HomeMy WebLinkAboutR2006-029S`.\Our Documents\Resolutions\06\Flow Medical Escrow Agreement.doc
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS,
REGARDING CLARIFICATION AND AMENDMENT OF AN ESCROW AGREEMENT
BETWEEN THE CITY OF DENTON AND FLOW HEALTH CARE FOUNDATION DATED
FEBRUARY 16,1993; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, on February 16, 1993 the City of Denton, Flow Health Care Foundation (the
Foundation"), and First State Bank of Texas, now Wells Fargo Bank (the "Escrow Agent")
entered into an escrow agreement (the "Escrow Agreement") providing for the escrowing of a
promissory note in the original principal sum of $2,000,000.00 executed by Notami Hospitals of
Texas, Inc. and payable to the Foundation (the "Note") and cash or its equivalent in the sum of
370,000.00 (the "Escrow"), as security for certain indemnity obligations owed the City as more
particularly described in the Bankruptcy Plan confirmed in the that certain case styled In Re:
Flow Regional Medical Center Inc., a Texas nonprofit corporation, a/k/a Flow Memorial
Hospital, In the United States Bankruptcy Court for the Eastern District of Texas, Sherman
Division, Case No. 88-42099 (Chapter H); and
WHEREAS, the principal portion of the proceeds of the Note has heretofore been paid
into the Escrow, there being a current balance of approximately $2.1 million; and
WHEREAS, the Escrow Agreement is ambiguous as to whether the Note and the
proceeds thereof should be calculated on a face value or actual value basis for purposes of
calculating the amount of the Escrow; and
WHEREAS, the Escrow Agreement will expire on January 1, 2008; and
WHEREAS, the City Council finds and determines that it is in the public interest to
redefine and authorize that the minimum amount of the Escrow shall be $2,000,000.00; NOW,
THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES:
SECTION 1. The findings and recitations contained in the preamble of this resolution
are true and correct and are incorporated into the body of this resolution by reference.
SECTION 2. The City Manager or his designee, is hereby authorized to submit written
documentation to the Escrow Agent authorizing release of the amount of the Escrow that exceeds
2,000,000.00.
SECTION 3. This Resolution shall become effective immediately upon its passage and
approval.
y
PASSED AND APPROVED this the
f
day of t 2006.
S:\Our Documents\Rcsolutions\06\Plow Medical 8scrow Agreement.doc
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PERR McNEILL, MAYOR ATTEST:
JENNIFER WALTERS, CITY SECRETARY BY:
Q~eV ~l WaUZUA~APPROVED
AS TO LEGAL FORM:EDWIN
M.
SNYDER, CITY ATTORNEY
BY: