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HomeMy WebLinkAboutContract 47144 (2)roveD TA zo2o\5 11 V 1t r I \k\i'l ESCROW AGREEMENT c��iiiT -� 4T -�. rETA 4 `i ,� +, v{ nihop, , mrEir THIS ESCROW AGREEMENT (the "Agreement"), entered into as of this day of Y , 2015 , byand amongFG Aledo Development, LLC,("Developer"), the of Fort p City orth, a Texas municipal corporation ("Fort Worth") and Southwest Bank ("Escrow Agent") is to witness the following: WHEREAS, Developer and Fort Worth have entered into a Community Facilities Agreement for Morningstar Section 6 Phase 1 Offsite Sanitary Sewer (CFA# . DOE# .7500 City Secretary No. 4"tiq4 ,) 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, 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 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 $ 66,455.75, 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"). "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 , City of Fort Worth, Texas Escrow Pledge Agreement CFA Official Release Date: 07.01.2015 Page 1 of 10 CITY SECRETARY Ft WORM, TX • 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, of 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 offices 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; (iii) notify Fort Worth of any claim, action, or proceeding affecting title to the Security Funds of 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* City of Fort Worth, Texas Escrow Pledge Agreement CFA Official Release Date: 07.01.2015 Page 2 of 10 (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 Esciow 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. (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: FG Aledo Development, LLC Attention- Kim Gill 3045 Lackland Road Fort Worth, TX 76116 City of Fort Worth, Texas Escrow Pledge Agreement CFA Official Release Date: 07.01.2015 Page 3 of 10 To • Escrow Agent: Southwest Bank Attention: Alec Barry PO Box 962020 Fort Worth, TX 76162-2020 To: City of Fort Worth With a copy to: City Of Fort Worth Attn: City Treasurer 1000 Throckmorton Foit Worth, TX 76102 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 perfoun 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. 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 City of Fort Worth, Texas Escrow Pledge Agreement CFA Official Release Date: 07 01 2015 Page 4 of 10 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 value 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 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. City of Fort Worth, Texas Escrow Pledge Agreement CFA Official Release Date: 07 01 2015 Page 5 of 10 If after the expiration of two (2) years from the date of this Agreement either: (i) none of the 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 tights, 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 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 tight 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. 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 City of Fort Worth, Texas Escrow Pledge Agreement CFA Official Release Date: 07.01.2015 Page 6 of 10 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 propel 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 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; Internleader. 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, of 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 City of Fort Worth, Texas Escrow Pledge Agreement CFA Official Release Date: 07.01.2015 Page 7 of 10 (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 Esciow 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 mterpleader or declaratory judgment action Anything in this Agreement to the contrary notwithstanding, in no event shall the 1-1,scrow 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 Date: /c.:," Approved at to Form & Legality: Douglas W. Black Sr. Assistant CityAttorney M&C No. Date: ATTEST: / An re ary Jer City Sebre ary City of Fort Worth, Texas Escrow Pledge Agreement CFA Official Release Date: 07.01.2015 Page 9 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 r in sus crs CHAPA Name: Assistant City Manager Title: President of KTFW Investments, Inc, Manager of Developer DEVELOPER FG Aledo Development, LLC Date: ESCROW AGENT Southwest Bank Name: Alec Barry Title: President, 7th Street Banking Center Date: OFFICIAL RECUrD CITY SE T A r Ft 'WORTH, fl