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12-R-31 Escrow Agreement with JMLG Holdings, LTD.RESOLUTION NO. 12-R-31 A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS AUTHORIZING A PERFORMANCE ESCROW AGREEMENT WITH JMI~G HOLDINGS, LTD. AND SCHERTZ BANK & TRUST COMPANY, AND OTHER MATTERS IN CONNECTION THEREWITH WHEREAS, the City staff of the City of Schertz (the "City") has recommended that the City enter into a performance escrow agreement with JMLG Holdings, Ltd. and Schertz Bank & Trust Company relating to completion of certain TXDOT-required improvements to serve Fairway Ridge Subdivision, Unit 3; and WHEREAS, the City Council has determined that it is in the best interest of the City to contract with JMLG Holdings, Ltd. and Schertz Bank & Trust Company pursuant to the Performance Escrow Agreement attached hereto as Exhibit A (the "Agreement"). BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS THAT: Section 1. The City Council hereby authorizes the City Manager to execute and deliver the Agreement with JMLG Holdings, Ltd. and Schertz Bank & Trust Company in substantially the form set forth on Exhibit A. The City Council further authorizes the City Manger to enter into similarly-structured cash escrow construction performance arrangements without additional City Council approval. Section 2. The recitals contained in the preamble hereof are hereby found to be true, and such recitals are hereby made a part of this Resolution for all purposes and are adopted as a part of the judgment and findings of the City Council. Section 3. All resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Resolution are hereby repealed to the extent of such conflict, 'and the provisions of this Resolution shall be and remain controlling as to the matters resolved herein. Section 4. This Resolution shall be conshued and enforced in accordance with the laws of the State of Texas and the United States of America. Section S. If any provision of this Resolution or the application thereof to any person or circumstance shall be held to be invalid, the remainder of this Resolution and the application of such provision to other persons and circumstances shall nevertheless be valid, and the City Council hereby declares that this Resolution would have been enacted without such invalid provision. Section 6. It is officially found, determined, and declared that the meeting at which this Resolution is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Resolution, was given, all as required by Chapter 551, Texas Government Code, as amended. Section 7. This Resolution shall be in force and effect from and after its final passage, and it is so resolved. PASSED AND ADOPTED, this 17`h day of April, 2012. CITY~~ SCHERTZ, TEXAS Pro- ATTEST: Ci Secretary (CITY SEAL) 50509036.1 EXHIBIT A PERFORMANCE ESCROW AGREEMENT 50509036.1 A-1 PERFORMANCE ESCROW AGREEMENT This PERFORMANCE ESCROW AGREEMENT (this "Agreement") is among JMLG HOLDINGS, LTD., a Texas limited partnership (the "Developer"), CITY OF SCHERTZ, TEXAS, a Texas home rule city (the "City"), and SCHERTZ BANK & TRUST COMPANY, a Texas banking corporation (the "Escrow Bank") on this 17'h day of April, 2012 (the "Effective Date"). Recitals: WHEREAS, the Developer, the City, and the Escrow Bank (the "Parties") desire to execute this Agreement in order to set forth the terms of the Developer's obligations to complete a highway construction project relating to Fairway Ridge Subdivision, Unit 3, a copy of the plat of which is attached hereto as Exhibit A and made a part hereof for all purposes. Agreement: NOW, THEREFORE, for and in consideration of the sum of Ten and No/100 Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Developer, the City, and the Escrow Bank hereby agree as follows: 1. The Project. The infrastructure project covered by this Agreement (the "Project") is the completion of a deceleration lane on FM 1103 adjacent to and leading to the enhance of Fairway Ridge Subdivision, Unit 3, as further described on Exhibit B attached hereto and made a part hereof. The Developer is obligated, at its sole expense, to complete construction of the Project and submit the completed Project to TXDOT for TXDOT's dedication acceptance. The purpose of this Agreement is to set forth the terms whereby the Developer is escrowing funds with the Escrow Bank as security for the City in the event the Developer does not complete the Project when and as required and to authorize the City to utilize the escrowed funds to complete the Project, including reimbursing the City for any and all third-party actual expenses incurred by the City which are directly related to and arising from this Agreement. The Developer has contracted with both (a) M.W. Code Engineering, L.L.C. ("Code") for all necessary engineering work, oversight of the construction, and all submittals to and coordination with TXDOT, and (b) SACC, Ina ("SACC") to do all of the construction of the Project. 2. Escrowed Funds. The Escrow Bank hereby acknowledges receipt on the Effective Date of the sum of $358,189.15 from the Developer (the "Escrowed Funds"). The Escrow Bank hereby agrees to hold and disburse the Escrowed Funds in strict accordance with the terms and provisions of this Agreement. 