R-1184-6-93RESOLUTION NO. 118 4 — 6 — 9 3 (R)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN
COUNTY, TEXAS, AUTHORIZING THE MAYOR OF THE CITY OF ALLEN TO
EXECUTE A CONTRACT WITH QUEST MEDICAL, INC.
WHEREAS, in order to maintain and/or enhance the industrial economic and employment base of the Allen
community; and,
WHEREAS, the City of Allen has adopted Resolution Nos. 1013-12-90 (R) and 1139-10-92 (R) stating that
it elects to be eligible to participate in tax abatement; and,
WHEREAS, on the 17th day of June, 1993, the City Council of the City of Allen, Texas, adopted Ordinance
No. 1183-6-93 establishing Reinvestment Zone No. Three, City of Allen, Texas for industrial tax
abatement, as authorized by Chapter 312 of the Texas Tax Code;
NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ALLEN,
COLLIN COUNTY, TEXAS THAT: The Mayor of the City of Allen is hereby authorized to execute a
contract between the City and Quest Medical, Inc. to abate ad valorem taxes effective June 17, 1993.
DULY PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF ALLEN,
TEXAS, ON THE BIZ DAY OF TTTNF , 1993.
APPROVED:
GP
Joe Farmer, MAYOR
ATTEST:
JuAy Mo son, CMC, CITY SECRETARY
I
AD VALOREM TAX ABATEMENT
This Agreement is entered into by and between the City of Allen, Texas
("ALLEN"), a Texas home rule municipal corporation of Collin County, Texas; and the
Allen Independent School District ("the DISTRICT"), sometime hereinafter collectively
referred to as TAXING UNITS; and QUEST MEDICAL, INC. ("QUEST").
WHEREAS, ALLEN represents that on the 17th day of June, 1993, the Allen City
Council adopted Ordinance No. 1183-6-93 which established Reinvestment Zone No.
3 in the City of Allen, Texas for Commercial/Industrial tax abatement, as authorized by
the Property Redevelopment and Tax Abatement Act (§312.001 et seq of the Texas
Tax Code [the "ACT"]);
WHEREAS, each TAXING UNIT represents that it has adopted guidelines and
criteria governing tax abatement (each, a "POLICY STATEMENT");
WHEREAS, each TAXING UNIT has elected to be eligible to participate in tax
abatement;
WHEREAS, each TAXING UNIT represents that its POLICY STATEMENT
constitutes appropriate guidelines and criteria governing tax abatement agreements to
be entered into by such TAXING UNIT as contemplated by the ACT;
WHEREAS, the TAXING UNITS represent that this Agreement is entered into
in order to maintain and enhance the economic and employment base of ALLEN for the
long term interest and benefit of the TAXING UNITS;
TAX ABATEMENT AGREEMENT - QUEST - Page 1 aedc\tx-abate3.gst
WHEREAS, QUEST represents that as consideration for this Agreement, QUEST,
will construct a facility on the PREMISES which shall have a construction cost of at
least Four Million Dollars ($4,000,000.00);
WHEREAS, QUEST represents that as consideration forthis Agreement, QUEST
will move, deliver or transfer to the PREMISES tangible personal property (including
inventory) which shall have a current book value (using generally accepted accounting
principals ["GAAP"]) of at least Six Million Dollars ($6,000,000.00);
WHEREAS, QUEST represents that it intends to maintain operations on the
PREMISES with more than One Hundred Fifty (150) employees for a minimum of ten
(10) years;
WHEREAS, ALLEN represents that the contemplated use as stated herein of the
PREMISES, together with the contemplated improvements to the PREMISES are
consistent with the purposes of the Reinvestment Zone, the intent of the POLICY
STATEMENT and all applicable law; and
WHEREAS, a copy of this Agreement has been furnished, in the manner
prescribed by the ACT, to the presiding officers of the governing bodies of each
TAXING UNIT in which the PREMISES is located;
NOW THEREFORE, the parties hereto mutually agree as follows:
PREMISES TO BE IMPROVED
1. The real property and improvements thereon to be the subject of this
Agreement shall be that property as described in EXHIBIT "A" and made a part hereof
and shall be hereinafter referred to as the PREMISES.
