HomeMy WebLinkAboutContract 55641o4/Za/Zo2i
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CSC No. 55641
E,SCROW AGREIIVIENT TO REPLACE COMPLETION AGRFFMF:NT
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"), KTFW Investrnents,
Inc. ("Developer"), and First Bank ("Escrow Agent").
WHEREAS, City and Developer entered into a Community Facilities Agreement for
M012NINGSTAR — SECTION 5, PHASE 5, (CFA# 19-0092), City Project Number 102206, 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 and Developer previously executed a Completion Agreement as 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 54060; 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 7'F�FRFFORE, 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 SIX HiJNDRED THIRTY FOUR THOUSAND
ONE H[JNDRED SIXTY FOUR DOLLARS AND EIGHTY FOUR CENTS, ($634,164.84),
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.
OFFICIAL RECORD
City ot'Fortwortt►, Texas CITY SECRETARY
Fscrow Pledge Agreement to Replace Completion Agreement
Rev: 10/19 FT. WORTH, TX
Page 1 of 8
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.
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Concurrently with the execution of this Agreement, Developer shall ha�e 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
accordancewiththenormalpractices ofEscrowAgentactingas anescrow agent. EscrowAgentshallreturn
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,
writtenacknowledgmentssignedbyanofficerofEscrowAgentdetailing theamountoftheSecurityFunds.
City's rights in the Security Funds shallbe superior to those of Escrow Agent's notwithstanding any tenns
or understandings, written or otherwise, between Developer and Escrow Agent.
f.Y��71 II [�LCl�K�1%/��►`II 1:�
(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;
(rii) notify City of any claim, action, or proc eeding 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) Ne�ative Covenants. So long as any of the CFA Obligations remain unperformed, Developer
covenants and agrees that Developer will not:
CityofFortWorth,Texas
Fscrow Pledge Agreement to Replace Completion Agreement
Rev: 10/19
Page 2 of 8
(i)
(ri)
assign or transfer any rights of Developer in the Security Funds; or
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.
f.Y��[�L�� 11%II I:Y�7 � 17 �19RI1�M
Developer shall be in default under this Agreement only upon thehappening of any ofthe following
events ("Default"):
(a) default in the timely payment for or performanc e of the CFA Obligations after written notic e 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.
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(a) Remedy. Upon the occurrence of a Default, City shall have the right to direct Escrow Agent to
transfertoCity all ofthe SecurityFunds. EscrowAgentis herebyauthorizedto transferthe Security
Funds immediately upon the receipt of a written statement purporting to be executed by an
authorized representative of City stating that:
(i)
�ll�
(rii)
a Default by Developer has occurred related to the remaining CFA Obligations;
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
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 shallbe effective when actually received.
To: City
City of Fort Worth
Attn: City Treasurer
200 Texas Street
Fort Worth, TX 76102
With a copy to:
City of Fort Worth
Attn: CFA Administration
200 Texas Street
Fort Worth, TX 76102
To Developer:
FG Aledo Development, LLC
Attention: Kim Gill
3045 Lackland Rd.
Fort Worth, Texas 76ll6
To: Escrow Agent:
First Bank
Attention: Ryan Merrill
900 Bailey Ranch Rd.
Aledo, Texas 76008
CityofFortWorth,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. SUBSTITCJTION OF COLLATERAL.
Notwithstandmg 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
Notic e);
(b) Developer shall pledge to, or obtain for the benefit of City, and deliver to City the alternate
Financial Security acceptable to City ("Substituted CollateraP') which Substituted Collateral shall
in the aggregate be at least equal to the Estimated Developer's Cost; and
(c) said SubstitutedCollateral shall be of sufficient amounts to cover all workwhichhas occurredprior
to the substitution of collateral provided for in this Section.
Upon satisfaction of the above-specified conditions, Escrow Agent shallbe 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 shallpay the expenses incurred by Escrow Age�t
in connection with obtaining each such release and substitution.
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(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 of the value of Community Facilities being constructedpursuant 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
subc ontractors and material suppliers for one-third of the value of the Community Fac ilities
being constructed pursuant to the CFA.
