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HomeMy WebLinkAboutContract 56773 12/03/2021 CSC No.56773 2:39 pm ESCROW AGREEMENT TO REPLACE COMPLETION AGREEMENT 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"),FG Aledo Development, LLC ("Developer"),and Simmons Bank("Escrow Agent"). WHEREAS,City and Developer entered into a Community Facilities Agreement for Morningstar Section 5, Phase 4 (CFA# 21-0026, City Project Number 103161) for the construction of public infrastructure improvements("CFA"); and WHEREAS, 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 WHEREAS, City, Developer and Escrow Agent executed a Completion Agreement, as the financial security guaranteeing satisfactory compliance with the CFA Obligations ("Completion Agreement");and WHEREAS, the CFA and the Completion Agreement are filed with the City Secretary as City Secretary Contract Number 55553; and WHEREAS,Developer desires to replace the Completion Agreement with this 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 WHEREAS,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 One Hundred Fifteen Thousand Nine Hundred Eighty-Two and 80/100 Dollars ($115,982.80), 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"). OFFICIAL RECORD City of Fort Worth,Texas CITY SECRETARY Escrow Pledge Agreement to Replace Completion Agreement FT. WORTH, TX Rev:10/19 Page 1 of 9 "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 parry of this Agreement. SECTION 2. SECURITY FUNDS. 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 FUNDS. 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 normal practices 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)within two(2)business days 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 signed by 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 City of Fort Worth,Texas Escrow Pledge Agreement to Replace Completion Agreement Rev:10/19 Page 2 of 9 (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: (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 CFA 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 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 of the Security Funds.Escrow Agent is hereby authorized to transfer the Security Funds within two(2)business days 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: City of Fort Worth FG Aledo Development,LLC Attn: City Treasurer Attention: Kim Gill 200 Texas Street 3045 Lackland Rd. Fort Worth,TX 76102 Fort Worth,Texas 76116 With a copy to: City of Fort Worth,Texas Escrow Pledge Agreement to Replace Completion Agreement Rev:10/19 Page 3 of 9 City of Fort Worth To: Escrow Agent: Attn: CFA Administration 200 Texas Street Simmons Bank,an Arkansas state bank Fort Worth,TX 76102 Attention: David Hassell 2200 West 7'Street Fort Worth,TX 76102 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 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 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 IN SECURITY 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: City of Fort Worth,Texas Escrow Pledge Agreement to Replace Completion Agreement Rev:10/19 Page 4 of 9 (i) One-third 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 one-third of the value of the Community Facilities being constructed pursuant to the CFA. (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 assigned by 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. City of Fort Worth,Texas Escrow Pledge Agreement to Replace Completion Agreement Rev:10/19 Page 5 of 9 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 a waiver 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 may be amended,waived,or modified except pursuant to a written instrument executed by City, Escrow Agent and Developer. SECTION 12. CHOICE OF LAW; VENUE. This Agreement is to be construed and interpreted in accordance with the laws of the 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 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 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. ESCROW AGENT DUTIES. a. Duties Limited. The Escrow Agent shall perform only the duties expressly set forth herein and no further duties or responsibilities shall be implied. The Escrow Agent shall have no liability under and no duty to inquire as to the provisions of any agreement other than this City of Fort Worth,Texas Escrow Pledge Agreement to Replace Completion Agreement Rev:10/19 Page 6 of 9 Agreement. The Escrow Agent shall have no duty to solicit any funds that may be required to be deposited hereunder with Escrow Agent. b. Reliance. The Escrow Agent may rely upon, and shall be protected in acting or refraining from acting upon, any written notice, instruction or request furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the proper party or parties. The Escrow Agent shall be under no duty to inquire into or investigate the validity, accuracy or content of any such document. C. Good Faith. The Escrow Agent shall not be liable for any action taken or omitted by it in good faith except to the extent that a court of competent jurisdiction determines that the Escrow Agent's negligence, gross negligence or willful misconduct was the primary cause of any loss to City or Developer. The Escrow Agent may execute any of its powers and perform any of its duties hereunder directly or through agents or attorneys and may consult with counsel, accountants and other skilled persons to be selected and retained by it. d. Adverse Claim, Interpleader. If there is any disagreement or dispute in connection with this Agreement or the subject matter hereof, or in the event of adverse or inconsistent claims or demands upon, or inconsistent instructions to, Escrow Agent, or if Escrow Agent in good faith is in doubt as to what action to take pursuant to this Agreement,Escrow Agent may, at its election, refuse to comply with any such claims, demands, or instructions, or refuse to take any other action pursuant to this Agreement until: (i) the rights of all persons involved in the dispute have been fully and finally adjudicated by a court of competent jurisdiction; or (ii) all disputes have been resolved between the parties involved, and Escrow Agent has received written notice thereof satisfactory to it from all such persons. Without limiting the generality of the foregoing, Escrow Agent may, at its election, institute an action for interpleader and deposit the Escrow Fund or any portion thereof into the registry of a court of competent jurisdiction in Tarrant County, Texas, or commence judicial proceedings for declaratory judgment, and Escrow Agent shall be entitled to recover from Developer, its attorneys' fees and costs in connection with any such interpleader or declaratory judgment action. Anything in this Agreement to the contrary notwithstanding, in no event shall the Escrow Agent be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Escrow Agent has been advised of the likelihood of such loss or damage and regardless of the form of action. SECTION 17. TERMINATION OF COMPLETION AGREEMENT The Completion Agreement is terminated City of Fort Worth,Texas Escrow Pledge Agreement to Replace Completion Agreement Rev:10/19 Page 7 of 9 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 Assistant City Manager or their designee. CITY OF FORT WORTH DEVELOPER FG Aledo Development,LLC Oana 24L( hdoff Dana Burghdoff ec 1,2021 21:42 CST) Dana Burghdoff Kim gill(Dec 1,202110:05 CST) Assistant City Manager Name: Kim Gill Date: Dec 1, 2021 Title: President Date: Dec 1, 2021 Recommended by: r zg—e l/�g 15ze a"I( ESCROW AGENT Jennifer Ez�rnack(Dec 1,2021 10:14 CST) Simmons Bank Evelyn Roberts/Jennifer Ezernack Contract Compliance Specialist Planning and Development David Hassell(Dec 1,202110:08 CST) Approved at to Form &Legality: Name: David Hassell Title: Market Executive Richard A.McCracken(Dec 1,202112:30 CST) Date: Dec 1' 2021 Richard A.McCracken 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: ddaann� of this contract, including ensuring all oO� F� q r performance and reporting requirements. A. 00000000 terry OO C Li PI00 0 o° 7GlfZGE'�000yCE2`t`"/�IP�G�E� .,� o���O� Janie Scarlett Morales(Dec 1,202110:41 CST) Ronald P. Gonzales 6� o o*) Janie Scarlett Morales 0 Acting City Secretary � .000..0 ap Development Manager �a OFFICIAL RECORD City of Fort Worth,Texas CITY SECRETARY Escrow Pledge Agreement to Replace Completion Agreement FT. WORTH, TX Rev:10/19 Page 8 of 9 ATTACHMENT"1" Changes to Standard Agreement Escrow Pledge Agreement to Replace Completion Agreement Negotiated changes are contained in the body of the Agreement. City of Fort Worth,Texas Escrow Pledge Agreement to Replace Completion Agreement Rev:10/19 Page 8 of 9