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IMPROVEMENTS TO BE MADE
2. QUEST will construct (or cause to be constructed) improvements to the
PREMISES having a construction cost of at least Four Million Dollars ($4,000,000).
The improvements are generally described as follows: (i) a commercial building having
approximately 107,000 square feet, designed for office, manufacturing and warehousing
uses, with approximately one-third (1/3) of the floor space designated for each such
use; and (ii) a parking facility for a minimum of two .hundred (200) employees; all of
which is more fully described in the submittals filed by QUEST with ALLEN from time
to time in order to obtain a building permit(s) ("the IMPROVEMENTS").
TIME FOR CONSTRUCTION OF IMPROVEMENTS
AND USE THEREOF
3. QUEST shall commence construction of the IMPROVEMENTS on the
PREMISES, which IMPROVEMENTS shall be substantially completed on or before
September 1, 1994. An extension of time to complete the IMPROVEMENTS may be
granted by ALLEN upon the request of QUEST, which approval will not be
unreasonably withheld. In addition, QUEST shall have such additional time to complete
the IMPROVEMENTS as may be required if QUEST is diligently pursuing completion
of the IMPROVEMENTS and is prevented from timely completion by an event of "force
majeure." For the purpose of this Agreement, "force majeure" shall mean a
contingency or cause beyond the reasonable control of QUEST including, without
limitation, acts of God, war, riot, civil commotion, insurrection, governmental action
(unless caused by acts or omissions of QUEST), fire, explosion, flood, or strikes. The
TAX ABATEMENT AGREEMENT - QUEST - Page 3 aedc\tx-abate3.gst
date of substantial completion of the IMPROVEMENTS shall be defined as the date a
Certificate of Occupancy is issued for the IMPROVEMENTS by ALLEN.
4. QUEST represents that it is or will be legally or contractually liable to
directly pay the ad valorem tax on the PREMISES and the tangible personal property
(including inventory) located thereon ("T.P.P.") whether the PREMISES and the T.P.P
are owned in fee or leased. QUEST shall, upon written request, provide the Collin
County Appraisal District with satisfactory evidence of QUEST's legal or contractual
obligation to pay the ad valorem taxes abated herein.
5. QUEST shall, from the date a Certificate of Occupancy is issued until
August 31, 2003, operate and maintain operations on the PREMISES and maintain a
minimum of 150 employees within ALLEN.
TANGIBLE PERSONAL PROPERTY
6. QUEST agrees that on or before September 1, 1994 (such date being
subject to extension on the same basis as provided in Section 3 above) it will move,
transfer or otherwise deliver T.P.P. (i.e., equipment, furniture, fixtures, inventory, and
other personal property) to the PREMISES which shall have a current book value
(pursuant to GAAP) of at least Six Million Dollars ($6,000,000). QUEST represents that
the PREMISES and T.P.P. is essential and necessary for its operations.
GRANT OF TAX ABATEMENT
7. Subject to the terms and conditions of this Agreement, and subject to the
rights of holders of any outstanding bonds of the TAXING UNITS, the portion of ad
valorem taxes on the PREMISES and on the T.P.P. located on the PREMISES
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otherwise due the TAXING UNITS above the Four Hundred Eighteen Thousand Six
Hundred Twelve Dollars ($418,612.00) base (which is agreed by the parties to this
Agreement to be the value of the PREMISES for the year in which this Agreement is
executed) relative to the six (6) tax years commencing with the tax year 1994 shall be
abated in accordance with the schedule listed on EXHIBIT "B" attached hereto and
made a part hereof. The tax rates may change from year to year,, however, the amount
of tax paid and abated shall be.in accordance to that given year's prevailing tax rate
and assessed value. The parties to this Agreement agree that there is no tangible
personal property located on the PREMISES as of the date of execution of this
Agreement.
EVENTS OF DEFAULT
8. In the event that QUEST breaches any of the obligations of this
Agreement or allows the ad valorem taxes due the TAXING UNITS to become
delinquent, then QUEST shall be deemed to be in default. In the event of default,
ALLEN shall give QUEST written notice of such default. QUEST shall have ninety (90)
days of said written notice to cure the default. If QUEST fails to cure the default within
the ninety (90) day cure period, then this Agreement may be terminated by the TAXING
UNITS. Notice shall be in writing and shall be delivered in accordance with the Notice
Provisions of this Agreement.