CityofFortWorth,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 affidav�
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 w�h
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 bemg constructed pursuant to the CFA,
(rii) 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 reduc ed in an amount that does not exc eed two-thirds of the amount of the financ ial
guarantee if more than thirty calendar days have passed since the first reduction in the
financial guarantee.
(� 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 m part. Any attempted transfer or assignment shall be absolutely
void and shall entitle Developer to a release of all Security Funds.
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No waiver by City of any Default shall be deemed to be a waiver of any other subsequent Defaulk
No delay or omission by City in exercising any right or power hereunder shall impair any such right or
pow er or be c onstrued as a waiver thereof, nor shall any single ar partial exerc ise of any such right or power
preclude other or further exercise thereof.
SECTTON 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 executedby City,
Escrow Agent and Developer.
CityofFortWorth,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 ac c ordanc e with the law s 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. COUN'I'ERPARTS.
This Agreement may be executed m 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. INDENINITI'.
DEVELOPER HEREBY AGREE.S TO RELEASE, HOLD HARMLESS, AND
INDIIVINIFY FSCROW AGENT (AND ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS
AND REPRFSENTATIVFS) FROM AND AGAINST ALL CLAIMS, DAMAGES, EXPENSES,
COSTS, SUITS AND OTHER LIABILITY OF ANY HIND WHATSOEVER THAT ARISE OUT
OF ORARE DIRECTLY ORINDIRECTLY RELATED TO THE PERFORMANCE BY FSCROW
AGENT OF ITS DLITIFS HII2ELTNDER EXCEPT FOR Tf� GROSS NEGLIGINCE OR
WILLFUL MISCONDUCT OF ESCROW AGENT OR ITS DIRECTORS, OFFICERS,
EMPLOYEES, AGEN'IS OR REPRESENTATIVES AND DEVELOPER HEREBY AGREFS TO
RII,EASE, HOLD HARMI,FSS, AND INDEMNIFY CITY (AND ITS RFSPECTIVE
DIRECTORS, OFFICERS, EMPLOYEFS, AGENTS AND REPRESINTATIVFS) FROM AND
AGAINST ALL CLAIMS, DAMAGFS, EXPENSES, COSTS, SUITS AND OTI�R LIABILITY OF
ANY HIND WHATSOEVER THAT ARISE OUT OF OR ARE DIRECTLY OR INDIRECTLY
REI,ATID TO ANY ACTIONS OR INACTION BY CITY WITH RESPECT TO THIS
C�li:7 �I �I►I I �1►Y�
SECTION 15. PAYMEIVVT OF FSCROW FEFS
Developer will be responsible for the payment of all fees to Escrow Agent associated with this
Agreement.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
CityofFortWorth,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
�Gi�lGi �GL�GI�G�D�
Dana Burghdoff (J �5.2�07 CST)
Dana Burghdoff
Assistant City Manager
Date: J a n 5, 2021
Recommended by:
�'��isv %��Qiz.�
� lyn Ro s(Jan 5, 2021 09:45 6T)
Evelyn Roberts/Jennifer Ezernack
Project Assistant
Planning and Development
Approved at to Form & Legality:
����
Richard A. McCracken (Jan 5, 202113:18 CST)
Richard A. McCracken
Assistant City Attorney
M&C No.
Date:
Form 1295:
ATTEST:
far Rohqld P. GanzAles
for Ronald P. Gonzales (Jan 6, 202114:06 CST)
Mary J. Kayser
City Secretary
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CityofFortWorth,Texas
Fscrow Pledge Agreement to Replace Completion Agreement
Rev: 10/19
Page 7 of 8
DEVII,OPER
KTFW Investments, Inc., general partner
Kr ai, zozo ie:zs csr)
Name: Kim Gill
Title: President
Date: Dec 31, 2020
E,SCROW AGENT
First Bank
lzvan Merrill
Ryan Mcrrill (Jan 5, 202109:43 CST)
Name: Ryan Merrill
Title: Vice President
Date: J a n 5, 2021
Contract Compliance Manager
By signing I acknowledge that I am the person
responsible for the monitoring and administration
of this contract, including ensuring all
performance and reporting requirements.
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Janie Scarlett Morales
Development Manager
OFFICIAL RECORD
CITY SECRETARY
FT. WORTH, TX
ATTACHIVIENT "1"
Changes to StandardAgreement
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