HomeMy WebLinkAbout24-348Exhibit “A”
First Amendment to Operating Agreement
Hunter Ranch Improvement District No. 1 of Denton County, Texas
Exhibit “D-1”
Amendment to Consent Resolution
RESOLUTION NO. 24-989
A RESOLUTION OF THE CITY OF DENTON, TEXAS, AMENDING PRIOR RESOLUTION
CONSENTING TO THE CREATION OF “HUNTER RANCH IMPROVEMENT DISTRICT
NO. 1 OF DENTON COUNTY, TEXAS” AND THE INCLUSION OF LAND THEREIN; AND
PROVIDING AN EFFECITVE DATE
WHEREAS, pursuant to Section 59, Article XVI, Texas Constitution, Hunter Ranch
Improvement District No. 1 of Denton County, Texas (the “District”) has been created during the
86th Regular Session of the Texas Legislature through the passage of HB 4683 and codified under
Chapter 3980, Special District Local Laws Code (the “District Act”), to include land within the
City of Denton, Texas (the 'U.”), as a special district for the benefit of the public, including the
acquisition, construction, improvement, financing, operation, and maintenance of water,
wastewater, drainage, road, landscaping, park and recreational facilities;
WHEREAS, in satisfaction of the requirements of Section 3981.0109(a)(1) of the District
Act, the City has adopted Resolution No. 20-762, dated April 7, 2020 (the “Consent Resolution”),
consenting to the creation of the District and to the inclusion of the land described therein; and
WHEREAS, in satisfaction of the requirements of Section 3981.0109(a)(2) of the District
Act, the City and the District have entered into that “Operating Agreement”, dated as of April 7,
2020 (the “Operating Agreement”); and
WHEREAS, a conservation easement in the form required by Section 3 of the Consent
Resolution was recorded in the real property records of Denton County, Texas, within 180 calendar
days from the date of passage of the Consent Resolution, and all requirements of the Consent
Resolution related to the conservation easement have been fully and timely satisfied; and
WHEREAS, the City and District have agreed to amend the terms and provisions of the
Operating Agreement and the City has adopted Resolution No. 2-1-1 8 7, dated May J_, 2024,
approving a First Amendment to Operating Agreement, between the City and the District (the
“First Amendment”); and
WHEREAS, amendment of the Operating Agreement as provided by the First Amendment
requires amendment of the Consent Resolution as provided herein.
NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY
RESOLVES :
SECTION 1. The facts and recitations contained in the preamble of this resolution are
true and correct.
SECTION 2. Section 4 of the Consent Resolution is hereby amended and restated to
provide as follows:
The District shall be subject to the following terms and provisions:
(a) Board of Directors
(1)The City may appoint one additional director to the District board of
directors.
(b)Construction of Improvement Projects
(1)The District may provide, design, construct, acquire, improve, relocate,
operate, maintain, or finance, inside and outside of its boundaries, only
those improvement projects or services as permitted by the District Act and
Chapter 375, Local Government Code, as may be limited by the operating
agreement between the City and the District (a “District Project”);
(ii)Before the commencement of construction of any District Project financed
by bonds, notes, or other obligations (the “Bonds”) or to be conveyed or
dedicated to the City, the District will submit to the City all plans and
specifications for the construction and obtain City approval thereof;
(iii) Prior to the construction of each District Project described above, the
District or its engineer will give written notice to the City, stating the date
that the construction will be commenced;
(iv)The construction of each District Project described above will be in
accordance with plans and specifications approved by the City; and during
the progress of the construction and installation of the improvements, the
City or a City representative may make periodic on-the-ground inspections;
and
(V)Upon completion of each District Project, District will convey ownership
of such improvements to the City in accordance with the operating
agreement between the City and the District.
(C)Issuance of Bonds
(1)The District may issue Bonds payable wholly or partly from ad valorem
taxes, revenue other than assessments, contract payments, grants, or other
District money, or any combination of those sources of money, only to pay
for an authorized District purpose or project;
(ii)Each series of Bonds will have a maximum maturity of 30 years, and
expressly provide that the District reserves the right to redeem each series
of Bonds on any date not later than the 10th anniversary of the date of
issuance without premium;
(111)Except as otherwise permitted by law, the Bonds will be sold only after
taking public bids;
2
(iv)
(V)
The bids for the Bonds will be received not more than forty-five days after
notice of the sale of the Bonds is given;
The Bonds will not be payable from or secured by special assessment
revenues of the District;
(vi) The Bonds will not be payable from or secured by a pledge of ad valorem
taxes of the City or the revenues from the City’s utility or other system or
any other revenues of the City;
(Vll)The principal amount of Bonds secured by ad valorem taxes issued by the
District, when combined with the District’s other similarly secured Bonds
outstanding at the time of issuance may not exceed ten percent (10%) of the
assessed value of all real property in the District. The principal amount of
Bonds secured by contract payments meeting the requirements of Section
3980.0504(2) of the District Act issued by the District, when combined with
the District’s other similarly secured Bonds outstanding at the time of
issuance may not exceed ten percent (10%) of the assessed value of all real
property subject to the applicable District contract;
(Vlll)No Bonds, other than refunding Bonds, will be sold for less than 95% of
par; provided that the net effective interest rate on the Bonds so sold, taking
into account any discount or premiums as well as the interest borne by such
Bonds, will not exceed two percent (2%) above the highest average interest
rate reported by the Daily Bond Buyer in its weekly “20 Bond Index” during
the one-month period next preceding the date notice of the sale of such
Bonds is given;
(ix)Any refunding Bonds issued by the District must provide for a minimum of
three percent (3%) net present value savings; and the latest maturity of the
refunding Bonds may not extend beyond the latest maturity of the refunded
Bonds unless approved by the City;
(X)At least 45 days before the sale of a series of Bonds or at least 45 days before
entering into any bond purchase agreement for the sale of Bonds, the
District shall submit a copy of the documents authorizing the Bonds to the
City staff together with (a) the certifications from each developer in the
District that the developer is in compliance with the developer’s project
agreement with the City; and (b) certification that the District is in
compliance with this resolution and its operating agreement with the City
(collectively, the “Bond Documents”).
(xi)The City staff must complete its review of the Bond Documents not later
than the 30th day after the date the City receives such documents. In the
event the City staff determines a developer or the District is not in
compliance, it may object to the issuance of a series of Bonds by the
delivery of written notice of such objection (the “Initial Notice of
3
Noncompliance”) to the District within 35 days from the date of City’s
receipt of the Bond Documents. Such notice shall set forth in reasonable
detail the basis for the City staff objection and the District shall be given a
reasonable time to cure based on the alleged noncompliance, but in no event
less than 30 days (the “Cure Period”). In the event that the City staff
determines the basis for its objection has not been cured within the Cure
Period, it shall provide written notice (the “Final Notice of
Noncompliance”) of such determination to the District . Subsequent to its
receipt of the Final Notice of Noncompliance, the District must obtain
consent of the City Council for the issuance of such Bonds.
(d)Boundary Changes
(1)Land shall not be added to or excluded from the District without the written
consent of the City Council as provided by the District Act.
(e)District Division
(1)The City’s consent to the creation of the District granted by this resolution
shall constitute consent to future creation of any new district created by
division pursuant to the District Act; provided the new district is located
wholly within the area of the District as of the effective date of the District
Act
(ii)The creation of any new district by division shall be subject to the conditions
of this resolution and the District Act.
(iii) The District may not be divided into more than four (4) new districts without
City consent.
(f)Dissolution
(1)The District board of directors shall provide 180 days advance written
notice to the City of its intent to dissolve the District.
(g)Miscellaneous
(1)A contract of the District payable from ad valorem taxes or special
assessments for a period longer than 3 years must be approved by the City
unless such contract is terminable at will at the discretion of the District
upon 30 days written notice, is subject to annual appropriation by the
District or has been approved by the qualified voters of the District.
(ii)City consent shall be required to include any part of the area of the District
in a tax increment reinvestment zone or tax abatement reinvestment zone.
4
(h)Remedies
(1)In addition to all the rights and remedies provided by the laws of the state,
in the event the District violates the terms and provisions of this written
consent, the City shall be entitled to injunctive relief or a writ ofmandamus
issued by a court of competent jurisdiction restraining, compelling or
requiring the District and its officials to observe and comply with the terms
and provisions prescribed in this written consent to the inclusion of land
within the District.
SECTION 3. If any section, subsection, clause, phrase or portion of this resolution is for
any reason held invalid or unconstitutional by any court of competent jurisdiction, such shall be
deemed a separate, distinct, and independent provision, and such holding shall not affect the
validity of the remaining portion thereof.
SECTION 4. This resolution shall be in full force and effect from and after its passage.
The motion to approve this resolution was made by Chris (D ,' Hr and seconded
by Cef ,_ ) t+ua set( The resolution was passed and approved by the following vote tba
Aye
\/
IZ
IZ
IZ
IZ
JZ-
Nay Abstain Absent
Mayor Gerard Hudspeth:
Vicki Byrd, District 1 :
Brian Beck, District 2 :
Paul Meltzer, District 3
Joe Holland. District 4:
Brandon Chase McGee, At-Large Place 5
Chris Watts, At-Large Place 6
-7-
PASSED AND APPROVED this the L day of 2024
ATTEST:
„._ _Lk,Ma
FmTHODENfCITY SECRETARY
APPROVED AS TO LEGAL FORM:
MACK REINWAND, CITY ATTORNEY
5
Attachment “1”
Exhibit “E” – Form of Joinder
EXHIBIT E – FORM OF JOINDER
EXHIBIT E
JOINDER AGREEMENT
THIS JOINDER AGREEMENT (the “Joinder”), dated as of __________, 20__, is
executed by and between Hunter Ranch Improvement District No. 1 of Denton County,
Texas (the “District”), and Hunter Ranch Improvement District No. ___ of Denton
County, Texas (the “New District”), in connection with that certain Operating Agreement
entered into between the City and the District, dated effective as of April 7, 2020, as
amended by the First Amendment to Operating Agreement, dated ____________, 2024
(the “Operating Agreement”). Capitalized terms used herein shall have the definitions
provided in the Operating Agreement.
WHEREAS, the District was created during the 86th Regular Session of the Texas
Legislature through the passage of H.B. 4683 and codified under Chapter 3980, Special
District Local Laws Code (the “District Act”); and
WHEREAS, the New District has been created pursuant to the District Act by an
order, dated ____________, 20___ (the “Division Order”), adopted by the board of
directors of the District; and
WHEREAS, the Division Order provides that the existing District shall remain
named “Hunter Ranch Improvement District No. 1 of Denton County, Texas” and the
New District shall be named “Hunter Ranch Improvement District No. ___ of Denton
County, Texas”; and
WHEREAS, the Division Order designates the initial boundaries of the New
District as shown on Exhibit “A” hereto (the “New District Area”), and revised
boundaries of the District as shown on Exhibit “B” hereto (the “Revised District Area”);
and
WHEREAS, before the New District may exercise any powers under the District
Act, the New District must enter into a joinder to the Operating Agreement or a separate
operating agreement with the City; and
WHEREAS, the New District desires to enter into and execute this Joinder in order
to become a party to the Operating Agreement with respect to the New District Area.
