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HomeMy WebLinkAboutContract 46787 CITY SECRETAW CONTRACT N0._401-1 ESCROW AGREEMENT THIS ESCROW AGREEMENT (the "Agreement"), entered into as of this At,-tay Of�Vn.Qc, 2015, by and among, Steadman Farms LLC ("Developer"), the City of Fort Worth, a Texas a municipal corporation ("Fort Worth") and American National Bank of Texas ("Escrow Agent") is to witness the following: WHEREAS, Developer and Fort Worth have entered into a Community Facilities A,greement for Steadman Farms, Phase 2 (CFA# 2015-033, DOE# 7437 City Secretary No. ,) in the City of Fort Worth, Tarrant County, Texas (the "CFA"); which contains both On-Site and Off-Site improvements as described in 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 Off-Site improvements of the CFA Obligations; NOW THEREFORE, for and in consideration of these recitals, ten dollars ($10.00) and other good and valuable consideration, the receipt, sufficiency, and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows: SECTION 1. DEFINED TERMS. For the purposes of this Agreement, unless the context otherwise clearly requires, the following terms shall have the following meanings: "Security Funds" shall mean the sum of$ 130,818.50, 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. M C-) M SECTION 2. SECURITY FUNDS. Z n 3 As financial security for the full and punctual performance of the CFA Obligations, z Developer hereby pledges, assigns, and transfers to Fort Worth, and hereby grants to Fort Worth Z\D a security interest in the Security Funds and all rights and privileges pertaining thereto with the cn C= City of Fort Worth, Texas C1 Escrow Pledge Agreement OFFICIAL RECORD CFA Oficial Release Date: 06.01.2015 CITY SECRETARY Page 1 of 8 FT.WORTHS TX 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 ofFort Worth or Escrow Agent to, or transfer or in any way affect or modify, any obligation of Developer with respect to any of the CFA Obligations or Security Funds or any transaction involving or giving rise therefrom. SECTION 3. PHYSICAL POSSESSION OF SECURITY FUNDS. Concurrently with the execution of the Agreement, Escrow Agent and Developer has agreed that the Security Funds shall be set aside from the general construction funds available under the Development Loan and said Security Funds shall not be advanced by Escrow Agent until Escrow Agent has determined that the Developer has satisfied the CFA Obligations and confirmed with the City of Fort Worth that the CFA Obligations have been performed by Developer. The parties acknowledge and agree that Escrow Agent shall be required to set aside the Security Funds from other funds to be disbursed 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 set aside pursuant to this Escrow Agreement or such amount remaining in the set aside funds (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 set aside all or any portion of the Security Funds, Escrow Agent shall furnish to Fort Worth (when requested by Fort Worth) written acknowledgment(s) 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 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 City of Fort Worth, Texas Escrow Pledge Agreement CFA Official Release Date: 06.01.2015 Page 2 of 8 (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: (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 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 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. City of Fort Worth, Texas Escrow Pledge Agreement CFA Official Release Date: 06.01.2015 Page 3 of 8 To Developer: Steadman Farms, LLC Attention: Ben Luedtke, EVP 3001 Knox St, Ste 207 Dallas , TX 75205 To: Escrow Agent: American National Bank of Texas Attention: 2'7 0 3 0 1*'&-L.4t1wA-7 pigq-t-A1/ 7W '75-2-1 41 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 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: City of Fort Worth,Texas Escrow Pledge Agreement CFA Official Release Date: 06.01.2015 Page 4 of 8 (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 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 from the set aside amount (hereinafter called the "Withdrawn Collateral"), upon satisfaction of the following conditions: (a) Developer shall provide the City offort 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 verified by Escrow Agent; 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 City of Fort Worth, Texas Escrow Pledge Agreement CFA Official Release Date: 06.01.2015 Page 5 of 8 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. 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, but is not so obligated, to receive the Security Funds 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 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 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 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. City of Fort Worth, Texas Escrow Pledge Agreement CFA Official Release Date: 06.01.2015 Page 6 of 8 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 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. REMAINDER OF THIS PAGE INTENTIONALLY BLANK City of Fort Worth,Texas Escrow Pledge Agreement CFA Official Release Date: 06.01.2015 Page 7 of 8 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 DEVELOPER Fernando Costa Name: Ben Luedtke Assistant City Manager Title: Executive Vice President Date: G/Z41/S Date: 61A i l-.T- Approved Approved at to Form &Legality: ESCROW AGENT Douglas W. Black Name:ST�V4rr-7 L4-1H/TE' Sr. Assistant City. Attorney Title: 134'NW41d, CtC UM4 M&C No. & P�25��a✓'�.JT�' Date: Date: ATTEST: �Fo A a J. y �' -g g7o City Secret 46 0 Q O� 0000000 AS � OFFICIAL RECORD City of Fort Worth, Texas CITY SECRETARY Escrow Pledge Agreement FT.WORTM,TX CFA Official Release Date: 06.01.2015 Page 8 of 8