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R99-088 10-25-99 RESOLUTION NO. R99-88 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO ENTER INTO A MASTER DEVELOPER REIMBURSEMENTAGREEMENT WITH CITY OF PEARLAND REINVESTMENT ZONE #2 AND SHADOW CREEK RANCH DEVELOPMENT COMPANY, L.P., A NEVADA LIMITED PARTNERSHIP, FOR THE CONSTRUCTION AND FINANCING OF CERTAIN TIRZ IMPROVEMENTS. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: Section 1. That certain Master Developer Reimbursement Agreement (the "Agreement") by and between the City of Pearland and City of Pearland Reinvestment Zone #2 ("Reinvestment Zone"), and Shadow creek Ranch Development Company, L.P. ("Master Developer"), a copy of which is attached hereto as Exhibit "A" and made a part hereof for all purposes, is hereby authorized and approved. Section 2. That the City Manager or his designee is hereby authorized to execute and the City Secretary to attest the Agreement with Reinvestment Zone and Master Developer, for and on behalf of the City of Pearland, for reimbursement by the City and the Reinvestment Zone from the Tax Increment Fund for the construction and financing of certain TIRZ improvements. PASSED, APPROVED and day of October ., A.D., 1999. ATTEST: c~.UyN G~ I~G SE~I~ETARY APPROVED AS TO FORM: DARRiN M. COKER CITY ATTORNEY ADOPTED this the 25th TOM REID MAYOR MASTER DEVELOPER REIMBURSEMENT AGREEMENT THIS MASTER DEVELOPER REIMBURSEMENT AGREEMENT (this "Agreement'), is made and entered into as of the 22nd day of September, 1999, by and between the CITY OF PEARLAND, TEXAS, a home rule municipality located in the counties of Brazoria, Harris, and Fort Bend, Texas (the "City"), REINVESTMENT ZONE NUMBER TWO, CITY OF PEARLAND, TEXAS (the "Reinvestment Zone"), a tax increment reinvestment zone created by the City pursuant to Chapter 311 of the Texas Tax Code, as amended, acting by and through its governing body, the Board of Directors (the "Zone Board"), and SHADOW CREEK RANCH DEVELOPMENT COMPANY, L.P., a Nevada limited partnership (the "Master Developer"). (The City, the Reinvestment Zone and the Master Developer are sometimes hereinafter referred to individually as "Party" and collectively as the "Parties".) RECITALS: A. The City and the Master Developer have entered into that certain Development Agreement dated September 13, 1999 (the "Development Agreement"), which provides generally for the development of the Shadow Creek Ranch master-planned community located in the City, generally between State Highway 288 on the east, Clear Creek on the north, FM 518 on the south and FM 521 on the west. B. The City has created the Reinvestment Zone and has appointed members of the Zone Board which has adopted the Project Plan and the Financing Plan, which Plans have been approved by the City. C. The Reinvestment Zone desires to implement the Plans and to provide for the construction of certain TIRZ Improvements as described in the Plans. D. The Reinvestment Zone has requested, and the Master Developer has agreed, to construct and finance certain TIRZ Improvements, subject to reimbursement by the City and the Reinvestment Zone from the Tax Increment Fund, as provided hi this Agreement, the Development Agreement and the Plans. E. The Master Developer also agreed to advance certain costs related to the creation, organization, operation and administration of the Reinvestment Zone, subject to reimbursement by the City and the Reinvestment Zone from the Tax Increment Fund, as provided in this Agreement, the Development Agreement, and the Plans. NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties do hereby agree as follows: 1. Incorporation of Recitals. The representations, covenants and recitations set forth in the foregoing recitals are material to this Agreement and are hereby incorporated into and made a part of this Agreement as though they were fully set forth in this Section. 2. (a) Development A_~reement. The terms of the Development Agreement are hereby incorporated in this Agreement, and the Reinvestment Zone adopts and ratifies the Development Agreement and agrees to abide by its terms. (b) Definitions. Capitalized terms used herein, including the recital thereto, shall have the meanings set forth in the Development Agreement, unless otherwise defined in this Agreement, or unless the context clearly requires another definition. 3. Cooperation. The Parties agree to take such actions, including the execution and delivery of such documents, instruments, petitions and certifications (and, in the case of the Reinvestment Zone, the adoption of such orders and resolutions), as may be necessary or appropriate, from time to time, to carry out the terms, provisions and intent of this Agreement and to aid and assist each other in carrying out said terms, provisions and intent. 