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HomeMy WebLinkAboutResolution - 2008-R0026 - Vintage Township PID - 01/24/2008Resolution No. 2008-R0026 January 24, 2008 Item No. 4.7 RESOLUTION WHEREAS, the City Council of the City of Lubbock, by Resolution No. 2007-R0022, created the Vintage Township Public Improvement District (PID); and WHEREAS, the City of Lubbock, by Ordinance No. 2007-00058, approved the Service and Assessment Plan and Assessment Roll for the PID June 26, 2007; and WHREAS, it is anticipated that the bonds for the PID will be ready to be marketed in late January and early February and sold upon City Council approval in February, 2008; and WHEREAS, the Acquisition and Funding Agreement is the contract between the City and the Developer which contains the provisions governing acquisition and construction of the PID improvements and the payment of such costs from the bond project fund, which must be approved by the Council on the date the bonds are sold; and WHEREAS, a draft Acquisition and Funding Agreement has been prepared for approval in anticipation of the bond sale; NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the City Council of the City of Lubbock hereby approves the draft Acquisition and Funding Agreement between the City of Lubbock and Vintage Land Company, Ltd., in concept, and understands that the final Agreement for their approval will have substantially the same form and content. Said draft is attached hereto and incorporated herein and shall be included in the minutes of this meeting. Passed by the City Council this 24th day of January , 2008. DAVID A. MILLER, MAYOR YATTEST: becca 0arza, City Secretary .'ED AS TO CONTENT: 4 Rob Allis AtsistanLCity Manager Development Services APPROVED AS TO FORM: Linda L. Chamales, Senior Attorney Office Practice Section LCAcdoes/LindaRes-Vintage draft 1114108 Resolution No. 2008-ROO26 ACQUISTION AND FUNDING AGREEMENT By and Between CITY OF LUBBOCK, TEXAS and VINTAGE LAND COMPANY, LTD. VINTAGE TOWNSHIP PUBLIC IMPROVEMENT DISTRICT SPECIAL ASSESSMENT REVENUE BONDS SERIES 2008A and SERIES 2008B (LUBBOCK, TEXAS) 1294387v.6 LUB200/58000 TABLE OF CONTENTS Page ARTICLE I DEFINITIONS ARTICLE II RECITALS Section2.01. The District..............................................................................................................3 Section2.02. The Development.....................................................................................................3 Section 2.03. Improvement Projects..............................................................................................3 Section2.04. Agreements..............................................................................................................3 ARTICLE flf FUNDING Section3.01. Bonds.......................................................................................................................3 Section3.02. Bond Proceeds.........................................................................................................3 Section 3.03. Debt Service Reserve Fund and Cost of Issuance...................................................4 ARTICLE IV CONSTRUCTION OF IMPROVEMENT PROJECTS Section4.01. Plans.........................................................................................................................4 Section 4.02. Duty of Developer to Construct...............................................................................5 Section 4.03. Independent Contractor............................................................................................5 ARTICLE V ACQUISITION AND PAYMENT Section5.01. Inspection.................................................................................................................6 Section 5.02. Agreement to Convey Improvement Projects..........................................................6 Section 5.03. Payment Requests for the Improvement Projects....................................................6 Section 5.04. Withholding Payments.............................................................................................7 ARTICLE VI OWNERSHIP AND TRANSFER OF IMPROVEMENT PROJECTS Section6.01. Title Evidence..........................................................................................................7 Section 6.02. Conveyance of Improvement Projects.....................................................................8 (i} 1294387v.6 LUB200/58600 ARTICLE VII REPRESENTATIONS, WARRANTIES AND COVENANTS Section 7.01. Representations, Covenants and Warranties of the Developer................................8 Section 7.02. Indemnification and Hold Harmless.......................................................................9 Section 7.03. Use of Monies by City; Changes to Indenture.........................................................9 ARTICLE VIII TERMINATION Section 8.01. Mutual Consent......................................................................................................10 Section 8.02. City's Election for Cause.......................................................................................10 Section 8.03. Force Majeure........................................................................................................11 ARTICLE IX MISCELLANEOUS Section 9.01. Limited Liability of City........................................................................................11 Section 9.02. Modification to Exhibit A; Budgeted Costs of Improvement Projects..................I I Section9.03. Audit......................................................................................................................I I Section9.04. Notices................................................................................................................... I 1 Section9.05. Severability............................................................................................................12 Section 9.06. Successors and Assigns..........................................................................................12 Section 9.07. Other Agreements..................................................................................................12 Section9.08. Waiver....................................................................................................................12 Section9.09. Merger....................................................................................................................13 Section 9.10. Parties in Interest....................................................................................................13 