Agreement or in any certificate or other instrument delivered by Borrower to Lender under this Agreement shall be considered to have been relied upon by Lender and will survive the making of the Loan and delivery to Lender of the Related Documents, regardless of any investigation made by Lender or on Lender's behalf. (o) Time isof the Essence. Tirne is of the essence in the performance of this Agreement. (p) Undocumented Workers. Borrower certifies that Borrower does not and will not knowingly employ an undocumented worker in accordance with Chapter 2264 of the Texas Government Code, as amended. If during the Term of this Agreement, Borrower is convicted of a violation under 8 U.S.C. § 1 324a(f), Borrower shall repay the amount of the public subsidy provided under this Agreement plus interest, at the rate of eight percent (8%), not later than the 120th day after the date the Lender notifies Borrower of the violation. [The Remainder of this Page Intentionally Left Blank] Loan Agreement Pearland Economic Development Corporation 12/3/2012 2.15:35 PM Page 12 of 25 BORROWER ,AC „IC.NOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATEIVAS OFEFFECTIVE AS OF <T4tUthAXY...30i3 BORROWER: DOVER ENERGY, INC. a Delaware Corporation, By: (La Alte:.4.50- Frank Wie engo Vier President Date Signed: /2/11/it LENDER: PEARLAND ECONOMIC DEVELOPMENT CORPORATION, a Texas non-profit corporation By: j Mat( Buchanan a Vice President Date Signed: Page 13 of 25 Loan Agreement Pearland Economic Development Corporation 1213/2012 2:15:35 PM THE STATE OF TEXAS COUNTY OF BRAZORIA JANICE VEGA Notary public, State of Texas My Commission Expires Apr1126, 2014 BEFORE ME, the undersigned Notary Public, on this day personally appeared Matt Buchanan, President of the Pearland Economic Development Corporation, a Texas non-profit corporation, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same for the purposes and consideration therein expressed. GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS 3r6 DAY OF t_TA NYtA N R Y , A.D., 20 i 3 THE STATE OF TEXAS COUNTY OF QF K�►� SEs•• BEFORE ME, the undersigned Notary Public, on' # °�iaypersonally appeared FrankWierengo, a Vice President, of Dover Energy, Inc., a Delaware Corporation, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same for the purposes and consideration therein expressed. NOTARY 'UBLIC, STAT OF T,EXAS Printed Name: ,Th 1 e V t" G4 J Commission E q . j t . "1 I • `'4'F�� GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS 11+ DAY OF ,) QCst IM Volt - , A.D., 20 i . NOTARY PUBLIC, STAT OF 1.VrS Wt Printed Name: •t DQ Commission Expires: )- Page 14 of 25 Loan Agreement Pearland Economic Development Corporation 12/3/2012 2:15:35 PM Exhibit A [Description or Depiction of the Property] Page 15 of 25 Loan Agreement Pearland Economic Development Corporation 10/17/2012 2:15:15 PM 11 i i #u E I'i 1 n•;'{i{E �s qa .�1I 1 is r11t !: ri�rEi�E t 111.M RN 111.-S MIEN r111 Page 1 of 2 EXHIBIT "A" OWNER: SHT/KIRBY, LTD. JAMES HAMILTON SURVEY, ABSTRACT No. 876 HARRIS COUNTY, TEXAS PROPERTY DESCRIPTION Being a 14.087 acre tract of land out of Lots 21, 21-1/2, 28 & 28.1/2, Section F, Allison Richey Gulf Coast Homes Subdivision, an addition to the City of Pearland, Harris & Brazoria County, Texas as recorded in Volume 3, Page 40 of the Map Records of Harris County, Texas, said 14.086 acre tract of land being a portion of a 36.166 acre tract of land (by deed) deeded to SHT/KIRBY, LTD. as recorded in Harris County Clerk's File Number 20080049996 in the Official Public Records of Real Property, Harris County, Texas, said 14.087 acre tract of land being more particularly described as follows: BEGINNING at a 5/8 inch iron rod found in the west line of said 36.166 acre tract of land, said 5/8 inch iron rod being the intersection of the existing north right-of-way line of Spectrum Boulevard (a 100' right-of-way) with the existing east right-of-way line of Hooper Road (a 60' right-of-way); THENCE North 02 degrees 26 minutes 19 seconds West, with the west line of said 36.166 acre tract of land and with the existing east right-of-way line of said Hooper Road, a distance of 982.23 feet to a 5/8 inch iron rod with cap stamped "GORRONDONA" set for corner; THENCE North 87 degrees 36 minutes 13 seconds East, a distance of 569.88 feet to a 5/8 inch iron rod with cap stamped "GORRONDONA" set for corner; THENCE South 02 degrees 38 minutes 10 seconds East, a distance of 