PAYMENT OF ABATED TAXES
9. In the event of any such default, failure to cure, and termination, the
TAXING UNITS shall be entitled to receive payment from QUEST of all ad valorem
TAX ABATEMENT AGREEMENT - QUEST - Page 5 aedc\bc-abate3.gst
taxes which otherwise would have been paid to the TAXING UNITS without the benefit
of abatement provided in Section 6 above in accordance with §312.205(a)(4) of the
Texas Tax Code. Payment of those taxes payable to the TAXING UNITS shall be
secured by a tax lien on the PREMISES and T.P.P. Such taxes shall be paid to the
TAXING UNITS within ninety (90) days after the expiration of the cure period provided
in Section 7 above. The TAXING UNITS may use -any- legal and: lawful .process or
procedure to collect such taxes. Payment of the taxes, penalties, interest and
attorney's fees as provided by the Texas Tax Code, shall be in lieu of any other
damages payable by QUEST as a result of any default under this Agreement.
ASSIGNMENT
10. The terms and conditions of this Agreement are binding upon the
successors and assigns of all parties hereto. This Agreement cannot be assigned by
QUEST unless written permission is first granted by ALLEN, which permission shall be
at the sole discretion of -ALLEN;,provided, however,.that no'such permission shall be
required in any of the following cases:
A. Assignment or transfer to a wholly owned subsidiary of QUEST; or
B. The sale of the PREMISES by QUEST to a third party, provided,
however, that QUEST shall lease back the PREMISES and shall continue to
conduct business on the subject PREMISES as agreed herein.
INDEPENDENT RELATIONSHIP
11. It is understood and agreed between the parties that QUEST, in
performing its obligations hereunder, is acting independently and the TAXING UNITS
TAX ABATEMENT AGREEMENT - QUEST - Page 6 aedc\tx-aba1e3.gst
assume no responsibilities or liabilities in connection therewith to third parties. In the
event a breach of this Agreement by QUEST or lack of authority on the part of QUEST
causes a claim against the TAXING UNITS by a third party, QUEST agrees to
indemnify and hold the TAXING UNITS harmless from any and all damages resulting
therefrom including reasonable defense costs and reasonable attorney's fees. It is
further understood and agreed among the parties , that -the TAXING UNITS, in
performing their obligations hereunder, are each acting independently and that QUEST
assumes no. responsibilities or liabilities in connection therewith to third -parties. In the
event a breach of this Agreement by any of the TAXING UNITS or lack of authority on
the part of any of the TAXING UNITS causes a claim against the QUEST by a third
party, TAXING UNITS agree to indemnify and hold QUEST harmless from any and all
damages resulting therefrom including reasonable defense costs and reasonable
attorney's fees.
12. . QUEST further agrees that -ALLEN, its agents and employees, shall have
reasonable right of.access to.the PREMISES -during regular.business hours to inspect
the IMPROVEMENTS and T.P.P. in order to insure compliance with this Agreement
and all applicable state and local laws and regulations or valid waiver thereof. After
completion of the IMPROVEMENTS and delivery of the T.P.P., the TAXING UNITS
shall have the continuing right, subject to QUEST's reasonable security requirements,
to inspect the PREMISES during regular business hours to insure that the PREMISES
are thereafter maintained and operated in accordance with this Agreement.
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AUTHORIZATIONS
13. This Agreement was authorized by Resolution of the Allen City Council
at its council meeting on the 22nd day of July, 1993, authorizing its Mayor to execute
the Agreement on behalf of ALLEN.
14. This Agreement was authorized by the Board Minutes of the Allen
Independent School District at its Board of Trustees meeting on the 21st day of June,
1993, whereupon it was duly determined that the Board President would execute the
Agreement on behalf of the Allen Independent School District.
15. This Agreement was entered into by QUEST MEDICAL, INC. pursuant to
authority granted to its President and Chief Executive Officer, Thomas C. Thompson.