4. Payment and Reimbursement. (a) Following the effective date of this Agreement, the Master Developer shall let contracts for the design and construction of certain TIRZ Improvements in the manner provided by subsection (1) through (4) of this section. (1) To initiate the construction of a TIRZ Improvement, the Master Developer shall provide a written request therefor to the Zone Board (i) describing the requested TIRZ Improvements, (ii) specifying the estimated schedule for the design and construction, (iii) estimating the likely costs thereof, as certified by the Reinvestment Zone's engineer, and comparing such estimate to the TIRZ budget established for such TIRZ Improvements in the Plans and (iv) specifying the area within the Zone which is benefitted by such TIRZ Improvements over which the available Tax Increment is to be applied for purposes of determining when reimbursement is to be made. If the Reinvestment Zone's engineer determines that the requested TIRZ Improvements qualify for reimbursement, the Master Developer may proceed to design and construct the requested TIRZ Improvements in accordance with the procedures set forth on the attached Exhibit "B". (2) All legal requirements relating to City contracts shall apply to the design and construction of the TIRZ Improvements. (3) For purposes of record-keeping and establishing a priority of reimbursement, the Reinvestment Zone and the Master Developer shall execute a letter agreemem for each phase of eonstruetlon, substantially in the form attached as Exhibit "C". The purpose of the letter agreement is to confirm that the Master Developer will design and construct a phase of the TIRZ Improvements, will pre- finance all associated costs of such phase, and wilt be reimbursed by the City and the Reinvestment Zone from bond proceeds or uncommitted Tax Increment, all in accordance with the terms and conditions of this Agreement, the Plans and the Development Agreement. (b) If the Master Developer follows the procedures set forth in Exhibit "B" and after the Reinvestment Zone engineer and auditor have certified in letters in substantially the form attached as Exhibit "D" that the TIRZ Improvements have been completed and are in order for reimbursement, the Reinvestment Zone shall reimburse the Master Developer for all amounts advanced to the Reinvestment Zone pursuant to this Agreement, plus the appropriate interest on such amounts as calculated under the provisions of Article V of the Development Agreement up to the amount certified by the Reinvestment Zone engineer and auditor to be within the TIRZ budget (as may be adjusted for inflation) established for such TIRZ Improvements in the Plans. (c) The Master Developer has made or will continue to make certain expenditures related to the creation, organization, operation and administration of the Reinvestment Zone, including, but not limited to, legal fees, engineering fees, consultant fees, market study costs, publication expenses, and government fees. Such expenses are Project Costs for purposes of reimbursement in accordance with Article V of the Development Agreement and a letter agreement in substantially the form attached as Exhibit "E" shall be executed for each fiscal year in which the Master Developer makes such expenditures. (d) The Reinvestment Zone shall be obligated to reimburse the Master Developer solely, and in order of priority, from (i) Bond Proceeds or (ii) uncommitted Tax Increment if such funds are available and are not reasonably expected to be required by the Reinvestment Zone for debt service on TIRZ Bonds or for administrative expenses. In accordance with the Plans, priority for the reimbursement of advances is as follows: (i) creation and administration, (ii) Master Developer TIRZ Improvements, and (iii) Sub-Developer TIRZ Improvements. The Reinvestment Zone agrees to request at the earliest feasible date that the City issue TIRZ Bonds and the City agrees to use its best efforts to issue TIRZ Bonds to fund reimbursements at such time as the City's financial advisor certifies that the unencumbered Tax Increment (exclusive of Tax Increment contributed by Alvin ISD or another participating school district) generated within the area benefitted by the TIRZ Improvements is sufficient to support the applicable TIRZ Bonds and satisfies the coverage test and Tax Increment Fund projection requirement set forth in the Development Agreement and the Plans. The Reinvestment Zone's obligation to request that the City issue TIRZ Bonds to reimburse the Master Developer is conditioned on a determination by the City's financial advisor that such TIRZ Bonds are reasonably marketable under then-current market conditions, and issuance thereof will