98.00 feet to a 5/8 inch iron rod with cap stamped "GORRONDONA" set for corner; THENCE North 87 degrees 36 minutes 13 seconds. East, a distance of 60.00 feet to a 5/8 inch iron rod with cap stamped "GORRONDONA" set for the northwest corner of an 11.9337 acre tract of land (by deed) deeded to Merit Medical Systems, Inc, as recorded in Harris County Clerk's File Number 20110322713 of said Official Public Records of Real Property, Harris County, Texas, from which a 1 inch iron rod found for an interior ell corner of said 36.166 acre tract of land bears North 02 degrees 38 minutes 10 seconds West, a distance of 60.00 feet; THENCE South 02 degrees 38 minutes 10 seconds East, with the west line of said 11.9337 acre tract of land, a distance of 881.53 feet to a 5/8 inch iron rod with cap stamped "Gruler" found for the southwest comer of said 11.9337 acre tract of land, said 5/8" iron rod with cap stamped "Gruler" being in the existing north right-of-way line of said Spectrum Boulevard; GORRONDONA & ASSOCIATES, INC.. 11710 NORTH FREEWAY, SUITE 700 HOUSTON, TEXAS 77060 • 281-469-3347 FAX 281-419-2506 Page 2of'2 THENCE South 87 degrees 21 minutes 30 seconds West, with the existing north right-of- way line of said Spectrum Boulevard, a distance of 633.26 feet to the POINT OF BEGINNING and containing 613,612 square feet or 14.087 acres of land, more or less. This property description is accompanied by a separate plat of even date All bearings are referenced to the Texas State Plane Coordinate System, Central Zone, NAD83. All distances and areas are surface. Date: October 20, 2012 Jam Ivi Ewing Regi erect Professional Land Surveyor No. 4892 GORRONDONA & ASSOCIATES, INC. • 11710 NORTH FREEWAY, SUITE 700 HOUSTON, TEXAS 77060 • 281.469.3347 FAX 281-419-2506 Exhibit B [Annual Compliance Verification Form] Loan Agreement Pearland Economic Development Corporation 10/17/2012 2:15:15 PM Page 16 of 25 /EARLECONOMC DEVELOPMENT CORPORATION AND PEARLAND ECONOMIC DEVELOPMENT CORPORATION ANNUAL EMPLOYMENT AND INVESTMENT 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.con . Please attach exhibits and additional information. Company Information Name of Business: Address: City: State: Contact Person: Phone: Fax: Date: Title: Email: Annual Compliance Verification Zip: 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 Employment -Position Information All positions must be full-time (2000 hours or more annually) and permanent, with the Company. 1 Total Number of Employment Positions previously certified: 2. Total Number of New Employment Positions Submitted for Certification this period: 3. Total Number of Employment Posidons Reported (line 1 + line 2): 4. Total Payroll for all Employment Positions Reported this Claim Period: 5. Average annual gross compensation at this Company/Project Facility (line 4/line 3): Did the Company meet the job creation and retention targets for this reporting period? 0 Yes 0 No If no, please explain why Does the Company provide medical and dental benefits to all employees? [J Yes 0 No Investment Information (if applicable) 1. Total Investment (Qualified Expenditures) Previously Certified: 2. Total New Investment (Qualified Expenditures) Submitted for Certification this Claim Period: 3. Total Investment (Qualified Expenditures) Reported (previously certified and new line 1 and 2): Did the Company meet the investment target for this reporting period? ❑ Yes 0 No If no, please explain why: Taxable Value Information (if applicable) The following should reflect the change in taxable value according to the appropriate Central Appraisal District. TAXABLE VALUE ON SITE 20_ ORIGINAL BASE VALUE TAX YEAR 20_ TAX YEAR 20_ TOTAL INCREASE OVER 20_ BASE Land $ $ $ Building and Improvements $ $ $ $ Fixed Equipment $ $ $ $ Personal Property $ $ $ $ Inventory $ $ $ $ Total Taxable Value $ $ $ $ Please submit requested attachments. Other Information Is the company in compliance with all terms and conditions of the agreement for this reporting period and all previous periods: 0 Yes ❑ No If no, please explain why: 2 Attachments Please attach the following documents: Al 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. A2 Business Personal Property Rendition of Taxable Property Form Certification 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 ANNUAL EMPLOYMENT COMPLIANCE VERIFICATION ABC Company, Inc. Project Approved: 10/23/98 Job Certification Period: January 1, 2000 through