MISCELLANEOUS
16. ALLEN represents that it will authorize QUEST to construct, at its sole
expense, a culvert system through the existing floodplain on the PREMISES in order
that QUEST may develop certain areas of the west end of the PREMISES. It being
understood, however, that QUEST will comply with any and all regulations that are
applicable to construction or improvements within a floodplain, including any regulations
of the Federal Emergency Management Agency (FEMA).
17. ALLEN represents and warrants that the PREMISES do not include any
property that is owned or leased by an individual member of the Allen City Council or
the Allen Planning and Zoning Commission.
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18.
QUEST agrees that it will endeavor (but shall not be obligated) to make
the PREMISES the point of sale for any materials and equipment purchased by QUEST
for use on the PREMISES.
19. The parties further agree as follows:
A. This Agreement, including the recitals herein and its Exhibits,
constitute,the-entire Agreement and understanding between the parties hereto,
and supersede to. any prior or contemporaneous oral or written agreement and
understanding relating to the subject matter of this Agreement. This Agreement
and its Exhibits may be modified or amended only by a duly authorized written
instrument executed by the parties hereto;
B. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument. It shall not be
necessary that any single counterpart hereof be executed by all parties hereto
so long as,at least one counterpart is executed by each party;
C. Any notice or communication required or permitted hereunder shall
be sufficiently given if personally delivered or if sent by registered or certified
mail, return receipt requested, postage and fees prepaid to:
(1) City of Allen
(2) Allen Independent
School District
TAX ABATEMENT AGREEMENT - QUEST - Page 9
Mayor
City of Allen
One Butler Circle
Allen, Texas 75002
Superintendent of Schools
Allen Independent School Dist.
P. O. Box 13
Allen, Texas 75002
aedc\tx-abate3.gst
(3) QUEST, Inc. Thomas C. Thompson
Quest Medical, Inc.
4103 Billy Mitchell Drive
Dallas, Texas 75244;
D. All warranties, covenants, and representations shall survive the
execution of this Agreement. The parties hereto in executing, and in carrying out
the provisions of this Agreement, are relying solely on -the representations,
warranties, and agreements contained .. in this Agreement or in any writing
delivered pursuant to provisions of this Agreement herein provided for and not
upon any representation, warranty, -agreement, promise, -or information, written
or oral, made by any person other than as specifically set forth herein or therein;
E. In the event any section, subsection, paragraph, subparagraph,
sentence, phrase or word herein is held invalid, illegal, or unenforceable, 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;, subparagraph, sentence;- phrase or word. In such event, there shall
be substituted for such deleted provision a provision as similar in terms and in
effect to such deleted provision as may be valid, legal and enforceable;
F. A portion or all of the PREMISES and the T.P.P. may be eligible
for complete or partial exemption from ad valorem taxes as a result of existing
law (such as the freeport exemption) or future legislation. This Agreement is not
to be construed as evidence that such exemptions apply or do not apply to the
PREMISES or the T.P.P.; and
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G. This Agreement shall be construed in accordance with the laws of
the State of Texas and is performable in Collin County, Texas.
EXECUTED on the day ofAz(aV-<T- , 1993.
ATTEST: CITY OF ALLEN, TEXAS
dy M rison, City Secretary
94 ..-
e Farmer, Mayor
EXECUTED on the _a!� k day of , 1993.
ATTEST:
J-:�" 0 aD Q-"
Izzi aller, Board Secretary
ALLEN INDEPENDENT SCHOOL
STRICT
q-� L" (j
r'j 1 4j
Glenn Andrew, Board President
EXECUTED on the day of
ATTEST:
e
QUEST MEDICAL, INC.
omas C. Thompson, President
and Chief Executive Officer
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EXHIBIT "A"
CITY OF ALLEN
REINVESTMENT ZONE #3
The general description of the Premises is as follows.
