HomeMy WebLinkAboutWestlake Solana PID 2018 Reimbursement AgreementSOLANA PUBLIC IMPROVEMENT DISTRICT
ASSESSMENT PART B REIMBURSEMENT AGREEMENT
This Solana Public Improvement District Assessment Part B Reimbursement Agreement
(this "Agreement") is executed between the Town of Westlake, Texas (the "Town") and MRW
Investors, LLC, a Texas limited liability company (the "Developer") (individually referred to as a
"Party" and collectively as the "Parties") to be effective January 29, 2018 (the "Effective Date").
RECITALS
WHEREAS, the Public Improvement District Assessment Act, Texas Local Government
Code, Chapter 372, as amended (the "Act"), authorizes the Town Council (the "Council") of the
Town of Westlake, Texas (the "Town"), to create a public improvement district within the Town;
and
WHEREAS, on February 24, 2014, the Council conducted a public hearing to consider a
petition received by the Town on October 18, 2013 titled "Petition for the Creation of a Public
Improvement District Within the Town of Westlake, Texas, for the Solana Public Improvement
District" requesting the creation of a public improvement district; and
WHEREAS, on February 24, 2014, the Council approved Resolution No. 14-07 (the
"Authorization Resolution"), authorizing, establishing and creating the Solana Public
Improvement District (the "District"); and
WHEREAS, on January 15, 2015, the Council adopted Ordinance No. 741 which, among
other matters, approved and accepted the Solana Public Improvement District Service and
Assessment Plan (the "SAP") and levied assessments on certain assessable property in the District;
and
WHEREAS, on January 29, 2018, the Council passed and approved Ordinance No.
______ (the "Part B Assessment Ordinance"), which Part B Assessment Ordinance (i) approved
an update to the SAP entitled Solana Public Improvement District Annual Service Plan Update -
Assessment Part B (the "SAP Update") and (ii) levied the Assessment Part B against all assessable
property in the District (the "Part B Assessed Property") benefitting from Improvement Project B
improvements (the "Improvement Project B Improvements") in the amount noted on the
Assessment Roll for Assessment Part B attached as an Appendix to the SAP Update; and
WHEREAS, capitalized terms used in this Agreement and not otherwise defined shall
have the meanings given to them in the SAP and the SAP Update; and
WHEREAS, all Assessment Part B revenues (the "Assessment Part B Revenues") shall be
deposited into an Assessment Part B project fund segregated from all other funds of the Town (the
"Project Fund") as further described herein; and
WHEREAS, the Project Fund shall be used to reimburse the Developer as set forth in this
Agreement and subject to the provisions of any trust indenture (a "Bond Indenture") relating to
any bonds issued for Improvement Project B Improvements (the "Improvement Project B Bonds"),
if any are issued, to pay the Reimbursement Amount (hereinafter defined).
2
NOW THEREFORE, FOR VALUABLE CONSIDERATION THE RECEIPT AND
ADEQUACY OF WHICH ARE ACKNOWLEDGED, THE PARTIES AGREE AS
FOLLOWS:
1. The recitals in the "WHEREAS" clauses of this Agreement are true and correct,
create obligations of the Parties, and are incorporated as part of this Agreement for all purposes.
2. The Town shall cause to be deposited into the Project Fund, unless Improvement
Project B Bonds are issued, all Assessment Part B Revenues collected (excluding Delinquent
Collection Costs and annual Administrative Expenses). If Improvement Project B Bonds are
issued, then Assessment Part B Revenues shall be deposited into the funds and accounts set forth
in, and pursuant to, a Bond Indenture. The Project Fund shall only be used as provided in this
Agreement and for no other purposes.
