RE 2024-0528.1 Tax Abatement Agreement - Fulgent GeneticsRESOLUTION NO. 2024-0528.1
A RESOLUTION OF THE CITY OF COPPELL, TEXAS, APPROVING THE
TERMS AND CONDITIONS OF A TAX ABATEMENT AGREEMENT BY AND
BETWEEN THE CITY OF COPPELL, TEXAS, AND FULGENT GENETICS, INC.;
AUTHORIZING ITS EXECUTION BY THE MAYOR; AND PROVIDING AN
EFFECTIVE DATE.
WHEREAS, the City Council has been presented a proposed Tax Abatement Agreement
by and between the City of Coppell, Texas, and Fulgent Genetics, Inc. for Tax Abatement
Reinvestment Zone No. 116 (the “Agreement”), a copy of which is attached hereto and
incorporated herein by reference; and
WHEREAS, the City of Coppell, as required by Tax Code Section 312.207, caused notice
to be posted of the meeting at which the Agreement is to be approved by the City Council; and
WHEREAS, upon full review and consideration of the Agreement, and all matters related
thereto, the City Council is of the opinion and finds that the terms and conditions thereof should
be approved, and that the Mayor should be authorized to execute the Agreement on behalf of the
City of Coppell, Texas;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF COPPELL, TEXAS, THAT:
SECTION 1. The Agreement attached hereto having been reviewed by the City Council
of the City of Coppell, Texas, and found to be acceptable and in the best interest of the City and
its citizens, be, and the same is hereby, in all things approved, and the Mayor is hereby authorized
to execute the Agreement on behalf of the City of Coppell, Texas.
SECTION 2. The City Council finds that the use of the Premises described in the
Agreement will enhance the economic vitality of the community through a combination of new
capital investment, increased sales tax revenues, and the creation of additional job opportunities.
SECTION 3. The tax abatement to be granted by the Agreement will not include
inventory, and supplies.
SECTION 4. The use of the Premises is consistent with and will accomplish the tax
abatement guidelines of the City of Coppell, Texas.
4879-5095-1843, v. 1
SECTION 5. The City Manager delivered to the presiding officer of the governing body
of each taxing unit in which the property subject to the Agreement is located, a written notice that
the City of Coppell, Texas, intends to enter into the Agreement. The notice given by the City
Manager included a copy of the Agreement approved by this Resolution.
SECTION 6. This Resolution and the Tax Abatement Agreement are hereby approved by
the affirmative vote of the majority of the members of the City Council of the City of Coppell,
Texas, at a regularly scheduled meeting of the City Council.
SECTION 7. This Resolution shall become effective immediately from and after its
passage.
DULY RESOLVED AND ADOPTED by the City Council of the City of Coppell, Texas,
h on this the Z roll day of M oY , 2024.
CITY-OF COPPELL, TEXAS
ears WES MAYS, MAYOR Q
(pgs:2-6-24)
4879-5095-1843, v. 1
legal@fulgentgenetics.com
EXHIBIT “A”
4879-5095-1843, v. 1
STATE OF TEXAS §
§ TAX ABATEMENT AGREEMENT
COUNTY OF DALLAS) §
This Tax Abatement Agreement (the “Agreement”) is entered into by and between the
City of Coppell, Texas (the “City”), and Fulgent Genetics, Inc., a Delaware corporation (the
“Owner”) (each a “Party” and collectively the “Parties”), acting by and through their authorized
representatives.
WITNESSETH:
WHEREAS, the City Council of the City of Coppell, Texas (the “City Council”), passed
an Ordinance (the “Ordinance”) establishing Tax Abatement Reinvestment Zone No. 116 (the
“Zone”), for commercial/industrial tax abatement, as authorized by the Property Redevelopment
and Tax Abatement Act, Chapter 312 of the Texas Tax Code, as amended (the “Tax Code”); and
WHEREAS, the City has adopted guidelines for tax abatement (the “Tax Abatement
Guidelines”); and
WHEREAS, the Tax Abatement Guidelines contain appropriate guidelines and criteria
governing tax abatement agreements to be entered by the City as contemplated by the Tax Code;
and
WHEREAS, the City has adopted a resolution stating that it elects to be eligible to
participate in tax abatement; and
WHEREAS, in order to maintain and enhance the commercial and industrial economic
and employment base of the Coppell area, it is in the best interests of the taxpayers for the City
to enter into this Agreement in accordance with said Ordinance, the Tax Abatement Guidelines,
and the Tax Code; and
WHEREAS, Owner has purchased and owns the real property and Improvements
(hereinafter defined) located at 1111 S. Freeport Parkway in Coppell, Texas (Dallas County),
being further described in Exhibit “A” (“Land”) (collectively the Land and Improvements
hereinafter defined as the “Premises”), and intends to add Tangible Personal Property
(hereinafter defined) to the Improvements; and
WHEREAS, Owner’s development efforts described herein will create permanent new
jobs in the City; and
WHEREAS, the City Council finds that the contemplated use of the Premises and the
contemplated Improvements are consistent with encouraging development of the Zone in
accordance with the purposes for its creation and/or in compliance with the Tax Abatement
Guidelines, the Ordinance adopted by the City, the Tax Code, and all other applicable laws; and
Pacet TAX ABATEMENT AGREEMENT
CITY OF COPPELL AND FULGENT GENETICS, INC.