Section9.11. Amendment............................................................................................................13 Section9.12. Counterparts...........................................................................................................13 Section 9.13. Effective Date........................................................................................................13 EXHIBIT A - Description of Improvement Projects and Applicable Budgeted Costs EXHIBIT B — Certification of Approval for Payment EXHIBIT C - Form of Payment Request for Improvement Projects 1294387v.6 LUB200/58000 ACQUISITION AND FUNDING AGREEMENT THIS ACQUISITION AND FUNDING AGREEMENT (this "Agreement"), dated as of , 2008, is by and between the CITY OF LUBBOCK, TEXAS, a municipal corporation of the State of Texas (the "City") and VINTAGE LAND COMPANY, LTD., a Texas limited partnership (the "Developer"). ARTICLE I DEFINITIONS The following terms shall have the meanings ascribed to them in this Article I for purposes of this Agreement. Unless otherwise indicated, any other terms, capitalized or not, when used herein shall have the meanings ascribed to them in the Indenture (as hereinafter defined). "Acceptable Title" means title or other appropriate conveyance of land or interests in land (such as easements) in form acceptable to the City, free and clear of all liens, taxes, assessments, leases, easements and encumbrances, whether or not recorded, other than exceptions that do not materially interfere with the actual or intended use of the land or interest therein. "Act" means Chapter 372, Improvement Districts in Municipalities and Counties, Subchapter A, Public Improvement Districts, Texas Local Government Code, as amended. "Actual Cost" means the substantiated costs with respect to an Improvement Project, which costs include: (i) construction, reconstruction, installation, and acquisition of all lands, structures, real or personal property, rights, rights-of-way, franchises, easements, and interests acquired, installed or constructed; (ii) architectural, engineering, financial, and legal services; (iii) plans, specifications, studies, surveys, and estimates of cost and of revenues; (iv) project administration expenses; and (v) other expenses as may be necessary or incident to the construction, acquisition and installation of an Improvement Project, as appropriate. "Administrator" means, initially, MuniCap, Inc., or any other individual or entity designated by the City to administer the District. "Annual Service Plan Amendment" means has the meaning set forth in the Service and Assessment Plan. 1294387x.6 LUB200/58000 "Assessment Ordinance" means Ordinance No. 2007-00058, adopted by the City Council of the City on June 26, 2007, as amended on January 24, 2008. "Bond Counsel" means Vinson & Elkins L.L.P. or any other independent counsel approved by the City that regularly renders opinions with general acceptance in the municipal bond market and that is familiar with the transactions contemplated by this Agreement. "Bonds" means, collectively, the Series 2008A Bonds and the Series 20088 Bonds. "Budgeted Cost" means the estimated cost of an Improvement Project as shown on Exhibit A hereto, as such exhibit may be amended and/or supplemented to conform to Exhibit B to the Service and Assessment Plan. "City Representative" means the Capital Projects Manager or any other person appointed in writing by the Mayor or the City Manager. "Completion" means the time at which an Improvement Project has been finally inspected and tested by the City and has been determined by the department of the City performing the inspection to be in conformance with all codes, standards and requirements of the City and to otherwise be acceptable to the City. "District" means the Vintage Township Public Improvement District, created by the City Council on January 1.2, 2007, pursuant to Resolution No. 2007 — R0022. "Improvement Projects" means, collectively, Improvement Project A and Improvement Project B. "Improvement Project A" mean the public improvements identified as Improvement Project A in the Service and Assessment Plan. "Improvement Project B" mean the public improvements identified as Improvement Project B in the Service and Assessment Plan. "Indenture" means the Trust Indenture dated as of , 2008 by and between the City and The Bank of New York Trust Company, N.A., as Trustee, relating to the Bonds, and any Supplemental Indenture executed pursuant to the provisions of the Indenture. "Engineer" means the Developer's engineer of record, registered and qualified to practice the profession of engineering under the laws of the State of Texas. "Payment Request" means a document, substantially in the form of Exhibit C hereto or in a form otherwise agreed to by the Developer, the Administrator and the City Representative, to be used by the Developer in requesting disbursements of funds by the Trustee from the Project Fund to pay for the Actual Costs of an Improvement Project. "Plans" means the plans, design, specifications, schedules and related construction contracts for the Improvement Projects approved pursuant to the applicable standards of the City and any other applicable government entity. -2- 1294387v.6 LUB200/58000 "Series 2008A Bonds" means the "Vintage Township Public Improvement District Special Assessment Revenue Bonds, Series 2008A." "Series 2008E Bonds" means the "Vintage Township Public Improvement District Special Assessment Revenue Bonds, Series 2008B." "Service and Assessment Plan" means the document, including the Assessment Roll, as updated, modified and amended from time to time in accordance with its terms and the PID Act, which is attached as Exhibit A of the Assessment Ordinance. "State" means the State of Texas. "Supplement" means a written document agreed upon by the parties to this Agreement amending, supplementing or otherwise modifying this Agreement and any exhibit hereto, including any amendments to the list of Improvement Projects in Exhibit A in a manner consistent with the Act, the Assessment Ordinance, the Indenture, and this Agreement. ARTICLE II RECITALS Section 2.01. The District. The City has created the District under the Act for the financing of, among other things, the acquisition, construction and installation of the Improvement Projects identified in the Service and Assessment Plan and listed and diagrammed in Exhibit A hereto. Section 2.02. The Development. The Developer is developing land within the District and will undertake the construction and development