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HomeMy WebLinkAboutContract 44711 (2)ESCROW/PLEDGE AGREEMENT CITY SECRETARY /j. , I CONTRACT NO........ . -I I _ THIS ESCROW/PLEDGE AGREEMENT (the "Agreement"), entered into as of this I( day of Ata, 2013, by and among KEYSTONE EQUITY PARTNERS, LLC, ("Developer"), the City of Fort Worth, Texas a municipal corporation ("Fort Worth") and AMERICAN ESCROW COMPANY ("Escrow Agent") is to witness the following: WHEREAS, Developer and Fort Worth have entered into a Community Facilities Agreement for the construction of public Water and Sanitary Sewer service to BIG CITY CRUSHED CONCRETE (City Secretary No. 1 4 1)1) ,) in the City of Fort Worth, Tarrant County, Texas (the "CFA"); and WHEREAS, the CFA provides that Developer shall submit to Fort Worth performance and payment bonds, cash deposits or other financial security to Fort Worth (collectively, the "Intended Security") for the purpose of guaranteeing satisfactory compliance by Developer with all requirements, terms, and conditions of the CFA; 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 AMERICAN ESCROW COMPANY, as Escrow Agent, in complete satisfaction of the obligation to submit the Intended Security to secure the performance of the CFA. NOW THEREFORE, for and in consideration of ten dollars ($10.00) and other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged and confessed, 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: "Initial Security Funds" shall mean the cash deposit of $179.869.00, which sum represents 125 percent of the estimated Developer's share of the cost of constructing the improvements identified in the CFA. The Developer's share of the total cost of such improvements shall hereinafter be called 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. "Payment and Performance Bond" shall mean a bond issued by a corporate surety or insurance company acceptable to Fort Worth in an amount equal to cost of improvements not yet completed by Developer. Keystone Equity Partners-CFW Escrow Pledge Agreement re: Big City Crushed Concrete RECEIVE[) AUG 15 2013 OFFICIAL RECOR[ ge I of 9 GUI SECRETARY Ft WORM, T SECTION 2. PLEDGE. As financial security for the full and punctual performance of the CFA, Developer hereby pledges, assigns, and transfers to Fort Worth, and hereby grants to Fort Worth a security interest in, the Initial 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 AMERICAN ESCROW COMPANY in accordance with Developer's periodic instructions (The Initial Security Funds and any substitution by Developer with a Payment and Performance Bond as permitted hereunder, are collectively referred to hereafter as the "Pledged Collateral"); TO HAVE AND TO HOLD the Pledged Collateral, together with all rights, titles, interests, privileges, and preferences appertaining to or incidental thereto, unto Fort Worth 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 AMERICAN ESCROW COMPANY to, or transfer or in any way affect or modify, any obligation of Developer with respect to any of the Pledged Collateral or any transaction involving or giving rise thereto. SECTION 3. PHYSICAL POSSESSION OF PLEDGED COLLATERAL. Concurrently with the execution of this Agreement, Developer shall have delivered to and deposited with AMERICAN ESCROW COMPANY the Initial Security Funds representing or evidencing the Pledged Collateral. The parties acknowledge and agree that AMERICAN ESCROW COMPANY shall be required to segregate the Pledged Collateral from other funds held by AMERICAN ESCROW COMPANY for Developer in accordance with the normal practices of AMERICAN ESCROW COMPANY as an Escrow Agent. AMERICAN ESCROW COMPANY shall return all funds on deposit representing or evidencing the Pledged Collateral remaining in its possession to Developer (or take such other action as Developer may request or direct) immediately after receipt of written notice from the City of Fort Worth that the Secured Obligations have been fully performed. During such time as AMERICAN ESCROW COMPANY has possession of the Pledged Collateral, KEYSTONE EQUITY PARTNERS. LLC shall furnish to the City of Fort Worth (when requested by Fort Worth) written acknowledgments signed by an officer of COMPANY detailing the amount of the Pledged Collateral. SECTION 4. COVENANTS. (a) Affirmative Covenants. So long as any of the Secured 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 Pledged Collateral; (ii) furnish Fort with information which Fort Worth may reasonably request concerning the Pledged Collateral; and (iii) notify Fort Worth of any claim, action, or proceeding affecting title to the Pledged Collateral or Fort Worth's security interest therein. Keystone Equity Partners-CFW Escrow Pledge Agreement Page 2 of 9 re: Big City Crushed Concrete (iv) adjust the Pledged Collateral to an amount equal to the actual contract price, including revisions thereto. (b) Negative Covenants. So long as any of the Secured Obligations remain unperformed, Developer covenants and agrees that Developer will not: (i) assign or transfer any rights of Developer in the Pledged Collateral; or (ii) create any Lien in the Pledged Collateral, 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 or performance of the Secured Obligations after written notice thereof has been given to Developer and AMERICAN ESCROW COMPANY 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 AMERICAN ESCROW COMPANY to transfer to Fort Worth all of the Pledged Collateral. AMERICAN ESCROW COMPANY is hereby authorized to transfer the Pledged Collateral