NOW THEREFORE, the District and the New District agree as follows:
1. Attached hereto as Exhibit “C” is a true, correct, and complete copy of the
Operating Agreement. The terms and provisions of the Operating Agreement are
incorporated herein for all purposes.
2. New District hereby acknowledges, agrees, and confirms that, by its
execution of this Joinder, New District shall be deemed to be a “party” to the Operating
Agreement, but only with respect to the New District Area, and shall have all of the rights
and obligations of the District thereunder with respect to the New District Area, as if it
had originally executed Operating Agreement. New District hereby ratifies, as of the date
hereof, and agrees to be bound by, all of the applicable terms, provisions and conditions
contained in the Operating Agreement with respect to the New District area, to the same
effect as if it were an original party thereto. Attached hereto as Exhibit “D” is a general
description of the portion of the Improvement Projects, and Supplemental Projects that
can be identified, projected to be constructed and financed to serve the New District.
District and New District agree to prepare annual reports identifying: (a) the
Improvement Projects and Supplemental Projects (as such terms are defined in the
Operating Agreement) to be constructed and financed; (b) the status of such construction
and financing activities; (c) the amount of Bonds authorized for such projects; and (d) the
amount of Bonds issued to finance such projects. From and after the date hereof, the
District shall be released from any liability that results from New District’s failure to
perform its obligations under the Operating Agreement.
3. [FOR REGIONAL DISTRICT JOINDER ONLY] District and New District
acknowledge and agree District has been designated as the “Regional District”
responsible for coordinating and managing the activities assumed by it in the Operating
Agreement.
4. The Parties hereto have entered into this Joinder in satisfaction of the
requirements of Section 3980.0708 of the District Act. New District further acknowledges,
agrees, and confirms that it is subject to and will abide with the terms and conditions of
City Resolution No. 20-765, consenting to the creation of the District, as amended by City
Resolution No. _____.
5. The Parties intend that the City and the Developer, but no other parties, be
third party beneficiaries of this Joinder.
6. This Joinder may be executed in two or more counterparts, each of which
shall constitute an original but all of which when taken together shall constitute one
agreement.
7. This Joinder shall be governed by and construed and interpreted in
accordance with the laws of the State of Texas, and exclusive venue shall lie in Denton
County, Texas.
8. The New District agrees to provide a copy of this Joinder to the City within
15 days after its execution by all parties.
IN WITNESS WHEREOF, each party has caused this Joinder to be duly executed
by its authorized officer as of the day and year first above written.
[SIGNATURE PAGE TO FOLLOW]
HUNTER RANCH IMPROVEMENT DISTRICT
NO. 1 OF DENTON COUNTY, TEXAS
“District”
By:____________________________________
Name:_________________________________
Title:__________________________________
Address:_______________________________
_______________________________________
Fax:___________________________________
Phone:_________________________________
Email:__________________________________
ATTEST:
By:____________________________________
Name:_________________________________
Title:__________________________________
Address:_______________________________
_______________________________________
Fax:___________________________________
Phone:_________________________________
Email:__________________________________
HUNTER RANCH IMPROVEMENT DISTRICT
NO. ___ OF DENTON COUNTY, TEXAS
“New District”
By:____________________________________
Name:_________________________________
Title:__________________________________
Address:_______________________________
_______________________________________
Fax:___________________________________
Phone:_________________________________
Email:__________________________________
ATTEST:
By:____________________________________
Name:_________________________________
Title:__________________________________
Address:_______________________________
_______________________________________
Fax:___________________________________
Phone:_________________________________
Email:__________________________________
EXHIBIT A
NEW DISTRICT AREA
EXHIBIT B
REVISED DISTRICT AREA
EXHIBIT C
COPY OF OPERATING AGREEMENT
EXHIBIT D
DESCRIPTION OF PORTION
OF IMPROVEMENT PROJECTS AND SUPPLEMENTAL PROJECTS
TO BE CONSTRUCTED AND FINANCED
Attachment “2”
Exhibit “I-1” – Form of Developer Reimbursement Agreement
EXHIBIT I-1 - FORM OF DEVELOPER REIMBURSEMENT AGREEMENT
Page 1
EXHIBIT I-1
DEVELOPER REIMBURSEMENT AGREEMENT
This DEVELOPER REIMBURSEMENT AGREEMENT (the “Agreement”) is made
and entered into effective as of the ___ day of ____________, 20__, (the “Effective Date”)
between ________________________, a _____________________ (the “Developer”) and
HUNTER RANCH IMPROVEMENT DISTRICT NO. 1 OF DENTON COUNTY, TEXAS
(the “District”), a conservation and reclamation district and political subdivision of the
State of Texas created pursuant to Article III, Section 52, Article III, Section 52-a, and
Article XVI, Section 59, of the Texas Constitution and an Act of the Texas Legislature
codified at Chapter 3980, Special District Local Laws Code (the “District Act”), and
operating under the District Act, and Chapter 375, Local Government Code. (The
Developer and District are sometimes hereinafter referred to individually as “Party” and
collectively as “Parties”.)
RECITALS:
WHEREAS, Developer is the owner of and desires to develop the _____________
acre tract of land (the “Property”) more particularly described in Exhibit “A”, attached
hereto; however, as of the Effective Date, the Property is not served by adequate water,
wastewater, drainage, road, landscaping, park, and recreational facilities, and such
facilities are not otherwise available to the Property; and
WHEREAS, the Property is located within the corporate limits of the City of
Denton (the “City”), and within Water Certificate of Convenience and Necessity No.
10195 and Sewer Certificate of Convenience and Necessity No. 20072, each issued to the
City (collectively, the “City CCNs”); and
WHEREAS, District was created during the 86th Regular Session of the Texas
Legislature through the passage of HB 4683 and codified under the District Act, for the
benefit of the public and for the purposes of, including but not limited to, the acquisition,
construction, improvement, financing, operation, and maintenance of water, wastewater,
drainage, road, landscaping, park and recreational facilities; and
WHEREAS, in satisfaction of the requirements of Section 3980.0109(a)(1) of the
District Act, the City adopted Resolution No. 20-765, dated April 7, 2020 (the
“2020Resolution”), consenting to the creation of the District and to the inclusion of the
Property in the District; and
WHEREAS, the City has adopted Resolution No. _____, dated __________, 2024
(the “2024 Resolution”), amending the 2020 Resolution (the 2020 Resolution as amended
by the 2024 Resolution, the “Consent Resolution”); and
Ex I-1 Developer Reimbursement Agreement clean 5.3.24
Page 2
WHEREAS, the land within the boundaries of the District as of the Effective Date,
and as they may be adjusted from time to time, is hereinafter sometimes referred to as the
“District Area”; and
WHEREAS, in satisfaction of the requirements of Section 3980.0109(a)(2) of the
District Act, the District and City entered into an “Operating Agreement”, effective April
7, 2020, as amended by that “First Amendment to Operating Agreement”, effective
____________, 2024 (the “Operating Agreement”), that provides for: (a) a general
description of the Improvement Projects and Supplemental Projects (collectively, the
“Projects”) that may be financed by the District; (b) the terms and conditions of the
financing of the Projects; and (c) the operation of the District; and
WHEREAS, in satisfaction of the requirements of Section 3980.0109(a)(3) of the
District Act, the Developer and the City have entered into a Project Agreement, effective
April 7, 2020, as amended by that “First Amendment to Project Agreement”, effective
_____________, 2024 (the “Project Agreement”), relating to various aspects of the
development of property inside or outside the District Area; and
WHEREAS, unless otherwise specifically defined herein, all capitalized terms
used in this Agreement shall have the meanings ascribed to them in the Operating
Agreement; and
WHEREAS, the Developer wishes to proceed with development of the District
Area in phases; however, the Parties acknowledge the District does not have funds
currently available to fund the acquisition and construction of the Projects to facilitate
such development; and
WHEREAS, Developer has paid certain costs related to creation of the District (the
“Creation Costs”), and certain operating and administrative costs of the District, and
pursuant to the terms of this Agreement is willing: (i) to advance or pay on behalf of the
District certain monies needed to pay for the ongoing costs and expenses for the
operation and administration of the District including, but not limited to, director fees,
insurance premiums, bookkeeping fees, legal fees, engineering fees, inspection fees,
auditing fees, fees to operate and maintain certain Improvement Projects, and all other
similar fees and expenses (such costs collectively with the Creation Costs, the “District
Operating Costs”); and (ii) to advance or pay on behalf of the District all monies to pay
for all portions of the Projects that are necessary for development of all of the Property,
that are eligible for reimbursement from the District; and
WHEREAS, the District hereby requests Developer: (i) to advance or pay on behalf
of the District certain monies to pay for District Operating Costs; and (ii) at such time as
Ex I-1 Developer Reimbursement Agreement clean 5.3.24
Page 3
Developer determines to proceed with development, to advance to or pay on behalf of
the District all monies to acquire and construct the Projects; and
WHEREAS, Developer and the District acknowledge that development within the
District Area would not occur but for this Agreement and the performance by Developer
and the District of their respective duties and obligations under this Agreement; and
WHEREAS, in order to induce Developer to advance or pay on behalf of the
District monies for the purposes set forth above, the District represents it will: (i) conduct
elections for the approval of the resident electors of the District of the authorization of
bonds (the “Bonds’) for Projects and District Operating Costs; (ii) issue and sell, from
time to time (and at the earliest possible time pursuant to applicable law, the rules of the
Texas Commission on Environmental Quality (the "TCEQ"), and the provisions hereof
and of the Consent Resolution and the Operating Agreement) Bonds in multiple issues
and secured in whole or in part by ad valorem taxes levied on land within the District,
revenue other than ad valorem taxes or contract payments; and (iii) use the proceeds
from the sale of the Bonds to reimburse Developer; and
WHEREAS, Developer is only willing to advance on behalf of the District monies
for the purposes set forth above based on the obligation of the District to issue and sell,
from time to time (and at the earliest possible time pursuant to applicable law, the rules
of the TCEQ, and the provisions hereof and of the Consent Resolution and the Operating
Agreement), the Bonds and to use the proceeds from the Bonds to reimburse Developer;
and
WHEREAS, the District represents it will proceed with the issuance and sale, from
time to time (and at the earliest possible time pursuant to applicable law, the rules of the
TCEQ, and the provisions hereof and of the Consent Resolution and the Operating
Agreement), of the Bonds and is obligated to issue and sell, from time to time (and at the
earliest possible time pursuant to applicable law, the rules of the TCEQ, and the
provisions hereof and of the Consent Resolution and the Operating Agreement), the
Bonds to reimburse Developer subject only to: (i) satisfaction of the conditions set forth in
Section 5.2 of this Agreement; and (ii) the performance by the District of the acts set forth
in Section 5.4 of this Agreement; and
WHEREAS, the Parties acknowledge they are entering into this Agreement to
implement the purpose of the Operating Agreement, and this Agreement is subject to the
terms and provisions of the Consent Resolution and Operating Agreement; and
WHEREAS, the Parties each represent to the other that it may enter into this
Agreement pursuant to authority provided by the Constitution and laws of the State of
Texas, particularly the District Act and Chapter 375, Local Government Code.