Strictly subject to the terms, conditions and requirements and solely from the revenues
herein provided, and subject to the Developer making the initial deposit required by Section 3
below, the Town agrees to pay to the Developer, and the Developer shall be entitled to receive
from the Town, until September 1, 2048 (the "Maturity Date") TWO MILLION FOUR HUNDRED
TWENTY-FIVE THOUSAND DOLLARS ($2,425,000.00), or so much thereof as from time to time
remains outstanding (such outstanding amount, from time to time, is referred to as the
"Reimbursement Amount"), for the cost of the Improvement Project B Improvements, solely from
the net proceeds of one or more series of Improvement Project B Bonds issued by the Town to pay
the Reimbursement Amount (the "Bond Proceeds") and from the Project Fund as provided in
Section 5 below. The costs of the Improvement Project B Improvements are authorized by the Act
and approved by the Council and represent the total cost to be assessed against the Part B Assessed
Property for the Improvement Project B Improvements, which are eligible public improvement
projects that are being undertaken and financed by the PID for the special benefit of the Part B
Assessed Property and that upon completion will be dedicated in fee and accepted by the Town.
The Reimbursement Amount shall bear simple interest per annum at the rate of (i) 6.43% from the
Effective Date through January 28, 2023 and (ii) 5.855% from January 29, 2023 through the
Maturity Date. If any portion of the Reimbursement Amount remains unpaid after the Town has
elected to sell Improvement Project B Bonds, the interest rate paid to the Developer for such unpaid
Reimbursement Amount shall continue to be the rate set forth in the immediately preceding
sentence. The interest rates have been approved by the Council and are authorized by the Act.
3. On or before February 15, 2018, the Developer shall make an initial deposit of
$2,425,000 (the "Developer Initial Deposit") into an escrow account held by a trustee bank selected
by the Town. The costs of the Improvement Project B Improvements shall be paid first from
Developer Initial Deposit held in the escrow account.
4. The Reimbursement Amount, plus interest, which interest shall begin to accrue on
the date Improvement Project B Improvements are accepted by the Town, as described above
(collectively, the "Unpaid Balance"), are payable to the Developer under this Agreement and are
secured by and payable solely from (i) Bond Proceeds and (ii) the Project Fund, if Improvement
Project B Bonds are not issued. No other Town funds, revenue, taxes, income or property shall be
used even if the Unpaid Balance is not paid in full at or before the Maturity Date. If,
notwithstanding its collection efforts, the Town fails to receive all or any part of the Assessment
3
Part B Revenues and, as a result, is unable to make payments from the Project Fund, such failure
and inability shall not constitute a Failure or Default by the Town under this Agreement. This
Agreement and/or any Improvement Project B Bonds shall not and shall never give rise to or
create:
a. a charge against the general credit or taxing powers of the Town or any
other taxing unit; or
b. a debt or other obligation of the Town payable from any source of revenue,
taxes, income or properties of the Town other than from Bond Proceeds and the Project
Fund; or
c. any obligation of the Town to issue Improvement Project B Bonds or other
obligations; or
d. any obligation of the Town to pay any amount due or to become due under
this Agreement other than from Bond Proceeds and the Project Fund and any other funds
established under a Bond Indenture.
5. If Improvement Project B Bonds are issued, the Bond Proceeds shall be used to pay
the Unpaid Balance. Until Improvement Project B Bonds are issued, the balance in the Project
Fund shall be paid to the Developer beginning the first March 31st, June 30th, September 30th or
December 31st to occur after the earlier of the date that (i) the Town issues Improvement Project
B Bonds, if any, or (ii) the Town issues a certificate of occupancy for the Improvement Project B
Improvements (the "Reimbursement Date"), and continuing each month thereafter until the earlier
of the Maturity Date or the date the Unpaid Balance is paid in full, at which time this Agreement
shall terminate. Notwithstanding the foregoing, the Town's payment obligations under this
Agreement shall be subject to the following conditions: (i) either (1) if the Developer is the payee
under this Agreement, the Developer must be current on all taxes, fees and obligations to the Town,
or (2) if any Transferee (defined below) is the payee under this Agreement, the Transferee must
be current on all taxes, fees and obligations to the Town and the Developer must be current on all
taxes, fees and obligations to the Town relating to Improvement Project B, (ii) the Developer
and/or any Transferee is not in default under this Agreement and (iii) the Developer shall have
made the Developer Initial Deposit.
