HomeMy WebLinkAboutContract 55164 O1/15/2021
CSC No. 55164
8:07 AM
ESCROW AGREEMENT TO REPLACE COMPLETION AGREIIVIINT
This ESCROW AGREEMENT ("Agreement"),is made an entered into by and between the City
of Fort Worth, a home-rule municipal corporation of the State of Texas ("City"), VLMC, Inc,
("Developer"), and LTP Finance,LLC("Escrow Agent").
WBEREAS, City and Developer entered into a Community Facilities Agreement for Park Drive
East (CFA# CFA19-0066, City Project Number 102025, City Secretary Contract No. 54159) for the
construction of public infrastructure improvements("CFA");and
WBEREAS, the CFA provides that Developer shall submit to the City performance bonds,cash
deposits, or other financial security acceptable to the City (collectively, the "Financial Security")for the
purpose of guaranteeing satisfactory compliance by Developer with all requirements,terms,and conditions
of the CFA("CFA Obligations"); and
WBEREAS, City and Developer previously executed a Completion Agreement, City Secretary
Contract No. 54159 as financial security guaranteeing satisfactory compliance with the CFA Obligations;
and
WBEREAS, Developer desires to replace the Completion Agreement withthis Agreement in order
to guarantee satisfactory compliance with the remaining CFA Obligations; and
WHEREAS, City staff have determined that the amount of this Escrow Agreement is adequate
financial security to guarantee satisfactory compliance by Developer with the remaining CFA Obligations;
and
WBEREAS, City and Developer desire and agree that Developer be allowed to escrow and pledge
cash deposits to City, to be held by Escrow Agent, as an escrow agent, in complete satisfaction of the
obligation to submit the Financial Security to secure the performance of the remaining CFA Obligations.
NOW THEREFORE, for and in consideration of these recitals, ten dollars ($10.00)and other
good and valuable consideration,the receipt, sufficiency and adequacy of which are hereby acknowledged,
the parties hereto hereby 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:
"Security Funds"shall mean the cash deposit of Three Hundred Seventy Thousand Six Hundred
Seventy Dollars and Thirty-One Cents($370,670.31),which sum represents one hundred twenty-
five percent (125%) of the estimated Developer's cost of constructing the remaining CFA
Obligations ("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 of this Agreement.
City of Fort Worth,Texas OFFICIAL RECORD
Fscrow Pledge Agreement to Replace Completion Agreement
Rev:10/19 CITY SECRETARY
Page 1 of 8
FT.WORTH, TX
SECTION 2. SECURITY FONDS.
As financial security for the full and punctual performance of the remaining CFA Obligations,
Developer hereby pledges, assigns, and transfers to City, and hereby grants to City a security interest in the
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) 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 the City or Escrow Agent to, or transfer or in any
way affect or modify, any obligation of Developer with respect to the CFA Obligations or any transaction
involving or giving rise therefrom.
SECTION 3. PHYSICAL POSSESSION OF SECURITY FONDS.
Concurrently with the execution of this Agreement, Developer shall have delivered to and
deposited with Escrow Agent the Security Funds. The parties acknowledge and agree that Escrow Agent
shall be required to segregate the Security Funds from other funds held by Escrow Agent for Developer in
accordance with the normalpractices of Escrow Agent acting as an escrow agent.Escrow Agent shall return
all funds on deposit representing or evidencing the Security Funds remaining in its possession to Developer
(or take such other action as Developer may request or direct)immediately after receipt of written notice
from City that the CFA Obligations have been fully performed. During such time as Escrow Agent has
possession of the Security Funds, Escrow Agent shall furnish to the City, when requested by the City,
written acknowledgments signedby an officer of Escrow Agent detailing the amount of the Security Funds.
City's rights in the Security Funds shall be superior to those of Escrow Agent's notwithstanding any terms
or understandings,written or otherwise,between Developer and Escrow Agent.
SECTION 4. COVENANTS.
(a) Affirmative Covenants. So long as any of the remaining CFA Obligations are unperformed,
Developer covenants and agrees that Developer will:
(i) from time to time execute and deliver to City all such assignments, certificates,
supplemental writings, and other items and do all other acts or things as City may
reasonably request in order to evidence and perfect the security interest of City in the
Security Funds;
(ii) furnish City with information which City may reasonably request concerning the Security
Funds;
(iii) notify City of any claim,action,or proceeding affecting title to the Security Funds or City's
security interest(s)therein;and
(iv) adjust the Security Funds to an amount equal to the actual contract price, including
revisions thereto,if the original Security Funds were based on an engineer's estimate of
costs.
(b) Negative Covenants. So long as any of the CFA Obligations remain unperformed, Developer
covenants and agrees that Developer will not:
City of Fort Worth,Texas
Fscrow Pledge Agreement to Replace Completion Agreement
Rev:10/19
Page 2 of 8
(i) assign or transfer any rights of Developer in the Security Funds;or
(ii) create any Lien in the Security Funds, 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 the City.
SECTION 5. EVENTS OF DEFAULT.
