HomeMy WebLinkAboutContract 47718-ES1 ESCROW AGREEMENT CITY SECRETARY
11 1
CONTRACT NO. 4
THIS
ESCROW AGREEMENT (the "Agreement"), entered into as of this
T ___ day of Lby and among Wilbow-Morningstar Development Corporation, a
Texas corporation De Loper"), the City of Fort Worth, a Texas municipal corporation ("Fort
Worth") and Southside Bank,a Texas state bank ("Escrow Agent") is to witness the following:
WHEREAS, Developer and Fort Worth have entered into a Community Facilities
Agreement for Morningstar Section 7,Phase 1 (CFA# 2016-004, DOE# 7498, City Secretary
No. 47717) in the City of Fort Worth, Tarrant County, Texas(the "CFA"); and
WHEREAS, the CFA provides that Developer shall submit to Fort Worth performance
bonds, cash deposits or other financial security acceptable to Fort Worth (collectively, the
"Financial Security") for the purpose of guaranteeing satisfactory compliance by Developer with
all requirements, terms, and conditions of the CFA (the "CFA Obligations");and
WHEREAS, on April 22, 2016, Developer and Fort Worth entered into a Completion
Agreement (City Secretary Contract No. 47718), as the financial security guaranteeing
satisfactory compliance with the CFA Obligations;and
WHEREAS, Developer and Fort Worth agree to allow the Completion Agreement
(City Secretary Contract No. 47718),to be replaced with this Agreement; and
WHEREAS, City staff has determined that the Security Funds required by this
Agreement are sufficient financial security to guarantee satisfactory compliance by Developer
with the remaining CFA 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, as an escrow
agent, in complete satisfaction of the obligation to submit the Financial Security to secure the
performance of the CFA Obligations.
NOW THEREFORE, for and in consideration of these recitals, ten dollars ($10.00) and
other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
SECTION L DEFINED TERMS.
For the purposes of this Agreement, unless the context otherwise clearly requires, the
following terms shall have the following meanings:
"Security Funds" shall mean the cash deposit of$ 371,755.20 which sum represents one
hundred twenty-five percent (125%) of the estimated Developer's cost of constructing the
CFA Obligations (the "Estimated Developer's Cost").
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OFFICIAL RECORD AUL 42016
City of Fort worth,Texas CITY SECRETARY WpR�H
FT. WORTH, TX GIZYSEGR
Escrow Pledge Agreement ��T� ETARY
CFA Official Release Date:07.01.2015
Page I of 10
"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.
SECTION 2. SECURITY FUNDS.
As financial security for the full and punctual performance of the CFA Obligations,
Developer hereby pledges, assigns, and transfers to Fort Worth, and hereby grants to Fort Worth
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 of Fort Worth 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 Fort
Worth 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 of Fort Worth
(when requested by Fort Worth) written acknowledgments signed by an officer of Escrow Agent
detailing the amount of the Security Funds. Fort Worth'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 CFA 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 Security Funds;
(ii) furnish Fort Worth with information which Fort Worth may reasonably
request concerning the Security Funds;
City of Fort Worth,Texas
Escrow Pledge Agreement
CFA Official Release Date:07.01.2015
Page 2 of 10
(iii) notify Fort Worth of any claim, action, or proceeding affecting title to the
Security Funds or Fort Worth'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:
(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 Fort Worth.
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 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;
(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, Fort Worth shall have the right to direct
Escrow Agent to transfer to Fort Worth 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 Fort Worth stating
that:
(i) a Default by Developer has occurred related to the CFA Obligations;
(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 Security Funds transferred in accordance
with the Agreement.
City of Fort Worth, Texas
Escrow Pledge Agreement
CFA Official Release Date:07.01.2015
Page 3 of 10
(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:
Wilbow-Morningstar
Development Corporation
Attention: Jennifer Rabon
4131 N. Central Expressway, Suite 990
Dallas, Texas 75204
To Escrow Agent:
Southside Bank
Attn: Mark
Cundiff
1320 S. University Drive, Suite 402
Fort Worth, Texas 76107
To City of Fort Worth:
City Of Fort Worth
Attn: City Treasurer
1000 Throckmorton
Fort Worth,TX 76102
With a copy to:
City of Fort Worth
Attn:CFA Administration
1000 Throckmorton
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. EXCLUSIVE RIGHTS AND REMEDIES.
If the Developer fails to perform its obligations under the CFA, 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 as set
forth in Section 6 hereof.
City of Fort Worth,Texas
Escrow Pledge Agreement
CFA Official Release Date:07.01.2015
Page 4 of 10
SECTION 8. 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 Fort Worth and Escrow Agent written notice (the
"Substitution Notice") that the Developer desires to obtain Released Collateral in
exchange for a contemporaneous substitution of an alternate Financial Security
acceptable to Fort Worth (as specified and described in the Substitution Notice); and
(b) Developer shall pledge to, or obtain for the benefit of Fort Worth, and deliver to Fort
Worth the alternate Financial Security acceptable to Fort Worth (the "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 amount(s) 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 Fort Worth) 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 9. PERIODIC WITHDRAWAL OF COLLATERAL.