A 14.828 acre tract of land in the town of Allen, Texas out of the Rufus Sewell Survey,
Abstract No. 875, Collin County, Texas; said tract being Lot 2 of that same certain tract
of land described in deed to Quest Medical, Inc. as recorded in Volume 2275, Page 194
of the Deed Records of.Collin County, Texas and being more particularly described as
follows:
COMMENCING, at a 1/2 -inch iron rod found at the intersection of the West right-of-way
line of State Highway No. 5 (a 100 foot wide right-of-way) and the North right-of-way
line of Allentown Parkway (a 60 foot wide right-of-way); said point being on a curve to
the left whose center bears South 32 degrees, 33 minutes, 00 seconds West, a
distance of 330.00 feet from said point;
THENCE, In a Westerly direction and along the said North line of Allentown Parkway
and said curve to the left, through a central angle of 22 degrees, 31 minutes, 51
seconds, an arc distance of 129.77 feet to a 3/8 -inch iron rod found at the end of said
curve;
THENCE, North 79 degrees, 58 minutes, 51 seconds West,, continuing along the said
North line of Allentown Parkway,, a distance of 225.11 feet to a stake for corner; said
stake being the BEGINNING;
THENCE, North 79 degrees, 58 minutes, 51 .seconds West, continuing along the said
North line of Allentown Parkway, a distance of 636.26 feet to a 3/8 inch rod found for
corner; said point being on a curve to the left whose center bears South 70 degrees,
01 minutes, 09 seconds West, a distance of 60.00 feet from said point;
THENCE, in a Westerly direction and along said curve to the left, through a central
angle of 150 degrees, 00 minutes, 00 seconds, on a are distance of 157.08 feet to a
3/8 -inch iron rod found for corner;
THENCE, North 79 degrees, 58 minutes, 51 seconds West, departing the said right-of-
way of Allentown Parkway, a distance of 420.00 feet to a 3/8 -inch iron rod found in the
east right-of-way line of Southern Pacific Railroad (a 100 foot wide railroad right-of-
way); said point being on a curve to the right whose center bears South 47 degrees,
38 minutes, 21 seconds East, a distance of 2,957.10 feet from said point;
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aedc\tx-abate3.gst
s .
EXHIBIT "A" - continued
THENCE, in a Northerly direction and along said east line of Southern Pacific Railroad
and said curve to the right, through a central angle of 03 degrees, 04 minutes, 21
seconds, an arc distance of 158.58 feet to a 3/8 -inch iron rod found at the end of said
curve;
THENCE, North 45 degrees, 28 minutes, 00 seconds East, continuing along the said
East line of Southern Pacific Railroad, a distance of 112.30 feet to a 3/8 -inch iron rod
found at the beginning of a curve to the left whose center bears North 44'degrees, 32
minutes, 00 seconds West, a distance of 2,910.34 feet from said point;
THENCE, in a Northeasterly .direction, continuing along said East line of Southern
Pacific Railroad and said curve to the left, through a central angle of 12 degrees, 02
minutes, 58 seconds, an arc distance of 612.02 feet to a 3/8 -inch iron rod found for
corner; said point being the Southwest corner of a 27.000 acre tract of land described
in deed to the Federal Deposit Insurance Corporation as recorded in Volume 3849,
Page 81 of the Deed Records of Collin County, Texas;
THENCE, South 68 degrees, 23 minutes, 36 seconds East, along the South line of said
27.000 acre tract, a distance of 864.90 feet to a stake for corner;
THENCE, South 23 degrees, 36 minutes, 24 seconds West along the said West line of
Lot 1, a 4.334 acre tract of the Quest Medical Inc., a distance of 537.01 feet to the
POINT OF BEGINNING;
CONTAINING, 645,908 square feet or 14.828. -acres of -land more,or less.
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EXHIBIT "B"
SCHEDULE OF TAX ABATEMENT ON THE
IMPROVEMENTS AND TANGIBLE PERSONAL
PROPERTY AS IDENTIFIED IN THE AGREEMENT
Ad valorem taxes on real and tangible personal property, to the extent the
aggregate value of such real property and tangible personal property is in excess of
Four Hundred Eighteen Thousand Six Hundred Twelve Dollars ($418,612.00) which
such figure is based on -the certified tax role of the TAXING UNITS 1992-1993 fiscal
year shall be abated in accordance with the following schedule:
Year
Ad Valorem Tax Ad Valorem Tax To Be
Abated to Quest Paid to Allen (City & School)
1994
100%
0%
1995
100%
0%
1996
80%
20%
1997
80%
20%
1998
60%
40%
1999
60%
40%
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