of the Improvement Projects. Section 2.03. Improvement Proiects. Improvement Project A is eligible to be financed with proceeds of the Series 2008A Bonds. Improvement Project B is eligible to be financed with proceeds of the Series 2008B Bonds. All of the Improvement Projects are located within the District. Section 2.04. Agreements. In consideration of the mutual promises and covenants set forth herein, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the City and the Developer agree that the foregoing recitals, as applicable to each, are true and correct and further make the agreements set forth herein. ARTICLE III FUNDING Section 3.01. Bonds. The City, in connection with this Agreement, is proceeding with the issuance and delivery of the Bonds for the District. Section 3.02. Bond Proceeds. The proceeds of the Bonds shall be deposited, held, invested, reinvested and disbursed as provided in the Indenture. A portion of the -3- 1294387v.6 LUB200/58000 proceeds of the Series 2008A Bonds will be set aside under the Indenture in the 2008A Project Account of the Project Fund and a portion of the proceeds of the Series 2008E Bonds will be set aside under the Indenture in the 2008B Project Account of the Project Fund. Moneys in the Series 2008A Account of the Project Fund shall be withdrawn therefrom in accordance with the provisions of the Indenture and the applicable provisions hereof for payment of the respective Actual Costs of Improvement Project A. Moneys in the Series 20088 Account Project Fund shall be withdrawn therefrom in accordance with the provisions of the Indenture and the applicable provisions hereof for payment of the respective Actual Costs of Improvement Project B. The Developer agrees that the funds on deposit in the funds and accounts established by or pursuant to the Indenture, including the Project Fund, shall be invested as directed under the Indenture. The City shall have no responsibility whatsoever to the Developer with respect to any investment of funds made by the Trustee under the Indenture, including any loss of all or a portion of the principal invested or any penalty for liquidation of an investment. Any such loss may diminish the amounts available in the Project Fund to pay Actual Costs. The Developer acknowledges that any lack of availability of amounts in the Project Fund to pay Actual Costs shall in no way diminish any obligation of the Developer with respect to the construction of or contributions for the Improvement Projects required by this Agreement or any governmental approval to which the Developer or any land within the District is subject, in accordance with the terms hereof and thereof. Section 3.03. Debt Service Reserve Fund and Cost of Issuance. In consideration of the City issuing the Bonds and providing for payment of Actual Costs of the Improvement Projects as set forth herein, the Developer hereby agrees to fund (i) the Costs of Issuance of the Bonds, (ii) the 2008A Reserve Account in the amount of $ , the 2008A Prepayment Reserve Account in the amount of $ and (iii) the Developer Sub -Account of the 20088 Prepayment Reserve Account in the amount of $ The City shall instruct the Trustee how to invest funds on deposit in such accounts within five days of receipt of instructions from the Developer. Investment earnings on amounts on deposit in such accounts shall be applied as set forth in the Indenture. As directed in the Indenture, once the Bonds are no longer Outstanding, the Trustee will pay any amounts remaining on deposit in such accounts as directed in writing by the Developer. ARTICLE IV CONSTRUCTION OF IMPROVEMENT PROJECTS Section 4.01. Plans. The Developer shall cause Plans to be prepared for the Improvement Projects. The Developer shall obtain the written approval of such. Plans from the City and from all other applicable governmental authorities. The engineering design must follow all requirements of the City's Code of Ordinances in regard to design of the development. The Developer shall deliver to the City a written assignment of its interest in the -4- 1294387v.6 LUB200/58000 Plans for the Improvement Projects in a form acceptable to the City. As -built drawings for the Improvement Projects shall be provided to the City as soon as such drawings are available. Section 4,02. Duty of Developer to Construct. The Developer shall conduct all operations with respect to the construction of Improvement Projects in accordance with the terms hereof. The City and Developer agree that the Developer shall award all contracts for the acquisition, construction and installation of the Improvement Projects. The Developer shall perform all of its obligations hereunder and shall conduct all operations with respect to the acquisition, construction and installation of the Improvement Projects in a good, workmanlike and commercially reasonable manner, with the standard of diligence and care normally employed by duly qualified persons utilizing their best efforts in the performance of comparable work and in accordance with generally accepted practices appropriate to the activities undertaken. The Developer shall not be relieved of its obligation to fund the construction of each Improvement Project even if there are insufficient funds in the applicable account of the Project Fund to pay the Actual Cost thereof. Such obligation of the Developer to fund the construction of the Improvement Projects, and pay the costs thereof in excess of moneys in the Project Fund, shall be an obligation of the Developer as a party to this Agreement. The Developer shall be obligated to make payments from its own funds to pay all Actual Costs of any Improvement Project in excess of the funds available in the Project Fund. The City shall not be responsible for payment of the Actual Cost for any Improvement Project beyond the available funds in the Project Fund. Section 4.03. Independent Contractor. In performing this Agreement, the Developer is an independent contractor and not an agent or employee of the City. The City shall not be responsible for making any payments to any contractor, subcontractor, agent, consultant, employee or supplier of the Developer. Section 4.04. Assurance of Payment and Performance. Prior to receiving any bond proceeds, the Developer shall post cash with the City or provide for a letter of credit or other security reasonably acceptable to the City and allowable under the City's development policies and regulations, to assure the completion of all of the Public Improvements. Funds on deposit in the applicable account of the Project Fund shall