Ex I-1 Developer Reimbursement Agreement clean 5.3.24
Page 4
NOW THEREFORE, FOR AND IN CONSIDERATION of the mutual promises,
covenants, benefits and obligations hereinafter set forth, the District and Developer
contract and agree as follows.
ARTICLE I
MAINTENANCE AND OPERATING COSTS
1.1. The District has incurred and will continue to incur District Operating
Costs which will be paid from: (a) revenues from the District’s M&O Tax; and (b)
revenues from Assessments levied by the District; and (c) revenues from any other
legally available source (collectively, the “District Revenue”).
1.2. In order to ensure the timely and orderly administration of the District’s
operations, including the discharge of its obligations hereunder, Developer shall advance
to the District, from time to time, the amounts, if any, by which District Operating Costs
exceed District Revenue.
ARTICLE II
DEVELOPER OBLIGATIONS
2.1. The Parties acknowledge and agree that the only improvement projects that
may be financed by the District are (a) those Improvement Projects described in the
Operating Agreement, and (b) eligible Supplemental Projects as provided in the
Operating Agreement. Accordingly, the obligations of the District hereunder with
respect to the acquisition, construction, and financing of public infrastructure to serve the
District Area, including reimbursement of the Developer, are expressly limited to the
Projects.
2.2. From time to time Developer shall advise the District (a) that Developer
desires the District to proceed with the construction of a phase of the Projects and (b) that
Developer is prepared to advance to the District monies for the construction of such
improvements. Thereafter, the District shall acquire, construct or otherwise cause the
construction or acquisition of the Projects in the manner provided by the District Act, the
general law for conservation and reclamation districts and in full compliance with the
applicable rules and regulations of the TCEQ, the provisions of the Texas Water Code,
the Consent Resolution and the Operating Agreement, the ordinances and regulations of
the City, Denton County, Texas, and all other regulatory bodies having jurisdiction over
such construction or other acquisition.
Ex I-1 Developer Reimbursement Agreement clean 5.3.24
Page 5
2.3. Plans and Specifications.
(a) Plans and specifications for Projects shall be prepared by the District’s
engineer or other engineer selected by Developer and approved by the District (the
“District Engineer”). Unless otherwise agreed by the District and Developer, each
engineering design contract shall reflect the District as the “owner” of the Projects;
however, the District Engineer shall cooperate with the Developer regarding the design
and bidding of the Improvement Projects. Each contract shall provide that final design of
the Projects shall be subject to review and approval by the District Engineer and the
District, which shall not be unreasonably withheld or delayed. All monies due the
District Engineer relative to the design of the Projects shall be due and payable solely by
Developer, subject to reimbursement by the District as provided herein. Any contracts
entered into by the Developer for the design of the Projects shall be subject to review and
approval by the District, and each contract for Projects shall include the provision
attached hereto as Exhibit B acknowledging that the District shall not be liable under
such contract for any payments whatsoever.
(b) The Projects shall be designed in accordance with the standards and
specifications of the District, the City, the County, the TCEQ, including, but not limited
to, all rules and regulations applicable to the construction of improvements such that the
District can fulfill its obligation to reimburse Developer as provided by this Agreement,
and any other agency having or hereafter acquiring jurisdiction. The design and sizing,
including the location of stub outs and/or termination points, of the Projects shall take
into consideration the anticipated development of other land in the District so that the
District Area will be provided with adequate water, wastewater, drainage, road, parks,
and recreational facilities of consistent quality and on the most economical basis. In
addition, the District may require a phase of such facilities to be sized in order to co-
ordinate the construction of the facilities with similar facilities necessary to serve other
property within the District Area.
(c) Construction of the Projects shall be subject to the periodic review,
inspection, and approval by the District, which approval shall not be unreasonably
withheld or delayed. Developer shall pay the District Engineer for inspections of that
portion of the Projects subject to inspection by the District a fee not to exceed 2% of the
costs to construct the Projects, which fee shall be payable monthly commencing on the
date which is 30 days from the commencement of construction of the Projects. The
Developer shall also pay to the City the review and inspection fees of the City for review
and inspection services provided by the City or its agents for the construction and
installation of Projects.
2.4. Provision of Projects. The District shall cooperate with Developer and take
all steps necessary to facilitate construction of the Projects including, but not limited to,
Ex I-1 Developer Reimbursement Agreement clean 5.3.24
Page 6
causing construction drawings and plans and specifications to be prepared, obtaining all
necessary governmental approvals, and bidding and awarding a contract or contracts for
the construction, installation or other acquisition of the Projects, all at the cost of
Developer. Developer shall not initiate the bidding for construction of a phase of the
Projects until authorized by the District, which authorization shall not be unreasonably
withheld or delayed. The District Engineer shall be responsible for bidding each
construction contract and all bids shall be received at an office of the District Engineer.
District contracts shall be subject to the competitive bidding requirements of Section
375.221, Local Government Code. Developer shall be solely responsible for all costs and
expenses related to such bidding, design and construction of the Projects, subject to
reimbursement by the District as provided herein. Unless otherwise agreed by the
Parties, all of such contracts shall reflect the District as “owner,” but Developer as
“guarantor of payment” under the contract, for all Projects. No contracts shall be let for
the design or construction of the Projects without the approval of the Developer. Any
contracts entered into by Developer for the design of the Projects shall be subject to
review and approval by the District.
No change in the final plans and specifications for Projects shall be effected or
permitted except pursuant to written change order approved by the District. Such
change orders shall clearly state changes to be made and the increase or decrease in costs
effected thereby. It is understood and agreed that any change orders are subject to the
rules of the TCEQ.
2.5. Payment of Costs. Developer shall make, in a timely fashion, either (1) all
payments on the contracts awarded by the District for the construction or other
acquisition of the Projects, including engineering and consultant invoices or (2) advances
of money to the District in amounts sufficient to make all such payments. Payment shall
be made by Developer only after approval thereof by the District Engineer. Such
contracts shall provide that the contractor shall look solely to the Developer for payment
of all monies due for construction of the Projects. Developer shall, within 60 days after
making any payment, provide copies to the District of all invoices and certifications
recommending payment together with copies of all cancelled checks (with all such
documentation clearly describing the Projects to which the documentation applies).
2.6. Lienholder Releases. In the event Developer borrows the money for the
acquisition or development of the Property or to make payments for the design and
construction of the Projects (or otherwise desires to place a lien on the Property),
Developer agrees to: (a) notify the District in writing of the name of such lender; (b)
obtain from such lender, and deliver to the District, written releases and/or
subordination agreements, in a form reasonably satisfactory to the District (which
reasonable satisfaction shall be evidenced by written acknowledgement), evidencing that
such lender has not taken a lien on any portion of the Projects and that in the event such
Ex I-1 Developer Reimbursement Agreement clean 5.3.24
Page 7
lienholder should foreclose on any portion of the Property, such lienholder shall not have
any title to the Projects; (c) obtain from such lender, and deliver to the District, written
releases, in a form reasonably satisfactory to the District (which reasonable satisfaction
shall be evidenced by written acknowledgement), evidencing that such lender has not
taken a lien, pledge, or any other interest in this Agreement or to any right, title, or
interest of Developer under this Agreement except for the right of Developer to be
reimbursed under this Agreement; and (d) obtain from such lender, and deliver to the
District, the written acknowledgement of such lender, in a form reasonably satisfactory
to the District (which reasonable satisfaction shall be evidenced by written
acknowledgement), acknowledging and agreeing that should such lender, or its
successors or assigns, take title to any portion of the Property, that such lender, and its
successors and assigns, shall take title subject to the terms and conditions of this
Agreement.
2.7. Easements and Sites. Developer shall cause to be dedicated to the public all
easements, sites, and rights-of-way necessary for the installation of the Projects within
the District Area in accordance with Sections 4.05, 4.07 and 4.09 of the Operating
Agreement. All costs related thereto shall be paid by Developer and be subject to
reimbursement pursuant to and in accordance with applicable rules of the TCEQ and as
provided herein. Developer may retain the right to grant other easements within any
easement granted to the public (but not within sites granted in fee or rights-of-way
granted to the public) or to cross any such easement, as long as such rights are limited to
providing for the installation, operation and maintenance of any improvements that
benefit the District, do not unreasonably interfere with access and maintenance of public
infrastructure within the easement, and comply with all statutes, ordinances, rules and
regulations.
2.8. Records. Developer shall keep accurate records itemizing and separating
all costs relative to the portions of the Projects eligible for reimbursement by the District.
Within 60 days after the date of the District’s receipt of the District Engineer’s certificate
of completion for each portion of the Projects, Developer shall deliver to the District
copies of all records reasonably requested by the District to evidence that such portion of
the Projects constructed or otherwise acquired by Developer is subject to reimbursement
by the District. Such records shall include but shall not be limited to, contracts, requests
for payment, engineer’s recommendation for payment, and cancelled checks (or other
evidence of payment if approved by the TCEQ). Following its delivery of such
documentation, Developer's obligation regarding maintenance of its records shall be
limited to maintaining its records in its normal course of business; provided, however,
Developer shall not destroy such records for a period of not more than 36 months.
2.9. Further Documentation. Upon completion of any portion of the
Improvement Projects, Developer shall cause to be executed any additional
Ex I-1 Developer Reimbursement Agreement clean 5.3.24
Page 8
documentation reasonably requested by the District to evidence the District’s ownership
of the Improvement Projects free and clear of any liens, including any acknowledgment
from any lienholder on the Property.
ARTICLE III
CONVEYANCE AND MAINTENANCE OF IMPROVEMENTS
3.1. Conveyance of Improvements. The Parties acknowledge and agree that
upon completion and acceptance of any portion of the Improvement Projects, the District
shall convey such Improvement Projects to the City. All Improvement Projects shall be
used to serve the District Area to the fullest extent necessary.
3.2. Maintenance and Operation. Except as provided by law or the Operating
Agreement, upon acceptance of title to Improvement Projects by the City, the District
shall be relieved of any further responsibility for maintenance and operation thereof. The
District shall continue to be responsible for the maintenance of landscaping within road
right-of-way and Park Improvements in the District Area.
ARTICLE IV
ASSIGNMENT OF REIMBURSEMENT AMOUNT
4.1. Conditioned Permitted Assignment. Developer shall have the right to
assign, pledge, mortgage, transfer, or otherwise encumber all or any portion of the
District Reimbursement Amount (hereinafter defined); provided, however, that any such
assignment, pledge, mortgage or other transfer or encumbrance (an “Assignment”) shall
be effective as to the District only upon completion of the following: (a) the execution of
an acknowledgement of notice by the District to evidence the District’s receipt of notice
of such Assignment; and (b) District receipt of a copy of the Assignment as recorded in
the Real Property Records of Denton County.
4.2. Conveyance of Property. In the event Developer sells, conveys, or
otherwise transfers ownership of any portion of the Property (a “Sale Tract”) to any
person or entity (a “New Owner”) other than a homebuilder or an end-user homeowner,
prior to such conveyance Developer shall require New Owner execute a joinder (a
“Joinder”) to this Agreement (whereupon, New Owner shall be the “Developer” under
this Agreement with respect to the Sale Tract, and Developer shall be released from any
further obligations under this Agreement with respect to the Sale Tract). Such Joinder
shall be effective as to the District only upon completion of the following: (a) the
execution of an acknowledgement of notice by the District to evidence the District’s
receipt of notice of such conveyance; and (b) District receipt of a copy of the conveyance
and Joinder as recorded in the Real Property Records of Denton County.