not have a materially adverse effect on the viability of any outstanding TIRZ Bonds. The Reinvestment Zones' obligation to reimburse is conditioned on: (i) the approval of the issuance of the TIRZ Bonds by the City, the Attomey General of Texas and any other governmental authority having jurisdiction thereover; and (ii) the successful marketing, sale, and closing of the TIRZ Bonds. ::O DM A'xSOFTSOLX31 I\VEHOUOg[94270\0 -3 - 5. Powers. (a) The Reinvestment Zone hereby represents and warrants to the Master Developer that the Reinvestment Zone has full constitutional and lawful right, power and authority, under currently applicable law, to execute and deliver and perform the terms and obligations of this Agreement, and all of the foregoing have been or will be duly and validly authorized and approved by all necessary proceedings, findings and actions. Accordingly, this Agreement constitutes the legal, valid and binding obligation of the Reinvestment Zone, is enforceable in accordance with its terms and provisions and does not require the consent of any other governmental authority. (b) The Master Developer hereby represents and warrants to the Reinvestment Zone that the Master Developer has full lawful right, power and authority to execute and deliver and perform the terms and obligations of this Agreement and all of the foregoing have been or will be duly and validly authorized and approved by all necessary actions of the Master Developer. Concurrently with the Master Developer's execution of this Agreement, the Master Developer has delivered to the Reinvestment Zone copies of the resolutions or other corporate actions authorizing the execution of this Agreement and evidencing the authority of the persons signing this Agreement on behalf of the Master Developer to do so. Accordingly, this Agreement constitutes the legal, valid and binding obligation of the Master Developer, and is enforceable in accordance with its terms and provisions. 6. Time of Essence. Time is of the essence to this Agreement. The Parties will make every reasonable effort to expedite the subject matters hereof and acknowledge that the successful performance of this Agreement requires their continued cooperation. All dates and time periods provided for in this Agreement shall be delayed during any pending or threatened litigation that would affect the ability to issue the TIRZ Bonds, acquire the Property or commence or continue with construction of the TIRZ Improvements or the Project, for a time period equal to the duration of such litigation. 7. Default. (a) A Party shall be deemed in default under this Agreement (which shall be deemed a breach hereunder) if such Party fails to materially perform, observe or comply with any of its covenants, agreements or obligations hereunder or breaches or violates any of its representations contained in this Agreement. (b) Before any failure of any Party to this Agreement to perform its obligations under this Agreement shall be deemed to be a breach of this Agreement, the Party claiming such failure shall notify, in writing, the Party alleged to have failed to perform of the alleged failure and shall demand performance. No breach of this Agreement may be found to have occurred if performance has commenced to the reasonable satisfaction of the complaining Party within thirty (30) days of the receipt of such notice, subject, however, to the terms and provisions of Section 7(c). Each of the Parties shall have the affirmative obligation to mitigate its damages in the event of a default by the other Party. ::ODMA\SOFTSOL~ I I\VEHOU09\94270\0 -4- (c) Notwithstanding anything in this Agreement which is or may appear to be to the contrary, if the performance of any covenant or obligation to be performed hereunder by any Party is delayed as a result of circumstances which are beyond the reasonable control of such Party (which circumstances may include, without limitation, pending or threatened litigation, acts of God, war, acts of civil disobedience, fire or other casualty, shortage of materials, adverse weather conditions (such as, by way of illustration and not limitation, severe rain storms or below freezing temperatures, or tornados) labor action, strikes or similar acts) the time for such performance shall be extended by the amount of time of such delay. The Party claiming delay of performance as a result of any of the foregoing "force majeure" events shall deliver written notice of the commencement of any such delay resulting from such force majeure event not later than seven (7) days after the claiming Party becomes aware of the same, and if the claiming Party fails to so notify the other Party of the occurrence of a "force majeure" event causing such delay, the claiming Party shall not be entitled to avail itself of the provisions for the extension of performance contained in this Section. 