constitute security for payment and performance of the construction and acquisition of the Improvement Projects, and shall be credited toward the Developer's requirement under this Section thereby reducing the amount of cash or other security to be posted by the Developer with the City. The City shall determine the amount of security necessary to assure completion of the Public Improvements. Section 4.05. Assurance of Conveyance. Prior to receiving any payment of Actual Costs for a Public Improvement, the Developer shall have irrevocably offered or conveyed to the City, in a form acceptable to the City, title or other appropriate interest in land on which such Public Improvement shall be constructed. -5- 1294387v.6 LUB200/58000 ARTICLE V ACQUISITION AND PAYMENT Section 5.01. Inspection. No payment hereunder shall be made from the Project Fund for the Actual Cost of an Improvement Project until the work with respect to such Actual Cost has been inspected and found to be completed in accordance with the Plans relating thereto by the City. The City shall make or cause to be made regular ongoing site inspections of the Improvement Projects consistent with City policies and procedures for residential subdivision developments. Section 5.02. Agreement to Convey Improvement Projects. For no additional consideration other than the payment of the respective Actual Costs of the Improvement Projects from amounts in the Project Fund as provided herein, the Developer hereby agrees to convey, sell or transfer in fee, dedicate, or grant a public easement such that it is treated as a conveyance under Texas, the Improvement Projects, in a manner consistent with the orderly development of the Improvement Projects, to the City, and the City hereby agrees to pay the respective Actual Costs for the Improvement Projects from available amounts in the Project Fund, subject to the terms and conditions hereof. The City shall not be obligated to accept an Improvement Project until Completion, provided that the City agrees consistent with the terms and provisions of this Agreement to make progress payments for Actual Costs of an Improvement Project. Section 5.03. Payment Requests for the Improvement Projects. In order to cause a progress or final payment to be made from the Project Fund for the Actual Cost of an Improvement Project the following shall occur: (a) The conditions set forth in Sections 4.04 and 4.05 hereof shall have been met. (b) No more frequently than monthly, the Developer shall deliver to the City Representative a Payment Request in the form of Exhibit C hereto together with all attachments and exhibits required by Exhibit C to be included therewith or otherwise agreed to by the Developer and the City Representative (including, but not limited to, Attachments 1 and 2 to Exhibit C, and releases by the general contractor of materialsman's and mechanic's liens and an assignment of the warranties and guaranties or other evidence of contingent obligations of third parties for such Improvement Project.) (c) No payment hereunder shall be made from the Project Fund for the Actual Cost of an Improvement Project until the work with respect to such Actual Cost has been inspected and found to be completed in accordance with the Plans related thereto by the Engineer. The Engineer shall prepare or review, as applicable, each Payment Request (and all accompanying documentation), in order to confirm that such request is complete, that the work with respect to such Improvement Project identified therein for which payment is requested was completed in accordance with all applicable governmental laws, rules and regulations and applicable Plans therefor and with the terms of this Agreement, as applicable, and to verify and approve the Actual Cost of such work specified in such Payment Request (collectively, the "City Compliance Requirements"). The approval of the Payment Request by the Engineer shall constitute a -6- 1294387v.6 LUB200/58000 representation by the Engineer to the City and the Trustee that the City Compliance Requirements have been satisfied with respect to the Improvement Project identified therein. The Engineer shall also conduct such review as is required in his discretion to confirm the matters certified in the Payment Request. (d) No payment hereunder shall be made from the Project Fund for the Actual Cost of an Improvement Project unless the Administrator shall have approved such Payment Request and all accompanying documentation as to compliance with the requirements of this Agreement, the Service and Assessment Plan and the Indenture. (e) The City Representative shall circulate the Payment Request to the City departments responsible for conducting inspections with regard to the work that is the subject of the Payment Request. If such Payment Request is approved by the applicable City departments, the City Representative shall authorize the recording, as necessary, of conveyance documents and deliver the Payment Request along with the City's Certification of Approval for Payment in the form of Exhibit B attached hereto, to the Trustee. If the City disapproves the Payment Request, in whole or in part, as applicable, the City Representative shall give written notification to the Developer of the City's disapproval of such Payment Request, specifying the reasons for such disapproval and the additional requirements to be satisfied for approval of such Payment Request. The Developer agrees to cooperate with the City Representative during such approval process and to provide to the City Representative such additional information and documentation as is reasonably necessary for the City Representative to grant such approval. (f) Based upon an approved Payment Request, the Trustee shall make such payment from the applicable account of the Project Fund, Section 5.04. Withholding Payments. Nothing in this Agreement shall be deemed to prohibit the Developer from contesting in good faith the validity or amount of any mechanic's or materialman's lien and/or judgment nor limit the remedies available to the Developer with respect thereto so long as such delay in performance shall not subject the Improvement Projects or the Improvement Projects, as appropriate, to foreclosure, forfeiture, or sale. ARTICLE VI OWNERSHIP AND TRANSFER OF IMPROVEMENT PROJECTS Section 6.01. Title Evidence. The Developer shall furnish to the City a preliminary title report for land with respect to Improvement Projects to be acquired and accepted by the City from the Developer, for review and approval at least 30 calendar days prior to