Notwithstanding any contrary provision in this Agreement, Developer shall have the right to
periodic withdrawals of the Security Funds (hereinafter called the "Withdrawn Collateral"), upon
satisfaction of the following conditions:
(a) Developer shall provide the City of Fort Worth and Escrow Agent with written notice
(the "Withdrawal Notice") that Developer desires to obtain the Withdrawn Collateral in
any amount less than or equal to the then-completed CFA Obligations as inspected or
accepted by Fort Worth; and
(b) the balance of the Security Funds after withdrawal of the Withdrawn Collateral is at
least equal to the estimated value of the CFA Obligations then remaining to be performed
(such remaining val ue is hereinafter called 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 Security Funds
City of Fort Worth,Texas
Escrow Pledge Agreement
CFA Official Release Date:07.01.2015
Page 5 of 10
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 the City of 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 Fort Worth'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,
through a designated representative, will reconcile the calculations and jointly approve an
Estimated Cost to Complete and advise Escrow Agent to disburse the amount as jointly
determined.
If after the expiration of two (2)years from the date of this Agreement either:
(i) none ofthe CFA Obligations have been performed;or
(ii) there has been partial performance but the term of the CFA has not been extended
by Fort Worth;then
in either event, the City of Fort Worth shall be entitled to receive the Security Funds 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 interests held by Fort Worth hereunder in and to the Security
Funds 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
Security Funds.
SECTION 1 L 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.
City of Fort Worth,Texas
Escrow Pledge Agreement
CFA Official Release Date:07.01.2015
Page 6 of 10
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. 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 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 and Developer hereby agrees to
release, hold harmless, and indemnify Fort Worth (and its respective 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 any actions or inaction by Fort Worth with respect to this Agreement.
SECTION 16. PAYMENT OF ESCROW FEES.
Developer will be responsible for the payment of all fees to Escrow Agent associated
with this Agreement.
SECTION 17. 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 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 gross negligence or willful misconduct was the primary cause of any
loss to Fort Worth 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 shall be liable only for the
careful selection of any such agent or attorney) and may consult with counsel, accountants and
other skilled persons to be selected and retained by it. The Escrow Agent shall not be liable for
City of Fort Worth,Texas
Escrow Pledge Agreement
CFA Official Release Date:07.01.2015
Page 7 of 10
anything done, suffered or omitted in good faith and without gross negligence by it in accordance
with the advice or opinion of any such counsel,accountants or other skilled persons.
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 and Fort Worth, 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.
REMAINDER OF THIS PAGE INTENTIONALLY BLANK
City of Fort Worth,Texas
Escrow Pledge Agreement
CFA Official Release Date:07.01.2015
Page 8 of 10
ACCORDINGLY, the City of Fort Worth, Developer and Escrow Agent have each
caused this instrument to be executed in quadruplicate in each entity's respective name by its
duly authorized signatories effective as of the date executed by the City Manager or his/her
designee.
CITY OF FORT WORTH DEVELOPER
WILBOW-MO INGSTAR DEVELOPMENT
CORPORA
Name: s N e: Ll�
Title: . (��y��,c ov% Title:
Date: ���� Date:
Approve at to Form&Legality:
ESCROW AGENT
ame:
Title: SOUTHSIDE BANK
M&C No. IV 1A /.
Date: T rW 1
®p fame:
ATTEST- �® � �� Title: E V P - C R C
Date: --A.) ��7 2�b 1 L
e:
Title �($
Form 1295 Certification: �AS
City of Fort Worth,Texas
Escrow Pledge Agreement
CFA Official Release Date: 07.01.201 5
Page 9 of to
OFFICIAL RECORD
CITY SECRETARY
FT.WORTH, TX
ATTACHMENT "1"
Changes to Standard Agreement
Escrow Pledge Agreement
Recitals - added the following language:
WHEREAS, on April 22, 2016, Developer and Fort Worth entered into a
Completion Agreement (City Secretary Contract No. 47718), as the financial
security guaranteeing satisfactory compliance with the CFA Obligations;and
WHEREAS, Developer and Fort Worth agree to allow the Completion
Agreement (City Secretary Contract No.47718),to be replaced with this Agreement;
and
WHEREAS, City staff has determined that the Security Funds required by
this Agreement are sufficient financial security to guarantee satisfactory compliance by
Developer with the remaining CFA Obligations;and
Section 3—change"immediately"to"within two(2)business days"
Section 6- change"immediately"to"within two(2)business days"
Section 10- change "NON-ACCESSIBILITY" to "NON-ASSIGNABILITY"
Section 17- entire new section
City of Fort Worth, Texas
Escrow Pledge Agreement
CFA Official Release Date:07.01.2015
Page 10 of 10
MORNINGSTAR
Section 7-1
Water $ 13,738.19
Sewer $ 39,481.35
Storm $ 83,815.25
Paving $ 97,376.81
Street Lights $ 62,992.56
$297,404.16
125% $371,755.20