HomeMy WebLinkAboutContract 26824 CITY SECRETARY nn
ESCROW/PLEDGE AGREEMENT CONTRACT NO. c o�
THIS ESCROW/PLEDGE AGREEMENT(the "Agreement"),entered into as of , 2001,by
and among West/Loop 820 Partners("Developer"),the City of Fort Worth,Texas,a municipal corporation
of Tarrant County,Texas("Fort Worth")and The Frost National Bank(herein referred to as"Escrow Agent"
or "Lender") is to witness the following:
WHEREAS, Developer and Fort Worth have entered into a Community Facilities Agreement for
Settlement Village, an addition to the City of Fort Worth, Texas, (the "CFA"); and
WHEREAS, the CFA provides that Developer shall submit to Fort Worth performance and payment
bonds,cash deposits or other security acceptable to Fort Worth(collectively,the"Intended Security")for the
purpose of guaranteeing satisfactory compliance by Developer with all requirements,terms,and conditions
of the CFA (collectively, the "Secured Obligations"); and
WHEREAS,Developer and Fort Worth desire and agree that Developer be allowed to escrow and pledge
cash deposits to Fort Worth, to be held by Escrow Agent, in lieu of and in complete satisfaction of the
obligation to submit the Intended Security to secure the performance of the Secured Obligations;
WHEREAS,the source of the funds for the escrow deposit is Developer's cash resources and a loan from
Escrow Agent,as lender,to Developer,as borrower,in the amount of approximately 5868,770(the"Loan").
NOW THEREFORE, for and in consideration of the premises, ten dollars ($10.00) and other good and
valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged and
confessed, the parties hereto agree as follows:
SECTION 1. DEFINED TERMS.
For the purposes of this Agreement,unless the context otherwise clearly requires,the following terms shall
have the following meanings:
"Initial Security Funds" shall mean the cash deposit of $1,785,447.46,which sum represents 125
percent of the estimated Developer's share of the cost of constructing water, sanitary sewer, storm
drain and paving improvements identified in the CFA.The Developer's share of the total cost of such
improvements shall hereinafter be called the "Estimated Developer's Cost".
"Lien" shall mean any lien, security interest, charge, tax lien, pledge or encumbrance designed to
secure the repayment of indebtedness or the satisfaction of any other obligation to a third party not
a party to this Agreement.
"Payment and Performance Bond" shall mean a bond issued by a corporate surety or insurance
company acceptable to Fort Worth in an amount equal to cost of improvements not yet completed
by Developer.
SECTION 2. PLEDGE.
As security for the full and punctual performance of the Secured Obligations,Developer hereby pledges,
assigns,and transfers to Fort Worth,and hereby grants to FortWorth a security interest in,the Initial Security
Funds and all rights and privileges pertaining thereto with the exception of the interest income to be derived
therefrom,which interest income shall remain the property of Developer and shall be distributed by Escrow
Agent in accordance with Developer's periodic instructions.(The Initial Security Funds and any substitution
by Developer with a Payment and Performance Bond as permitted hereunder, are collectively referred to
hereafter as the"Pledged Collateral");TO HAVE AND TO HOLD the Pledged Collateral,together with all
rights, titles, interests, privileges, and preferences appertaining to or incidental thereto, unto Fort Worth
subject,however,to the terms,covenants,and conditions hereinafter set forth.The security interest granted
and the assignments made hereunder are made as security only and shall not subject Fort Worth to,or transfer
or in any way affect or modify,any obligation of Developer with respect to any of the Pledged Collateral or
any transaction involving or giving rise thereto.As between Lender and Developer only,without any impact
whatsoever on Fort Worth or its superior lien rights hereunder, this Agreement shall in no way affect or
modify any obligation of Developer to Lender with respect to any of the Pledged Collateral under the terms
of the Loan or any transaction involving or giving rise thereto. In that regard, as between Lender and
Developer only,the Developer will fully perform and comply with all of the terms,covenants and conditions
of the Loan and all requirements of Lender related thereto, including, without limitation, any draw
requirements set forth therein.
SECTION 3. PHYSICAL POSSESSION OF PLEDGED COLLATERAL.