the transfer of title to an Improvement Project to the City. The City shall approve the preliminary title report unless it reveals a matter which, in the reasonable judgment of the City, could materially affect the City's use and enjoyment of any part of the property or easement covered by the preliminary title report. In the event the City does not approve the preliminary title report, the City shall not be obligated to accept title to the Improvement Project until the developer has cured such objections to title to the satisfaction of the City. -7- 1294387v.6 LUB200/58400 Section 6.02. Conveyance of Improvement Projects. Acceptable Title to all property on, in or over which each Public Improvement to be acquired by the City will be located, shall be conveyed to the City. Completion of the transfer of title shall be evidenced by recordation of the acceptance thereof by the City. ARTICLE VII REPRESENTATIONS, WARRANTIES AND COVENANTS Section 7.01. Representations. Covenants and Warranties of the Developer. The Developer represents and warrants for the benefit of the City as follows: (a) Organization. The Developer is a limited partnership duly organized and validly existing under the laws of the State of Texas, is in compliance with the laws of the State of Texas, and has the power and authority to own its properties and assets and to carry on its business in the State of Texas as now being conducted and as hereby contemplated. (b) Authority. The Developer has Agreement, and has taken all action necessary delivered, and this Agreement has been duly Developer. the power and authority to enter into this to cause this Agreement to be executed and and validly executed and delivered by the (c) Binding Obligation. This Agreement is a legal, valid and binding obligation of the Developer, enforceable against the Developer in accordance with its terms, subject to bankruptcy and other equitable principles. (d) Compliance with Law. The Developer shall not with knowledge commit, suffer or permit any act to be done in, upon or to the lands of the Developer in the District or the Improvement Projects in violation of any law, ordinance, rule, regulation or order of any governmental authority or any covenant, condition or restriction now or hereafter affecting the lands in the District or the Improvement Projects. (e) Requests for Payment. The Developer represents and warrants that (i) it will not request payment from the Project Fund for the Actual Costs of any improvements that are not part of the Improvement Projects, and (ii) it will diligently follow all procedures set forth in this Agreement with respect to the Payment Requests. (f) Financial Records. Until the completion of the Improvement Projects, the Developer covenants to maintain proper books of record and account for the construction of the Improvement Projects and all costs related thereto. Such accounting books shall be maintained in accordance with generally accepted accounting principles, and shall be available for inspection by the City or its agent at any reasonable time during regular business hours on reasonable notice. (g) Plans. The Developer represents that it has obtained or will obtain approval of the Plans from all appropriate departments of the City and from any other public entity or public utility from which such approval must be obtained. The Developer further agrees that, subject to the terms hereof, the Improvement Projects have been or will be constructed in full compliance -8- 1294387v.6 LUB200/58000 with such Plans and any change orders thereto consistent with the Act, and the Ordinance, as approved in the same manner. (h) Land Sales. The Developer agrees that in the event that it sells any land owned by it within the boundaries of the District, the Developer will notify the purchaser in writing of the existence of the District and the lien in connection therewith. (i) Additional Information. The Developer agrees to cooperate with all reasonable written requests for nonproprietary information by the purchaser of the Bonds or the City Representative related to the status of construction of improvements within the District, the anticipated completion dates for future improvements and any other matter material to the investment quality of the Bonds. 0) Zoning. The Project will not violate any zoning regulations applicable thereto. (k) Financial Resources. The Developer represents and warrants that it has the financial resources, or the ability to obtain sufficient financial resources, to meet its obligations under this Agreement. Section 7.02. Indemnification and Hold Harmless. The Developer shall assume the defense of indemnify and save harmless the City, including its officers, employees and agents (each an "Indemnified Party"), from and against all actions, damages, claims, losses or expense of every type and description to which they may be subjected or put, by reason of, or resulting from the breach of any provision of this Agreement by the Developer, the negligent design, engineering and/or construction by the Developer or any architect, engineer or contractor hired by the Developer of any of the Improvement Projects acquired from the Developer hereunder, the Developer's nonpayment under contracts between the Developer and its consultants, engineers, advisors, contractors, subcontractors and suppliers in the provision of the Improvement Projects, or any claims of persons employed by the Developer or its agents to construct the Improvement Projects. Notwithstanding the foregoing, no indemnification is given hereunder for any action, damage, claim, loss or expense directly attributable to the gross negligence or willful misconduct of any Indemnified Party. Section 7.03. Use of Monies by City; Changes to Indenture. The City agrees not to take any action or direct the Trustee to take any action to expend, disburse or encumber the monies held in the Project Fund and any monies to be transferred thereto for any purpose other than the purposes permitted by the Indenture. Prior to the acceptance of all the Improvement Projects, the City agrees not to modify or supplement the Indenture without the approval of the Developer if as a result or as a consequence of such modification or supplement (a) the amount of monies that would otherwise have been available under the Indenture for disbursement for the Actual Costs of the Improvement Projects is reduced, delayed or deferred, (b) the obligations or liabilities of the Developer is or may be increased or otherwise adversely affected in any manner, or (c) the rights of the Developer is or may be modified, limited, restricted or otherwise adversely affected in any manner. -9- [2I4387v,6 LUB200/58000 ARTICLE VIII TERMINATION Section 8.01. Mutual Consent. This Agreement may be terminated by the mutual, written consent of the City and the Developer, in which event the City may either execute contracts for or perform any remaining work related to the Improvement Projects not accepted by the City and use all or any portion of funds on deposit in the Project Fund or other amounts transferred to the Project Fund under the terms of the Indenture to pay for same, and the Developer shall have no claim or right to any further payments for the Actual Costs of Improvement Projects hereunder, except as otherwise may be provided in such written consent. Section 8.02. City's Election for Cause. The City, at its option, may terminate this Agreement, without the consent of the Developer if the Developer shall breach any material covenant or default in the performance of any material obligation hereunder. If any such event occurs, the City shall give written notice of its knowledge thereof to the Developer, and the Developer agrees to meet and confer with appropriate City staff and consultants as to options available to assure timely completion, subject to the terms of this Agreement, of the Improvement Projects. Such options may include, but not be limited to, the termination of this Agreement by the City. If the City elects to terminate this Agreement, the City shall first notify the Developer (and any mortgagee or trust deed beneficiary specified in writing by the Developer to the City to receive such notice) of the grounds for such termination and allow the Developer a minimum of 45 days to eliminate or mitigate to the satisfaction of the City the grounds for such termination. Such period may be extended, at the reasonable discretion of the City, if the Developer, to the reasonable satisfaction of the City, is proceeding with diligence to eliminate or mitigate such grounds for termination. If at the end of such period (and any extension thereof, as determined reasonably by the City, the Developer has not eliminated or completely mitigated such grounds to the satisfaction of the City, the City may then terminate this Agreement. In the event of the termination of this Agreement, the Developer is entitled to payment for work accepted by the City related to the Improvement Projects undertaken prior to the termination date of this Agreement solely from the Project Fund according to the terms and conditions set forth in this Agreement. Notwithstanding the foregoing, so long as the Developer has breached any material covenant or defaulted in the performance of any material obligation hereunder, notice of which has been given by the City to the Developer, and such event has not been cured or otherwise eliminated by the Developer, the City may in its discretion cause the Trustee to cease making payments for the Actual Costs of Improvement Projects under Article V hereof, provided that the Developer shall receive payment of the Actual Costs of any Improvement Project that was accepted by the City at the time of the occurrence of such breach or default by the Developer upon submission of the documents and compliance with the other applicable requirements of this Agreement. In the event that this Agreement is terminated by the City for cause, the City may either execute contracts for or perform any remaining work related to the Improvement Projects and -10- 1294387v.6 LLJB200/58000 use all or any portion of the funds on deposit in the Project Fund or other amounts transferred to the Project Fund and the Developer shall have no claim or right to any further payments for the Improvement Projects hereunder, except as otherwise may be provided upon the mutual written consent of the City and the Developer. Section 8.03. Force Maier ure. Whenever performance is required of a party hereunder, that party shall use all due diligence and take all necessary measures in good faith to perform, but if completion of performance is delayed by reasons of floods, earthquakes or other acts of God, war, civil commotion, riots, strikes, picketing or other labor disputes, damage to work in progress by casualty or by other cause beyond the reasonable control of the party (financial inability excepted), then the specified time for performance shall be extended by the amount of the delay actually so caused. ARTICLE IX MISCELLANEOUS Section 9.01. Limited Liabili of Cily. The Developer agrees that any and all obligations of the City arising out of or related to this Agreement are special obligations of the City, and the City's obligations to make any payments hereunder are restricted entirely to the moneys, if any, in the Project Fund and from no other source. Neither the City nor any City employee or agent shall incur any liability hereunder to the Developer or any other party in their individual capacities by reason of their actions hereunder or execution hereof. (a) Modification to Exhibit A• Budgeted Costs of Improvement Pro'ects. The City acknowledges that the Actual Costs of an Improvement Project may vary from the budgeted amounts. The City shall review any modifications requested by the Developer and shall approve such modifications if such modifications will not materially alter or reduce the Improvement Projects to be provided pursuant to the Service and Assessment Plan. The City, as part of the Annual Service Plan Amendment or such other amendment or modification to the Service and Assessment Plan permitted by the Act and the terms of the Service and Assessment Plan, shall amend Exhibit B to the Service and Assessment Plan to reflect the revised budget for the Improvement Projects. In connection with such amendment, Exhibit A shall be deemed amended to conform to the revised Service and Assessment Plan. Any such modification shall be approved by the City unless such modification would, in the opinion of Bond Counsel, adversely affect the tax -exemption of the interest on the Bonds. Section 9.02. Audit. The City representative or a finance officer of the City shall have the right, during normal business hours and upon the giving of three business days' prior written notice to a Developer, to review all books and records of the Developer pertaining to costs and expenses incurred by the Developer with respect to any of the Improvement Projects and any bids taken or received for the construction thereof or materials therefor. Section 9.03. Notices. Any notice, payment or instrument required or permitted by this Agreement to be given or delivered to any party shall be deemed to have been received when personally delivered or transmitted by telecopy or facsimile transmission (which shall be 1294387v.6 LLJB200/58000 immediately confirmed by telephone and shall be followed by mailing an original of the same within 24 hours after such transmission) or 72 hours following deposit of the same in any United States Post Office, registered or certified mail, postage prepaid, addressed as follows: City: City of Lubbock, Texas P.O. Box 2000 Lubbock, Texas 79457 Attention: Developer: Vintage Land Company, Ltd. Attention: Mr. Paul Stell Any party may change its address or addresses for delivery of notice by delivering written notice of such change of address to the other party. Section 9,04. Severability. If any part of this Agreement is held to be illegal or unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall be given effect to the fullest extent possible. Section 9.05. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto. This Agreement shall not be assigned by the Developer without the prior written consent of the City, which consent shall not be unreasonably withheld or delayed, except pursuant to a collateral assignment to any person providing construction financing to the Developer for the Improvement Projects provided such person expressly agrees to assume all obligations of the Developer hereunder if there is a default under such financing and such person elects to complete the Improvement Projects. In connection with any consent of the City, the City may condition its consent upon the acceptability of the financial condition of the proposed assignee, upon the assignee's express assumption of all obligations of the Developer hereunder and/or upon any other reasonable factor which the City deems relevant in the circumstances. In any event, any such assignment shall be in writing, shall clearly identify the scope of the rights and/or obligations assigned and shall not be effective until approved by the City. The City may assign by a separate writing its rights hereunder to the Trustee and the Developer hereby consents to such assignment. Section 9.06. Other Agreements. The obligations of the Developer hereunder shall be those of a party hereto and not as an owner of property in the District. Nothing herein shall be construed as affecting the City's or the Developer's rights or duties to perform their respective obligations under other agreements, use regulations or subdivision requirements relating to the development of the lands in the District. Section 9.07. Waiver. Failure by a party to insist upon the strict performance of any of the provisions of this Agreement by any other party, or the failure by a party to exercise its rights upon the default of any other party, shall not constitute a waiver of such party's right - 12- 1294387v.6 LUB200/58000 to insist and demand strict compliance by such other party with the terms of this Agreement thereafter. Section 9.08. Merger. No other agreement, statement or promise made by any party or any employee, officer or agent of any party with respect to any matters covered hereby that is not in writing and signed by all the parties to this Agreement shall be binding. Section 9.09. Parties in Interest. 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 City and the Developer any rights, remedies or claims under or by reason of this Agreement or any covenants, conditions or stipulations hereof, and all covenants, conditions, promises and agreements in this Agreement contained by or on behalf of the City or the Developer shall be for the sole and exclusive benefit of the City and the Developer. Section 9.10. Amendment. Except as otherwise provided in Section 9.02, this Agreement may be amended, from time to time in a manner consistent with the Act and the Ordinance, by written Supplement hereto and executed by both the City and the Developer. Section 9.11. Countemarts. This Agreement may be executed in counterparts, each of which shall be deemed an original. Section 9.12. Effective Date. This Agreement has been dated as of the date first above written solely for the purpose of convenience of reference and shall become effective upon its execution and delivery, on the Closing Date, by the parties hereto. All representations and warranties set forth herein shall be deemed to have been made on the Closing Date. [Signatures Appear on Following Page] -13- 1294387v.6 LUB200/58004 IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. CITY OF LUBBOCK, TEXAS David A. Miller, Mayor VINTAGE LAND COMPANY, LTD. a Texas limited partnership By: VINTAGE LAND GP, L.L.C., a Texas Limited Liability Company Its General Partner Paul D. Stell Sole Member DRAFT ONLY — DO NOT EXECUTE -14- 6294387v.6 LUB200/58000 EXHIBIT A TO ACQUISITION AND FUNDING AGREEMENT DESCRIPTION OF IMPROVEMENT PROJECTS AND APPLICABLE BUDGETED COSTS IMPROVEMENT PROJECTS Land Site Preparation Drainage Streets Walkways Water and Sewer Lighting and Street Signs Signage and monumentation Park Features Roundabouts Street trees and irrigation Project Administration Master Planning Architectural Design Engineering (civil) Engineering (other) Legal fees A-1 1294387v.6 LUB200/58000 BUDGETED COSTS EXHIBIT B TO ACQUISITION AND FUNDING AGREEMENT VINTAGE TOWNSHIP SPECIAL ASSESSMENT REVENUE BONDS SERIES CERTIFICATION OF APPROVAL FOR PAYMENT TO: , AS TRUSTEE (THE "TRUSTEE") UNDER THE INDENTURE OF TRUST, DATED AS OF , 2008 (THE "INDENTURE"), BETWEEN THE CITY OF LUBBOCK, TEXAS (THE "CITY") AND THE TRUSTEE. This Certification of Approval for Payment is delivered to the Trustee in accordance with Section 6.5(b) of the Indenture. Payment shall be made from the [Series 2008A/Series 2008B] Account of the Project Fund established in accordance with Section 6.1(a)(iii) of the Indenture. All terms used herein which are not otherwise defined herein shall have the meaning given such terms in the Indenture and the Acquisition and Funding Agreement, dated as of , 2008, as supplemented, between the City and the Developer (the "Acquisition Agreement") . The undersigned, duly authorized to act on behalf of the City, hereby certifies as follows, to -wit: (1) This is City Certification of Approval for Payment No.: (2) The Amount of disbursement from the [Series 2008A/Series 2008Bj Account of Project Fund for the Actual Costs of an Improvement Project approved by this Certification is: (3) Of the total amount of disbursement set forth in (2) above, (a) $ is to be paid to the Developer and represents Actual Costs of an invoice or