8. Amendment. Except as otherwise provided in Section 3(e) of this Agreement, this Agreement, and any exhibits attached hereto, may be amended only by the mutual agreement of the Parties evidenced by a written amendment and by the execution of such written amendment by the Parties or their successors in interest. 9. Entire Agreement. This Agreement (including all Exhibits attached to this Agreement) sets forth all agreements, understandings and covenants between and among the Parties relative to the matters herein contained; provided, however, that the terms of this Agreement and those contained in the Development Agreement shall be construed in pari materia so as to give effect to the intent of the Parties. This Agreement supersedes all prior agreements, negotiations and understandings, written and oral (except for the Development Agreement) and, together with the Development Agreement, shall be deemed a full integration of the entire agreement of the Parties. To the extent of an irreconcilable variance between the terms of this Agreement and the Development Agreement, the Development Agreement shall control. 10. Severability. If any provision, covenant, agreement or portion of this Agreement, or its application to any person, entity or property, is held invalid, such invalidity shall not affect the application or validity of any other provisions, covenants, agreements or portions of this Agreement and, to that end, all provisions, covenants, agreements or portions of this Agreement are declared to be severable. 11. Texas Law. This Agreement shall be construed in accordance with the laws of the State of Texas, and any actions concerning this Agreement shall be brought in either the Texas State District Courts of Brazoria County, Texas or the United States District Court for the Southern District of Texas. 12. Notice. Any notice sent under this Agreement (except as otherwise expressly required) shall be sent according to the terms of the Development Agreement. 13. Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same agreement. 14. Consent or Approval. Except as otherwise provided in this Agreement, whenever consent or approval of either Party is required, such consent or approval shall not be unreasonably withheld. 15. Term of Agreement. The term of this Agreement shall commence on the date first above written and shall continue until the date (the "Termination Date") on which the Master Developer has been fully reimbursed for all amounts advanced to the Reinvestment Zone and interest on such amounts in accordance with Section 4 of this Agreement. 16. Interoretation. This Agreement has been jointly negotiated by the Parties and shall not be construed against a Party because that Party may have primarily assumed responsibility for the drafting of this Agreement. 17. Exhibits and Schedules. All exhibits and schedules attached hereto are declared to be a part of this Agreement and are incorporated herein by this reference. ::ODMA\SOFTSOLX31 I\VEHOU09\94270\0 -6- IN WITNESS WHEREOF, the Parties have duly executed this Agreement pursuant to all requisite authorizations as of the date first above written. ATTEST: TiO/ c~rsecret ~'~/ CITY: CITY OF PEARLAND, TEXAS Title: £ity ~la na?r ::ODMA\SOFTSOLX31 I\VEHOU09\94270\0 -7- REINVESTMENT ZONE: REINVESTMENT ZONE NUMBER TWO, CITY OF PEARLAND, TEXAS By: ~ ATTEST: By: ~//~~ Name: Title: MASTER DEVELOPER: SHADOW CREEK RANCH DEVELOPMENT COMPANY, L.P., a Nevada limited partnership By: SHADOW CREEK RANCH, INC. Gary W~_~ok, President EXHIBITS Exhibit "A" Exhibit "B" Exhibit "C" Exhibit "D" Exhibit "E" Development Agreement TIRZ Project Implementation and Reimbursement Process Form of Engineer and Auditor's Completion Certificate Form of Letter Agreement -- TIRZ Improvements Form of Letter Agreement -- Reinvestment Zone Creation ::ODMA\SOFTSOL~31 t\VEHOU09\94270\0 - 1 0- EXHIBIT "A" DEVELOPMENT AGREEMENT (Previously Distributed) EXHIBIT "B" CITY OF PEARLAND REINVESTMENT ZONE NUMBER TWO CITY OF PEARLAND, TEXAS TIRZ PROJECT IMPLEMENTATION AND REIMBURSEMENT PROCESS June 30, 1999 SHADOW CIZEEI(. RANCH EXHIBIT "B" TIRZ Project Implementation and Reimbursement Process To begin the process of planning, design, construction and reimbursement under the TIRZ Plan, the TIRZ and the Developer/Sub-developer will sign a reimbursement agreement that establishes the extent of TIRZ Improvements (the "Project") and the terms and conditions under which the Project will be eligible for reimbursement. The reimbursement agreement, once executed, shall constitute the approval by the TIRZ for the Developer/Sub-developer to proceed with construction of the Project. The reimbursement agreement