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HomeMy WebLinkAboutContract 46584 CITY SECRETARY CONTRACT NO. ESCROW AGREEMENT THIS ESCROW AGREEMENT (the "Agreement"), entered into as of this 3rd day of April, 2015 ("Effective Date"), by and among Roanoke 35/114 Partners, L.P., a Texas limited partnership ("Developer"), Churchill at Champions Circle Community, L.P., a Texas limited partnership ("Buyer"), the City of Fort Worth, a Texas municipal corporation ("Fort Worth") and First American Title Insurance Company c/o Republic Title of Texas, Inc. ("Escrow Agent") is to witness the following: WHEREAS, Developer and Fort Worth have entered into a Community Facilities Agreement for Champions Circle— Outlet Boulevard / Golf View Drive (CFA#2015-015, DOE# 7406, City Project No. 02521) in the City of Fort Worth, Denton 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; and WHEREAS, as of the Effective Date, Developer is selling and conveying to Buyer certain real property in Developer's Champions Circle development pursuant to a Contract of Sale dated effective January 15, 2014, as subsequently amended ("Contract"); and WHEREAS, pursuant to the Contract, Developer is responsible to Buyer for the completion of the construction of the CFA Obligations on or before September 1, 2015 ("Construction Deadline"); and WHEREAS, pursuant to the Contract, Developer and Buyer are required to set up an C-) escrow account at closing with Escrow Agent with Developer depositing the reasonably M estimated costs to complete the CFA Obligations (other than the sidewalks) which is $685,930.04 ("Developer's Escrow Deposit"), and Buyer depositing the reasonably estimated n costs for the sidewalks which is $69,242.00 ("Buyer's Escrow Deposit"). -v o 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 N acknowledged, the parties hereto hereby agree as follows: OFFICIAL RECORD CITY SECRETARY FT.WORTH,TX ESCROW/PLEDGE AGREEMENT FOR CFA of 12 Champions Circle—Outlet Boulevard/Churchill Drive 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 $755,172.04, which sum represents Developer's Escrow Deposit, Buyer's Escrow Deposit, and Developer's additional cash deposit to bring the total escrowed funds to 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 and Buyer hereby pledge, assign, and transfer to Fort Worth, and hereby grant 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 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 and Buyer 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 in accordance with the normal practices of Escrow Agent acting as an escrow agent. Escrow Agent shall invest the Security Funds in an interest-bearing account with a financial institution approved by Developer, Buyer and Fort Worth. Escrow Agent shall make periodic disbursements of the Security Funds in accordance with Section 9 below, and 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) immediately 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 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 ESCROW/PLEDGE AGREEMENT FOR CFA Page 2 of 12 Champions Circle—Outlet Boulevard/Churchill Drive 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 or Fort Worth's security interest(s)therein; and (iv)adjust the Security Funds to an amount equal to the actual contract price for the CFA Obligations, 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 and Buyer each covenant and agree that it will not: (i) assign or transfer any rights of Developer or Buyer, respectively, 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, Buyer 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. ESCROW/PLEDGE AGREEMENT FOR CFA Page 3 of 12 Champions Circle—Outlet Boulevard/Churchill Drive SECTION 6. RIGHTS AND REMEDIES OF FORT WORTH UPON AND AFTER DEFAULT. (a) Remedy. Upon the occurrence of a Default and subject to Buyer's completion rights in Section 9, 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 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 related to the CFA Obligations; (ii) written notice of such Default has been given by Fort Worth to Developer, Buyer 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. (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: Roanoke 35/114 Partners, L.P. c/o Fine Line Diversified Development 201 Main Street, Suite 3100 Fort Worth, Texas 