Ex I-1 Developer Reimbursement Agreement clean 5.3.24
Page 9
4.3. Reliance. The District shall be entitled to pay any sums due or to become
due under this Agreement in accordance with the most recent Assignment or Joinder
with respect to which the District has executed an acknowledgement of notice as
required hereunder, and the District’s records with respect thereto shall be deemed
conclusively correct. The District shall not be required to pay any sums due or to become
due under this Agreement unless the party claiming such right to receive such sums can
prove to the satisfaction of the District compliance with these requirements, and such
party’s rights thereto.
4.4. District’s Rights. In the event any litigation should arise with respect to
rights to any monies due or to become due under this Agreement, the District shall
continue to have the obligation to issue Bonds to pay such monies, and, at the District’s
sole and absolute discretion, to institute a bill of interpleader in any court of competent
jurisdiction to determine the rights of the parties to such monies. No assignment or other
transfer by any party of its rights or obligations under this Agreement (even though the
District may acknowledge such assignment or transfer) shall constitute a waiver by the
District of its rights under this Agreement; and all parties to this Agreement
acknowledge and agree that all assignments or transfers shall be subject to the obligation
of the assignees or transferees to be bound by the terms of this Agreement.
ARTICLE V
DISTRICT REIMBURSEMENTS
5.1. District Reimbursement Amount.
(a) As part of the consideration for the Parties entering into this Agreement, the
District shall reimburse Developer for monies advanced or paid by Developer that are
eligible for reimbursement by the District, plus the maximum interest allowed by TCEQ
rules, including, but not limited to, (i) monies advanced or paid for District Operating
Costs, but not to exceed the maximum amount of $4,000,000; and (ii) monies advanced or
paid by Developer for Projects. However, the total amount that the District is obligated to
pay Developer pursuant to this Agreement (the “District Reimbursement Amount”) shall
not exceed the maximum amount of $______________ in the aggregate. The District
Reimbursement Amount shall be paid in accordance with the provisions of this
Agreement, including without limitation the conditions set forth in this Article V, from
Bond proceeds or other legally available District funds as permitted by the Operating
Agreement. The District Reimbursement Amount shall include all amounts allowed by
state law and rules of the TCEQ under its then current rules including, but not limited to,
engineering fees, reports, studies, land costs, easement and right-of-way costs,
organizational and administrative costs, legal expenses, contract costs, all construction
costs, impact fees, and interest on the monies expended by Developer through the date
such monies are paid in accordance with this Agreement.
Ex I-1 Developer Reimbursement Agreement clean 5.3.24
Page 10
(b) In the event (and to the extent) the TCEQ determines, in reviewing any
Bond application, that any portion of the District Reimbursement Amount may not be
reimbursed or interest paid under the rules of the TCEQ, then the District
Reimbursement Amount shall be reduced as required by such rules. Subject to Section
2.8 of this Agreement, Developer shall provide the District with such information and
documentation as the District may reasonably request to enable the District to calculate
interest and verify payments. In the event there is a disagreement between Developer
and the District as to whether an expenditure or advance of money by Developer is owed
hereunder or eligible to be reimbursed under state law or the rules of the TCEQ, the
District shall include such amount in the Bond application and shall provide Developer
with the opportunity to submit information and appear before the TCEQ in support of
the reimbursement. The District and Developer shall be bound by the decision of the
TCEQ.
(c) If reimbursement for any portion of the District Reimbursement Amount is
not subject to the rules of the TCEQ, then the District shall reimburse Developer the
maximum amount allowed by law and the rules of any state agency having jurisdiction
over such reimbursement, including the office of the Attorney General of the State of
Texas (the “OAG”). The District shall always be obligated to pay Developer the
maximum amount allowed by then-current applicable law and rules and regulations of
the TCEQ, but not to exceed the maximum amount of $__________ in the aggregate.
5.2. Sale and Issuance of District Bonds.
(a) The District hereby agrees to proceed with the sale and issuance, from time
to time (and at the earliest possible time), of the Bonds in multiple series to reimburse
and pay Developer the District Reimbursement Amount as provided by this Agreement.
However, the District and Developer acknowledge and agree that the District shall not
issue more than $____________ aggregate principal amount of Bonds to pay the District
Reimbursement Amount. The District Bonds shall be secured by District ad valorem tax
revenue (other than the Contract Tax) and any other revenue or contract payments other
than Assessments.
(b) The obligation of the District to sell and issue Bonds for such purposes is
subject to the following conditions: (i) approval by the TCEQ (when applicable) of the
issuance and sale of the Bonds; (ii) a finding of economic feasibility as set forth in Section
5.4 hereof, (iii) compliance with the District Act, Consent Resolution, Project Agreement
and Operating Agreement; (iv) the receipt of a bid and awarding of sale of the Bonds by
the District; (v) approval of the Bonds by the Attorney General of the State of Texas;
(vi) registration of the Bonds by the Comptroller of Public Accounts of the State; and
(vii) the receipt of the proceeds from the sale of the Bonds. The District shall fully
cooperate with Developer to cause the foregoing conditions to be satisfied. The District
Ex I-1 Developer Reimbursement Agreement clean 5.3.24
Page 11
has a continuing obligation to issue and sell the Bonds until Developer has been fully
paid the District Reimbursement Amount, subject only to the performance of the
additional actions set forth in Section 5.4 of this Agreement.
5.3. Order of Payment. Unless otherwise agreed by the District and Developer,
the District shall include in each Bond application the first monies advanced by
Developer pursuant to this Agreement that have not yet been reimbursed by the District.
5.4. Bond Issuance Activities. In connection with the issuance of the Bonds, the
District shall promptly perform the activities described below. The District shall fully
cooperate with Developer and shall complete such activities so that Bonds may be issued
at the earliest possible date and the District can fulfill its payment obligations to
Developer as provided by this Agreement. The District shall not take any action (or fail
to take any action) that may or will reduce any amount owed to Developer pursuant to
this Agreement or that may or will delay or impair in any way the issuance of any Bonds
or the prompt payment to Developer of the amount owed Developer under this
Agreement.
(a) Call elections within the District for authorization by the resident District
electors to issue the Bonds from time to time in amounts and within terms sufficient to
reimburse Developer for costs of acquiring and constructing the Projects necessary to
serve all of the District Area, and $4,000,000 of District Operating Costs.
(b) Apply to the TCEQ (when applicable) for approval of the issuance of the
Bonds at such time as Developer requests, and upon the District’s financial advisor
determining that it is feasible for the District to issue the Bonds. A Bond issue will be
considered “feasible” if (i) it can be amortized compliant with the Benchmark Tax Rate
feasibility test of the Operating Agreement, based upon existing values and projections of
future values located within the Property in accordance with the TCEQ rules and the
Operating Agreement, (ii) meets the applicable requirements of the Consent Resolution
and Operating Agreement, and (iii) otherwise meets the requirements of the TCEQ and
OAG. Developer may request that the Bonds be issued in more than one series, provided
that the District shall not be required to issue any series of Bonds in an initial principal
amount of less than $1,000,000 unless it is the last series of Bonds to be issued by the
District pursuant to this Agreement. At such time as the District submits each
application to the TCEQ for approval of the issuance of any Bonds, the District shall
notify Developer in writing of such bond application (and upon request of Developer
shall immediately provide a full and complete copy of such bond application) so that
Developer can verify that the District is in full compliance with the provisions of this
Agreement. In no event shall the District be required to begin the process of issuing any
series of bonds (whether or not TCEQ approval is required for such series) until such
Ex I-1 Developer Reimbursement Agreement clean 5.3.24
Page 12
time as the District’s financial advisor determines that such issuance would be financially
feasible.
(c) Promptly sell the Bonds after obtaining TCEQ approval (if applicable).
(d) Obtain the OAG approval of the Bonds.
(e) Obtain registration of the Bonds by the Comptroller of Public Accounts and
the State of Texas.
(f) Pay Developer in accordance with this Agreement promptly after the
closing of the sale of the Bonds.
5.5. Developer Obligations. Developer agrees to cooperate with the District in
the preparation of each Bond application and to provide to the District all documents and
information reasonably requested by the District: (a) in preparing the Bond application;
(b) in otherwise documenting the amounts to be reimbursed pursuant to this Agreement;
and (c) to allow completion of a developer reimbursement report by the District’s auditor
relative to any issuance of Bonds. In addition, Developer agrees to provide the District
all information reasonably requested by the District in the preparation of its Official
Statement relative to the issuance of the Bonds, including all information and documents
needed by the District to comply with Securities and Exchange Commission Rule
15(c)(2)-12.
5.6. Waiver of Exemptions. As a condition to proceeding with the actions set
forth in Section 5.4(b), Developer and all holders of a lien on the Property shall enter into
an agreement whereby, as to taxes levied by the District, Developer and any subsequent
owner of all or any portion of the Property permanently waive the right to claim
agricultural, open space, wildlife management, timberland, or inventory valuations for
any land, homes or buildings owned by Developer within the District, in accordance
with the rules of the TCEQ. Nothing herein shall prevent (a) Developer from
maintaining an agricultural exemption over the Property for any taxing jurisdiction other
than the District and the City, or (b) a residential homeowner from qualifying for any
lawfully available exemption from any taxing jurisdiction, including the District.
5.7. M&O Tax Proceeds and Assessments. The Parties acknowledge and agree
that the primary source of funds for payment of the District Reimbursement Amount
shall be proceeds of the District Bonds. However, the Developer shall have the right to
reimbursement from other legally available funds of the District, including M&O Tax
proceeds, contract tax proceeds, or Assessments, to the extent permitted by the Operating
Agreement.
Ex I-1 Developer Reimbursement Agreement clean 5.3.24
Page 13
ARTICLE VI
ADDITIONAL PROVISIONS
6.1. General. This Agreement and the obligations of the Parties hereunder are
subject to the Consent Resolution, the Operating Agreement, and all rules, regulations
and laws which may be applicable by the City, the State of Texas, or any regulatory
agency having jurisdiction, including the rules of the TCEQ and OAG.
6.2. Recitals. The “Recitals” set forth in this Agreement are true and correct and
are incorporated as part of this Agreement.
6.3. Force Majeure. If a Party is prevented from performing, in whole or in part,
its obligations under this Agreement by reason of “force majeure” that could not have
been avoided by the exercise of due diligence by such Party, then performance by such
Party may be suspended to the limited extent and during the limited period that
performance is made impossible by the force majeure; provided, however, such Party
must use its best efforts to diligently and continuously pursue a course of action that will
eliminate the force majeure and allow such Party to resume full performance at the
earliest possible time. As an express condition precedent to suspending performance,
however, immediately after the occurrence of any force majeure, the Party whose
performance is rendered impossible shall give notice and full details of the force majeure
to the other Party. For purposes of this Agreement, “force majeure” means any of the
following: floods; earthquakes; acts of God; acts of war; acts of terrorism; acts of public
enemies; insurrection; riot; labor strikes; the inability to procure labor or materials in the
open market; the interruption of utility services by an entity other than the District; the
issuance of a restraining order by any court having jurisdiction.