will establish: (1) the quantitative and qualitative aspects and character of the Project, (2) the maximum costs to be reimbursed for the Project, (3) a checklist of requirements for implementing and completing the Project for reimbursement, and (4) the procedures for the review of the Project for the purposes of the TIRZ approving reimbursement of the Project costs once construction is completed The maximum costs to be reimbursed to the Developer/Sub-developer for the Project shall be established in the reimbursement agreement, based on the TIRZ Engineer's determination of the scope of TIRZ capital improvements that are consistent with the TIRZ Plan in the development of the Developer/Sub- developer's development area. The quantitative and qualitative aspects and character of the Project shall be as depicted in the Project and Financing Plan, the PUD, the Development Agreement, Shadow Creek Ranch Design Guidelines and other, related documents made available to the Developer/Sub-developer. These shall establish the over-all intent of the development for Shadow Creek Ranch TIRZ, including those portions of the master plan improvements constituting the Project to be undertaken by the Developer/Sub-developer under the reimbursement agreement. The procedures for the design and construction of the Project shall be as follows: 1. Prior to commencing construction, the Developer/Sub-developer shall prepare all necessary plans and specifications which shall be approved by all regulatory authorities having jurisdiction; 2. DevelopedSub-developer shall bid all contracts in accordance with Texas competitive bidding laws for public improvements and in accordance with any requirement of the City and in full compliance with the rules and regulations of any local, regional, state or federal agencies having jurisdiction, and shall comply with all policies of the City as they may be in effect from time to time; · 3. DevelopedSub-developer shall construct the project in accordance with all local and state law for construction of public improvements; EXHIBIT "B" 4. Developer/Sub-developer shall obtain inspections and approvals in accordance with all of the City of Peadand's processes and procedures, and with the processes and procedures of any authority or agency having jurisdiction; · 5. DevelopedSub-developer shall obtain inspections and approvals from Shadow Creek Ranch Maintenance Association (SCRMA); and, 6. Developer/Sub-developer shall submit documentation demonstrating that the Project was completed in accordance with the terms of the reimbursement agreement as substantially set out in the check list specified below. The checklist of requirements for TIRZ reimbursement and completing the Project include but are not limited to the following: Recorded Plat __ Approved Plans and Specifications __ City of Pearland~approved form of Contract for Construction Bid Notice/Bid Advertisement Affidavits Bid Tabulation Recommendation of Award __ Payment, Performance and Maintenance Bonds Insurance Certificates Executed Contract for Construction Notice To Proceed __ Testing and Inspection Reports __ Certified Pay Applications __ Approved Change Orders __ Certificates of Completion __ Letters of Acceptance (incl. City of Pearland) __ Consent of Surety for Final Payment Contractors' Unconditional Release of Liens __ Signed Record Drawings The completed documentation shall be submitted to the TIRZ Administrator and shall be reviewed for compliance with the reimbursement agreement by the TIRZ Engineer and the TIRZ Auditor (the "TIRZ Consultants"). All TIRZ Consultants' costs associated with the review of the Developer/Sub-developer reimbursement review documentation shall be paid by the Developer/Sub- dbveloper upon the submittal of the reimbursement package. The TIRZ Consultants will review the documentation to verify that the costs for the Project are eligible for TIRZ reimbursement under the terms and conditions specified in the reimbursement agreement. Once the review of the submitted package is complete, the TIRZ Consultants shall make a recommendation to the TIRZ Board in conformance with the reimbursement agreement. When approved, the Project reimbursement costs will be logged for priority of reirnbur~ement as established by the reimbursement approval date and the Project and Financing Plan. If appropriate, the TIRZ Board will recommend to the City to reimburse the DevelopedSub~developer when increment becomes available. EXHIBIT "C" (Engineer's Letter) REINVESTMENT ZONE NO. TVVO, CITY OF PEARLAND, TEXAS (SHADOW CREEK RANCH) [Date] Reinvestment Zone No. Two, City of Pearland, Texas Attn: Chairman, Board of Directors cio City of Pearland, Texas 3519 Pearland Drive Pearland, Texas 77581 Re: Completion of TIRZ Improvements described in the Letter Financing Agreement dated ; TIRZ Project No. __ Dear Mr. Chairman and Members of the Board: As the Engineer for Reinvestment Zone No. Two, City of Pearland, Texas (the "Zone"), I have reviewed the completed documentation submitted by Shadow Creek Ranch Development Company, L.P. (the "Master Developer") relating to the construction of the TIRZ Improvements described by that Letter Financing Agreement dated, (the "Letter Financing Agreement"). By the Letter Financing Agreement, the Master Developer agreed to pre-finance the design and construction of the TIRZ Improvements to be reimbursed in accordance with the Reimbursement Agreement between the City of Pearland, the Zone and the Master Developer dated ,1999 (the "Reimbursement Agreement"). The Letter Financing Agreement states that the budget (adjusted for inflation) established in the Zone's Project Plan and Reinvestment Zone Financing Plan for the TIRZ Improvements is $. plus "developer interest" calculated per the Reimbursement Agreement. In accordance with the Zone's Project Plan and Reinvestment Zone Financing Plan and the Development Agreement between the City of Pearland, Texas, and the Master Developer dated September 13, 1999, "developer interest" on these TIRZ Improvements is to be calculated at __ percent per annum for The Master Developer has provided, and I have reviewed, the necessary documentation to prove compliance with all procedures set forth in the document entitled "TIRZ Project Implementation and Reimbursement Process." Based upon my review, I conclude that the construction of the TIRZ Improvements was conducted in compliance with the Reimbursement Agreement and the procedures set forth in the document entitled "TIRZ Project Implementation and Reimbursement Process," is complete, and is in order for reimbursement. I therefore recommend that the Zone reimburse the Master Developer the amount of $. for the funds advanced to the Zone for the construction of the TIRZ Improvements, plus "developer interest" calculated per the Reimbursement Agreement, as applicable. A detailed breakdown of the costs of the construction of the TIRZ Improvements is attached to this letter. Very trulyyours, Engineer for the Zone F:~TLI532\SHADCRK~ONE~EIMAGP,2 WPD EXHIBIT "C" (Auditor's Letter) REINVESTMENT ZONE NO. TWO, CITY OF PEARLAND, TEXAS (SHADOW CREEK RANCH) [Date] Reinvestment Zone No. Two, City of Pearland, Texas Attn: Chairman, Board of Directors cio City of Pearland, Texas 3519 Pearland Drive Pearland, Texas 77581 Re~ Completion of TIRZ Improvements described in the Letter Financing Agreement dated ; TIRZ Project No. __ Dear Mr. Chairman and Members of the Board: As the Auditor for Reinvestment Zone No. Two, City of Pearland, Texas (the "Zone"), I have reviewed the completed documentation submitted by Shadow Creek Ranch Development Company, L.P. (the "Master Developer") relating to the construction of the TIRZ Improvements described by that Letter Financing Agreement dated , __ (the "Letter Financing Agreement"). By the Letter Financing Agreement, the Master Developer agreed to pre-finance the design and construction of the TIRZ Improvements to be reimbursed in accordance with the Reimbursement Agreement between the City of Pearland (the "City"), the Zone and the Master Developer dated ,1999 (the "Reimbursement Agreement"). Based upon my review of the payments made and of the certification of the Zone's Engineer, I conclude that the construction of the TIRZ Improvements was conducted and have been completed in compliance with the Reimbursement Agreement and the document entitled "TIRZ Implementation and Reimbursement Process" and are in order for reimbursement upon availability of funds: I therefore recommend that the Zone reimburse the Master Developer the amount of $. for the funds advanced to the Zone for the design and construction of the TIRZ Improvements, which amount is within the TIRZ budget (adjusted for inflation) established in the Zone's Project Plan and Reinvestment Zone Financing Plan for the TIRZ Improvements. In accordance with the Zone's Project Plan and Reinvestment Zone Financing Plan and the Development Agreement between the City and the Master Developer dated September 13, 1999, "developer interest" on this advance shall be calculated at percent per annum for Based upon this rate of interest, interest due as of the date of the letter is $ , wit~ an additional per diem rate of interest equal to $ until reimbursed. The last day that interest will accrue on this advance, if still unreimbursed, is ,.