Concurrently with the execution of this Agreement,Developer shall have delivered to and deposited with
Escrow Agent the Initial Security Funds representing or evidencing the Pledged Collateral. The parties
acknowledge and agree that Escrow Agent shall be required to segregate the Pledged Collateral from other
funds held by Escrow Agent for Developer in accordance with the normal practices of Escrow Agent as an
Escrow Agent. Escrow Agent shall return all funds on deposit representing or evidencing the Pledged
Collateral remaining in its possession to Developer or Lender (or take such other action as Lender may
request or direct) immediately after receipt of written notice from Fort Worth that the Secured Obligations
have been fully performed. During such time as Escrow Agent has possession of the Pledged Collateral,
Escrow Agent shall furnish to Fort Worth(when requested by Fort Worth)written acknowledgments signed
by an officer of Escrow Agent detailing the amount of the Pledged Collateral.
SECTION 4. COVENANTS.
(a) Affirmative Covenants. So long as any of the Secured Obligations remain unperformed,
Developer covenants and agrees that Developer will:
(i) from time to time execute and deliver to Fort Worth all such assignments, certificates,
supplemental writings, and other items and do all other acts or things as Fort Worth may
reasonably request in order to evidence and perfect the security interest of Fort Worth in the
Pledged Collateral;
(ii) furnish Fort Worth with information which Fort Worth may reasonably request
concerning the Pledged Collateral;
(iii) notify Fort Worth of any claim, action, or proceeding affecting title to the Pledged
Collateral or Fort Worth's security interest therein; and
(iv)adjust the Pledged Collateral to an amount equal to the actual contract price,including
revisions thereto.
(b)Negative Covenants. So long as any of the Secured Obligations remain unperformed,Developer
covenants and agrees that Developer will not:
(i) assign or transfer any rights of Developer in the Pledged Collateral; or
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(ii) create any Lien in the Pledged Collateral, or any part thereof, or permit the same to be
or become subject to any Lien except the security interest herein created in favor of Fort
Worth and in favor of Lender.
SECTION 5. EVENTS OF DEFAULT.
Developer shall be in default under this Agreement only upon the happening of any of the following
events (a "Default"):
(a) default in the timely payment or performance of the Secured Obligations after written notice
thereof has been given to Developer and Escrow Agent and such default is not cured within seven
(7) days after such notice; or
(b) any affirmative or negative covenant is breached by Developer.
SECTION 6. RIGHTS AND REMEDIES OF FORT WORTH UPON AND AFTER DEFAULT.
(a) Remedy. Upon the occurrence of a Default by Developer hereunder, Fort Worth shall provide
Lender with a reasonable opportunity to complete the improvements required by the CFA,if Lender
chooses to do so,and to utilize the Pledged Collateral to do so as contemplated by,and in accordance
with,the provisions of Section 9 below. Upon the failure of Lender to complete the improvements
required by the CFA as aforesaid,Fort Worth shall have the right to direct Escrow Agent to transfer
to Fort Worth the balance of the Pledged Collateral.Escrow Agent is hereby authorized and directed
to transfer the Pledged Collateral to Fort Worth without the consent of Developer immediately upon
the receipt of a written statement (upon which Escrow Agent may totally rely) purporting to be
executed by an authorized representative of Fort Worth stating that:
(i) a Default by Developer has occurred under the CFA executed in connection with this
Escrow/Pledge Agreement;
(ii) written notice of such Default has been given by Fort Worth to Developer and Escrow
Agent and such Default was not cured within seven(7) days after such notice; and
(iii)Fort Worth is entitled to have the balance of the Pledged Collateral transferred to Fort
Worth in accordance with this Agreement for completion of Developer's obligation
hereunder.
In the foregoing regard, Fort Worth will cause the improvements required by the CFA to be
completed within a reasonable period of time after the transfer to it of the Pledged Collateral,failing
which the Lender may cause the improvements required by the CFA to be completed utilizing the
Pledged Collateral to do so and,in furtherance thereof,Fort Worth will release the Pledged Collateral
to Lender in accordance generally with the provisions of Section 9 below. Notwithstanding anything
contained herein to the contrary, to the extent any Pledged Collateral remains unused after the
completion of the improvements required by the CFA(whether same are completed by Developer,
Lender or Fort Worth)or upon Ft.Worth's failure to complete the improvements as provided above,
all such remaining Pledged Collateral shall be promptly paid over to Lender.