487 1-0953-4883, v. 1
WHEREAS, the City Council finds that the Improvements sought are feasible and
practicable and would be of benefit to the Premises to be included in the Zone and to the City
after expiration of this Agreement; and
WHEREAS, a copy of this Agreement has been furnished, in the manner prescribed by
the Tax Code, to the presiding officers of the governing bodies of each of the taxing units in
which the Premises is located;
NOW, THEREFORE, in consideration of the mutual benefits and promises contained
herein and for other good and valuable consideration, the adequacy and receipt of which is
hereby acknowledged, including the expansion of primary employment, the attraction of major
investment in the Zone, which contributes to the economic development of Coppell and the
enhancement of the tax base in the City, the Parties agree as follows:
Article I
Definitions
Wherever used in this Agreement, the following terms shall have the meanings ascribed
to them:
“Bankruptcy or Insolvency” shall mean the dissolution or termination of a Party’s
existence as a going business, insolvency, appointment of receiver for any part of a Party’s
property and such appointment is not terminated within ninety (90) days after such appointment
is initially made, any general assignment for the benefit of creditors, or the commencement of
any proceeding under any bankruptcy or insolvency laws by or against such Party, and such
proceeding is not dismissed within ninety (90) days after the filing thereof.
“Base Year Taxable Value” shall mean the Taxable Value for the Land for the year in
which the Tax Abatement Agreement is executed (2024).
“City” shall mean the City of Coppell, Texas.
“Effective Date” shall mean the last date of execution of this Agreement.
“Expiration Date” shall mean March 1 of the calendar year following the fifth (Sth)
anniversary date of the First Year of Abatement.
“First Year of Abatement” shall mean January 1, 2025.
“Force Majeure” shall mean any contingency or cause beyond the reasonable control of
a Party including, without limitation, acts of God or the public enemy, war, riot, terrorism, civil
commotion, insurrection, government or de facto governmental action, restrictions or
interferences (unless caused by the intentional acts or omissions of the Party), fires, explosions,
floods or other inclement weather, strikes, slowdowns or work stoppages, incidence of disease or
other illness that reaches outbreak, epidemic, or pandemic proportions or similar causes that
results in a reduction of labor force or work stoppage in order to comply with local, state, or
PAGE 2 TAX ABATEMENT AGREEMENT
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4871-0953-4883, v. 1
national disaster orders, construction delays, shortages or unavailability of supplies, materials or
labor, necessary condemnation proceedings, or any other circumstances which are reasonably
beyond the control of the Party obligated or permitted under the terms of this Agreement to do or
perform the same, regardless of whether any such circumstances are similar to any of those
enumerated or not, the Party so obligated or permitted shall be excused from doing or performing
the same during such period of delay, so that the time period applicable to such obligation or
performance shall be extended for a period of time equal to the period such Party was delayed,
provided the Party whose performance is delayed provides written notice to the other Party not
later than fifteen (15) business days after the last day of the month of the occurrence of the
event(s) or condition(s) causing the delay or the date the Party whose performance has been
delayed becomes aware or should have reasonably known of the event, describing such event(s)
and/or condition(s) and the date on which such event(s) and/or condition(s) occurred.
“Freeport Goods” shall have the same meaning as assigned by Section 11.251 of the Tax
Code and Article VIII, Section 1-j of the Texas Constitution. Freeport Goods does not include
“Goods in Transit” as defined by Tax Code, Section 11.253.
“Goods in Transit” shall have the same meaning assigned by Tax Code, Section 11.253.
“Improvements” shall mean a medical office/laboratory building
containing approximately 98,000 square feet of space on the Land located at 1111 S.
Freeport Parkway Coppell, Texas, together with other ancillary facilities such as required
parking and landscaping; provided, however “Improvements” shall not include the Land.
“Land” means the real property described in Exhibit “A”.