__ Very truly yours, Auditor for the Zone EXHIBIT "D" REINVESTMENT ZONE NO. TWO, CITY OF PEARLAND, TEXAS (SHADOW CREEK RANCH) [Date] Shadow Creek Ranch Development Company, L.P. Attn: Gary Cook 2947 East Broadway, Suite 304 Pearland, Texas 77581 Re: Financing for TIRZ Improvements: ; TIRZ Project No. __ Dear Mr. Cook: The City of Peadand, Texas (the "City"), Reinvestment Zone No. Two, City of Pearland, Texas (the "Zone"), and Shadow Creek Ranch Development Company, LP. (the "Master Developer") entered into a Reimbursement Agreement (the "Reimbursement Agreement") dated ,1999, to provide for the financing and construction of TIRZ Improvements to serve land within the Zone. The Zone and the Master Developer have determined to proceed with the design and construction of the following TIRZ Improvements in accordance with the Reimbursement Agreement: [description of TIRZ Improvements and location by section and/or plat name) Attached to this letter is a map showing the area which is benefitted by the TIRZ Improvements over which the available Tax Increment will be applied for purposes of determining when reimbursement is made. The Master Developer has agreed to pro-finance the design and construction of the TIRZ Improvements to be reimbursed in accordance with the Reimbursement Agreement. The Zone hereby gives its approval to proceed with the construction of the above described TIRZ Improvements. All procedures set forth in the document entitled "TIRZ Project Implementation and Reimbursement Process" must be followed and letters from the Zone's Engineer certifying the completion of the TIRZ Improvements and from the Zone's Auditor must be issued before the Zone will reimburse the Master Developer. The Zone's Engineer has determined that the budget (adjusted for inflation) established in the Zone's Project Plan and Reinvestment Zone Financing Plan for the above described TIRZ Improvements is $. plus "developer interest" calculated per the Reimbursement Agreement. The Zone is not obligated to reimburse the Master Developer for any amount in excess of that budgeted amount plus "developer interest" calculated by the Reimbursement Agreement. In accordance with the Zone's Project Plan and Reinvestment Zone Financing Plan and the Development Agreement between the City and the Master Developer dated September 13, 1999, "developer interest" on these TIRZ Improvements will be simple interest calculated at percent per annum for the ATTEST: By: This agreement was duly authorized at a meeting of the Board of Directors of the Zone held on day of , , with Director Cook abstaining from voting. Very truly yours, REINVESTMENT ZONE NO. TWO, CITY OF PEARLAND, TEXAS (SHADOW CREEK RANCH) By: Chairman, Board of Directors Secretary, Board of Directors F:WL 15 3 2~SHADC RK~ZONEkREIM AGR2 WPD (SEAL) AGREED TO AND ACCEPTED THIS __ DAY OF , __. SHADOW CREEK RANCH DEVELOPMENT COMPANY, L,P., a Nevada Limited Partnership By Shadow Creek Ranch, Inc., Its General Partner By:. Name: Title: EXHIBIT "E" (Administration) REINVESTMENT ZONE NO. TWO, CITY OF PEARl_AND, TEXAS (SHADOW CREEK RANCH) [Date] Shadow Creek Ranch DeveLopment Company, L.P. Attn: Gary Cook 2947 East Broadway, Suite 304 Pearland, Texas 77581 Re: Financing for administration of the Zone for fiscal year __ Dear Mr. Cook: The City of Pearland, Texas (the "City"), Reinvestment Zone No. Two, City of Peadand, Texas (the "Zone"), and Shadow Creek Ranch Development Company, L.P. (the "Master Developer") entered into a Reimbursement Agreement (the "Reimbursement Agreement") dated ,1999, to provide for the operation and administration of the Zone. The Master Developer has agreed to pre-finance the administration expenses for fiscal year on behalf of the Zone, in accordance with the Reimbursement Agreement, to the extent there is insufficient revenue in the Tax Increment Fund. In accordance with the Development Agreement between the City and the Master Developer dated September 13,1999, the first $1,000,000 of creation and administrative advances shall be reimbumed with simple interest calculated at eight percent per annum for a maximum period of five years from the advance. Creation and administrative advances in excess of the first $1,000,000 shall be reimbursed with simple interest calculated at 6.5 percent per annum until reimbursed. Prior to the advance described in this letter financing agreement, the Master Developer has advanced $ for the creation and administration of the Zone. Therefore, this advance will accrue interest atthe rate of__ percent per annum for Documentation of these advances must be submitted to the Zone's Auditor for review. The Zone's Auditor will review the completed documentation and issue a letter to the Board of Directors of the Zone certifying the amount to be reimbursed and calculating the appropriate interest on such amount. Reimbursement will not occur until such review has been conducted and such letter has been received by the Board of Directors