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Escrow AgreementESCROW AGREEMENT This Escrow Agreement ( "Agreement ") is entered into, this 15`h day of March, 2013, by and between the 'City: of Salina, Kansas, a Kansas municipal corporation ( "City"), Dane Q. Barclay, Sparrowhawk Land, LLC, a Kansas limited liability, company and Alsop Sand, Inc., a Kansas corporation (collectively,.the "Developer "), and Swedish American State.Bank, a Kansas banking corporation ( "Escrow Agent").' Recitals A. The City and the Developer are parties.to an Improvement District Development Agreement and Capital Cost Recovery Agreement ( "Development Agreement "), relating to the Developer's Petition filed with the City Clerk for the construction of certain infrastructure improvements pursuant.to K.S:A. - 12 -6a01 et seq.; and the assessment of the costs thereof- against the Developer's Property included in the Improvement District. Unless otherwise defined herein, all capitalized terms used herein shall have the meanings assigned to them in the Development Agreement, a copy of which is attached hereto as Exhibit A. B. Pursuant to the Development Agreement, the Developer is obligated to provide a Financial Commitment to the City to secure the prompt payment of the Special Assessments levied against the Developer's property included within the Improvement District, and an escrow account is a permissible form of Financial Commitment. i C. The parties to this Agreement desire to.establish an escrow fund to satisfy the Developer's _ Financial Commitment obligations under the Development Agreement, which escrow fund may be utilized by the City, subject to the terms, and conditions of this Agreement, to satisfy the principal of and interest on the Improvement District Obligations, if any Special Assessments are not paid when due. NOW THEREFORE, for and in consideration of the foregoing, the mutual covenants and promises hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, hereby agree as follows: I. Recitals. The foregoing Recitals are true and correct and are incorporated herein by this reference, 2. Appointment of Escrow Agent. The City and.the Developer hereby appoint the Escrow Agent to act as'agent and custodian for the Escrow Funds (as defined below) for their respective benefit pursuant to the terms of this Agreement. The Escrow Agent hereby agrees to act as agent and custodian and to hold, safeguard and'disburse the Escrow Funds pursuant to the terms of this Agreement. i 3. Establishment of the Escrow Account. The Developer; contemporaneously with the execution and delivery of this Agreement, has delivered to the Escrow Agent a certificate of deposit issued by Swedish American State Bank, identified as 'Certificate of Deposit No. 7520, in the amount of Two Hundred Fifty -Nine Thousand Nine Hundred Fifty -Seven Dollars and Sixty- ... 4 Seven Cents ($259,957.67), and the Escrow Agent has ac knowledged, receipt thereof (such amount, the "Escrow Funds "). The Escrow Funds shall be; deposited and held in an escrow account (the "Escrow Account "), and shall be made available for payment to the City in accordance with the terms of this Agreement. The Escrow Funds shall not be used, encumbered, or pledged by the Developer for any purpose during the period the Escrow. Account is in effect. 4. Purpose of Escrow. The Escrow Funds shall be security for, and may be applied annually to satisfy, the principal of and interest on the Improv.ementDistrict Obligations, should any Special Assessments not be paid when due. The City acknowledges and agrees that the establishment and funding of the Escrow Account, will satisfy the Developer's obligations with respect to providing a Financial Commitment,. ,as required in Section 6.02 of the Development 'Agreement. Si Disbursement- of:Escrow Fund. -The Escrow -Agent shall only release or disburse - the Escrow Funds as follows: 5.1. Written Draw Request by the City. The City shall be entitled to issue to the Escrow Agent, on an annual basis during the term of this lAgreement, a written request for a distribution from the Escrow Account in an amount 'equal to the sum of any unpaid Special Assessments levied against the property in the Improvement District.. Within -three (3) business days -after receipt of such request from the City, the Escrow Agent shall convert the Escrow Funds to cash and transfer to the City, in immediately available funds; the amount so requested, which amount shall be used by .the City to satisfy the unpaid principal of an interest on the Improvement District Obligations arising from the failure to paySpecial Assessments when due. 5.2. Developer's Consent to Disbursements The Developer hereby authorizes and directs the Escrow Agent to convert the Escrow Funds to cash and to make disbursements from the Escrow Account, when requested by the City pursuant to Section 5.1 above, without any additional or further authorization or notification to the Developer being necessary or required; and the_Developer does hereby release and hold the Escrow Agent harmless from any and all claims whatsoever by it against the Escrow Agent for�releasing such funds to the City in accordance with the terms hereof. Further, the. Developer he expressly waives any and all defenses, rights of setoff, and challenges to any such draw request submitted by the City. i 6. Escrow Period: Final Disbursement. The Escrow Funds and all interest thereon I shall be held in the Escrow Account; subject to annual disbursement to the City as set forth herein, until the expiration of the escrow period, which shall occur upon:the earlier of: (i) five (5) years from the date of this Agreement; or (ii) the date,when the City provides written notice that certificates of occupancy have been issued for at least four (4),of the properties within the Improvement District. Upon the expiration of the escrow period, the Escrow Agent shall distribute all of the Escrow Funds to the Developer,'less any amounts. previously requested by the City but unpaid pursuant to Section 5.1 above, and the Escrow Agent shall be discharged from any further obligation under this Agreement. 