December 31, 2000 ABC Company 114 Oak Drive Pearland, Texas 77581 Job No. Position Title Social Employee Wages Hours Date Hired to City of Security Name During Claim Worked Position/Date Pearland Number Period During Claim Left Position Resident Period PREVIOUSLY CERTIFIED JOBS (updated): 001 Division ###-##-#### Dennis Director Director $68.987 2.318 09/01/98 to Present N 002 Office #4l4/4#4/4/## Mary Worker $15,236 1,200 01/15/98 to Y Manager 813T//98 ###-##4### Lindsey $12,008 900 9/1/98 to Y Sellsmith Present 002A NEW JOBS THIS CERTIFICATION: 003 Sales ###-a;t# Delores $29,695 2,080 09/01/99 to N Manager Incharge Present 004 Print Shop #q# -##-##At# Adam $32,450 2,056 09/01/99 to Y Manager Typeset Present Total Jobs Created: 4 Total Payroll: $###,### Vacant Positions: 0 TOTAL # OF JOBS ON THIS PAGE 4 PAGE # 1 of 1 TOTAL # OF JOBS ON THIS CLAIM 4 4 Exhibit C [Note] Page 21 of 25 Loan Agreement Pearland Economic Development Corporation 10/17/20122:15:15 PM PROMISSORY NOTE $630, 000.00 , 20_ ("Effective Date") DOVER ENERGY, INC., (including successors and assigns, hereinafter referred to as the "Maker"), For Value Received, promises and agrees to pay unto the order of PEARLAND ECONOMIC DEVELOPMENT CORPORATION, a Texas non-profit corporation (hereinafter referred to as the "Payee"), at its corporate offices located at 1200 Pearland Parkway, Suite 200, Pearland, Texas 77581, in lawful money of the United States of America, the principal sum of Six Hundred Thirty Thousand and no/100 Dollars ($630,000.00), or so much as shall be advanced, said sums to accrue interest at the rate of eight percent (8.0%) per annum. TERMS OF PAYMENT: The principal of this Note is due on demand, but in any event, on or before December 31, 2021. Notwithstanding the foregoing, loan proceeds hereunder shall be advanced in accordance with the terms and provisions of that certain Loan Agreement executed as of even date herewith between Maker and Payee (hereinafter referred to as the "Loan Agreement"), and such loan proceeds shall be forgiven and or repaid according to said Loan Agreement after such advance if Maker is not then in default under the Loan Agreement. As such, Payee shall make no demand on principal under this Note except for upon occurrence of an Event of Default by Maker as that term is defined in the Loan Agreement. THIS LOAN is a line of credit but is not revolving. As already stated, loan proceeds made hereunder are also governed by the Loan Agreement of even date herewith. IF DEFAULT is made in the payment of any interest or principal hereof, as and when the same is or becomes due, or if an Event of Default by Maker occurs under any instrument securing the payment hereof or executed in connection herewith, including the Loan Agreement, the owner and holder of this Note may declare all sums owing pursuant to the schedule in the Loan Agreement due and payable within thirty (30) days of the date of notice. If default is made in the payment of this Note at maturity (regardless of how its maturity may be brought about), and the same is placed in the hands of an attorney for collection, or suit is filed hereon, or proceedings are had in bankruptcy, probate, receivership or other judicial proceedings for the establishment or collection of any amount called for hereunder, or any amount payable or to be payable hereunder is collected through any such proceedings, Maker agrees and is also to pay to the owner and holder of this Note a reasonable amount as attorneys' or collection fees. Except as provided herein and in the Loan Agreement, upon an Event of Default (as that term is defined in the Loan Agreement) only, Maker, co -makers, signers, permitted assigns, sureties, endorsers and guarantors, and each of them, expressly waive demand and presentment Page 22 of 25 Loan Agreement Pearland Economic Development Corporation 12/3/2012 2:15::35 PM for payment, notice of nonpayment, protest, notice of protest, notice of dishonor, notice of intent to accelerate the maturity hereof, notice of the acceleration of the maturity hereof, bringing of suit and diligence in taking any action to collect amounts called for hereunder and in the handling of securities at any time existing in connection herewith; and are and shall be jointly, severally, directly and primarily liable for the payment of all sums owing and to be owing hereon, regardless of and without any notice, diligence, act or omission as or with respect