HomeMy WebLinkAbout025687 - Construction-Related - Contract - Three S. Whispering Oaks, Ltd., and Monitex Financial Services, Inc.ESCROW/PLEDGE AGREEMENT
03-15-00 A10:02 IN
THIS ESCROW/PLEDGE AGREEMENT (the “Agreement"), entered into as of
March 1 , 2000 , by and among Three b. whispering Oaks, Ltd. , (Developer), the
City of Fort Worth, Texas a municipal corporation of Tarrant County, Texas (“Fort
Worth") and Monitex Financial Services, Ir((EscrOW Agent) is to witness the following:
WHEREAS, Developer and Fort Worth have entered into a Community Facilities
Agreement for, Ten Mile Bridge Addition____________ _ (property description) an
addition to 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 security acceptance 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
(collectively, the "Secured 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
Monitex Fin, serv,, inc., as Escrow Agent, in lieu of and in complete satisfaction of the
obligation to submit the Intended Security to secure the performance of the Secured
Obligations;
NOW THEREFORE, for and in consideration of the premises, 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 $475,590.00 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.
SECTION 2. PLEDGE.
/^security for the full and punctual performance of the Secured Obligations,
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
Monirpx Fin.serv, ,Tnc, 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 Fort Worth orMonitex Fin.serv., inc .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 the Agreement, Developer shall have
delivered to and deposited withMonitex Fin.serv.,inc. the Initial Security Funds
representing or evidencing the Pledged Collateral. The parties acknowledge and agree,
thatMoni.tex Fin.serv.,inc.shall be required to segregate the Pledged Collateral from
other funds held byMonitex Fin, serv., inc .for Developer in accordance with the normal
practices ofMonitex Fin.serv. ,Inc, aS an Escrow Aqent.Monitex Fin.serv. ,Inc, 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 Fort Worth that the Secured
Obligations have been fully performed. During such time asMonirex Fin.serv, .inc.has
possession of the Pledged Collateral, Monitex Fin.serv. ,incshall furnish to Fort Worth
(when requested by Fort Worth) written acknowledgments signed by an officer of
Monitex Fin. Serv.,inc, 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.
(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 andMonitex Fin.serv.,inc.
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
directMonttex Fin.serv.,inc, to transfer to Fort Worth all of the Pledged Collateral.
Monitex Fin.serv. ,inc. 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 Fort Worth to
Developer andMonitex Fin.serv.,inc, 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:
Three B Whispering Oaks, Ltd.
8101 Boat Club Road, Suite 330
Fort Worth, Texas 76179
To: Escrow Agent:
Monitex Financial Services, Inc.
P. 0. Box 1236
Cedar Hill, Texas 75106-1236
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.: Development Section
Department of Transportation and Public Works
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 andMonitex Fin.serv. ,inc. 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
(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 conditionsMonitex Fin.serv.,inc. shall be
authorized (without the consent of Fort Worth) to return to Developer the original
Intended Security Funds inMonitex Fin.serv. ,inc. '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 byMonit-.ex Fin.serv,,inc.in connection with obtaining each such release and
substitution.
SECTION 9 PERIODIC WITHDRAWL 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 Fort Worth ancfaonitex Fin.Serv.,Inc, 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
Mnnitpy Fin.sprv.,Tnc. of any objection, then Developer’s calculation shall be deemed
to have been accepted and approved by Fort Worth andMonitex Fin.serv.,inc, 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 Monitex Fin.serv. ,inc. to disburse the amount originally
submitted by Developer, 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, 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 Fort Worth,Monitex Fin.serv,, inc .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
Monitex Fin.Serv., inc, (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 Monitex Fin, serv., inc .of its duties hereunder except for the gross
negligence or willful misconduct of Monitex Fin.Serv,,inc.or its directors, officers,
employees, agents or.representatives.
THREE B WHISPERING OAKS, LTD.
(Developer)
Mike Groomer
Assistant City Manager
MONITEX FINANCIAL SERVICES, INC.
(Escrow Agent)
APPROVED AS TO FORM AND
LEGALITY
Contract Authorization