HomeMy WebLinkAboutContract 47139 w
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Agreement"), entered into as of this day of
20 , by and among FG Aledo Development, LLC, ("Developer"), the City of Fort
Worth, a Texas municipal corporation ("Fort Worth") and Southwest Bank ("Escrow Agent") is
to witness the following:
WHEREAS, Developer and Fort Worth have entered into a Community Facilities
Agreement 141J,3'1 nt for Westside 4 Water Line (CFA# 2015-057, DOE# 7474 City Secretary No.
,) in the City of Fort Worth, Tarrant 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.
NOW THEREFORE, for and in consideration of these recitals, ten dollars ($10.00) and
other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
SECTION 1. DEFINED TERMS.
For the purposes of this Agreement, unless the context otherwise clearly requires, the
following terms shall have the following meanings:
"Security Funds"shall mean the cash deposit of$ 1,241,734.19,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.
SECTION 2. SECURITY FUNDS.
As financial security for the full and punctual performance of the CFA Obligations,
Developer hereby pledges, assigns, and transfers to Fort Worth, and hereby grants 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
City of Fort Worth Texas
Escrow Pledge Agreement
CFA Official Release Date: 07.01.2015
Pagel of 10
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 of 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 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
for Developer in accordance with the normal practices of Escrow Agent acting as an escrow agent.
Escrow Agent 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) within two (2) business days 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 the City of 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 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,
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
City of Fort Worth, Texas
Escrow Pledge Agreement
CFA Official Release Date: 07.01.2015
Page 2 of 10
(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 FONT 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 within two(2)business days 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.
To Developer:
FG Aledo Development, LLC
Attention: Kim Gill
3045 Lackland Road
Fort Worth, TX 76116
City of Fort Worth, Texas
Escrow Pledge Agreement
CFA Official Release Date: 07.01.2015
Page 3 of 10
To: Escrow Agent:
Southwest Bank
Attention: Alec Barry
PO Box 962020
Fort Worth, TX 76162=2020
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:
(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
City of Fort Worth, Texas
Escrow Pledge Agreement
CFA Official Release Date: 07.01.2015
Page 4 of 10
(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 (hereinafter called the "Withdrawn Collateral"), upon
satisfaction of the following conditions:
(a) Developer shall provide the City of Fort 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
(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 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:
City of Fort Worth, Texas
Escrow Pledge Agreement
CFA Official Release Date: 07.01.2015
Page 5 of 10
(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 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 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.
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
City of Fort Worth, Texas
Escrow Pledge Agreement
CFA Official Release Date: 07.01.2015
Page 6 of 10
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.
SECTION 17. ESCROW AGENT DUTIES
a. Duties Limited. The Escrow Agent shall perform only the duties expressly
set forth herein and no further duties or responsibilities shall be implied. The Escrow Agent shall
have no liability under and no duty to inquire as to the provisions of any agreement other than this
Agreement. The Escrow Agent shall have no duty to solicit any funds that may be required to be
deposited hereunder with Escrow Agent.
b. Reliance. The Escrow Agent may rely upon,and shall be protected in acting
or refraining from acting upon, any written notice, instruction or request furnished to it hereunder
and believed by it to be genuine and to have been signed or presented by the proper party or parties.
The Escrow Agent shall be under no duty to inquire into or investigate the validity, accuracy or
content of any such document.
C. Good Faith. The Escrow Agent shall not be liable for any action taken or
omitted by it in good faith except to the extent that a court of competent jurisdiction determines
that the Escrow Agent's gross negligence or willful misconduct was the primary cause of any loss
to Fort Worth or Developer. The Escrow Agent may execute any of its powers and perform any
of its duties hereunder directly or through agents or attorneys (and shall be liable only for the
careful selection of any such agent or attorney) and may consult with counsel, accountants and
other skilled persons to be selected and retained by it. The Escrow Agent shall not be liable for
anything done, suffered or omitted in good faith and without gross negligence by it in accordance
with the advice or opinion of any such counsel, accountants or other skilled persons.
d. Adverse Claim; Interpleader. If there is any disagreement or dispute in
connection with this Agreement or the subject matter hereof, or in the event of adverse or
inconsistent claims or demands upon, or inconsistent instructions to, Escrow Agent, or if Escrow
Agent in good faith is in doubt as to what action to take pursuant to this Agreement,Escrow Agent
may, at its election, refuse to comply with any such claims, demands, or instructions, or refuse to
take any other action pursuant to this Agreement until:
(i) the rights of all persons involved in the dispute have been fully and finally
adjudicated by a court of competent jurisdiction; or
(ii) all disputes have been resolved between the parties involved, and Escrow
Agent has received written notice thereof satisfactory to it from all such persons. Without
limiting the generality of the foregoing, Escrow Agent may, at its election, institute an
City of Fort Worth, Texas
Escrow Pledge Agreement
CFA Official Release Date: 07.01.2015
Page 7 of 10
action for interpleader and deposit the Escrow Fund or any portion thereof into the registry
of a court of competent jurisdiction in Tarrant County, Texas, or commence judicial
proceedings for declaratory judgment, and Escrow Agent shall be entitled to recover from
Developer and Fort Worth, its attorneys' fees and costs in connection with any such
interpleader or declaratory judgment action. Anything in this Agreement to the contrary
notwithstanding, in no event shall the Escrow Agent be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including but not limited to lost
profits),even if the Escrow Agent has been advised of the likelihood of such loss or damage
and regardless of the form of action.
REMAINDER OF THIS PAGE INTENTIONALLY BLANK
City of Fort Worth,Texas
Escrow Pledge Agreement
CFA Official Release Date: 07.01.2015
Page 8 of 10
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
FG Aledo Dev to ment, LLC
J Gd s Nai le` Kim Gill
Assistant City Manager Title: President of KTFW Investments, Inc,
} Manager of Developer
Date: l � ��
Approved at to Form &Legality: Date:
ESCROW AGENT
W Southwest Bank
Douglas W. Black
Sr. Assistant City Attorney
M&C No. '0��°'
Date: Name: Alec Barry
Title: President, 7 h street Banking Center
ATTEST:
Ile
,ee,
Date:
G
Mary J. s
City Secretary "
City of Fort Worth, Texas
Escrow Pledge Agreement "
CFA Official Release Date: 07.01.2015
Page 9 of 10
ATTACHMENT 4"
Changes to Standard Agreement
Escrow Pledge Agreement
Section 3 —change "immediately"to "within two (2) business days"
Section 6—change "immediately"to "within two (2)business days"
Section 17—entire new section
City of Fort Worth, Texas
Escrow Pledge Agreement
CFA Official Release Date: 07.01.2015
Page 9 of 10