“Owner” shall mean Fulgent Genetics, Inc., a Delaware corporation, and its permitted
assigns under Section 8.9.
“Owner Affiliate” shall mean any entity that is directly or indirectly controlled by or is
under common control with Owner, and its permitted assigns under Section 8.9
“Premises” shall mean collectively, the Land and Improvements following construction
thereof.
“Related Agreement” shall mean agreement (other than this Agreement) by and between:
(i) the Owner or any Owner Affiliate; and (ii) the City.
“Required Use” shall mean full-service cancer diagnostic testing on patient samples.
“Tangible Personal Property” shall mean furniture, fixtures and equipment owned or
leased by Owner and located at the Premises, after the execution of this Agreement. Tangible
Personal Property shall not include inventory, supplies, Freeport Goods and Goods in Transit
located at the Premises at any time before the period covered by the Agreement.
PAGE 3 TAX ABATEMENT AGREEMENT
City oF COPPELL AND FULGENT GENETICS, INC.
4871-0953-4883, v. 1
“Taxable Value” means the appraised value as certified by the applicable Appraisal
District (or its successor) as of January | of a given year.
Article IT
General Provisions
ail Owner owns the Land and Improvements, which Land is located within the city
limits of the City and within the Zone. Owner intends to locate Tangible Personal Property at the
Improvements on the Land.
2.2 The Premises are not in an improvement project financed by tax increment bonds.
2.3. This Agreement is entered into subject to the rights of the holders of outstanding
bonds of the City.
2.4 The Premises are not owned or leased by any member of the Coppell City Council
or any member of the Coppell Planning and Zoning Commission.
2.5. Owner shall, before May 1, of each calendar year that the Agreement is in effect,
certify in writing to the City that it is in compliance with each term of the Agreement.
2.6 The Land and the Improvements constructed thereon at all times shall be used
primarily in the manner (i) that is consistent with the City’s Comprehensive Zoning Ordinance,
as amended, and (ii) that, during the period taxes are abated hereunder, is consistent with the
general purposes of encouraging development or redevelopment within the Zone.
Article HI
Tax Abatement Authorized
3.1 This Agreement is authorized by the Tax Code and in accordance with the City
Tax Abatement Guidelines and approved by resolution of the City Council.
3.2 Subject to the terms and conditions of this Agreement and provided the Taxable
Value for the Tangible Personal Property is at least Five Million Dollars ($5,000,000.00), as of
the First Year of Abatement and as of January 1 of each year thereafter that this Agreement is in
effect, the City hereby grants Owner an abatement of seventy-five percent (75%) of the Taxable
Value of the Tangible Personal Property for a period of five (5) consecutive years beginning with
the First Year of Abatement. The actual percentage of Taxable Value of the Tangible Personal
Property subject to abatement for each year this Agreement is in effect will apply only to the
Tangible Personal Property located at the Improvements subsequent to the execution of this
Agreement. The failure of the Tangible Personal Property to have a Taxable Value of at least
Five Million Dollars ($5,000,000.00) as of January 1 of any given Tax Year shall not be an event
of default subject to termination and repayment of the abated taxes pursuant to Article V hereof
but shall result in the forfeiture of the tax abatement for the Tangible Personal Property for such
Tax Year.
PAGE4 Tax ABATEMENT AGREEMENT
City OF COPPELL AND FULGENT GENETICS, INC.
4871-0953-4883, v. 1
3.3. The period of tax abatement herein authorized shall be for a period of five (5)
consecutive years beginning with the First Year of Abatement.
3.4 During the period of tax abatement herein authorized, Owner shall be subject to
all taxation not abated, including but not limited to, sales tax and ad valorem taxation on the
Land.
3.5. The term of this Agreement shall begin on the Effective Date and shall continue
until the Expiration Date, unless sooner terminated as provided herein.
3.6 Asacondition of receiving the tax abatement provided herein, Owner, or Owner
Affiliate, shall continuously own and occupy the Premises. .
3.7. Required Use. During the term of this Agreement, beginning on the First Year of
Abatement and continuing for a period of at least five (5) years thereafter, the Premises shall not
be used for any purpose other than the Required Use, and the operation of the Premises in
conformance with the Required Use shall not cease for more than thirty (30) continuous days
except in connection with, and to the extent of, an event of Force Majeure or casualty, or for
reasonable periods of time not to exceed ninety (90) days for expansion, re-equipping or
remodeling.
Article IV
Improvements
4.1 Nothing in this Agreement shall obligate Owner to locate Tangible Personal
Property at the Improvements on the Land, but said actions are conditions precedent to tax
abatement for such Parties pursuant to this Agreement.