statement previously paid by the Developer to a third party; and (b) $ is to be paid to a third party payee that is not affiliated with the Developer (including any mortgagee or trust deed beneficiary, contractor or supplier of materials) or on a joint basis to the Developer and such a third party payee with respect to an expense previously incurred. (4) To the best knowledge of the undersigned, the Developer is not in default under (a) any agreement with the City regarding the construction of the Improvement Projects, or (b) any other contract pertaining to the Improvement Projects for which the Developer is seeking payment of the Actual Costs with Certificate of Developer No. _. (5) The Trustee is entitled to conclusively rely on these certifications. B-1 1294387v.6 LUB200/58000 (6) Payment of the amounts and to the party or parties listed on Attachment II of the Certificate of Developer and Request for Payment No. attached hereto are hereby approved and shall be made by the Trustee. CITY OF LUBBOCK, TEXAS City Representative Date: B-2 1294387v.6 LUB200/58000 APPENDIX C VINTAGE TOWNSHIP SPECIAL ASSESSMENT REVENUE BONDS SERIES CERTIFICATE OF DEVELOPER AND REQUEST FOR PAYMENT NO. _ Vintage Land Company, Ltd. (the "Developer"), pursuant to the Acquisition and Funding Agreement, dated as of , 2008, as supplemented, between the City of Lubbock, Texas (the "City") and the Developer (the "Acquisition Agreement") hereby requests a payment from the Project Fund in the amounts and for the purposes set forth below. The Developer, by its duly authorized representative hereby certifies, in connection with this Certificate of Developer and Request for Payment (the "Certificate of Developer") that: 1. Terms used herein and not otherwise defined herein shall have the meaning given such terms in the Acquisition Agreement. 2. All costs of the Improvement Projects for which payment is requested hereby are Actual Costs (as defined in the Acquisition Agreement) and have not been inflated in any respect. The items for which payment is requested have not been the subject of any prior payment request, or if previously requested, no disbursement was made with respect thereto. 3. The work for which this disbursement is sought has been completed in compliance with City codes and Ordinances. 4. The total amount requested to be disbursed pursuant to this Certificate for the Actual Casts of Public Improvements is $ . The Actual Costs for which funding is requested by this Payment Request are listed in Attachment I hereto. A detailed calculation of the Actual Costs is shown in Attachment 11 hereto and such calculation is supported by the attached copies of invoices or statements. 5. A cumulative summary of disbursements by category and item to date are set forth in Attachment I attached hereto. 6. To the best knowledge of the undersigned, the Developer has no knowledge of any material default under (A) any agreement with the City concerning the construction of the Improvement Projects, or (B) any other contract pertaining to the Improvement Projects for which the Developer is seeking a disbursement with this Certificate of Developer. 7. Releases by the general contractor of materialman's and mechanic's liens for work which payment is requested hereby are attached hereto. [Execution Page Follows] C-1 1294387v.6 LUB200/58000 I hereby declare that the above representations and warranties are true. 1N WITNESS WHEREOF, this Certificate of Developer has been duly executed by the Developer by its duly authorized representative this day of C-2 1294387x.6 LUB200/58000 APPROVAL OF ADMINISTRATOR The undersigned hereby certifies that s/he reviewed Certificate of Developer and Request for Payment No. e, including all attachments and exhibits hereto, and found it to be in the appropriate form required by the Funding Agreement and the Indenture and in compliance with and consistent with the Service and Assessment Plan and that such Costs as listed in the Certificate of Developer are included in and consistent with the Public Improvements set forth in the Service and Assessment Plan, and the payee(s) of the amounts requested by be paid by the Certificate of Developer is(are) correctly listed in Attachment 11. This is hereby approved by the undersigned with respect to such form requirements in satisfaction of the requirements of the Funding Agreement. The Administrator has not undertaken an independent review of the Public Improvements relating to this Developer's Payment Request. MUNICAP, INC., Administrator By: Date: C-3 1294387v.6 LU13200/58000 APPROVAL OF ENGINEER The undersigned hereby approves this Developer's Payment Request pursuant to the provisions of the Funding Agreement. The undersigned hereby certifies that (i) the Engineer has made a site inspection of the Improvement Project for which a payment is requested hereby and confirmed that the work with respect to such Improvement Project was completed or proportionately completed in accordance with all applicable governmental laws, rules and regulations and applicable Plans, (ii) the payment requested hereby is for Actual Costs (as defined in the Funding Agreement) of an Improvement Project identified on Attachment II and the Engineer verified such Actual Costs of the Improvement Project specified herein and such Actual Costs appear reasonable, and (iii) the Improvement Project with respect to which payment is requested hereby is correctly described in Attachment I1. $y; Date: C-4 1294387x.6 LLFB200/58000 Engineer ATTACHMENT 1 PAYMENT REQUEST NO. (IMPROVEMENT PROJECTS) IMPROVEMENT PROJECTS FOR WHICH PAYMENT IS REQUESTED AND DRAW AMOUNTS Previous Draws Approved Description of Category (tri -sinal Revised For Cost Improvement Project of Cost lQ et Budget Category Total Draws Current Approved for Draw All Cost Request Categories Total of Current Draw Request Approved for Pavment $ $ $ $ $ C-7 1294387v.6 LUB200/58000 ATTACHMENT 2 PAYMENT REQUEST NO. (IMPROVEMENT PROJECTS) CALCULATION OF ACTUAL COSTS TO BE PAID 1. Total amount of disbursement pursuant to this Payment Request: $ Payment to the Developer: Description of Improvement Categories Projects of Cost Contractor/Supplier Invoice No. Date of Payment Amount S TOTAL: $ C-8 1294387v.6 LUB200/58000 3. Payment to Third -Party Payees or Jointly to the Developer and Third -Party Payees; Description of Improvement Categories Projects of Costs Contractor/Supplier Invoice No. Date of Payment Amount S S S S S S S S S S S S S TOTAL S The items listed are supported by attached copies of invoices or statements. C-8 1294387x.6 LUB200/58000