Amendment
Number One
to
the
Economic Development
Agreement
between
The State
of Texas
and
Rackspace
US, Inc.
July 24,
2009
This Amendment number
one (“Amendment”) is by and between the
State of Texas (the “State”), acting by and through the
Office of Economic Development and Tourism, a division within the
Office of the Governor (“OOGEDT”), and Rackspace US,
Inc., a Delaware corporation d/b/a Rackspace Managed Hosting
(“Rackspace”). The State and Rackspace are
hereinafter referred to either individually as the
“party,” or collectively as the
“parties.” The Effective Date of this
Amendment is July 24, 2009.
Recitals
Whereas,
the parties hereto entered into that
certain Economic Development Agreement dated effective August 1,
2007 (the “Agreement”); and
Whereas
, since entering into the Agreement, Rackspace has
invested over $70 million at the Walzem Road facility and has
created 529 new jobs in the State of Texas;
and
Whereas
, due to the current global economic
recession and banking crisis, the parties recognize that the job
creation commitments in the Agreement are no longer feasible and
are therefore desirous of amending the Agreement to provide
additional time for job creation and other matters, while at the
same time protecting the assets and investments of the people of
Texas;
Agreements
Now,
therefore, in
consideration of the mutual promises herein, the parties agree as
follows:
I. Section
1, State of Texas
Commitment , is deleted in its entirety and replaced
with the following:
1. STATE
OF TEXAS COMMITMENT
Grant of
Funds from the Texas Enterprise Fund. The State agrees to pay cash from the Texas
Enterprise Fund to Rackspace in an amount not to exceed Twenty-Two
Million Dollars ($22,000,000) (the "Funds"). The Funds are composed
of a Basic Fund amount of Eight Million Five Hundred Thousand
Dollars ($8,500,000) and Option Fund amounts of up to Thirteen
Million Five Hundred Thousand Dollars ($13,500,000). The
Option Fund amounts described below under Option A, Option B and/or
Option C will be paid promptly after Rackspace’s exercise of
said options in accordance with the terms and conditions set forth
herein. In no event shall the total of all Basic Fund
and Option Fund amounts paid by the State to Rackspace exceed
Twenty-Two Million Dollars ($22,000,000). The Basic Fund
amount and Option Fund amounts are more fully described as
follows:
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( BASIC)
i. Five Million Dollars ($5,000,000) of the Funds will be paid
to Rackspace as soon as practicable following execution of this
Agreement, provided that all necessary
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documents for
disbursement of the funds have been provided to the
State as required and Rackspace provides evidence of creating at
least Four Hundred Seventy-Five (475) Employment Positions by
December 31, 2008 (it being understood and agreed that the said $5
million has been received by Rackspace and the 475 Employment
Positions have been created); and
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ii. Three Million Five Hundred Thousand
Dollars ($3,500,000) of the Funds will be paid to Rackspace as soon
as practicable following receipt of evidence from Rackspace of
creating at least Seven Hundred Fifty (750) additional Employment
Positions no later than December 31, 2012, in addition to the 475
Employment Positions referred to in subparagraph a.i. above for a
total of 1,225 Employment Positions.
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(OPTION
A). At
Rackspace’s sole option, Rackspace shall have the right to
receive an additional Five Million Five Hundred Thousand Dollars
($5,500,000) as soon as practicable following receipt of evidence
from Rackspace of creating:
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at least Eight
Hundred Seventy-Five (875) additional Employment Positions no later
than December 31, 2013, in addition to the 1225 Employment
Positions required to receive the Basic Fund amount for a total of
2,100 Employment Positions.
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(OPTION
B). At
Rackspace’s sole option, it shall have the right to receive
an additional:
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Five Million
Two Hundred Fifty Thousand Dollars ($5,250,000) as soon as
practicable following receipt of evidence from Rackspace of
creating:
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at least Nine
Hundred (900) additional new employment positions no later than
December 31, 2014, if OPTION A was exercised, in addition to the
1,225 Employment Positions required under the Basic Fund amount and
the 875 Employment Positions under Option A for a total of 3,000
Employment Positions; or
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Ten Million
Dollars ($10,000,000) as soon as practicable following receipt of
evidence from Rackspace of creating:
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at least One
Thousand Seven Hundred Seventy-Five (1,775) additional Employment
Positions no later than December 31, 2014, if OPTION A was not
exercised, in addition to the 1,225 Employment Positions required
under the Basic Fund amount for a total of 3,000 Employment
Positions.
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(OPTION
C). At
Rackspace’s sole option, Rackspace shall have the right to
receive an additional Two Million Seven Hundred Fifty Thousand
Dollars ($2,750,000) as soon as practicable following receipt of
evidence from Rackspace of creating:
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at least One
Thousand (1,000) additional new employment positions no later than
December 31, 2015, if both OPTION A and OPTION B(i) were exercised,
in addition to the 1,225 Employment Positions required under the
Basic Fund amount, the 875 Employment Positions under Option A, and
the 900 Employment Positions under Option B(i), for a total of
4,000 Employment Positions; or
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Three Million
Five Hundred Thousand Dollars ($3,500,000) as soon as practicable
following receipt of evidence from Rackspace of
creating:
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at least One
Thousand (1,000) additional Employment Positions no later than
December 31, 2015, if only OPTION B(ii) was exercised, in addition
to the 1,225 Employment Positions required under the Basic Fund
amount, and the 1,775 Employment Positions under Option B(ii), for
a total of 4,000 Employment Positions; or
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Eight Million
Dollars ($8,000,000) as soon as practicable following receipt of
evidence from Rackspace of creating:
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at least One
Thousand Nine Hundred (1,900) additional Employment Positions no
later than December 31, 2015, if only OPTION A was exercised, in
addition to the 1,225 Employment Positions required under the Basic
Fund amount and the 875 E
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