Developer shall be in default under this Agreement only upon the happening of any of the following
events("Default"):
(a) default in the timely payment for or performance of the CFAObligations 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 covenant 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, City shall have the right to direct Escrow Agent to
transfer to City all ofthe Security Funds.Escrow Agent is hereby authorized to transfer the Security
Funds immediately upon the receipt of a written statement purporting to be executed by an
authorized representative of City stating that:
(i) a Default by Developer has occurred related to the remaining CFA Obligations;
(ii) written notice of such Default has been given by City to Developer and Escrow Agent and
such Default was not cured within seven(7)days after delivery of such notice;and
(iii) City is entitled to have the Security Funds transferred in accordance with the Agreement.
(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: City To Developer:
VLMC, Inc.
City of Fort Worth Attention: Don Allen
Attn: City Treasurer 3045 Lackland Rd.
200 Texas Street Fort Worth,TX 76116
Fort Worth,TX 76102
With a copy to:
To:Escrow Agent:
City of Fort Worth UP Finance,LLC
Attn: CFA Administration Attention: Benjamin Compton
200 Texas Street 3045 Lackland Drive
Fort Worth,TX 76102 Fort Worth, TX 76116
City of Fort Worth,Texas
Fscrow Pledge Agreement to Replace Completion Agreement
Rev:10/19
Page 3 of 8
Any party may change its address for notice by giving all other parties hereto notice to such change
in the manner set forth in this Section no later than ten(10) days before the effective date of such new
address.
SECTION 7. SUBSTITUTION OF COLLATERAL.
Notwithstanding any contrary provision in this Agreement, Developer shall have the right, at any
time and from time to time,to obtain releases of all or any part of the Security Funds(hereinafter called the
"Released Collateral") upon satisfaction of the following conditions:
(a) Developer shall provide City and Escrow Agent written notice ("Substitution Notice") that the
Developer desires to obtain Released Collateral in exchange for a contemporaneous substitution of
an alternate Financial Security acceptable to City (as specified and described in the Substitution
Notice);
(b) Developer shall pledge to, or obtain for the benefit of City, and deliver to City the alternate
Financial Security acceptable to City ("Substituted Collateral") which Substituted Collateral shall
in the aggregate be at least equal to the Estimated Developer's Cost;and
(c) said Substituted Collateral shall be of sufficient amounts to cover all workwhichhasoccurredprior
to the substitution of collateral provided for in this Section.
Upon satisfaction of the above-specified conditions,Escrow Agent shall be authorized(without the
further consent of City)to return to Developer the original Security Funds in Escrow Agent's possession
that represent or evidence the Released Collateral or take such other action with respect to the Released
Collateral as Developer may request or direct. Developer shall pay the expenses incurred by Escrow Agent
in connection with obtaining each such release and substitution.
SECTION 8. REDUCTIONS INSECURITY FUNDS.
(a) Notwithstanding any contrary provision in this Agreement, Developer shall have the right to
reductions in the Security Funds (hereinafter called a "Reduction in the Security Funds"), in
accordance with this Section 9.
(b) Developer may request a Reduction in the Security Funds only if the initial term of the CFA is
more than four(4)months.
(c) Developer may make no more than two(2)Reductions in the Security Funds.
(d) The first Reduction in the Security Funds may only be made after:
(i) One-third ofthe value of Community Facilities being constructed pursuant to the CFAhave
been verified by the City's inspectors to have been constructed in accordance with the
engineering plans; and
(ii) The City has received an affidavit and release of lien executed by the contractor indicating
that the contractor has been paid by the Developer and the contractor has paid all
subcontractors and material suppliers for one-third of the value of the Community Facilities
being constructed pursuant to the CFA.
City of Fort Worth,Texas
Fscrow Pledge Agreement to Replace Completion Agreement
Rev:10/19
Page 4 of 8
(iii) After the City has confirmed that one-third of the Community Facilities have been
constructed in accordance with the engineering plans and the City has received an affidavit
and release of lien from the contractor in the amount of one-third of the value of the
Community Facilities being constructed pursuant to the CFA,then the Security Funds may
be reduced in an amount that does not exceed one-third of the amount of the Security
Funds.
(e) The second Reduction in the Security Funds may only be made after:
(i) Two-thirds of the value of Community Facilities being constructed pursuant to the CFA
have been verified by the City' s inspectors to have been constructed in accordance with
the engineering plans;and
(ii) The City has received an affidavit and release of lien executed by the contractor indicating
that the contractor has been paid by the Developer and the contractor has paid all
subcontractors and material suppliers for two-thirds of the value of the Community
Facilities being constructed pursuant to the CFA.
(iii) After the City has confirmed that two-thirds of the Community Facilities have been
constructed in accordance with the engineering plans and the City has received an affidavit
and release of lien from the contractor in the amount of two-thirds of the value of the
Community Facilities being constructed pursuant to the CFA,then the financial guarantee
may be reduced in an amount that does not exceed two-thirds of the amount of the financial
guarantee if more than thirty calendar days have passed since the first reduction in the
financial guarantee.