6. If on the Maturity Date, after application of the Bond Proceeds and the balance in
the Project Fund, any portion of the Unpaid Balance remains unpaid, such Unpaid Balance shall
be canceled and for all purposes this Agreement shall be deemed to have been conclusively and
irrevocably PAID IN FULL, and such Unpaid Balance shall no longer be deemed to be payable;
provided, however, that if any Assessment Part B Revenues remain due and payable and are
uncollected on the Maturity Date, such Assessment Part B Revenues, when, as and if collected
after the Maturity Date, shall first be applied to any amounts due in connection with outstanding
Improvement Project B Bonds and then paid to the Developer and applied to the Unpaid Balance.
7. The Developer has the right to convey, transfer, assign, mortgage, pledge or
otherwise encumber, in whole or in part without the consent of (but with written notice to) the
Town, the Developer's right, title or interest under this Agreement including, but not limited to,
4
any right, title or interest of the Developer in and to payment of the Unpaid Balance, whether such
payment is from Bond Proceeds or the Project Fund (any of the foregoing, a "Transfer," and the
person or entity to whom the transfer is made, a "Transferee"). A Transfer by the Developer
pursuant to this Section shall be effective upon delivery to the Town of a copy of the fully executed
Transfer or assignment agreement, which shall include the information required by Section 15 and
unambiguous provisions regarding any apportionment between the Developer and the Transferee
of the right to receive any payments under this Agreement, and from and after the effective date
of any Transfer, the Developer shall be released from performing or benefiting from the duties,
obligations and rights assigned. Notwithstanding the foregoing, no Transfer shall increase the
liability of, or impose additional liabilities upon, the City beyond what is specifically provided for
herein or increase the duties or expenses of, or impose additional duties or expenses upon, the City
beyond what is specifically provided for herein.
8. The Town may rely on any notice of a Transfer received from the Developer
without obligation to investigate or confirm the validity or occurrence of such Transfer. The
Developer waives all rights or claims against the Town for any such funds provided to a third party
as a result of a Transfer for which the Town has received notice, and the Developer's sole remedy
shall be to seek the funds directly from the third party.
9. The inability or failure of the Town to issue Improvement Project B Bonds shall
not constitute a Failure or Default under this Agreement.
10. The obligations of the Town under this Agreement are non-recourse and payable
only from Bond Proceeds and the Project Fund and do not create a debt or other obligation payable
from any other Town revenues, taxes, income or property. None of the Town or any of its elected
or appointed officials or any of its officers or employees shall incur any liability hereunder to the
Developer or any other party in their individual capacities by reason of this Agreement or their
acts or omissions under this Agreement.
11. From and after the Reimbursement Date, following the Town's inspection, approval
and acceptance of the Improvement Project B Improvements, and until Improvement Project B
Bonds are issued by the Town, if ever, there will be no conditions or defenses to the obligation of
the Town to use Bond Proceeds and the Project Fund to pay the Unpaid Balance, except as
provided in Section 5 hereof. Except for the conditions contained in this Agreement, if
Improvement Project B Bonds are issued by the Town, there will be no conditions or defenses to
(i) the pledge of the Project Fund to secure payment of the Improvement Project B Bonds in
accordance with the applicable Bond Indenture, (ii) the use of the Bond Proceeds to pay the Unpaid
Balance or (iii) the use of any excess funds in the Project Fund to pay the remainder of the Unpaid
Balance, if any.
12. Nothing in this Agreement is intended to constitute a waiver by the Town of any
remedy the Town may otherwise have outside this Agreement against any person or entity
involved in the design, construction or installation of the Improvement Project B Improvements.
13. The Town will consider issuing one or more series of Improvement Project B Bonds
when requested by the Developer to pay the Unpaid Balance; however, the Parties covenant and
acknowledge that approval of the issuance of Improvement Project B Bonds by the Council is a
5
governmental function within the Town's sole discretion. If the balance in the Project Fund
exceeds the amount necessary to pay debt service on the Improvement Project B Bonds in
accordance with the applicable Bond Indenture, the excess shall continue to be paid to the
Developer and applied against the Unpaid Balance, if any.