6.4. Notices. Any notice required or contemplated by this Agreement shall be
deemed given: (a) if mailed via U.S. Mail, Certified Mail Return Receipt Requested, on
the earlier of the date actually received at the delivery address or five business days after
mailed; (b) if deposited with a private delivery service (such as UPS or FedEx), when
delivered, as evidenced by a receipt signed by a person at the delivery address; and (c) if
otherwise given (including by FAX or E-mail), when actually received at the delivery
address. All notices shall be addressed as set forth below; however, any Party may
change its address for purposes of this Agreement by giving notice of such change as
provided by this section.
Ex I-1 Developer Reimbursement Agreement clean 5.3.24
Page 14
If to the District:
Hunter Ranch Improvement District No. 1 of Denton County
President, Board of Directors
c/o Allen Boone Humphries Robinson LLP
3200 Southwest Freeway
Suite 2600
Houston, Texas 77027
Phone: 972-823-0805
E-mail: ccrawford@abhr.com
If to Developer:
_________________________________
_________________________________
_________________________________
Attn: _____________________________
Phone: _____________________________
E-mail: _____________________________
6. 5. Parties In Interest. The Parties intend that the City be a third party
beneficiary of this Agreement. This Agreement shall be for the sole and exclusive benefit
of the District, Developer (and their successors as permitted by this Agreement), and the
City and shall not be construed to confer any benefit or right upon any other party.
6.6. Modification. Except as expressly provided in Sections 6.17 and 6.21 below,
this Agreement shall be subject to amendment, change, or modification only with the
written consent of Developer and the District.
6.7. Entire Agreement. This Agreement constitutes the entire Agreement
between the parties relative to the subject matter hereof. There are no agreements,
covenants, representations or warranties between the parties other than those expressly
stated or provided for herein, relating to such subject matter. Further, this Agreement
shall replace and supersede in all respects any other agreement relating to the subject
matter hereof that may be construed to apply to the Property.
6.8. Good Faith Cooperation. The Parties agree to use good faith in the
performance of their respective duties and obligations under this Agreement such that
the intent of the Parties shall be fulfilled. The Parties further agree to take such
additional actions, from time to time, as may be necessary to fully carry out the purposes
and intent of this Agreement including, but not limited to, the execution of further
documentation.
Ex I-1 Developer Reimbursement Agreement clean 5.3.24
Page 15
6.9. Term. This Agreement shall remain in effect for a term ending on the
earlier of (a) sixty-five (65) years after the Effective Date, or (b) when the District has
reimbursed the District Reimbursement Amount.
6.10. Default and Remedies.
(a) Notice. No Party shall be in default under this Agreement until written
notice of the alleged failure of such Party to perform has been given (which notice shall
set forth in reasonable detail the nature of the alleged failure).
(b) Remedies. If a Party is in default under this Agreement, then the non-
defaulting Party shall be entitled to all remedies available under applicable law
including, but not limited to, specific performance, injunctive relief, mandamus relief,
and damages; provided, however, no Party to this Agreement shall have the right to
terminate this Agreement prior to the expiration of its term (and the prohibition against
termination of this Agreement applies regardless of the nature or frequency of any
default). In addition, once Developer has advanced monies on behalf of the District
under this Agreement, the obligation of the District to issue and sell Bonds to reimburse
such advances in accordance with this Agreement shall not be affected by any alleged or
actual default by the party who has advanced such monies (unless the default constitutes
or results in a breach of the TCEQ rules or requirements for such Bond issuance). The
failure of any Party to insist, in one or more instances, upon performance by another
Party of any provision of this Agreement shall not be construed as a waiver of
performance of such provision.
(c) Attorney Fees. If any Party hereto is the prevailing party in any legal
proceedings against the other brought under or with relation to this Agreement, such
prevailing party shall additionally be entitled to recover court costs and reasonable
attorney’s fees from the non-prevailing party to such proceedings.
6.11. Assignability. Except as provided in Section 6.21 below, this Agreement
shall bind and benefit District and its legal successors and Developer and its legal
successors, but shall not otherwise be assignable, in whole or in part, by either party
except by supplementary written agreements between the Parties. If the City dissolves
the District in its entirety it shall assume the obligations of the District, to the fullest
extent provided by law, and this Agreement shall remain in full force and effect in
accordance with, and subject to, Section 6.01 of the Operating Agreement. In the event of
such dissolution of the District and assumption of this Agreement, the Parties
acknowledge and agree that (a) nothing in this Agreement is intended to delegate or
impair the performance by the City of its governmental functions, (b) the calling of bond
elections and the issuance and sale of bonds, notes or other obligations of the City for
Ex I-1 Developer Reimbursement Agreement clean 5.3.24
Page 16
payment of any District Reimbursement Amount are governmental functions within the
sole discretion of the City Council of the City, and (c) the inability or failure by the City to
call bond elections or to issue and sell bonds, notes or other obligations shall not under
any circumstances constitute a failure to perform an obligation of, or a default by, the
City under this Agreement, and the City shall remain obligated to reimburse the
Reimbursement Amount, but such reimbursement may occur only if and when the City
determines to issue bonds, notes, or other obligations or use other legally available funds
for such purpose.
6.12. Severability. The provisions of this Agreement are severable, and if any
word, phrase, clause, sentence, paragraph, section, or other part of this Agreement, or the
application thereof to any person or circumstance, shall ever be held by any court of
competent jurisdiction to be invalid or unconstitutional for any reason, (a) the remainder
of this Agreement, and the application of such word, phrase, clause, sentence, paragraph,
section, or other part of this Agreement to other persons or circumstances, shall be not be
affected thereby and the remainder of this Agreement shall be construed to achieve the
intent of the parties and (b) the invalid or unconstitutional provision shall be rewritten to
achieve the intent of the parties as expressed in the recitals.
6.13. Consideration. Each Party hereto agrees that the mutual obligations of the
parties under this Agreement, including the resulting benefits, constitute due
consideration for its execution of this Agreement. In particular, the obligation of
Developer to advance monies to the District results in material benefits to the District and
constitutes adequate consideration for the District’s obligations to issue Bonds from time
to time, and otherwise reimburse Developer for monies spent or advanced under this
Agreement.
6.14. Construction and Interpretation. This Agreement shall be construed in
accordance with and governed by the laws of the State of Texas. The titles assigned to
the various Sections and Articles of this Agreement are for convenience of reference only
and shall not be restrictive of the subject matter of any such Section or Article or
otherwise affect the meaning, construction, or effect of any part hereof.
6.15. Developer Verifications.
(a) Developer represents and warrants that, at the time of execution and
delivery of this Agreement, neither Developer, nor any wholly owned subsidiary,
majority-owned subsidiary, parent company, or affiliate of the same that exists to make a
profit, if any, boycotts Israel or will boycott Israel during the term of the Agreement, as
amended. The foregoing verification is made solely to comply with Section 2271.002,
Texas Government Code, and to the extent such Section does not contravene applicable
Federal law. As used in the foregoing verification, “boycotts Israel” and “boycott Israel”
Ex I-1 Developer Reimbursement Agreement clean 5.3.24
Page 17
means refusing to deal with, terminating business activities with, or otherwise taking any
action that is intended to penalize, inflict economic harm on, or limit commercial
relations specifically with Israel, or with a person or entity doing business in Israel or in
an Israeli-controlled territory, but does not include an action made for ordinary business
purposes. Developer understands “affiliate” to mean an entity that controls, is controlled
by, or is under common control with Developer.
(b) Developer represents and warrants that, neither Developer, nor any wholly
owned subsidiary, majority owned subsidiary, parent company, or affiliate of the same
that exists to make a profit, if any, are companies identified on a list prepared and
maintained by the Texas Comptroller of Public Accounts under Sections 2252.153 or
2270.0201, Texas Government Code, and posted on the following pages of the Texas
Comptroller of Public Account’s internet website
https://comptroller.texas.gov/purchasing/docs/sudan-list.pdf
https://comptroller.texas.gov/purchasing/docs/iran-list.pdf
https://comptroller.texas.gov/purchasing/docs/fto-list.pdf
The foregoing representation is made solely to comply with Section 2252.152,
Texas Government Code, and to the extent such Section does not contravene applicable
Federal law and excludes Developer and each parent company, wholly- or majority-
owned subsidiaries, and other affiliates of the same that exist to make a profit, if any, that
the United States government has affirmatively declared to be excluded from its federal
sanctions regime relating to Sudan, Iran, or a foreign terrorist organization. Developer
understands “affiliate” to mean any entity that controls, is controlled by, or is under
common control with Developer.
(c) Developer represents and warrants that it and its parent company, wholly-
or majority-owned subsidiaries, or other affiliates, if any, do not boycott energy
companies and will not boycott energy companies during the terms of the Agreement, as
amended. The foregoing verification is made solely to comply with Section 2274.002,
Texas Government Code, and to the extent such Section is not inconsistent with a
governmental entity’s constitutional or statutory duties related to the issuance,
incurrence, or management of debt obligations or the deposit, custody, management,
borrowing, or investment of funds. As used in the foregoing verification, “boycott
energy company” means, without an ordinary business purpose, refusing to deal with,
terminating business activities with, or otherwise taking any action that is intended to
penalize, inflict economic harm on, or limit commercial relations with a company
because the company: (1) engages in the exploration, production, utilization,
transportation, sale, or manufacturing of fossil fuel-based energy and does not commit or
pledge to meet environmental standards beyond applicable federal and state law; or (2)
does business with a company described by the preceding statement.
Ex I-1 Developer Reimbursement Agreement clean 5.3.24
Page 18
(d) Developer represents and warrants that it and its parent company, wholly-
or majority-owned subsidiaries, and other affiliates, if any, do not have a practice, policy,
guidance, or directive that discriminates against a firearm entity or firearm trade
association and will not have a practice, policy, guidance, or directive that discriminates
against a firearm entity or firearm trade association during the term of the Agreement, as
amended. The foregoing verification is made solely to comply with Section 2274.002,
Texas Government Code. As used in the foregoing verification, “discriminate against a
firearm entity or firearm trade association” means: (1) refuse to engage in the trade of any
goods or services with the entity or association based solely on its status as a firearm
entity or firearm trade association; (2) refrain from continuing an existing business
relationship with the entity or association based solely on its status as a firearm entity or
firearm trade association; or (3) terminate an existing business relationship with the
entity or association based solely on its status as a firearm entity or firearm trade
association; but does not include the established policies of a merchant, retail seller, or
platform that restrict or prohibit the listing or selling of ammunition, firearms, or firearm
accessories; or a company’s refusal to engage in the trade of any goods or services,
decision to refrain from continuing an existing business relationship, or decision to
terminate an existing business relationship to comply with federal, state, or local law,
policy, or regulations or a directive by a regulatory agency; or for any traditional
business reason that is specific to the customer or potential customer and not based
solely on an entity’s or association’s status as a firearm entity or firearm trade association.
6.16. Limited Waiver of Sovereign Immunity. The District agrees that this
Agreement shall constitute a contract subject to the provisions of Subchapter I of Chapter
271, Texas Local Government Code. Further, to the extent allowed by law, the District
waives its rights to sovereign immunity as to an action in equity by the Developer for a
writ of mandamus of specific performance to enforce all the terms of this Agreement.