(f) The Developer must pay the CFA amendment fee to the City before a Reduction in the Security
Funds will be authorized by the City.
(g) City, Developer and Escrow Agent will execute an amendment to this Agreement to authorize a
Reduction in the Security Funds.
SECTION 9. NON ASSIGNABILITY OF CITY'S RIGHTS.
The rights,powers, and interests held by City hereunder in and to the Security Funds may not be
transferred or assignedby City in whole or in part.Any attempted transfer or assignment shall be absolutely
void and shall entitle Developer to a release of all Security Funds.
SECTION 10. NO WAIVER.
No waiver by City of any Default shall be deemed to be a waiver of any other subsequent Default.
No delay or omission by City in exercising any right or power hereunder shall impair any such right or
power or be construed as awaiver thereof,nor shall any single or partial exercise of any such right or power
preclude other or further exercise thereof.
SECTION 11. BINDING EFFECT.
This Agreement shall be binding on the parties,their successors and assigns.No provision of this
Agreement maybe amended,waived,or modified except pursuant to a written instrument executedby ,City,
Escrow Agent and Developer.
City of Fort Worth,Texas
Fscrow Pledge Agreement to Replace Completion Agreement
Rev:10/19
Page 5 of 8
SECTION 12. CHOICE OF LAW;VENUE.
This Agreement is to be construed and interpreted in accordance with the laws ofthe State of Texas.
Venue shall be in the state courts located in Tarrant County, Texas or the United States District Court
for the Northern District of Texas, Fort Worth Division.
SECTION 13. 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 14. INDEMNITY.
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 HIND WHATSOEVER THAT ARISE OUT
OF ORARE 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 AND DEVELOPER HEREBY AGREES TO
RELEASE, HOLD HARMLESS, AND INDEMNIFY CITY (AND ITS RESPECTIVE
DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND REPRESENTATIVES) FROM AND
AGAINST ALL CLAIMS,DAMAGES, EXPENSES, COSTS,SUITS AND OTHER LIABILITY OF
ANY HIND WHATSOEVER THAT ARISE OUT OF OR ARE DIRECTLY OR INDIRECTLY
RELATED TO ANY ACTIONS OR INACTION BY CITY WITH RESPECT TO THIS
AGREEMENT.
SECTION 15. PAYMENT OF ESCROW FEES
Developer will be responsible for the payment of all fees to Escrow Agent associated with this
Agreement.
SECTION 16. TERMINATION OF COMPLETION AGREEMENT
Developer and City agree that the Completion Agreement is terminated and the City will release
the hold on the final plat related to the construction of the Community Facilities.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
City of Fort Worth,Texas
Fscrow Pledge Agreement to Replace Completion Agreement
Rev:10/19
Page 6 of 8
ACCORDINGLY, the City, Developer, and Escrow Agent have each caused this Agreement to
be executed in each entity's respective name by its duly authorized signatories effective as of the date
executed by the City's City Manager or their designee.
CITY OF FORT WORTH
DEVELOPER
VLMC, Inc.
Dana Burghdoff(J 12,20212:26 CST)
Dana Burghdoff
Assistant City Manager Don Allen(Jan 12,202116:47 CST)
Jan 12 2021 Name: Don Allen
Date: Title: Secretary
Recommended by: Date: Jan 12, 2021
Evelyn Roberts
Evelyn Roberts(Jan 12,202117:02 CST) ESCROW AGENT
Evelyn Roberts/Jennifer Ezernack UP Finance,LLC
Project Assistant
Planning and Development
sett,Cr�
Ben Compton(Jifn 12,202117:00 CST)
Approved at to Form&Legality: Name: Benjamin Compton
Title: Manager
Jan 12 2021
Richard A.McCracken(Jan 12,202117:04 CST) Date: ,
Richard A. McCracken
Sr. Assistant City Attorney
M&C No. N/a Contract Compliance Manager
Date:
Form 1295: N/A By signing I acknowledge that I am the person
responsible for the monitoring and administration
ATTEST: poo�OR��a of this contract, including ensuring all
,cyOF0.00006.0P performance and reporting requirements.
foYRonald P. Gonzales ,v o o=d
for Ronald P.Gonzales(Jan 13,202108:58 CST) °o° °o �d a Scarlett Morales(Jan 12,202117:03 CST)
Mary J.Kayser �� °°°°°°°°°° *a Janie Scarlett Morales
City Secretary aa�nEXASaAp Development Manager
City of Fort Worth,Texas OFFICIAL RECORD
Fscrow Pledge Agreement to Replace Completion Agreement
Rev:10/19 CITY SECRETARY
Page 7 of 8
FT.WORTH, TX
ATTACHMENT "1"
Changes to Standard Agreement
Escrow Pledge Agreement to Replace Completion Agreement
None
City of Fort Worth,Texas
Fscrow Pledge Agreement to Replace Completion Agreement
Rev:10/19
Page 8 of 8