1998-04-27 Regular Meeting of City Council

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e e EXHIBIT C ESCROW AGREEMENT THIS ESC:ROW AGREEMENT (this "Escrow Agreement") is entered into as of the _ day of , 1998, by and among GULF COAST WATER AUTHORITY ("GCWA"), the CITY OF GALVESTON, TEXAS ("Galveston"), LA PORTE AREA WATER AUTHORITY ("LPAWA"), and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION ("Escrow Agent"). WIINESSEIH: WHEREAS, GCWA and LPAWA have entered into that certain Water Capacity Purchase and Sa~e Agreement, dated as of April 28, 1998 (the "Sale Agreement") by which LPAWA has agreed to place in escrow with Escrow Agent the amount necessary to pay the Purchase Price in the amount of $3,412,700, such amount to be paid in installments as set forth below, for a portion of the interest of the City of Galveston, Texas in the City of Houston's Southeast Water Purification Plant; and NOW THE:REFORE, the parties agree as follows: Section 1. The Escrow Fund. LPAWA agrees to deposit with GCWA, on June 1, 1998 (the "First Payment Date"), the amount of $500,000. LPAWA a"rees to pay to the Escrow Agent for the account of GCWA on or before the Transfer Date (as defined in the Sale Agreement) the remainder of the Purchase Price (as defined in the Sail! Agreement). The Escrow Fund shall be held by Escrow Agent and shall be disbursed according to the provisions contained herein. (d) The Escrow Fund shall pe invested by Escrow Agent in. an interest-bearing account containing direct or indirect securities of the United States of America, money market funds rated "AAA" by S&P or "Aaa" by Moody's Investors Services, Inc. or fully collateralized certificates of deposit in this Esc:row Agreement as directed by LPAWA, or LPAWA's agent, in writing, with the maturity date of the investments not to exceed three (3) years from the date of this Escrow Agreement. After the third anniversary date of this Escrow Agreement, investments in the Escrow Fund shall not have a maturity longer than ninety (90) days. Except as provided belo~, the interest thus derived shall become part of the Escrow Fund until the full Purchase Price has been deposited. Except as provided below, such interest will be the property of LPAWA, even though the Escrow Fund may be paid to GCWA in accordance with this Escrow Agreement. Escrow Agent shall pay the interest earned on the investment of the Escrow Fund to LPAWA from time to time as directed by LP,AWA, so long as the value of the Escrow Fund, as determined by the Escrow Agent, is equal to the amount required by Section 1(b) to be on deposit at any time. It is 14