to the collection of any amount called for hereunder or in connection with any right, lien, interest or property at any and all times had or existing as security for any amount called for hereunder. IT IS the intention of Maker and Payee to conform strictly to applicable usury laws. Accordingly, if the transactions contemplated hereby would be usurious under applicable law (including the laws of the State of Texas and the laws of the United States of America), then, in that event, notwithstanding anything to the contrary herein or in any agreement entered into in connection with or as security for this Note, it is agreed as follows: (i) the aggregate of all consideration which constitutes interest under applicable law that is taken, reserved, contracted for, charged or received under this Note or under any of the other aforesaid agreements or otherwise in connection with this Note shall under no circumstances exceed the maximum amount of interest allowed by applicable law, and any excess shall be canceled automatically and, if theretofore paid, shall be credited on the Note by the holder hereof (or, to the extent that this Note shall have been or would thereby be paid in full, refunded to the Maker); and (ii) in the event that maturity of this Note is accelerated by reason of an election by the holder hereof resulting from any Event of Default, or in the event of any required or permitted prepayment, then such consideration that constitutes interest may never include more than the maximum amount allowed by applicable law, and excess interest, if any, provided for in this Note or otherwise shall be canceled automatically as of the date of such acceleration or prepayment and, if theretofore paid, shall be credited on this Note (or, to the extent that this Note shall have been or would thereby be paid in full, refunded to the Maker). THIS NOTE has been executed and delivered in and shall be construed in accordance with and governed by the laws of the State of Texas and of the United States of America, except that V.T.C.A. Finance Code, Chapter 346, as amended (which regulates certain revolving credit loan accounts and revolving tri -party accounts) shall not apply hereto. Payee's address for notice is 1200 Pearland Parkway, Suite 200, Pearland, Texas 77581. [signature on next page] Page 23 of 25 Loan Agreement Pearland Economic .Development Corporation 12/3/2012 2:15:35 Phi In witness whereof, Maker has executed this Note to be effective as of the Effective Date. MAKER: DOVER ENERGY, INC. a Delaware corporation Bytr Frank terengo a Vice President Date Signed: t Z,i 7/i Z. Page 24 of 25 Loan Agreement Pearland Economic Development Corporation 12/3/2012 2:15:35 PM Exhibit D [Application] Loan Agreement Pearland Economic Development Corporation 10/17/2012 2:15:15 PM PEAR AND t oNov i la a .ttli PEARLAND ECONOMIC DEVELOPMENT CORPORATION FINANCIAL ASSISTANCE APPLICATION The Pearland Economic Development Corporation (PEDC) encourages a consultation visit before completing an application. Application should be submitted to the Pearland Economic Development Corporation President, 1200 Pentland Parkway, Suite 200, Pearland, Texas 77581, 281.997.3000 zAJ, ... ,��< + ;; tm Please attach exhibits and additional information. Applicant Information Name of Business: Dover Energy, Inc Date: 9/28/2012 Address. 1585 Sawdust Rd. Suite 210 City: The Woodlands Contact Person: Frank Wierengo Phone: 281-602-2172 State: TX Fax: NAICS Codes for primary business operations: Zip: 77380 Title: President - Cook Compression Email: FWierengo@cookcompression.com Federal Tax ID Number: 73-1251301 Does the Business file a consolidated tax return under a different tax ID number? If yes, please also provide that tax ID number: Texas Tax ID Number. 10431248078 0 Yes Is the contact person listed above authorized to obligate the Business? 