The District does not waive its rights to sovereign immunity for any other actions
permitted by law or for any amount of money beyond the amounts provided in Article V
herein.
6.17. Addition of Land to District. In the event that District should add land
owned by Developer or an affiliate of Developer to the District (the “Added Land”), the
Added Land shall be included within the definition of “Property” for all purposes of this
Agreement, and the rights and obligations of the Parties hereunder shall be expressly
applicable to the Added Land without necessity of amendment to this Agreement.
6.18. Governing Law and Venue. THIS AGREEMENT AND THE
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE INTERPRETED,
CONSTRUED, GOVERNED, AND ENFORCED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF TEXAS. VENUE SHALL BE IN DENTON COUNTY, TEXAS.
Ex I-1 Developer Reimbursement Agreement clean 5.3.24
Page 19
6.19. Representations by Developer. The Developer represents and covenants
that:
(a) This Agreement, the transactions contemplated herein, and the execution
and delivery of this Agreement have been duly authorized by the Developer;
(b) This Agreement, and the representations and covenants contained herein,
and the consummation of the transactions contemplated herein, will not violate or
constitute a breach of any contract or other agreement to which the Developer is a party;
and
(c) The Developer has made or will make sufficient financial arrangements to
assure its ability to provide funds to pay District Operating Costs and the costs
associated with the acquisition and construction of the Projects.
6.20. Representations by the District. The District represents and covenants that
it will use its best efforts to:
(a) Conduct Bond authorization elections;
(b) Apply for and obtain the approval of the TCEQ for the issuance and sale of
the Bonds, subject to the terms and conditions set forth herein;
(c) Market the Bonds, subject to the terms and conditions set forth herein, in
the manner contemplated hereby; and
(d) Apply for and obtain the approval of the Attorney General of the State of
Texas of the Bonds.
6.21. District Division. In the event the District adopts an order dividing the
District, it is required to provide for the division of assets and liabilities between the new
districts. The Parties acknowledge and agree that as part of such division, it may be
necessary to amend this Agreement by the partial assignment of the rights and
obligations of the Parties hereunder between the new districts. In such event, the Parties
agree to use good faith in the negotiation and documentation of such amendment and
assignment to fully carry out such addition.
6.22. District Dissolution. The Parties acknowledge that the City has the right to
dissolve the District pursuant to the provisions of the District Act. The Parties intend for
the obligations of the District under this Agreement to constitute “obligations” of the
District within the meaning of Section 43.075, Local Government Code, and the District
Act. The Parties further intend in the event that the City adopts an ordinance dissolving
the District, the City shall assume the obligations of the District, including under this
Agreement, to the fullest extent permitted by law and the terms of the Operating
Ex I-1 Developer Reimbursement Agreement clean 5.3.24
Page 20
Agreement and this Agreement. The City has agreed to provide the District and
Developer nine (9) months advance written notice of its intent to initiate proceedings for
the dissolution of the District. Upon receipt of such notice the Parties will meet with the
City to confirm the status of the outstanding obligations of each of the Parties under the
Agreement.
[SIGNATURE PAGES FOLLOW]
Ex I-1 Developer Reimbursement Agreement clean 5.3.24
Page 21
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first written above.
DISTRICT:
ATTEST: HUNTER RANCH IMPROVEMENT DISTRICT
NO. ___ OF DENTON COUNTY, TEXAS
______________________________ By:
Secretary, Board of Directors President, Board of Directors
(DISTRICT SEAL)
THE STATE OF TEXAS §
COUNTY OF DENTON §
This instrument was acknowledged before me on the _______ day of
______________, 2020, by ____________________________, ___ President, Board of
Directors, Hunter Ranch Improvement District No. ___ of Denton County, Texas, a
political subdivision of the State of Texas, on behalf of said political subdivision.
___________________________
Notary Public in and for the
State of Texas
Ex I-1 Developer Reimbursement Agreement clean 5.3.24
Page 22
DEVELOPER:
By:____________________________________
Name:_________________________________
Title:___________________________________
STATE OF TEXAS §
§
COUNTY OF §
This instrument was acknowledged before me on ___________________, 20__, by
____________________________________, ____________________________ of
______________________________., as general partner of ___________________ on behalf
of said company and partnerships.
Notary Public in and for T E X A S
EXHIBIT A
PROPERTY DESCRIPTION
EXHIBIT B
SPECIAL CONDITION
Notwithstanding any other items, conditions, or provisions of the general or special
conditions or any other provisions of the Contract Documents to the contrary,
_______________________________________________ (the “District”) shall be deemed
and considered as the “Owner” for all purposes under the Contract Documents, except
for purposes of making payment to the Contractor of all or any portion of sums due or to
become due to Contractor pursuant to or in relation to this Contract, including any
damages which may ever become due under the Contract and including any costs
associated with any change orders to the Contract. After submission to and approval by
the District, the Contractor agrees to and shall look solely to
____________________________ (“Developer”), for payment of all construction estimates,
invoices or other sums, of whatever kind or nature, due or to become due pursuant to or
in relation to this Contract, and the District shall never be responsible to the Contractor;
therefore, Developer, agrees to make all payments to Contractor in accordance with the
terms hereof. It is agreed that a default by Developer in making such payments to the
Contractor shall constitute a default by Owner and shall entitle the Contractor to all
rights and remedies arising under the Contract Documents for a default in payment of
sums due the Contractor pursuant to the Contract Documents; provided, however, that,
as aforesaid, the Contractor shall look solely to Developer for payment of sums due or to
become due pursuant to or in relation to this Contract (including any damages which
may ever become due under the Contract), and the District shall have no obligation for
payment of such sums.
edies arising under the Contract Documents for a default in payment of sums due the
Contractor pursuant to the Contract Documents; provided, however, that, as aforesaid,
the Contractor shall look solely to Developer for payment of sums due or to become due
pursuant to or in relation to this Contract (including any damages which may ever
become due under the Contract), and the District shall have no obligation for payment of
such sums.
sing under the Contract Documents for a default in payment of sums due the Contractor
pursuant to the Contract Documents; provided, however, that, as aforesaid, the
Contractor shall look solely to Developer for payment of sums due or to become due
pursuant to or in relation to this Contract (including any damages which may ever
become due under the Contract), and the District shall have no obligation for payment of
such sums.
Developer reserves the right to assign its obligations hereunder to the District, subject to
written acceptance thereof by the District. A copy of any such assignment and the
acceptance thereof by the District shall be provided to the Contractor, and thereafter the
District shall be obligated to make further payments due the Contractor pursuant to this
Contract.
For purposes of convenient administration of this Contract, District may from time to
time make payments due the Contractor pursuant to this Contract from funds advanced
to the District by Developer or from other sources available to the District; provided,
however, no such payment by the District will obligate the District to make further
payments due the Contractor pursuant to this Contract (and Developer, shall remain
liable to make such future payments), unless and until District has accepted an
assignment of Developer obligations hereunder and a copy of the assignment and the
District’s acceptance is delivered to the Contractor. The District, the Developer, and the
Contractor hereby acknowledge that these Special Conditions to the Contract are
acceptable.
ment of Developer obligations hereunder and a copy of the assignment and the District’s
acceptance is delivered to the Contractor. The District, the Developer, and the Contractor
hereby acknowledge that these Special Conditions to the Contract are acceptable.
ent of Developer obligations hereunder and a copy of the assignment and the District’s
acceptance is delivered to the Contractor. The District, the Developer, and the Contractor
hereby acknowledge that these Special Conditions to the Contract are acceptable.
"CONTRACTOR" “DISTRICT”
_________________________________ __________________________________
[DEVELOPER]
__________________________________
Attachment “3”
Exhibit “I-2” – Form of Builder Reimbursement Agreement
1
EXHIBIT "I-2"
BUILDER REIMBURSEMENT AGREEMENT
AND ASSIGNMENT OF REIMBURSEMENT RIGHTS
(Road Improvements and Capital Recovery Fees)
THE STATE OF TEXAS §
§
COUNTY OF DENTON §
THIS BUILDER REIMBURSEMENT AGREEMENT AND ASSIGNMENT OF
REIMBURSEMENT RIGHTS (the "Agreement") is made and entered into as of the ____
day of ________________, 20___, by and between ____(Builder Name)___________, a
______________________ (the "Owner"), ____(Development Entity Name)____, a
_____________________________ ("Assignee"), and HUNTER RANCH IMPROVEMENT
DISTRICT NO. ___ OF DENTON COUNTY, TEXAS (the "District"), a political
subdivision of the State of Texas, operating under the provisions of Article III, Section 52,
and Article XVI, Section 59, of the Texas Constitution, Chapter 375 of the Texas Local
Government Code, as amended, Chapter 49 of the Texas Water Code, as amended, and
Chapter 3980, Special District Local Laws Code. Owner, Assignee, and the District may
be individually referred to as a "Party" or collectively as the "Parties."
RECITALS:
WHEREAS, the District was created by act of the 86th Texas Legislature, House
Bill 4683, codified at Chapter 3980, Special District Local Laws Code, for the purpose,
among others, of providing water, sanitary sewer, drainage, and road facilities to serve
the land within its boundaries; and
WHEREAS, the District is located within the corporate limits of the City of Denton
(the “City”) and subject to the terms and conditions of Denton City Council Resolution
NO. 20-762, dated April 7, 2020, as amended by Denton City Council Resolution No.
_______, dated ___________, 2024 (collectively, the “Consent Resolution”); and
WHEREAS, the District and City have entered into that “Operating Agreement”,
dated April 7, 2020, as amended by that “First Amendment to Operating Agreement”,
dated ___________, 2024 (collectively, the “Operating Agreement”); and
WHEREAS, Owner is or will be the owner of that certain real property located
within the District, more particularly described in Exhibit "A" attached hereto and made
a part hereof for all purposes ("Owner's Land"); and
WHEREAS, Owner wishes the District to finance the construction or other
acquisition of certain roadway facilities and related appurtenances and facilities located
2
within right-of-way or elsewhere within Owner’s Land, and capital recovery fees related
to water and sewer facilities and roads that are necessary to serve Owner's Land
(collectively, the "Facilities"), as Owner's development schedule dictates; and
WHEREAS, the District wishes Owner to proceed with the construction or other
acquisition of the Facilities, as Owner's development schedule dictates, but the District
does not have any funds which could be used to construct the Facilities, nor does the
District have the ability, at this time, to issue its bonds to construct such Facilities; and
WHEREAS, pursuant to the laws of the State of Texas, the District is authorized to
enter into agreements whereby a landowner constructs certain facilities on behalf of the
District so that land in the District can be served with public facilities; and
WHEREAS, Owner desires to assign to Assignee all of Owner's rights to
reimbursement payments in, to and under this Agreement, as further described in
Section F herein, Assignee desires to accept such assignment, subject to the terms and
provisions of this Agreement, and the District agrees to make all reimbursement
payments directly to Assignee pursuant to the terms of this Agreement.