immediately 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 under the CFA executed in connection with this Escrow/Pledge Agreement; (ii) written notice of such Default has been given by the City of Fort Worth to Developer and AMERICAN ESCROW COMPANY such Default was not cured within seven (7) days after such notice; and (iii) Fort Worth is entitled to have the Pledged Collateral 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: Keystone Equity Partners, LLC 777 Main Street Suite 3100 Fort Worth, Texas 76102 Keystone Equity Partners-CPW Escrow Pledge Agreement Page 3 of 9 re: Big City Crushed Concrete Attention: Mike Blubaugh 817-820-7032 To: Escrow Agent: American Escrow Company 2626 Howell Street Dallas, Texas 75204 Attention: Carla D. Janousek Senior Vice -President 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 obligation 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 (without the consent of Fort Worth), at any time and from time to time, to obtain releases of all or any part of the Pledged Collateral (hereinafter called the "Released Collateral") upon satisfaction of the following conditions: (a) Developer shall provide Fort Worth and AMERICAN ESCROW COMPANY written notice (the "Substitution Notice") that the Developer desires to obtain Released Collateral (as specified and described in such notice) in exchange for a contemporaneous substitution of a Payment and Performance Bond (as also specified and described in the Substitution Notice); and Keystone Equity Partners-CFW Escrow Pledge Agreement Page 4 of 9 re: Big City Crushed Concrete (b) Developer shall pledge to, or obtain for the benefit of, Fort Worth, and deliver to Fort Worth a Payment and Performance Bond from a surety 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 Payment and Performance Bonds shall be accompanied by a written commitment from the surety that such Performance and Payment Bonds shall cover all work which has occurred prior to the substitution of Collateral provided for in this Section. Upon satisfaction of the above -specified conditions AMERICAN ESCROW COMPANY shall be authorized (without the consent of the City of Fort Worth) to return to Developer the original Intended Security Funds in their 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 AMERICAN ESCROW COMPANY 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 Pledged Collateral (hereinafter called the "Withdrawn Collateral"), upon satisfaction of the following conditions: (a) Developer shall provide the City of Fort Worth and AMERICAN ESCROW COMPANY with written notice (the "Withdrawal Notice") that Developer desires to obtain the Withdrawn Collateral; and (b) the balance of the Pledged Collateral after withdrawal of the Withdrawn Collateral is at least equal to the estimated value of the Secured 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 Pledged Collateral is insufficient to cover the Estimated Cost to Complete. If Fort Worth fails to timely notify Developer and AMERICAN ESCROW COMPANY of any objection, then Developer's calculation shall be deemed to have been accepted and approved by the City of Fort Worth and AMERICAN ESCROW COMPANY 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 AMERICAN ESCROW COMPANY to disburse the amount originally submitted by Developer, Keystone Equity Partners-CFW Escrow Pledge Agreement Page 5 of 9 re: Big City Crushed Concrete less any amounts necessary to ensure that the balance of the Pledged collateral equals the Estimated Cost to Complete as jointly determined by Fort Worth and Developer. If after the expiration of two (2) years from the date of this Agreement either (i) none of the Secured Obligations have been performed; (ii) 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 Pledged Collateral as specified in Section 6 and construct the improvements contemplated in the CFA. SECTION 10. NON -ACCESSIBILITY OF FORT WORTH'S RIGHTS. The rights, powers, and interests held by Fort Worth hereunder in and to the Pledged Collateral 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 Pledged Collateral. 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 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 the City of Fort Worth, AMERICAN ESCROW COMPANY 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 AMERICAN ESCROW COMPANY (and its directors, officers, employees, agents and representatives) from Keystone Equity Partners-CPW Escrow Pledge Agreement Page 6 of 9 re: Big City Crushed Concrete 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 AMERICAN ESCROW COMPANY of its duties hereunder except for the gross negligence or willful misconduct of its directors, officers, employees, agents or_representatives. 1. Escrow Agent is not a party to, or bound by any agreement which may be deposited under, evidenced by, or which arises out of the foregoing instructions. 2. Escrow Agent acts hereunder as a depository only and is not responsible or liable in any manner whatever for the sufficiency, correctness, genuineness, or validity of any instrument deposited with it hereunder, or with respect to the form or execution of the same, or the identity, authority, or rights of any person executing or depositing the same. 3. Escrow Agent shall not be required to take or be bound by notice of any default of any person, or to take any action with respect to such default involving any expense or liability, unless notice in writing is given to an officer of Escrow Agent of such default and unless it is indemnified in a manner satisfactory to it against any such expense or liability. These instructions shall not be subject to rescission or modification except upon receipt by Escrow Agent of written instructions of all the parties hereto or their successors in interest, and no such modification shall be effective unless and until consented to in writing by Escrow Agent. 