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(b) Notices. Any notice required or permitted to be given to any party hereto shall be given in
writing,shall be personally delivered or mailed by prepaid certified or registered mail to such party
at the address set forth below,and shall be effective When actually received.
To Developer.
West/T,00p 820 Partners
Attm James 7.Mclino
8235 Douglas Avenue, Suite 650,LB-65
Dallas,Texas 75225
To Escrow Agent:
'17ie Frost National Bank
Attn: Tyle Mayeaux
4200 South l lulen
P.O.Dox 16509
Fort Worth,'Texas 76162-0509
To City of Fort Worth:
City of Fort Worth
Development Project Coordinator
Department of Transportation and Public Works
1000 Throckmorton Street
Fort Worth,'Texas 76102
with a copy to:
Development Coordinator
Fort Worth Water Department
1000 Throckmorton
Fort Worth,Texas 76102
Any party may clivige its address fur notice by giving 01 other parties hereto notice of such change
in the manner set forth in this Section no later than 10 days before the effective date of such new
address.
SE(.'TTON 7. EXCLUSIVE RTGRTS AND REMEDIES.
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It'the Dcvclup,.r fails to perform its obligations under the CT'A,Fort Worth's sole and exclusive remedy
shall be to complete the obligations of Developer at Developer's expense. In furtherance of such sole and
exclusive remedy,Fort Worth is entitled to exercise its rights;is set forth in Section 6 hereof.
SECTION A. SUBSTITUTION OF COLLATERAL.
Notwithstanding any contrary provision in this Agreement,i)eveloper shall have the right(without the
consent of Tort Worth),at any time and from time to time,to ob#ain releases of all or any part of the Pledged
Collateral (hereinafter called the "Released Collateral") upon siitisfaction of the following conditions:
:
(a)Dcveloper shall provide FortWorth and Escrow Agent written notice(the"Substi tution Noticc")
that Developer desires to obtain Released Collateral(as specified and described in such notice)in
exchange for a contemporaneous substitution ofa payment and Performance Bond(as also specified
and described in the Substitution Notice); and pp ffII r
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(b)Developer shall pledge to, or obtain for the benefit of,Fort Worth, and deliver to Fort Worth a
Payment and Performance Bond from a surety acceptable to FortWorth(the"Substituted Collateral")
which Substituted Collateral shall in the aggregate be at least equal to the Estimated Developer's
Cost; and
(c)Said Payment and Performance Bonds shall be accompanied by a written commitment from the
surety that such Performance and Payment Bonds shall cover all work which has occurred prior to
the substitution of Collateral provided for in this Section.
Upon satisfaction of the above-specified conditions,Escrow Agent shall be authorized(without the consent
of Fort Worth)to return to Lender or, if authorized under the terms of the Loan,to Developer the balance of
the original intended Security Funds in Escrow Agent's possession that represent or evidence the Released
Collateral. Developer shall pay all expenses incurred by Escrow Agent in connection with obtaining each
such release and substitution.
SECTION 9. PERIODIC WITHDRAWAL OF COLLATERAL.
Notwithstanding any contrary provision in this Agreement, Developer shall have the right to periodic
withdrawals of the Pledged Collateral(hereinafter called the "Withdrawn Collateral"), upon satisfaction of
the following conditions:
(a) Developer shall provide Fort Worth and Escrow Agent with written notice (the "Withdrawal
Notice")that Developer desires to obtain the Withdrawn Collateral; and
(b)all administrative requirements or prerequisites to the funding of any draw under the Loan shall
have been fully performed; and
(c) the balance of the Pledged Collateral after withdrawal of the Withdrawn Collateral is at least
equal to the estimated value of the Secured Obligations then remaining to be performed (such
remaining value is hereinafter called the "Estimated Cost to Complete").
Neither Escrow Agent nor Lender shall be required to fund any amount of deficit of the Estimated Cost to
Complete.