of the Zone. the This agreement was duly authorized at a meeting of the Board of Directors of the Zone held on day of , , with Director Cook abstaining from voting. Very truly yours, REINVESTMENT ZONE NO. TWO, CITY OF PEARLAND, TEXAS (SHADOW CREEK RANCH) ATTEST: By: Chairman, Board of Directors By: Secretary, Board of Directors (SEAL) AGREED TO AND ACCEPTED THIS DAY OF SHADOW CREEK RANCH DEVELOPMENT COMPANY, L.P., a Nevada Limited Partnership By Shadow Creek Ranch, Inc., Its General Partner By:. Name: Title: EXHIBIT "E" (Creation and Organization) REINVESTMENT ZONE NO. TWO, CITY OF PEARLAND, TEXAS (SHADOW CREEK RANCH) [Date] Shadow Creek Ranch Development Company, L.P. Attn: Gary Cook 2947 East Broadway, Suite 304 Pearland, Texas 77581 Re: Financing for creation of the Zone through end of 1999 fiscal year Dear Mr. Cook: The City of Pearland, Texas (the "City"), Reinvestment Zone No. Two, City of Pearland, Texas (the "Zone"), and Shadow Creek Ranch Development Company, L.P. (the "Master Developer") entered into a Reimbursement Agreement (the "Reimbursement Agreement") dated ,1999, to provide for the creation and organization of the Zone. The Master Developer has pre-financed the creation and organization expenses on behalfof the Zone, in accordance with the Reimbursement Agreement. In accordance with the Development Agreement between the City and the Master Developer, the first $1,000,000 of creation and administrative advances shall be reimbursed with simple interest calculated at eight percent per annum for a maximum period of five years from the advance. Creation and administrative advances in excess of the first $1,000,000 shall be reimbursed with simple interest calculated at 6.5 percent per annum regardless of when the advance was made. As of the end of the 1999 fiscal year (September 30, 1999), the Master Developer has advanced $. for the creation of the Zone. Therefore, this advance will accrue interest at the rate of eight percent per annum for a maximum period of five years from the date of this letter financing agreement. Documentation of these advances must be submitted to the Zone's Auditor for review. The Zone's Auditor will review the completed documentation and issue a letter to the Board of Directors of the Zone certifying the amount to be reimbursed and calculating the appropriate interest on such amount. Reimbursement will not occur until such review has been conducted and such letter has been received by the Board of Directors of the Zone. This agreement was duly authorized at a meeting of the Board of Directors of the Zone held on the day of __, , with Director Cook abstaining from voting. Very truly yours, REINVESTMENT ZONE NO. TWO, CITY OF PEARLAND, TEXAS (SHADOW CREEK RANCH) ATTEST: By: Secretary, Board of Directors (SEAL) By: Chairman, Board of Directors AGREED TO AND ACCEPTED THIS DAY OF SHADOW CREEK RANCH DEVELOPMENT COMPANY, L.P., a Nevada Limited Partnership By Shadow Creek Ranch, Inc., Its General Partner By: Name: Gary W. Cook Title: President Memo To: From: Date: Subject: Mayor and City Council Members Alan Mueller October 21, 1999 TIRZ Master Developer Reimbursement Agreement This agreement between the TIRZ, the City, and Shadow Creek Ranch Development Company, documents the detailed procedures for TIRZ Board approval of projects and the procedures the Master Developer must follow to be eligible for reimbursement. By this agreement, the City is not making any commitments in addition to those already contained the Project and Financing PI'-~ and the Development Agreement. However, attorneys for the TIRZ and City have recommended the City be a party to this agreement due to the interrelatedness of this document with previous agreements that have been approved. The only clause in the agreement where the City is agreeing to take any action is on page 3, Section 4(d). In this section, the City agrees to use its best efforts to issue TIRZ bonds, provided the coverage tests have been satisfied and the financial advisor recommends their issuance. The City has already agreed to do this in the Development Agreement. This agreement formalizes many of the implementation and reimbursement procedures we have discussed conceptually. Attachments to the Agreement define the TIRZ implementation and reimbursement process and form letters that are to be used to authorize specific projects and for the engineers and auditors to use at the appropriate time to certify that the procedures have been followed. This agreement will apply to the Master Developer (Shadow Creek Ranch Development Company), but a similar form is anticipated for sub-developers that may become involved in the project. The TIRZ Board is expected to consider the agreement at their Board meeting on October 25, 4:30 PM.