42 Owner agrees to maintain the Improvements during the term of this Agreement in
accordance with all applicable state and local laws, codes, and regulations.
43 The City, its agents and employees shall have the right of access to the Premises
during and following construction to inspect the Improvements at reasonable times and with
reasonable notice to Owner, and in accordance with visitor access and security policies of the
Owner in order to insure that the construction of the Improvements are in accordance with this
Agreement and all applicable state and local laws and regulations (or valid waiver thereof).
Article V
Default; Recapture of Tax Revenue
5.1 In the event that during the term of this Agreement: (i) Owner has delinquent ad
valorem or sales taxes owed to the City (provided Owner retains its right to timely and properly
protest such taxes or assessment) after the expiration of the notice and cure periods described
below; (ii) has an event of Bankruptcy or Insolvency; or (iii) breaches any of the terms and
conditions of this Agreement, or a Related Agreement, then Owner, after the expiration of the
notice and cure periods described below, shall be in default of this Agreement. As liquidated
ave wt —
PAGES TAX ABATEMENT AGREEMENT
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damages in the event of such default, the Owner shall, within thirty (30) days after demand, pay
to the City all taxes which otherwise would have been paid by the Owner to the City without
benefit of a tax abatement, for the property the subject of this Agreement at the statutory rate for
delinquent taxes as determined by Section 33.01 of the Tax Code, as amended, but without
penalty. The Parties acknowledge that actual damages in the event of default termination would
be speculative and difficult to determine. The Parties further agree that any abated tax, including
interest, as a result of this Agreement, shall be recoverable against the Owner, its successors and
assigns and shall constitute a tax lien against the Premises, and shall become due, owing, and
shall be paid to the City within thirty (30) days after notice of termination.
5.2. Upon breach by Owner of any of the obligations under this Agreement, the City
shall notify Owner in writing, which shall have thirty (30) days from receipt of the notice in
which to cure any such default. If the default cannot reasonably be cured within such 30-day
period, and the Owner has diligently pursued such remedies as shall be reasonably necessary to
cure such default, then the City may extend the period in which the default must be cured.
5.3. If the Owner fails to cure the default within the time provided as specified above or, as
such time period may be extended, the City, at its sole option, shall have the right to terminate
this Agreement by providing written notice to the Owner. The City’s power to terminate this
Agreement is limited to Section 5.3.
5.4 Upon termination of this Agreement by City, all tax abated as a result of this
Agreement, shall become a debt to the City as liquidated damages, and shall become due and
payable not later than thirty (30) days after a notice of termination is provided. The City shall
have all remedies for the collection of the abated tax provided generally in the Tax Code for the
collection of delinquent property tax. The computation of the abated tax for the purposes of the
Agreement shall be based upon the full Taxable Value of the Tangible Personal Property without
tax abatement for the years in which tax abatement hereunder was received by the Owner, as
determined by the Appraisal District, multiplied by the tax rate of the years in question, as
calculated by the City Tax Assessor-Collector. The liquidated damages shall incur penalties as
provided for delinquent taxes and shall commence to accrue after expiration of the thirty (30)
day payment period.
Article VI
Annual Application for Tax Exemption
It shall be the responsibility of the Owner, pursuant to the Tax Code, to file an annual
exemption application form for the Tangible Personal Property with the Chief Appraiser for the
Appraisal District (or its successor) in which the eligible taxable property has situs. A copy of
the respective exemption application shall be submitted to the City upon request.
—— 7 a 7 eee
PAGE 6 TAx ABATEMENT AGREEMENT
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4871-0953-4883, v. 1
Article VII
Annual Rendition
The Owner shall annually render the value of the Tangible Personal Property to the
Appraisal District and shall provide a copy of the same to the City upon written request.
Article VII
Miscellaneous
8.1 Notice. Any notice required or permitted to be delivered hereunder shall be
deemed received upon the earlier of (a) actual receipt or (b) three (3) days thereafter sent by
United States Mail, postage prepaid, certified mail, return receipt requested, addressed to the
Party at the address set forth below, or such other address as is designated by the applicable Party
from time to time, or on the day actually received as sent by courier or otherwise hand delivered.
_Ifintended for City, to: With a copy to:
Attn: City Manager Attn: Peter G. Smith
City of Coppell, Texas P. Nichols, Jackson, Dillard,
O. Box 478 Hager & Smith, L.L.P.
Coppell, Texas 75019 1800 Ross Tower
500 N. Akard
Dallas, Texas 75201
If intended for Owner, to: With a copy to:
Attn:
Fulgent Genetics, Inc.