121 Yes ©N o If no, please provide the name and title of a company officer authorized to obligate the Business: 1 ►1 Business Information Provide a brief description and history of the Business. Include information about the Business' products or services and markets served. Dover Energy is a segment group of Dover Corporation, a Fortune 500 company, that provides highly- engineered solutions for the safe and efficient extraction of oil & natural gas and handling of critical fluids and materials worldwide in the drilling, production and downstream markets. Thus facility will provide manufacturing, service, warehouse and general business space for three Doter Energy companies: Cook Compression, Waukesha Bearings, and OPV(' -FTG. Significant additional information can be found at each company's websites listed below, as well as the Dover Corporate website Dover; wwu•.dovercorporationcom Cook Compression: www.cookcompression.com Waukesha: www.waukbearing.com OM -FTG: nww.opwftg.com Business Structure: ❑ Cooperative CI Corporation 0 Limited Liability Company 0 Not for Profit ❑ Partnership ❑ S -Corporation 0 Sole Proprietorship State of Incorporation: DE Years in business: 50+ Identify the Business' owners and percent ownership: Dover Corporation - 100% Annual Sales (Most Recent): $8,000,000,000 Projected Total Sales: Year 1: $N/A Year 2: $N/.3 Year 3: $N/A How many employees are currently employed by the Business including all locations, subsidiaries, divisions worldwide? List the Business' Texas Locations and the Current Number of full-time equivalent (FTE) Employees at each Location (including Pearland if applicable): Dover worldwide employment 30,000+ Project Related: Houston, TX 50, Stafford, TX: 65, Breckenridge, TX: 30, Pearland, TX (ETJ): 40 Current annual payroll of Pearland facility excluding any benefits (if applicable): $0 Does the Business offer medical and dental insurance? f°2 Yes 0 No If yes, please describe. Does the Business offer a pension plan, 401(k) plan, and/or retirement -plan? Yes 0 No If yes, please describe. Please provide a brief description of the Business' involvement in the community(ies) that it has locations. 1'ankipation in charitable acts iter, United VVav, Habitat for Humanity, etc.sponsorship in a variety of community sporting leagues, etc. Our employees arc; typically invoked in many community activitrs, charities, and leagues. 2 Project Information Project Street Address: Spectrum Road and Hooper Road (Betz Property) Type of Business Project New Location 0 Expansion of Pearland Company Briefly describe the proposed project for which assistance is being sought. (Include project facility size, infrastructure improvements, proposed products/services, any new markets, etc.) Dover Energy is establishing a shared facility in Pearland, TX that supports current operating companies' needs and provides a foundation for future growth. The new facility will be 150k square feet with the ability to expand to 200k+ sq. ft. Three Dover companies will be the initial tenants including, Cook Compression who is consolidating mulitple facilities, Waukesha. Bearings who is relocating an existing operation, and OPW who is starting an operation in the Houston area. All companies are manufacturing companies producing highly - engineered solutions for the safe and efficient extraction and handling of ctitical fluids worldwide in the drilling, production and downstream markets. Has any part of the project started? E Yes 0 No If yes, please explain. The company currently has the land under contract but it is contingent upon rezoning, incentives, and other factors. 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. No known Pearland competitors Will any of the current Pearland employees lose their jobs if this project does not proceed in Pearland? (Existing Pearland Companies only) 0 Yes E No If yes, please explain why and identify those jobs as "retained jobs" in the Project Jobs section. Is the Business actively considering locations outside of Pearland? C. Yes 0 No If yes, where and what assistance is being offered? Will any State or Federal Permits be needed for the project? 0 Yes E No If yes, please describe each and current rime -frame for receiving each? Will rhe project be seeking LEED certification? 0 Yes No If yes, what level of certification is being sought? 3 Project Budget AMOUNTS BUDGETED Use of Funds Land Acquisition Site Preparation; Cost of Utilities to Site Building Acquisition Building Construction Building Remodeling Machinery & Equip. Computer Hardware Computer Software Furniture & Fixtures Working Capital Moving Expenses Job Training Source r Commitment Status Does the Business plan to lease the facility? 