The Withdrawal Notice shall include a description of the Withdrawn Collateral and Developer's calculation
of the Estimated Cost to Complete.Upon receipt of the Withdrawal Notice,Fort Worth shall have seven(7)
calendar days to notify Developer of Fort Worth's objection to Developer's calculation of the Estimated Cost
to Complete by providing Developer with Fort Worth's calculation of the Estimated Cost to Complete.The
grounds for any objection are limited solely to a good faith determination by Fort Worth that the balance of
the Pledged Collateral is insufficient to cover the Estimated Cost to Complete.If Fort Worth fails to timely
notify Developer and Escrow Agent of any objection,then Developer's calculation shall be deemed to have
been accepted and approved by Fort Worth and Escrow Agent is authorized to release the Withdrawn
Collateral requested by Developer without delay.In the event a written objection is timely filed by Fort Worth
and Fort Worth's calculation is within a range of five percent (5%) of Developer's Estimated Cost to
Complete,then Developer shall be allowed to withdraw the amount corresponding to FortWorth's calculation
of the Estimated Cost to Complete.If Fort Worth's calculation of the Estimated Cost to Complete is outside
a range of five percent(5%) of Developer's Estimated Cost to Complete, then Fort Worth and Developer,
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through a designated representative,will reconcile the calculations and jointly approve an Estimated Cost to
Complete and advise Escrow Agent to disburse the amount originally submitted by Developer, less any
amounts necessary to ensure that the balance of the Pledged Collateral equals the Estimated Cost to Complete
as jointly determined by Fort Worth and Developer and less any amount of retainage (initially ten percent
of the funding of each draw), as and to the extent required by the Loan.
If after the expiration of two (2) years from the date of this Agreement either
(i) none of the Secured Obligations have been performed; or
(ii) the term of the CFA has not been extended by Fort Worth,
then in either event, Fort Worth shall be entitled to receive the Pledged Collateral as specified in Section 6
and construct the improvements contemplated in the CFA.
SECTION 10. NON-ASSIGNABILITY OF FORT WORTH'S RIGHTS.
The rights,powers, and interest held by Fort Worth hereunder in and to the Pledged Collateral may not
be transferred or assigned by Fort Worth in whole or in part. Any attempted transfer or assignment shall be
absolutely void and shall entitle Developer to a release of all Pledged Collateral.
SECTION 11. NO WAIVER.
No waiver by Fort Worth of any Default shall be deemed to be a waiver of any other subsequent Default.
No delay or omission by Fort Worth in exercising any right or power hereunder shall impair any such right
or power or be construed as a waiver thereof, nor shall any single or partial exercise of any such right or
power preclude other or further exercise thereof.
SECTION 12. BINDING EFFECT.
This Agreement shall be binding on the parties, their successors and assigns. No provision of this
Agreement may be amended,waived,or modified except pursuant to a written instrument executed by Fort
Worth, Escrow Agent and Developer.
SECTION 13. CHOICE OF LAW.
This Agreement is to be construed and interpreted in accordance with the laws of the State of Texas.
SECTION 14. COUNTERPARTS.
This Agreement may be executed in any number of multiple counterparts and by different parties on separate
counterparts, all of which when taken together shall constitute one and the same agreement.
SECTION 15. ESCROW AGENT INDEMNITY AND RELEASE.
Developer hereby agrees to release, hold harmless, and indemnify Escrow Agent (and its directors,
officers,employees,agents and representatives)from and against all claims,damages,expenses,costs,suits
and other liability of any kind whatsoever that arise out of or are directly or indirectly related to the
performance by Escrow Agent of its duties hereunder except for the gross negligence or willful misconduct
of Escrow Agent or its directors, officers, employees, agents or representatives.
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IS II
THIS ESCROW/PLEDGE AGREEMENT has been executed by the parties hereto as of the day and
year first above written.
WEST/LOOP 820 PARTNERS,
a Texas partnership
By: Orinda Capital Partners, L.P.,
a Texas limited partnership,
its Managing Partner
By: Orinda Managers, Inc.,
a Texas corporatio ,
5yT: artn r
es J. elino,
President
CITY OF FORT RT , EXAS
By:
Title: Assistant City Manager
Date:
THE FROST NATIONAL BANK
By: 9- a�g��
(,2
Title: Se for Vice President
Date: June 6, 2001
APPROVED:
CITY OF FORT WORTH QTY CITY ATTORNEY
ATTESTED Y
By:
Date: � 0 0 f
jjm\doc\020l\Escrow Pledge Agreement-Loop Road V !V
Contract Authorization
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Date