3. Escrow Account. The Escrow Bank shall hold the Escrowed Funds in a separate interest- bearing account at the Escrow Bank (the "Escrow Account"). Earnings on the Escrowed Funds shall be deposited to the credit of a subaccount of the Escrow Account. The Developer's tax identification number is 20-1894342. The City's tax identification number is 74-1469344. 4. Distribution of Funds. The Escrowed Funds and the earnings thereon shall be distributed as set forth in this Section 4. soso6vva.s - 1 - (a) Disbursement of Escrowed Funds. In the event that either (a) construction of the Project has not Commenced (as defined herein) within 30 days after the Effective Date of this Agreement, or (b) the Project has not been completed and dedicated to and accepted by TXDOT within 120 days after the Effective Date of this Agreement, the City may instruct the Escrow Bank to disburse funds in such amounts and at such times as necessary to complete the Project, including to reimburse the City for Project costs incurred by the City. As used in the first sentence of this paragraph, the term "Commenced" shall mean the placement of construction barricades and the start of necessary clearing and grading work. The Developer and SACC shall give the City and the Escrow Bank written notice of the date construction of the Project has Commenced. The Developer and Cude shall also give the City and the Escrow Bank written notice of the date when construction of the Project is completed and the date the Project is submitted to TXDOT for its acceptance. The City's disbursement instructions to the Escrow Bank must be in writing and signed by the City Manager or his designated representative, with a copy to the Developer. After (i) receipt by the City of written notice from TXDOT that the Project has been accepted and (ii) the City has been reimbursed from the Escrow Account for any remaining expenses of the City relating to the City's completion of the Project, the City shall, within 20 days of the later of such events, provide written instruction to the Escrow Bank, with a copy to the Developer, to return any remaining portion of the Escrowed Funds (excluding earnings thereon in the subaccount) to the Developer. After the Project has been accepted by TXDOT, the City shall provide the Developer with a report describing its use of any Escrowed Funds. The Escrow Bank shall have no obligation to investigate or determine the occurrence or non-occurrence of any fact or event related to such instruction, but shall disburse funds in accordance with any such instruction received from the City. (b) Disbursement of Earnines. Upon disbursement in full of the Escrowed Funds pursuant to Section 4(a), earnings thereon held in the subaccount shall be disbursed as follows: (i) if all of the Escrowed Funds have been returned to the Developer pursuant to Section 4(a), all earnings on the Escrowed Funds in the subaccount shall be disbursed to the Developer; (ii) if all of the Escrowed Funds have been disbursed to or at the direction of the City to complete the Project pursuant to Section 4(a), all earnings on the Escrowed Funds in the subaccount shall be disbursed to the City; and (iii) if a portion of the fully-disbursed Escrowed Funds has been returned to the Developer and a portion has been disbursed to or at the direction of the City to complete the Project pursuant to Section 4(a), the earnings on the Escrowed Funds shall be disbursed to the Developer and the City in proportion to the disbursements of the Escrowed Fund to the Developer and the City. The Account shall thereupon be closed and this Agreement shall terminate. (c) No Disbursement at Develoaer's Direction. The Developer agrees that it has no authority to direct the Escrow Bank regarding the disbursement by the Escrow Bank of money held by it pursuant to this Agreement other than to provide wiring instructions to the Escrow Bank regarding City-authorized disbursements to the Developer. 5. Escrow Fee. In addition to the Escrowed Funds, the Escrow Bank further acknowledges receipt of $100.00 from the Developer as payment in full for the Escrow Bank's services under this Agreement. snsnfimas _ 2 _ 6. Liability of the Escrow Bank. The Escrow Bank shall be liable only to hold the Escrowed Funds and the earnings thereon and to deliver same to the persons or entities in accordance with the provisions of this Agreement and any amendments hereto, it being expressly understood that, by acceptance hereof, the Escrow Bank is acting in the capacity of a depository only and shall not be liable or responsible to anyone for any damages, losses or expenses, unless same shall be caused by the Escrow Bank's gross negligence or willful malfeasance. It is further understood and agreed that the Escrow Bank shall have no duty to investigate or inquire regarding genuiness or validity of any written instruction received purporting to be from the City and containing a signature purporting to be of an authorized representative thereof, and the Escrow Bank shall incur no liability for acting in accordance with such written instruction. 7. Interaleader by Escrow Bank. Subject to Subsection 4(c) of this Agreement, in the event of conflicting demands or instructions or other occurrences received by the Escrow Bank which the Escrow Bank in its sole judgment exposes it to potential liability, the Escrow Bank may file a petition in interpleader and place the funds held in escrow into the registry of an applicable Court. 