0 Yes No If yes, please provide the Annual Base Rent Payment (lease payment minus property taxes, insurance, and operating/maintenance expenses) and the length of the lease agreement. Financial assistance is need -based, please explain why assistance is needed: Dover is evaluating multiple sites in the Houston region and incentives will play a key factor in choosing a location. Any recipient of assistance is expected to provide security to the Corporation. The security will be exercised, when necessary, due to non-performance. In addition to a lien and/or mortgage, personal guarantees are expected for businesses not publicly traded, and corporate guarantees are expected when the business recipient has a parent (or holding) company. What security wilt be offered to secure financial assistance and describe what seniority or position the Corporation will have on any ben or mortgage? Dover is willing to enter into a forgivable loan agreement and sign a promissory note. 4 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.) To be considered a job must be with the company, a W2 employee of the company and spend 30 hours or more per week at the project site in Pearland. For jobs to be created, include the Starting and final hourly wage rate. For retained jobs, include the cyrrent hourly wage rate. Is the hourly wage rate based on a 40 hour work week, 52 weeks per year? r Yes 0 No lino please explain: Full -Time CREATEDJobs (Add additional rows ar needed) job Title/Classification Job Title/Classification Number of CREATED Jobs Starting Wage \�C'age at End of Year Three Machinist/Assembly/Machine Oper 127 $22 ` $24 Managers 13 $35 $38 Material Handless 15 $18 $20 Engineers/Office Personnel 30 $30 $33 $ $ 3 S_ $ $ $ 3 $ 3- 3 Total RETAINED Jobs 3 S $ $ $ $ $ $ $ $ $ Total CREATED Jobs 185 $ $ Full -Time RETAINED Jobs* (Add cidditivxalrawr ar needed) job Title/Classification Number of RETAINED Jobs Current Wage $ $ $ $ $ $ $ $ $ S_ $ $ $ 3 Total RETAINED Jobs *Existing jobs based m Pearland 5 Attachments Please attach the following documents: Al Completed Economic Impact Data Sheet (If requested) A2 Business Plan (lfrequested) A3 Completed employment compliance verification form (existing Pearland employers only). A4 Financial Information • Audited profit and loss statements and balance sheets for past three )ear�ends;. • Current YID profit and loss statement and balance sheet; and • Schedule of aged accounts receivable; • Schedule of aged accounts payable; and • Schedule of debts. Certification & Release of Information I hereby give permission to 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 neeessary for reasonable evaluation of this application. I understand that all information submitted to PEDC related to this application is subject to Texas Public Information Act. I understand this application is subject to final approval by the Pearland Economic Development Corporation Board of Directors, and under some circumstances the City of Pearland City Council, and the Project may not be initiated until final approval is secured. I understand that PEDC reserves the right to negotiate the financial assistance. Furthermore, I am aware that financial assistance 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. 1 hereby certify that all representations, warranties, or statements made or furnished to 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 procuting economic development assistance from a development corporation. For the Business: $ ture Date f 4/x GtAet7A -N40 Pf€. - » >Ur Name and Tide (typed or printed) 6 An Executive Summary of the Economic Impact of Dover Energy, Inc. in Pearland, Texas November 28,2012 Prepared for: Pearland Economic Development Corporation 1200 Pearland Parkway,Suite 200 Pearland,Texas 77581 Prepared by: Impact DataSource 4709 Cap Rock Drive Austin,Texas 78735 (512)892-0205 Fax(512)892-2569 www.impactdatasource.com ImpactDtSource About this Analysis This report summarizes the results of an economic impact analysis performed by Impact DataSource, Austin,Texas. The analysis was to determine the impact that Dover Energy, Inc. in Pearland,Texas will have on-the-economy of the Pearland area and the costs and benefits for-local taxing districts-over the first ten years. Description of the Facility Dover Energy,Inc.,a service company, extracts and handles fluids for clients in drilling, production and downstream markets. The company plans facility in Pearland. The firm plans to invest an estimated$21.6 million in the facility: $2.7 million in land,$13.9 million in real property improvements and$5 million in furniture,fixtures and equipment. The company plans to have 185 workers at the facility with annual increases of 4%. Average annual salaries will be$46,000. Economic