7. Investment of Escrow Funds. The Escrow Agent shall receive and hold the Escrow Funds in the Escrow Account. The Escrow Agent is authorized to invest and reinvest the Escrow Funds in Certificate of Deposit No. 7520, or in an interest - bearing bank account, both of which shall be insured by the Federal Deposit Insurance Corporation in the 'amount of $250,000.00. Allpayments of interest thereon and other accretions thereto shall be added to and become part of the Escrow Funds. Upon request by the .City! the Escrow Agent shall provide a reasonably detailed statement of. the Escrow Funds and the' manner in which such funds are invested. The federal taxpayer identification number of the Developer . shall be used for the Escrow Account and all interest earned on the Escrow Funds shall be. reported under the Developer's name and federal taxpayer identification number:, . '8.' Escrow Fees_. The Developer shall pay and be solely responsible for any and:all amounts owed the Escrow Agent for its services under this Agreement, which amounts shall be p'aid:from° separate 'funds of the Developer, and not from -the .Escrow Funds: - 9. Terms and Conditions of Escrow. Acceptance' by the Escrow Agent of its duties hereunder is subject to the following terms and conditions, which all of the parties hereto agree shall govern and control with respect to the rights, duties,: liabilities and immunities of the Escrow Agent: 9.1_ - Ministerial Acts. The parties agree that,the Escrow Agent's duties are as a depository only and that the Escrow Agent,is not a party to, and is not bound by any agreement that.may be evidenced by, or arise out of, the foregoing instructions, other than as expressly - herein set forth. The sole duties of the Escrow Agent under this Escrow Agreement shall be to " hold, invest, and make payments and distributions from the Escrow Account in accordance with the terms of this Agreement. 9.2. Good Faith Reliance. The Escrow Agent shall be protected in acting upon any written notice, request, waiver, consent; or receipt which the Escrow Agent in good faith 4 believes to be genuine and what it purports to be. 10. Notices. All notices required or permitted to be given pursuant to this Agreement shall be in writing and delivered personally or sent by registered or certified mail, return receipt requested, or by generally recognized, prepaid, commercial courier or overnight air courier service. Notice shall be considered given when received on the'date appearing on the return receipt, but if the receipt is not returned within five (5) days, then three (3) days after mailed,.if sent by registered or certified mail or commercial courier service; or the next business day, if sent by overnight air courier service. Notices shall be addressed as appears below for each party, provided that if any party gives notice of a change of name or address, notices to the giver of that notice shall thereafter be given as demanded in that notice. CITY: City Clerk P.O. Box 736 Salina, KS.67402 0736 n 3 I DEVELOPER: Sparrowhawk Land, LLC /Alsop Sand, Inc. Attn: Dane Q. Barclay 105 Industrial Road Concordia, KS 66901 . ESCROW AGENT: Swedish American State Bank Attn: Mark Post 324 Liberty St.: Courtland, KS 66939 I 11. Applicable Law; Venue. This Agreement and its validity, construction and performance shall be governed by the laws of Kansas. In the event of any legal action to enforce or interpret this Agreement, the sole and exclusive venue, shall be in the Saline County,-Kansas District Court. . 12. SeyerabiliLy. The unenforceability, invalidity, or illegality of any provision of this Agreement shall not render the other provisions unenforceable, invalid, or illegal. 13. Authority and Consent to Transaction: Each party represents to the other that the person executing this Agreement has full and legal authorityto bind such party to the terms of this Agreement, and that 'the execution and delivery of this Agreement have been. duly and validly authorized by each party. 14. Persons Bound. This Agreement shall extend to and bind the heirs, executors, administrators, trustees, successors and authorized assigns of the parties hereto. 15. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, or in multiple originals, and all such counterparts or originals shall for all purposes constitute one agreement. This Agreement may be executed by the parties and transmitted by facsimile or electronic transmission, and if so executed and transmitted, shall be effective as if the parties had delivered an executed original of this Agreement. 16. Amendments. Neither this Agreement nor any of its terms may be changed or modified, waived, or terminated except by an instrument in writing signed by an authorized representative of the party against whom the enforcement of the change, waiver, or termination is sought. 17. Waiver: No failure or delay by a party hereto to insist on the strict performance of any tern of this Agreement, or to exercise any right or remedy consequent to a breach thereof, shall constitute a waiver of any breach or any subsequent breach. of such term. No waiver of any breach hereunder shall affect or alter the remaining terms of this Agreement, but each'and every term of this Agreement shall continue in full force and effect with respect to any other then existing or subsequent breach thereof. 0 t 18. No Third Party Beneficiaries. Solely the parties to this Agreement shall have rights and may make claims under this Agreement. There are no intended third party beneficiaries under this Agreement, and no third parties shall have any rights or make any claims hereunder. l9. Typewritten or Handwritten Provisions. Typewritten or handwritten provisions inserted or attached shall supersede all conflicting printed provisions. 20. Headines. The headings of the sections of this Agreement are included for the purposes of convenience only and shall not affect the interpretation of any provision hereof. 21. Merger Clause. These terms are intended by the parties as a complete, conclusive and final expression of all the conditions of their Agreement. No other promises, statements, warranties, agreements or understandings, oral or written, made before or at the signing thereof, shall be binding unless in writing and signed by all parties and attached hereto. IN WITNESS WHEREOF, this Agreement has been signed on behalf of each of the parties hereto as of the date first written above. 5MDaneQ. Barclay, Individually AMERICAN STATE BANK By: &� S V/- Name: !MA4,,c� A-- Pos-r Title: Vicf �LfSZi