8. Amendments. Except for the termination of this Agreement pursuant to Section 4, this Agreement shall not be modified, revoked, released, or terminated, except by the written agreement of the Developer, the City, and the Escrow Bank. Should, at any time, any attempt be made to modify this Agreement in a manner that would materially increase the duties and responsibilities of the Escrow Bank, or to modify this Agreement in any manner that the Escrow Bank shall reasonably deem undesirable, the Escrow Bank may resign by notifying the parties . hereto in writing, by certified mail, postage prepaid, return receipt requested, to their respective addresses set forth hereinbelow; provided, such resignation shall not be effective until a successor banking entity agrees to assume the obligations of the Escrow Bank hereunder and the Escrow Bank has transferred the Escrowed Funds and earnings to date thereon to the successor banking entity. 9. Entire Agreement. THIS AGREEMENT IS THE ENTIRE AGREEMENT AMONG THE PARTIES REGARDING THE ESCROWED FUNDS AND THE EARNINGS THEREON AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES REGARDING THE ESCROWED FUNDS. 10. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. 11. Notices. Any notices, consents or other communications required or permitted to be given pursuant to this Agreement must be in writing and must be given by hand delivery, facsimile transmission or certified mail (postage prepaid, return receipt requested), and shall (except to the extent otherwise expressly provided herein) be deemed to have been given and received (whether actually received or not) when a letter containing such notice, consent or other communication, is (i) received, if sent via facsimile transmission or hand delivered or (ii) deposited in an official depository under the regular care and custody of the United States Postal sasnfisna s _ 3 _ Service located within the confines of the continental United States of America, if mailed, addressed to the parties hereto at the following respective addresses: To the Developer: JMLG Holdings, Ltd. 1250 NE Loop 410, Suite 330 San Antonio, TX 78209 Attention: Carlos Lomelin To the Citv: City of Schertz, Texas 1400 Schertz Parkway Schertz, TX 78154 Attention: City Manager With a copy to: Fulbright 8c Jaworski L.L.P. 300 Convent Street, Suite 2100 San Antonio, TX 78205 Attn: Michael L. Spain Telephone: (210) 270-7184 Fax: (210) 270-7205 e-mail: mspain@fulbright.com To the Escrow Bank: Schertz Bank & Trust 519 Main Street Schertz, TX 78154 Attention: Melvin Golla or to such other substitute address and/or addressee as any party hereto shall designate by written notice to the other party in accordance with the terms of this Section; provided, however, that no such notice of change of address and/or addressee shall be effective unless and until actually received by the party to whom such notice is sent. 12. Multiple Counterparts; Bindin Effect. This Agreement may be executed in multiple counterparts each of which shall be an original and all of which together shall constitute one instrument. This Agreement shall be binding upon and shall inure to the benefit of and be enforceable by the Parties and their respective successors and assigns. 13. No Relationship. The Parties agree that nothing contained herein shall create athird- party beneficiary relationship as to any other persons or entities. Accordingly, this Escrow Agreement is executed solely for the benefit of the Parties. Srtsnfivna.5 _ 4 _ The parties have executed this Escrow Agreement to be effective as of the Effective Date. THE DEVELOPER: JMLG HOLDINGS, LTD. By: JMLG PROPERTIES, L.L.C., a Texas limited liability company, its Sole General Partner By: President THE CITY: THE CITY OF SCHERTZ, TEXAS By: m C. Kessel, City Manager THE ESCROW BANK: SCHERTZ BANK & TRUST COMPANY By: Melvin Golla, President snu~vnas S-1 Exhibit A Fairway Ridge Subdivision Unit 3 Plat 1 I LOM11Q1 W- Yul I~ 11 .r. ~ ~~.,`. ~i~~4 '~,L r ~ f, ;44-r t ~ 7- ~r 1 Muc .~_ mrx_ Imurt~ bOYUfl IeeaY uw Kllr, rc. e+,n - uYllewr f~itq,, lm m~rtur- ~'Iwml~inoK RI (110)1U~~ °Lnis 11l1l1R1[a lr7Yl111mI KIY! •~y ~wlw~Y~w~ww 00101M Y4.rl.~.r ~~~~ W 1n-r wwI^ ~ Ixww~lwo wlrlwwwYw m~w1 wwwY1M111f~ w ~~~ ~Iww1q •Oa Yw1~wIwIlltw~~lY~~R1~ Fb• m ~1~ wwm 111 wwl 1MIi~Ih~YwY~Y~1w114YY1n W N IRYIYYYNY~4YlIwllYx V~YYY Iw ARY~MIww~Y4R YIOYY Iw ~~ua~ra YMY~xMY ri-~~Y • W YYOYYYiIW MN ^ R I[ r u lu lea u lul lux 101n 11r ner s YuMO naa wY n 1c+we ~4144r R]y'y~1 ~19lIw~ IT Rf71wwlRwwR7~45 w ~~ R R m R l~ ><RI T Twl ~ Iwww! Na A ~- iT lit ~~ YwM~MI s~_ RK11V4d1' Ir~V IIIMTIIIA~MY~IIi YYIIF~ w~_ ~~ FAIIWAY AtltrE ~xY~x u!rr a u. .~ .Y1 vY1o411 10W II~YfY wnrlRlw _~IR+IrwnRwRllw .nwNw WT1Vw114~ I ~ `~RI~w~YlY1Yw ~IMww1lwlRf~w1~~ >•I Mw{ ww R 1~ w wY w1 FIR M JY~w~ ulsnr:lwas q _ 7 Exhibit B Project Description and Drawing See the FM 1003 Roadway Widening Construction Plans prepared by M. W. Cnde Engineers, L.L.C., sealed by Robert R. Delgado dated March 23, 2012 and approved by Texas Department of Transportation, San Antonio District, on March 30, 2012, a complete copy of which has been provided to the City. snmfinnan s R-1