14. This Agreement is being executed and delivered, and is intended to be performed
in the State of Texas. Except to the extent that the laws of the United States may apply to the terms
hereof, the substantive laws of the State of Texas shall govern the validity, construction,
enforcement and interpretation of this Agreement. In the event of a dispute involving this
Agreement, venue for such dispute shall lie in any court of competent jurisdiction in Tarrant
County, Texas.
15. Any notice required or contemplated by this Agreement shall be deemed given at
the addresses shown below: (i) when delivered by a national company such as FedEx or UPS with
evidence of delivery signed by any person at the delivery address regardless of whether such
person was the named addressee or (ii) 72 hours after the notice was deposited with the United
States Postal Service, Certified Mail, Return Receipt Requested. Any Party may change its address
by delivering written notice of such change in accordance with this Section.
Town: Town of Westlake, Texas
Attn: Town Manager
Westlake Town Hall
1500 Solana Boulevard, Building 7, Suite #7200
Westlake, Texas 76262
With a copy to: Chris Settle
McCall, Parkhurst & Horton, L.L.P.
717 North Harwood, 9th Floor
Dallas, Texas 75201
With a copy to: Stan Lowry
Boyle & Lowry, L.L.P.
4201 Wingren, Suite 108
Irving, Texas 75062
Developer: MRW Investors, LLC,
Attn: Mehrdad Moayedi
1800 Valley View Lane, Suite 300
Farmers Branch, Texas 75234
With a copy to: Miklos Law, PLLC
Attn: Robert Miklos
1800 Valley View Lane, Suite 360
Farmers Branch, Texas 75234
6
16. If any provision of this Agreement is held invalid by any court, such holding shall
not affect the validity of the remaining provisions, and the remainder of this Agreement shall
remain in full force and effect.
17. Failure; Default; Remedies.
a. If either Party fails to perform an obligation imposed on such Party by this
Agreement (a "Failure") and such Failure is not cured after written notice and the expiration
of the cure periods provided in this Section, then such Failure shall constitute a "Default."
Upon the occurrence of a Failure by a non-performing Party, the other Party shall notify
the non-performing Party and all Transferees of the non-performing Party in writing
specif ying in reasonable detail the nature of the Failure. The non-performing Party to
whom notice of a Failure is given shall have at least 30 days from receipt of the notice
within which to cure the Failure; however, if the Failure cannot reasonably be cured within
30 days and the non-performing Party has diligently pursued a cure within such 30-day
period and has provided written notice to the other Party that additional time is needed,
then the cure period shall be extended for an additional 30-day period so long as the non-
performing Party is diligently pursuing a cure. Any Transferee shall have the right, but not
the obligation, to cure any alleged Failure by the Developer within the same time periods
that are provided to the Developer. The election by a Transferee to cure a Failure by the
Developer shall constitute a cure by the Developer but shall not obligate the Transferee to
be bound by this Agreement unless the Transferee agrees to be bound.
b. If the Developer is in Default, the Town's sole and exclusive remedies shall
be to: (1) seek injunctive relief to compel performance by the Developer or (2) seek specific
enforcement of this Agreement. Subject to the limitations set forth in Section 5 of this
Agreement, no default by the Developer shall affect the obligations of the Town to use the
amounts in the Project Fund or Bond Proceeds, if Improvement Project B Bonds are issued,
as provided in Sections 10 and 11 of this Agreement.
c. If the Town is in Default, the Developer's sole and exclusive remedies shall
be to: (1) seek a writ of mandamus to compel performance by the Town or (2) seek specific
enforcement of this Agreement.
18. In the event of any conflict between this Agreement and any other agreement
between the Town and the Developer directly or indirectly related to the Bond Proceeds or the
Project Fund, the Parties intend that the provisions and intent of this Agreement shall control.
19. The failure by a Party to insist upon the strict performance of any provision of this
Agreement by the other Party, or the failure by a Party to exercise its rights upon a Default by the
other Party shall not constitute a waiver of such Party's right to insist and demand strict compliance
by such other Party with the provisions of this Agreement.