Impact of the Facility Over the First Ten Years Some of the economic impacts of the facility on the Pearland area over the first ten years are shown below: Economic Impact over the First Ten Years ' Total number of permanent direct and indirect jobs to be created 550 Number of direct and indirect workers who will move to the City 81 Number of new residents in the City 243 Number of new residential properties to be built in the City 16 Number of new students expected in Houston ISD 53 Salaries to be paid to direct and indirect workers $227,924,111 Taxable sales and purchases expected in the City $43,130,882 The value of new residential property to be built for direct and $3,581,692 indirect workers who move to the City by Year 10 The facility's assets added to local tax rolls $21,600,000 2 Executive Summary Net Benefits for Local Taxing Districts Over the First Ten Years Local taxing districts can expect the following net benefits from the facility over the first ten years: Net Benefits for Local Taxing Districts Over the First 10 Years of the Facility's Operation Benefits* Costs Net Benefits City of Pearland $3,236,554 $1,296,513 $1,940,042 Harris County $956,039 $69,583 $886,457 Houston ISD $5,835,122 $5,214,161 $620,961 Houston Community College $228,968 $0 $228,968 Lower Kirby Management District $235,511 $0 $235,511 Harris County Flood Control District $66,155 $0 $66,155 Port of Houston Authority $42,150 $0 $42,150 Harris County Hospital District $436,395 $0 $436,395 Harris County Department of Education $14,945 $0 $14,945 Total $11,051,841 $6,580,256 $4,471,585 *Property tax collections after some taxes may be abated by the city for the firm Property Taxes that May Be Abated for the Firm The City of Pearland is considering abating property taxes on the firm's real property at the following at the following percentages: Percentages of Taxes to be Abated City County Year 1 100% 0% Year 2 100% 0% Year 3 75% 0% Year4 75% 0% Year5 75% 0% Year 6 50% 0% Year 7 50% 0% Year 8 0% 0% Year 9 0% 0% Year 10 0% 0% Executive Summary 3 If taxes are abated as proposed,the following property taxes will be abated for the facility: Property Taxes to be Abated for the Facility City County Total Year 1 $98,009 $0 $98,009 Year 2 $99,969 $0 $99,969 Year 3 $76,476 $0 $76,476 Year 4 $78,006 $0 $78,006 Year 5 $79,566 $0 $79,566 Year 6 $54,105 $0 $54,105 Year 7 $55,187 $0 $55,187 Year 8 $0 $0 $0 Year9 $0 $0 $0 Year 10 $0 $0 $0 Total $541,318 $0 $541,318 Incentives Being for the Facility Pearland Economic Development Corporation is considering providing the following forgivable loan based on the number of workers: Jobs Incentives to be Provided to the Company Total Incentives Number Incentives to be of Workers Per Worker Provided Year 1 185 $3,500 $647,500 Total 185 $647,500 The incentives will be provided after the firm receives a certificate of occupancy and operations begin at the facility. Financial incentives that may be offered the facility may be considered as investments that the City is making in the facility. Four calculations analyzing possible investments were made--net benefits,discounted cash flow, rate of return on investment and payback period. Rate of return on investment is the City's average annual rate of return from additional revenues that the City will receive on the investment of incentives that the City may make in the facility. Payback period is the number of years that it will take the City to recover the costs of incentives from the additional revenues that it Executive Summary 4 will receive from the facility. Average annual rates of return on investment each year over the first ten years and payback periods for the possible levels of incentives are shown below. Rates of Return and Payback Periods Possible City Incentives' Annual Payback Total Rate or Period Incentives Return (In years) $647,500 30% 3.9 Executive Summary 5 Summary of Proposed Benefits for Project Ref-Chem,LP 8/25/2012 Assumptions Taxable values Land $2,600,000 Building $14,000,000 Personal Property $3,500,000 Inventory S0 Total $20,100,000 Sales Tax Annual Taxable Sales $0 Employment Levels: Employees 180 Average Wage $42,236 10 Year Benefit Summary 10 Year City Benefit Summary City Abatement $ 597,065 Real Property $ 540,201 County Abatement $ - Personal Property $ 239,785 Sales Tax Refund $ - Inventory $ - PEDC Forgivable Loan $ 630,000 Impact Fees $ 100,000 Infrastructure Assistance $ - Sales Tax-City $ - Total $ 1,227,065 Sales Tax-PEDC $ - Total $ 879,986 Summary of Proposed Benefits for Project Ref-Chem,LP 8/25/2012 I. City Tax Abatement City of Pearland-Real Property Year Taxable Value %Abated Taxable Value Rate Taxes Benefit Paid 1 16,600,000 100% - 0.00685100 113,727 113,727 - 2 16,600,000 100% - 0.00685100 113,727 113,727 - 3 16,600,000 75% 4,150,000 0.00685100 113,727 85,295 28,432 4 16,600,000 75% 4,150,000 0.00685100 113,727 85,295 28,432 5 16,600,000 75% 4,150,000 0.00685100 113,727 85,295 28,432 6 16,600,000 50% 8,300,000 0.00685100 113,727 56,863 56,863 7 16,600,000 50% 8,300,000 0.00685100 113,727 56,863 56,863 8 16,600,000 0% 16,600,000 0.00685100 113,727 - 113,727 9 16,600,000 0% 16,600,000 0.00685100 113,727 - 113,727 10 16,600,000 0% 16,600,000 0.00685100 113,727 - 113,727 Total 1,137,266 $ 597,065 540,201 II. Personal Property Year Taxable Value %Abated Taxable Value Rate Taxes Benefit Paid 1 3,500,000 0% 3,500,000 0.00685100 23,979 - 23,979 III. Inventory Year Taxable Value %Abated Taxable Value Rate Taxes Benefit Paid 1 - 0% - 0.00685100 - - - IV.Forgivable Loan Jobs 180 Per Job 3500 S 630,000 2012-10-09 RENDERED SITE PLAN SITE AREA=14.75 ACRES(842,459 SF) BUILDING AREA=150,000 SF;FUTURE EXPANSION=48,000 SF SITE COVERAGE=23.4% PARKING=183 SPACES @ 1.2/1000(151 SPACES REQUIRED) 1 %T 7 i v i P' cY r I. .s 7 r ' i. r v� I P P `% 4,as7 %...�'' �`Pi�.71:-. i %dn', liks�" •,ate Y ',s I'. ,; � ci,n-M hl..z. v ,,�' _ k ( ''�. �§ I x, tF ., r a,,i:.,"Y l �+ r; 'k �r f. r4 e`y s» `1't V ,a, 7+O q „' i,s °' r r � �h �dy� I��I��I4�'�ig��h�l��n*ik I �l y���ASo �'� � �I�ppi�m�pe'���r��Ir ih�` � %1" � I»I,'�'�avW�,l91°'�la��� `Ilud �r��'�� �.ih �� d� �ucnt+%% � '9 � ak r I j 1! )^`AF, ' d r :i r : r,ri u r I d"P ,r x v �:a '�, tl$ w .+ `' `C! , i4 �: . 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'' . ::',..'.' t -'' .- --"': n.",.-..7,7 - .- , ,,,'i•I''---`" -,-Z,01. 4,k,- ,--f.,---3. .- :-:-.4,7-4,1"'4 ":-; ‘,)-`.°. - - ' ' ' • rsified global di dollar lye is a multi-billion Corporation __ _ Dover manufacturer _ \ _ 2011 Dover Revenue __ .... ..... ',,, - - a 1 $8.2 billion .„.„ . ,..., ...a ,......„..../,',.- -'.4 it.:11!! ' ', •'.:. ,...11 1.751 1.1 t.,,,::‘ -- -,.. ) ej..I"'Artivil;'"''''-• ' ' . ' ...---- ,k-',....°'4,4. •••,-..t-P••• -t--,;,,.,,,-1Energy...i-••_-- -...., •,, • , - ', --'1''''-',IC______ — 1-1 ..-- '9*4°*v'w."4 ' ' ' 90--- ' ' — 4 t, A' ,' , ,,, •.:4.7. 41'4- , '..%:. ,, ': ," . -1, -- ,,i,,,,,,r,,-: - - .7°- '4,trustp., s. -, , - ;-.• ‘- 'A,' 1.11riltaltort fZ,Ii.r79.,, ' ..;. . ' ' ri '\----:•,c. .- --.7 - --- : - viOnari :,,,- Au.4, e;t0'e.k.'t1zr::,st r e6 ..,re Oy,V,,-ky1,5,,'4 s*v-t.o-.v..6 0a:6-1„'1t; .:.i.-i.,*0,,•:.„.;.,,,.-i'.-i-1- i , .kI lf #u,s.3 i,k i1 „ 0 , -a.e4•7-ce- 11• $8+ billion revenue • Founded in 1955 1 • 33 operating companies i i • More than 34,000 employees , , • Over 200 manufacturing locations worldwide , \ ' . FORTUNE 500 Company 1 www.dovercoriora tion corn. i DOVER ENERGir Proposed Site Plan - +200,000 SF s — r , 1 lhdllllllll t; �--; �1 lilllbil� I - �:- - - _ i< < I ---- - { ` ( ,_I.;I I I I� oocKm:MC 0 :7' 1 i f rsaas.11 .3 CertxID.r 11 1. _ — y _ 1 I 1 I 1 1 I I I I I - - -— - --l-1-4 1-17 -- — tCPd' I I I I I _�- _ _ ' _ u _ 1 I 1 I 1 I I I I I ' - i { -�h , __�_ __1_ _ -- _ - ,- - -1---1- __- ic- I -- I I - I la'. - = - - I - -I ___4_ _ - =---I -l ASH_a __ _ -- , -- - _—! i= I ==__ IIT --({{i=- - I _ I I I I I I I I (- ! L I_ - 1 - _ - -_ - I - ==1 J — — V1I_ II._lI I —7 = I_ - Ii -� DOVER ENERGY Dover Energy is interested in driving synergies through a shared facility in Houston, TX }_ i • Expand presence that creates possibilities for future growth and acquisition integration —Phase II (50,000 SF) f COOK. -- - - - -- - — - -- -- _ - _--=-_-_ _ . CRMPRESSION • - - - _ - Cook Compression currently operates three facilities in Texas _ I • Consolidate three operations and invest in aftermarket growth opportunities • +115,000 square feet • Relocate $ upgrade Stafford, Breckenridge and Houston operations 1NAUKESHA 1 c.e .lit.a BPI (Waukesha) currently operates one facility in Houston, TX • Expand & upgrade BPI Houston operation to capture growth opportunities • ±27,000 square feet • Relocate & upgrade BPI Houston operation i k, O P VV+ OPW FTG does not have a facility in Houston 1` • • Establish new OPW aftermarket operation to capture market share °• ±8,000 square feet .--;' www.dovercor.oration.com •