AGREEMENT:
FOR AND IN CONSIDERATION of the mutual promises, covenants, benefits and
obligations hereinafter set forth, the receipt and sufficiency of which is hereby
acknowledged by both Parties, the District and Owner hereby agree and contract as
follows:
A. Provision of Facilities. Owner, acting on behalf of the District, shall, from time to
time as Owner's development schedule dictates, purchase, construct or otherwise
cause the construction or acquisition of the Facilities or capacities needed for
development of Owner's Land in the manner provided by the general law for
municipal management districts and in full compliance with the applicable rules
and regulations of the Texas Commission on Environmental Quality (the "TCEQ"),
the provisions of the Texas Water Code, the applicable regulations of the City, and
all other regulatory bodies having jurisdiction over such construction or
acquisition. The provision of Facilities shall be subject to the terms and conditions
of the Consent Resolution and Operating Agreement.
B. Project Management. An engineer chosen by Owner and reasonably acceptable to
the District shall serve as "Project Engineer" (herein so called) for the construction
of the Facilities. Only if applicable pursuant to state laws related to competitive
bidding requirements for municipal management districts, the Project Engineer
shall advise and make recommendations to the Board of Directors (the "Board")
upon the award of construction contracts on the Facilities; shall make monthly
3
reports, if requested, to the Board and Owner on the progress of construction;
approve all pay estimates and change orders submitted, and shall certify them as
correct, and shall submit the same to the Board and Owner for approval; and
provide the appropriate level of inspection and observation during the
construction of the Facilities to assure construction is in substantial compliance
with the approved plans, and shall recommend final acceptance of the Facilities to
the Board when appropriate.
C. Contracts. Only if applicable pursuant to state laws related to competitive bidding
requirements for municipal management districts, the Board shall review all bids
received for the construction of the Facilities and shall authorize the award of the
construction contracts, provided that Owner authorizes same award. If
applicable, Construction contracts shall include payment and performance bonds
and maintenance guarantees after completion, all as required by law for municipal
management districts.
D. Payment of Costs. Owner shall make, in a timely fashion, all payments on the
contracts awarded by the Owner on behalf of the District or by the District for the
construction or other acquisition of the Facilities as the same become due. Such
contracts shall provide that the contractor shall look solely to the Owner for
payment of all claims. Owner shall, upon making any payment, provide copies of
all invoices and certifications recommending payment to the District.
E. District Reimbursement. The District shall reimburse Owner for the monies
hereafter funded by Owner for the Facilities with the proceeds of its bonds in
accordance with the terms of this Agreement. The amount to be reimbursed for
the Facilities shall be an amount equal to the maximum amount allowed by law,
and, if applicable, the TCEQ under its then current rules, including, but not limited
to, land, engineering fees, reports, studies and interest on the monies expended by
Owner through the date such monies are repaid to Owner. To the extent the TCEQ
determines in reviewing the District's bond application (if applicable) that the cost
of any portion of the Facilities may not be reimbursed or interest paid under the
rules of such agency, then the amount of payment or reimbursement shall be
appropriately reduced. Owner shall provide the District with such information
and documentation as the District may reasonably request to enable it to calculate
interest and verify payments. The District agrees to use its reasonable best efforts
to issue its Bonds to reimburse Owner when feasible. However, the District's
obligation to issue its bonds and repay Owner for the Facilities is subject to the
terms and conditions of the Consent Resolution and Operating Agreement.
F. Assignment of Reimbursables. Owner hereby conveys, transfers and assigns to
Assignee, and the District hereby agrees to pay directly to Assignee pursuant to
this Agreement as if otherwise paid to Owner, all of Owner's rights to all revenues,
4
monies, proceeds and payments accruing and to accrue, and all sums payable and
to be payable, to Owner and to which Owner is or may be otherwise entitled under
this Agreement (the "Reimbursables"). Assignee hereby accepts the assignment
of all Reimbursables under this Agreement from Owner (the “Assignment”).
G. Interpleader. In the event that any controversy or uncertainty should arise with
respect to the rights to any sum of the Reimbursables due or to become due under
this Agreement or in accordance with the Assignment, the District shall have the
right, in its sole and absolute discretion, to institute a bill of interpleader in any
court of competent jurisdiction to determine the rights of the Parties.
H Applicable Law. This Agreement and the obligations of the Parties hereunder are
subject to all rules, regulations and laws which may be applicable by the United
States, the State of Texas, or any regulatory agency having jurisdiction, including
the applicable rules of the TCEQ. Venue shall lie solely in Denton County.
I. Parties in Interest. This Agreement shall be for the sole and exclusive benefit of
the District, Assignee and Owner and shall not be construed to confer any benefit
or right upon any other party. Notwithstanding the foregoing, Assignee is a
beneficiary of the provisions contained herein and shall be authorized to enforce
them at any time in accordance with the terms provided in Section N.
J. Modification. This Agreement shall be subject to change or modification only with
the mutual written consent of the Parties.
K. Recitals. The "Recitals" set forth in this Agreement are true and correct and are
incorporated as part of this Agreement.
L. Entire Agreement and Survival. This Agreement constitutes the entire Agreement
between the Parties relative to the subject matter hereof. There have not been and
are no agreements, covenants, representations or warranties between the Parties
other than those expressly stated or provided for herein.
M. Good Faith Cooperation. The Parties agree to use good faith in the performance
of their respective duties and obligations under this Agreement such that the
intent of the Parties shall be fulfilled. The Parties further agree to take such
additional actions, from time to time, as may be reasonably necessary to fully carry
out the purposes and intent of this Agreement including, but not limited to, the
execution of further documentation. Except as otherwise expressly provided
herein, each Party shall pay its own expenses incident to carrying this Agreement
into effect and consummating the transactions provided herein.
5
N. Default and Remedies. No Party shall be in default under this Agreement until
notice of the alleged failure of such Party to perform has been given (which notice
shall set forth in reasonable detail the nature of the alleged failure) and until such
Party has had a reasonable time to cure the alleged failure (such reasonable time
determined based on the nature of the alleged failure). In addition, no Party shall
be in default under this Agreement if within the applicable reasonable cure period
the Party to whom the default notice was given begins performance and thereafter
uses its good faith efforts to diligently and continuously pursue performance until
the alleged failure has been cured. If a Party is in default under this Agreement,
then the non-defaulting Party shall be entitled to all remedies available under
applicable law including, but not limited to, specific performance, injunctive relief,
mandamus relief, and damages; provided, however, (i) the District does not have
the right to terminate this Agreement prior to the expiration of its term, and (ii)
once Owner advances money hereunder, the obligation of the District to issue and
sell Bonds to reimburse for such monies shall not be affected by any alleged default
by Owner that is unrelated to the advancing of such monies. The failure of any
Party to insist, in one or more instances, upon performance by another Party of
any provision of this Agreement shall not be construed as a waiver of future
performance of such provision. If any Party hereto is the prevailing Party in any
legal proceedings against the other brought under or with relation to this
Agreement, such prevailing Party shall additionally be entitled to recover court
costs and reasonable attorney's fees from the non-prevailing Party to such
proceedings. However, in no event shall any party be liable for any punitive
damages, or any speculative or consequential damages, such as lost profits, as a
result of the breach of a representation or warranty or any other default hereunder.
The District acknowledges that this Agreement is for the providing of goods and
services and, pursuant to Section 271.152, Texas Local Government Code, the
District has waived its immunity from suit solely for the purpose of Owner
enforcing this Agreement.
O. Merger of District. In the event the District should consolidate or otherwise merge
with another utility district or another public entity, such merger shall not in any
way impair or diminish Owner's rights hereunder.
P. Assignment. In the event Owner sells, conveys, or otherwise transfers ownership
of Owner's Land to any person or entity other than an end-user homeowner,
Owner may, upon written notice to the District and Assignee, assign Owner's
rights and obligations under this Agreement, subject to the Assignment of the
Reimbursables to Assignee pursuant to Section F herein, to the new owner,
provided that the new owner executes a joinder to this Agreement or otherwise
agrees in writing to be bound by the terms of this Agreement, including Assignee's
rights to all the Reimbursables. The District's acknowledgment of notice of any
6
assignment hereunder shall not be deemed a waiver of the District's rights
hereunder, and the Parties hereto acknowledge and agree that any subsequent
assignments shall be subject to all of the terms hereof, including specifically
Assignee's rights under this Agreement. Notwithstanding anything herein to the
contrary, Owner shall not assign its rights to Reimbursables hereunder to any
party other than to Assignee, as provided in Section F herein. Upon written notice
to the District and Owner, Assignee may assign to any other entity its rights, in
whole or in part, to the Reimbursables assigned by Owner pursuant to this
Agreement and the Assignment. Owner agrees that in the event it sells all or any
of Owner's Land (excluding the sale of developed lots to a homebuyer or sale to
an owner's association), Owner and the District shall require any reimbursement
agreement between the District and such purchaser to include the provisions
herein regarding Assignee's rights to receive the Reimbursables in accordance
with this Agreement and the Assignment, and no such reimbursement agreement
with any purchaser shall be valid unless and until Assignee has approved the
provisions thereof. Owner and the District agree that neither shall intentionally
take any action or inaction, including, but not limited to, any assignments
pursuant to this Section P, that may reduce or hinder the rights of Assignee
hereunder to promptly receive the Reimbursables in accordance with this
Agreement and the Assignment.
Q. Severability. The provisions of this Agreement are severable, and if any word,
phrase, clause, sentence, paragraph, section, or other part of this Agreement, or
the application thereof to any person or circumstance, shall ever be held by any
court of competent jurisdiction to be invalid or unconstitutional for any reason,
the remainder of this Agreement and the application of such word, phrase, clause,
sentence, paragraph, section, or other part of this Agreement to other persons or
circumstances shall not be affected thereby.
R. Consideration. Each Party hereto hereby finds, determines and represents that the
benefits provided to it and the obligations hereunder are binding upon it and
constitute due consideration for its execution of this Agreement. In particular,
Owner's commitment to advance monies hereunder results in certain material
benefits being provided to the District and constitutes adequate consideration for
the District's obligations to issue bonds from time to time to reimburse Assignee.
Owner hereby represents that the District's commitment to reimburse Assignee for
monies expended by Owner pursuant to this Agreement constitutes adequate
consideration for its commitment to perform its obligations hereunder.
S. Force Majeure. If a Party is prevented from performing, in whole or in part, its
obligations under this Agreement by reason of "force majeure" that could not have
been avoided by the exercise of due diligence by such Party, then performance by
such Party may be suspended to the limited extent and during the limited period
7
that performance is made impossible by the force majeure; provided, however,
such Party must use its best efforts to diligently and continuously pursue a course
of action that will eliminate the force majeure and allow such Party to resume full
performance at the earliest possible time. As an express condition precedent to
suspending performance, however, within thirty (30) days after the occurrence of
any force majeure, the Party whose performance is rendered impossible shall give
notice and full details of the force majeure to the other Party. For purposes of this
Agreement, "force majeure" means any of the following: floods; earthquakes; acts
of God; acts of war; acts of terrorism; acts of public enemies; insurrection; riot;
labor strikes; the inability to procure labor or materials in the open market; the
interruption of utility services by an entity other than the District; orders of any
kind of the Government of the United States or of the State of Texas or any civil or
military authority; the issuance of a restraining order by any court having
jurisdiction; and no other.