20. The Town does not waive or surrender any of its governmental powers, immunities
or rights except to the extent permitted by law and necessary to allow the Developer to enforce its
remedies under this Agreement.
7
21. Nothing in this Agreement, expressed or implied, is intended to or shall be
construed to confer upon or to give to any person or entity other than the Town and the Developer
any rights, remedies or claims under or by reason of this Agreement, and all covenants, conditions,
promises and agreements in this Agreement shall be for the sole and exclusive benefit of the Town
and the Developer.
22. All Parties to this Agreement, including any Transferees, understand that the
interest paid by the Town pursuant to this Agreement is not exempt from federal income taxes.
23. THE DEVELOPER AGREES TO INDEMNIFY, DEFEND AND HOLD
HARMLESS THE TOWN AND ITS OFFICERS, OFFICIALS, EMPLOYEES AND
REPRESENTATIVES FROM AND AGAINST ANY AND ALL CLAIMS, LIENS, SUITS,
DEMANDS AND ACTIONS FOR ANY AND ALL DAMAGES AND EXPENSES
(INCLUDING COURT COSTS, ATTORNEYS' FEES AND OTHER REASONABLE
COSTS OF LITIGATION) ARISING OUT OF OR RESULTING FROM THE
DEVELOPER'S OR ANY TRANSFEREE'S USE OF THIS AGREEMENT AS SECURITY
FOR THE ISSUANCE OF BONDS OR OTHER OBLIGATIONS. TO THE EXTENT THE
DEVELOPER DOES NOT REIMBURSE THE TOWN FOR ANY EXPENSES THE
TOWN INCURS UNDER THIS SECTION, THE TOWN SHALL HAVE THE RIGHT TO
REIMBURSE ITSELF FROM ASSESSMENT PART B REVENUES PRIOR TO MAKING
ANY PAYMENTS TO THE DEVELOPER UNDER THIS AGREEMENT.
24. This Agreement may be amended only by written agreement of the Parties.
25. This Agreement may be executed in counterparts, each of which shall be deemed
an original.
26. The Town represents and warrants that this Agreement has been approved by
official action by the Council in accordance with all applicable public notice requirements
(including, but not limited to, notices required by the Texas Open Meetings Act) and that the
individual executing this Agreement on behalf of the Town has been duly authorized to do so. The
Developer represents and warrants that this Agreement has been approved by appropriate action
of the Developer, and that the individual executing this Agreement on behalf of the Developer has
been duly authorized to do so. Each Party respectively acknowledges and agrees that this
Agreement is binding upon such Party and is enforceable against such Party, in accordance with
its terms and conditions and to the extent provided by law.
27. The Parties agree that at any time after execution of this Agreement, they will, upon
request of another Party, execute and deliver such further documents and do such further acts and
things as the other Party may reasonably request in order to effectuate the terms of this Agreement.
This provision shall not be construed as limiting or otherwise hindering the legislative discretion
of the Council seated at the time that this Agreement is executed or any future Council.
28. Each Party shall use good faith, due diligence and reasonable care in the
performance of its respective obligations under this Agreement, and time shall be of the essence
8
in such performance; however, in the event a Party is unable, due to force majeure, to perform its
obligations under this Agreement, then the obligations affected by the force majeure shall be
temporarily suspended. Within three (3) business days after the occurrence of a force majeure, the
Party claiming the right to temporarily suspend its performance, shall give notice to all the Parties,
including a detailed explanation of the force majeure and a description of the action that will be
taken to remedy the force majeure and resume full performance at the earliest possible time. The
term "force majeure" shall include events or circumstances that are not within the reasonable
control of Party whose performance is suspended and that could not have been avoided by such
Party with the good faith exercise of good faith, due diligence and reasonable care.
[Signature pages follow]
S-1
Executed by the Developer and the Town to be effective on January 29, 2018.
TOWN OF WESTLAKE , TEXAS
Laura Wheat, Mayor
S-2
DEVELOPER:
MRW Investors, LLC,
a Texas limited liability company
By: LLSF, LLC, a Texas limited liability company
Its Manager and Member
By:
Name: Mehrdad Moayedi
Its: Its Sole Managing Member