76102 Attention: William V. Boecker Telephone: 871-255-5781 Telecopy: 817-334-0795 with a copy to : Patricia F. Meadows Kelly Hart & Hallman LLP 201 Main Street, Suite 2500 Fort Worth, Texas 76102 Telephone: (817) 878-3549 Telecopy: (817) 878-9749 ESCROWIPLEDGE AGREEMENT FOR CFA Page 4 of 12 Champions Circle—Outlet Boulevard/Churchill Drive To Buyer: Churchill at Champions Circle Community, L.P. 5605 N. MacArthur Blvd., Suite 580 Irving, TX 75038 Attention: Brad Forslund Telephone: (972) 550-7800 Telecopy: (972) 550-7900 with a copy to: Barry J. Palmer Coats Rose 9 Greenway Plaza, Suite 1100 Houston, TX 77046 Telephone: 713-653-7395 Telecopy: 713-890-3944 To: Fort Worth: City of Fort Worth Attn: Fort Worth 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. ESCROW/PLEDGE AGREEMENT FOR CFA Page 5 of 12 Champions Circle—Outlet Boulevard/Churchill Drive 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 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) The 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 make monthly withdrawals of the Security Funds (hereinafter called the "Withdrawn Collateral") during the construction process, upon satisfaction of the following conditions: (a) Developer shall provide Fort Worth, Buyer 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, reasonable supporting documentation of the costs and expenses attributable to the requested 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 and Buyer of Fort Worth's objection to Developer's calculation of the Estimated Cost to Complete ESCROW/PLEDGE AGREEMENT FOR CFA Page 6 of 12 Champions Circle—Outlet Boulevard/Churchill Drive 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, Buyer and Escrow Agent of any objection, then Developer's calculation shall be deemed to have been accepted and approved by 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 with Developer having a right to reconcile the discrepancy with Fort Worth in subsequent Withdrawal Notices. 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. Upon any such distribution of Withdrawn Collateral, Escrow Agent shall concurrently notify Fort Worth, Buyer and Developer of the amount of the Withdrawn Collateral and of the remaining balance of the Security Funds. If Developer (i) fails to commence construction of the CFA Obligations within thirty (30) days after the Effective Date, (ii) fails to complete construction of at least 50% of the CFA Obligations within ninety (90) days after the Effective Date, or (iii) fails to complete the CFA Obligations by the Construction Deadline, then Buyer, as its sole and exclusive remedies, may, upon prior written notice to Escrow Agent, Fort Worth and Developer, either (i) extend these deadlines, or (ii) construct, in strict accordance with the plans and specifications described in Exhibit "A" attached to this Agreement, the applicable portions of the CFA Obligations that Developer has failed to construct, in which event Developer shall grant to Buyer temporary construction easements to complete construction of the CFA Obligations. In addition, if Buyer elects the second option from the preceding sentence, then Buyer shall also be authorized to request Withdrawn Collateral from the remaining Escrow Funds during the construction process upon delivery to Escrow Agent, Fort Worth, and Developer of a Withdrawal Notice, reasonable supporting documentation of the cost and expenses attributable to the requested Withdrawn Collateral, and Buyer's calculation of the Estimated Cost to Complete. Upon receipt of the Withdrawal Notice, Fort Worth shall have seven (7) calendar days to notify Buyer of Fort Worth's objection to Buyer's calculation of the Estimated Cost to Complete by providing Buyer 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 Escrowed Funds is insufficient to cover the Estimated Cost to Complete. If Fort Worth fails to timely notify Buyer, Developer and Escrow Agent of any objection, then Buyer's calculation shall be deemed to have been accepted and approved by Fort Worth, and Escrow Agent is authorized to release the Withdrawn Collateral requested by Buyer 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 Buyer's Estimated Cost to Complete, then Buyer shall be allowed to withdraw the Withdrawn Collateral in the amount corresponding to Fort Worth's calculation of the Estimated Cost to Complete, with Buyer having a right to reconcile the discrepancy with Fort Worth in subsequent Withdrawal Notices. If Fort Worth's calculation of the Estimated Cost to Complete is outside a range of five percent (5%) of Buyer's Estimated Cost to Complete, Fort ESCROW/PLEDGE AGREEMENT FOR CFA Page 7 of 12 Champions Circle—Outlet Boulevard/Churchill Drive Worth and Buyer, 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. Upon any such distribution of Withdrawn Collateral, Escrow Agent shall concurrently notify Fort Worth, Buyer and Developer of the amount of the Withdrawn Collateral and of the remaining balance of the Security Funds. If the reasonable cost to Buyer of constructing the CFA Obligations that Developer has failed to construct exceeds the Escrow Funds, Developer shall pay such commercially reasonable additional costs to Buyer within thirty (30) days after its receipt from Buyer of written notice reasonably evidencing such additional costs. If the reasonable cost to Buyer of constructing the CFA Obligations that Developer has failed to construct is less than the amount of the Escrow Funds disbursed to Buyer pursuant hereto, then Escrow Agent shall disburse the remaining Security Funds as set forth in Section 3 after receipt of written notice from Fort Worth that the CFA Obligations have been fully performed. 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, 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 and Buyer 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 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, Developer and Buyer. ESCROW/PLEDGE AGREEMENT FOR CFA Page 8 of 12 Champions Circle—Outlet Boulevard/Churchill Drive 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 and Buyer each 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 and Buyer each 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 Escrow Agent shall earn a fee of$100.00 for services performed under this Agreement, and Developer and Buyer shall share equally in the fee charged by Escrow Agent. Remainder of Page Intentionally Blank; Signatures and Exhibits to Follow ESCROW/PLEDGE AGREEMENT FOR CFA Page 9 of 12 Champions Circle—Outlet Boulevard/Churchill Drive ACCORDINGLY, Fort Worth, Developer, Buyer 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. DEVELOPER: ROANOKE 35/114 PARTNERS, L.P., a Texas limited partnership By: Roanoke 35/114 Genpar, LLC, its general partner Y it (r William V. Boecker, Manager BUYER: CHURCHILL AT CHAMPIONS CIRCLE COMMUNITY,L.P., a Texas limited partnership By: Bradley E. For und, Authorized Representative FORT WORTH: CITY OFOFF, FORT WORTH By: Fernando Costa Assistant City Manager Ap roved to form & legality: Douglas W. Black Sr. Assistant City Attorney M&C No. IV IA Date: A a y J. I r,eitxmcretary OFFICIAL RECORD CITY SECRETARY FT.WORTH,TX ESCROW/PLEDGE AGREEMENT FOR CFA Champions Circle—Outlet Boulevard/Churchill Drive ESCROW AGENT: FIRST AMERICAN TITLE INSURANCE COMPANY C/O REPUBLIC TITLE OF TEXAS,INC. By C Na e: o r Title: r-tj ESCROW/PLEDGE AGREEMENT FOR CFA Page 11 of 12 Champions Circle—Outlet Boulevard/Churchill Drive EXHIBIT"A" THE CITY OF FORT WORTH,TEXAS PLANS FOR THE CONSTRUCTION OF WATER, STORM DRAIN AND PAVING IMPROVEMENTS TO SERVE CHAMPIONS CIRCLE, OUTLET BOULEVARD AND GOLF VIEW DRIVE DOE#7406 SHEET INDEX Sheet Number Sheet Trde PLAT 2 LEGEND&ABBREVIATIONS 3 GENERAL CONSTRUCTION NOTES 4 CITY OF FORT WORTH GENERAL CONSTRUCTION NOTES 5 WATER PLAN&PROFILE 6 WATER DETAILS 7 WATER DETAILS 8 OUTLET BLVD.-PAVING PLAN&PROFILE 9 GOLF VIEW DRIVE-PAVING PLAN&PROFILE 10 PAVING DETAILS 11 PAVING DETAILS 12 PAVING DETAILS 13 PAVING DETAILS 14 PAVING DETAILS 15 GRADING PLAN 16 GRADING PLAN 17 POND GRADING PLAN 18 EROSION&SEDIMENTATION CONTROL PLAN 19 ISWM CONSTRUCTION DETAILS 20 PROPOSED DRAINAGE AREA MAP 21 HYDRAULIC CALCULATIONS 22 STORM DRAIN PLAN&PROFILE 23 STORM DRAIN DETAILS 24 STORM DRAIN DETAILS SCC-7 TX.DOT STORM DRAIN DETAILS SCP-7 TX.DOT STORM DRAIN DETAILS FW-0 TX.DOT STORM DRAIN DETAILS 28 PAVEMENT MARKING,SLEEVING AND STREET LIGHTING PLAN 29 PAVEMENT MARKING DETAILS 30 TRAFFIC CONTROL&BARRICADE DETAILS 31 STREET LIGHTING DETAILS 32 STREET LIGHTING DETAILS 33 STREET LIGHTING DETAILS ESCROW/PLEDGE AGREEMENT FOR CFA Page 12 of 12 Champions Circle—Outlet Boulevard/Churchill Drive