4. Escrow Agent shall be protected in acting upon any notice, request, waiver, consent, receipt, or other paper or document believed by Escrow Agent to be genuine and to be signed by the proper party or parties. 5. Escrow Agent shall not be liable for any error of judgment or for any act done or step taken or omitted by it in good faith, or for any mistake of fact or law, or for anything which it may do or refrain from doing in connection herewith, except its own willful misconduct, and Escrow Agent shall have no duties to anyone except those signing these instructions. 6. Escrow Agent may consult with legal counsel in the event of any dispute or questions as to the construction of the foregoing instructions, or Escrow Agent's duties hereunder, and Escrow Agent shall incur no liability and shall be fully protected in acting in accordance with the opinion and instructions of such counsel. 7. Escrow Agent assumes no liability and the parties hereto consent and agree that Escrow Agent shall have no liability for any defalcation, insolvency, receivership or conservatorship of the depository institution. 8. Nor shall Escrow Agent have any liability due to any of the parties other than Escrow Agent filing for bankruptcy or the consequences or effect of such a bankruptcy on the funds and/or documents deposited hereunder. The parties hereto further agree that Escrow Agent assumes no liability for and is expressly released from any claim or claims whatsoever in connection with the receiving, retaining and delivering of the above papers and funds except to account for payment and/or delivery made thereon. Deposit by Escrow Agent of the instruments and funds (less its charges and expenses incurred herein) comprising this escrow in Court, shall relieve Escrow Agent of all further responsibility and liability, and Escrow Agent is hereby expressly authorized to disregard in its sole discretion any and all notices or warnings given by any of the parties hereto, or by any Keystone Equity Partners-CFW Escrow Pledge Agreement Page 7 of 9 re: Big City Crushed Concrete other person or corporation, but the said Escrow Agent is hereby expressly authorized to regard and to comply with and obey any and all orders, judgments or decrees entered or issued by any court with or without jurisdiction, and in case Escrow Agent obeys or complies with any such order, judgment or decree of any court it shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such compliance, notwithstanding any such order, judgment or decree be entered without jurisdiction or be subsequently reversed, modified, annulled, set aside or vacated. In case of any suit or proceeding regarding this escrow to which Escrow Agent is or may be at any time a party, it shall have a lien on the contents hereof for any and all cost, attorneys' fees, whether such attorneys shall be regularly retained or specially employed and other expenses which it may have incurred or become liable for on account thereof, and it shall be entitled to reimburse itself therefor out of said deposit, and the undersigned jointly and severally agree to indemnify and hold harmless Escrow Agent from all loss, costs or damages incurred, including but not limited to attorneys' fees, by reason of this Agreement or the subject matter hereof or any cause of action which may be filed in connection therewith and to pay Escrow Agent, upon demand all such costs, fees and expenses so incurred. In the event that Escrow Agent performs any service not specifically provided hereinabove, or that there is any assignment or attachment of any interest in the subject matter of this escrow or any modification thereof, or that any controversy arises hereunder, or that Escrow Agent is made a party to, or intervenes in, any litigation pertaining to this escrow or the subject matter hereof, Escrow Agent shall be reasonably compensated therefor and reimbursed for all costs and expenses occasioned thereby; and the parties hereto agree jointly and severally to pay the same and, to the extent permitted by law, to indemnify Escrow Agent against any loss, liability, or expense incurred in any act or thing done by it hereunder, it being understood and agreed that Escrow Agent may interplead the subject matter of this escrow into any court of competent jurisdiction in Tarrant County, Texas, and the act of such interpleader shall immediately relieve Escrow Agent of its duties, liabilities, and responsibilities hereunder. SECTION 16. PAYMENT OF ESCROW FEES Developer will be responsible for the payment of all fees to American Escrow Company associated with the Escrow Agreement. Executed in quadruplicate by duly authorized representatives of each party hereto. KEYSTONE EOUITY PARTNERS, LLC CITY OF FORT WORTH, TEXAS By: Mike Blubaugh Vice President - -73 Date: By: Fernando Costa Assistant City Manager Date: 8/3 �3 Keystone Equity Partners-CFW Escrow Pledge Agreement Page 8 of 8 re: Big City Crushed Concrete By( Carla D. Janousek Senior Vice -President AMERIAN ESCPfoy- •MPANY APPROVED AS TO FORM AND LEGALITY Douglas W. Black Assistant City Attorney Keystone Equity Partners-CFW Escrow Pledge Agreement re: Big City Crushed Concrete ATTEST: ary'J. K' City Secre OFFICIAL RECORD ;1 CITY SECRETARY FT. WORTH, TX Page•9et9