T. Notice. All notices provided or permitted to be given under this Agreement must
be in writing and may be served by depositing same in the United States mail,
addressed to the Party to be notified, postage prepaid and registered or certified
with return receipt requested; by delivering the same in person to such Party; or
by facsimile copy transmission. Notice given by mail shall be effective upon
deposit in the United States mail. Notice given in any other manner shall be
effective upon receipt at the address of the addressee. For purposes of notice, the
addresses of the Parties shall be as follows:
If to the District: Hunter Ranch Improvement District No. ___ of Denton
County, Texas
c/o Allen Boone Humphries Robinson LLP
3200 Southwest Freeway, Suite 2600
Houston, Texas 77027
Attn: ______________________________
If to Owner: ____________________________
____________________________
____________________________
Attn: _______________________
If to Assignee: ____________________________
____________________________
____________________________
Attn: _______________________
Any Party hereto may change its address for notice by giving three (3) days prior written
notice to the other Parties.
8
U. Certifications. Owner certifies:
1) Pursuant to Texas Government Code Chapter 2271, as amended, the Owner
verifies that at the time of execution and delivery of this Agreement and for the
term of this Agreement, neither the Owner, its parent companies, nor its common-
control affiliates currently boycott or will boycott Israel. The term "boycott Israel"
as used in this paragraph has the meaning assigned to the term "boycott Israel" in
Section 808.001 of the Texas Government Code, as amended; and
2) Pursuant to Texas Government Code, Chapter 2252, as amended, the Owner
represents and verifies that at the time of execution and delivery of this Agreement
and for the term of this Agreement, neither the Owner, its parent companies, nor
its common-control affiliates (i) engage in business with Iran, Sudan, or any
foreign terrorist organization as described in Chapters 806 or 807 of the Texas
Government Code, or Subchapter F of Chapter 2252 of the Texas Government
Code, or (ii) is a company listed by the Texas Comptroller of Public Accounts
under Sections 806.051, 807.051, or 2252.153 of the Texas Government Code.
3) Pursuant to Chapter 2274 of the Texas Government Code (as added by Senate
Bill 19, 87th Texas Legislature, Regular Session, "SB 19"), Owner certifies that it is
not a Company that has a practice, policy, guidance, or directive that discriminates
against a firearm entity or firearm trade association and agrees it will not
discriminate against a firearm entity or firearm trade association during the term
of this Agreement. The terms "discriminates against a firearm entity or firearm
trade association" and "discriminate against a firearm entity or firearm trade
association" have the meaning assigned to the term "discriminate against a firearm
entity or firearm trade association" in Section 2274.001(3), Texas Government Code
(as added by SB 19). For purposes of this paragraph, "Company" means a for-
profit organization, association, corporation, partnership, joint venture, limited
partnership, limited liability partnership, or limited liability company, including
a wholly owned subsidiary, majority-owned subsidiary, parent company, or
affiliate of those entities or business associations, that exists to make a profit, but
does not mean a sole proprietorship.
4) Pursuant to Chapter 2275 of the Texas Government Code, Owner verifies that
neither Owner, nor any wholly owned subsidiary, majority-owned subsidiary,
parent company or affiliate of Owner, nor any of its sub-contractors (i) is owned
or controlled by (a) individuals who are citizens of China, Iran, North Korea,
Russia or any designated country; or (b) a company or other entity, including a
governmental entity, that is owned or controlled by citizens of or is directly
controlled by the government of China, Iran, North Korea, Russia, of any
designated country; and (ii) is headquartered in China, Iran, North Korea, Russia
9
or a designated country. The term “designated country” means a country
designated by the Governor as a threat to critical infrastructure under Section
113.003 of the Texas Business & Commerce Code. The term “critical infrastructure”
means a communication infrastructure system, cybersecurity system, electric grid,
hazardous waste treatment system, or water treatment facility.
5) Pursuant to Chapter 2276 of the Texas Government Code (as redesignated by
House Bill 4595, 88th Texas Legislature, Regular Session), Owner certifies that it is
not a Company that boycotts energy companies and agrees it will not boycott
energy companies during the term of this Agreement. The terms "boycotts energy
companies" and "boycott energy companies" have the meaning assigned to the
term "boycott energy company" in Section 809.001, Texas Government Code. For
purposes of this paragraph, "Company" means a for-profit sole proprietorship,
organization, association, corporation, partnership, joint venture, limited
partnership, limited liability partnership, or limited liability company, including
a wholly owned subsidiary, majority-owned subsidiary, parent company, or
affiliate of those entities or business associations, that exists to make a profit, but
does not include a sole proprietorship.
V. Form 1295 Certificate of Interested Parties. Prior to the execution of this
Agreement, Owner agrees to file with the District, pursuant to Texas Government
Code Section 2252.908, a signed and completed Texas Ethics Commission ("TEC")
Form 1295 and a certification of filing with the TEC.
W. Term. This Agreement shall remain in effect for a term of forty (40) years or until
Owner's Land has been fully developed and the District has reimbursed Owner
and/or Assignee for the Facilities.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
10
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
and year first written above.
DISTRICT:
HUNTER RANCH IMPROVEMENT
DISTRICT NO. ___ OF DENTON COUNTY,
TEXAS
ATTEST:
By:
Secretary, Board of Directors President, Board of Directors
11
OWNER:
____________________________,
a ___________________________
By: ______________________________
Name: ______________________________
Title: ______________________________
THE STATE OF TEXAS §
§
COUNTY OF __________ §
This instrument was acknowledged before me on __________________, 20__, by
_______________________, _____________________ of ________________________, a
_______________________, on behalf of said _______________________.
Notary Public, State of Texas
12
ASSIGNEE:
____________________________,
a ___________________________
By: ______________________________
Name: ______________________________
Title: ______________________________
THE STATE OF TEXAS §
§
COUNTY OF __________ §
This instrument was acknowledged before me on __________________, 20__, by
_______________________, _____________________ of ________________________, a
_______________________, on behalf of said _______________________.
Notary Public, State of Texas
13
EXHIBIT "A"
To Builder Reimbursement Agreement and Assignment of Reimbursement Rights
Property Description
(To be Inserted when Executed)
Attachment “4”
Exhibit “J” – District Certification
EXHIBIT J - DISTRICT CERTIFICATION
EXHIBIT J
DISTRICT CERTIFICATION
[DATE]
Name of Issuer: Hunter Ranch Improvement District No. ___ of Denton
County, Texas
Name of Bond Issue: $_______________, __________________________ Bonds,
Series ____________
(Hunter Ranch Improvement District No. ___ of Denton
County, Texas)
Re: District Certification
To whom it may concern:
This District Certification is being delivered pursuant to the Operating Agreement,
dated as of April 7, 2020, and amended effective __________, 2024 (the “Operating
Agreement”), between the City of Denton, Texas, a Texas Home Rule municipality (the
"City"), and the Hunter Ranch Improvement District No. 1 of Denton County, Texas (the
"District"), as a condition precedent to the District issuing the referenced series of bonds
(the "Bonds") to reimburse ________________ (the "Developer(s)") for funds advanced for
the Improvement Projects and Supplemental Projects for which the Bonds are to be
issued. The capitalized terms used herein shall have the meanings ascribed to them in
the Operating Agreement unless otherwise specifically defined herein. The District
hereby makes the following certifications:
1. True and correct copies of the documents authorizing the Bonds are enclosed
herewith.
2. Certifications from each Developer in the District (which are listed below, along
with amounts to be reimbursed from proceeds of the Bonds, if any) certifying
compliance with the terms and conditions of its Project Agreement with the City
are enclosed herewith.
Developer Project Agreement Reimbursement
Amount
_______________________ ________________________ _____________
Exhibit J District Certification clean 05-03-2024
-2-
_______________________ ________________________ _____________
_______________________ ________________________ _____________
3. The District is in compliance in all material respect with the provisions of the
District Act relating to the proposed issuance of the Bonds and construction of the
Improvement Projects and Supplemental Projects for which the Bonds are to be
issued.
4. The District is in compliance with the terms and conditions set out in SECTION 4
of the City of Denton Resolution No. 20-765 consenting to the creation of the
District as amended by City of Denton Resolution No. _________.
CITY BENCHMARK CRITERIA (Y/N)
(b) Construction of Improvement Projects
Use of Bonds proceeds limited to Improvement Projects
and eligible Supplemental Projects _____
(See Exhibit A hereto)
Improvement Projects and eligible Supplemental Projects
to be funded by Bonds designed and constructed in
accordance with City plans and specifications _____
Improvement Projects and eligible Supplemental Projects
to be funded by Bonds conveyed to City _____
(c) Issuance of Bonds
Bonds payable solely from District ad valorem taxes (other than
the Contract Tax) or revenues or contract payments
OTHER THAN special District assessments, City ad valorem
taxes or other City revenues _____
Bonds have maximum maturity of 30 years or less, with right
to redeem within 10 years _____
Bonds publicly bid _____
Bonds not sold for less than 95% par value _____
Exhibit J District Certification clean 05-03-2024
-3-
Bond net effective interest rate does not exceed 2%
above highest average interest rate reported in “20 Bond
Index” during preceding month _____
Bonds payable solely from District ad valorem taxes, when
combined with outstanding District bonds similarly secured, do
not exceed 10% of assessed value of all real property in District _____
Bonds payable by contract payments meeting the
requirements of Section 3980.0504(2) of the District Act,
when combined with outstanding District bonds similarly
secured, do not exceed 10% of assessed value of all real
property subject to the applicable District contract _____
(d) Boundary Changes/(e) District Division
All District boundary changes approved by City Council _____
Joinders or new agreements provided for all District divisions _____
5. The District is in compliance with the terms and conditions of the Operating
Agreement.
CITY BENCHMARK CRITERIA (Y/N)
3.05 Financial Reporting.
All specified reports filed with City _____
5.01 General Bond Authority.
Improvement Project and Supplemental Project
Construction Status _____
(See Exhibit A hereto)
Proposed developer reimbursement amount ($__________) _____
Proposed Bond amount ($__________) _____
5.02 Terms and Conditions.
TCEQ and AG feasibility requirements met _____
Benchmark Tax Rate feasibility test met _____
Exhibit J District Certification clean 05-03-2024
-4-
TCEQ bond application or road bond information for Bonds filed
with City within specified time limits _____
Any projection of growth in District assessed valuation used to
support feasibility of Bonds limited to 2 years and supported by
market study _____
5.06 Final Bond Documents and Reports.
All specified reports relating to each outstanding series of bonds
filed with City _____
6. No outstanding bonds are in default and no reserve funds have been drawn upon
that have not been replenished in accordance with applicable bond order,
resolution or indenture requirements.
Any and all information provided by the District, contained in this certification, to
the best knowledge of the undersigned, is true and correct, as of _______________, 20__.
HUNTER RANCH IMPROVEMENT DISTRICT
NO. ___ OF DENTON COUNTY, TEXAS
By:_____________________________
Name:___________________________
Title:____________________________
STATE OF TEXAS §
§
COUNTY OF DENTON §
This instrument was acknowledged before me on ____________, 20__ by
___________, __________, the _____________ of Hunter Ranch Improvement District No.
___ of Denton County, Texas on behalf of said district.
Notary Public, State of Texas
Exhibit J District Certification clean 05-03-2024
-5-
EXHIBIT A
IMPROVEMENT PROJECT
CONSTRUCTION STATUS