1111 S. Freeport
Parkway Coppell, Texas
75019
8.2 Authorization. This Agreement was authorized by resolution of the City Council
approved by its Council meeting authorizing the Mayor to execute this Agreement on behalf of
the City. _.
8.3 Severability. In the event any section, subsection, paragraph, sentence, phrase, or
word herein is held invalid, illegal, or unconstitutional, the balance of this Agreement shall stand,
shall be enforceable and shall be read as if the Parties intended at all times to delete said invalid
section, subsection, paragraph, sentence, phrase, or word.
8.4 Governing Law. This Agreement shall be governed by the laws of the State of
Texas without regard to any conflict of law rules. Exclusive venue for any action under this
Agreement shall be the State District Court of Dallas County, Texas. The Parties agree to submit
to the personal and subject matter jurisdiction of said court.
PAGE7 TAX ABATEMENT AGREEMENT
CITy OF COPPELL AND FULGENT GENETICS, INC.
4871-0953-4883, v. 1
Legal Department legal@fulgentgenetics.com
8.5 Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original and constitute one and the same instrument.
8.6 Entire Agreement. This Agreement embodies the complete agreement of the
Parties hereto, superseding all oral or written previous and contemporary agreements between
the Parties and relating to the matters in this Agreement, and except as otherwise provided herein
cannot be modified without written agreement of the Parties to be attached to and made a part of
this Agreement.
8.7. Recitals. The determinations recited and declared in the preambles to this
Agreement are hereby incorporated herein as part of this Agreement.
8.8 Exhibits. All exhibits to this Agreement are incorporated herein by reference for
all purposes wherever reference is made to the same.
8.9 Assignment. This Agreement shall be binding on and inure to the benefit of the
Parties to it and their respective heirs, executors, administrators, legal representatives,
successors, and permitted assigns. This Agreement may not be assigned by the Owner without
the prior written consent of the City Manager.
8.10 Employment of Undocumented Workers. During the term of this Agreement, the
Owner agrees not to knowingly employ any undocumented workers and, if convicted of a
violation under 8 U.S.C. Section 1324a (f), the Owner shall repay the taxes abated herein, and
any other funds received by the Owner from the City as of the date of such violation within 120
days after the date the Owner is notified by the City of such violation, plus interest at the rate of
four percent (4%) compounded annually from the date of violation until paid. Owner is not liable
for a violation of this section by a subsidiary, affiliate, or franchisee of Owner or by a person
with whom Owner contracts.
8.11 Right of Offset. The City may at its option, offset any amounts due and payable
under this Agreement against any debt (including taxes) lawfully due to the City from the
Owner, regardless of whether the amount due arises pursuant to the terms of this Agreement or a
Related Agreement or otherwise and regardless of whether or not the debt due the City has been
reduced to judgment by a court.
[Signature page to follow]
Tax ABATEMENT AGREEMENT
City OF COPPELL AND FULGENT GENETICS, INC.
PAGES
4871-0953-4883, v. 1
EXECUTED in duplicate originals the 28 Yay of M ay , 2024. /
CITY OF COPPELL, TEXAS
Agreed as i) :
EXECUTED in duplicate originals the day of _- , 2024.
FULGENT GENETICS, INC.
By:
Name:_Paul Kim
Title: Chief Financial Officer
PAGE 9 TAX ABATEMENT AGREEMENT
. CITy OF COPPELL AND FULGENT GENETICS, INC.
4871-0953-4883, v. 1
13th June
Exhibit A
Legal Description
TRACT I:
BEING Lot 2. in Block A, GATEWAY BUSINESS PARK NO, 2, an Addition to the City of
Coppell, Dallas County, Texas, according to the Plat thereof recorded in Volume 98043, Page 1,
Map Records, Dallas County, Texas. '
TRACT 2:
NON-EXCLUSIVE Easement rights created pursuant to DECLARATION OF RECIPROCAL
ACCESS AND FIRELANE EASEMENT executed by CATELLUS DEVELOPMENT
CORPORATION, a Delaware corporation, filed 02/09/1999, recorded in Volume 99026, Page
1852, Real Property Records, Dallas County, Texas.
TRACT 3:
NON-EXCLUSIVE Easement rights created pursuant to DECLARATION OF EASEMENTS
executed by CATELLUS DEVELOPMENT CORPORATION, a Delaware corporation, filed
02/09/1999, recorded in Volume 99026, Page 1886, Real Property Records, Dallas County.
Texas.
SOLO PAGE Exurpit “A” TO TAX ABATEMENT AGREEMENT
Ciry OF COPPELL AND FULGENT GENETICS, INC.
487 1-0953-4883, v. 1