THOMAS W. POLLARD
ATTORNEY AT LAW
STATE BAR NO. 16100000
951 MAIN STREET
KERRVILLE, TEXAS 78028-3598
(21 O) 896-7500
FAX (21 O) 257-7079
July 9, 1997
Ms. Pat Dye, County Clerk
Kerr County, Texas
Kerr County Courthouse
Kerrville, TX 78028
Re: Kerr County Juvenile Board
Recor, Inc. and
Y.err County Juvenile Detention Corporation, Inc.
Dear Ms. Dye:
As depository for Kerr County and its subdivisions, I hand you
herewith an original "Agreement" sometimes referred to as the
"Exit Agreement", between Recor, Inc. and Kerr County Juvenile
Board as Well as Kerr County, for safekeeping.
morn time to time we have also sent you documents or copies of
documents concerning the creation of a new public corporation
(sonletilnes called a 717S corporation) known as the Kerr County
Juvenile Detention Corporation, Inc., for safekeeping as well.
Please note that the Exit Agreement enclosed herewith bears all
original signatures on the same page. I have retained only
photocopies of same.
Thank you very much.
Sincerely,
T omas W. Pollard
TWP/t
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Enclosure
cc: The Honorable Robert A. Denson, County Judge
Kerr County, Texas
Kerr County Courthouse
Kerrville, TX 78028
The Honorable Stephen B. Ables, District Judge
216th Judicial District Court
Kerr County Courthouse
Kerrville, TX 78028
The Honorable Emil Karl Prohl, District Judge
198th Judicial District Court
Kerr County Courthouse
Kerrville, TX 78028
AGREEMENT
THE STATE OF TEXAS
KNOW ALL MEN BY THESE PRESENTS:
THE COUNTY OF KERR
RECOR, INC, a Texas Corporation acting herein by its sole
stockholder and President, MR. BRUCE C. WILLIAMS of P. O. Box 1985,
Fort Walton Beach, Florida 32549 {"ReCor"), purchased two (2) tracts of
land in Kerr County, Texas, described on Exhibit "A", on October 11,
1994. ReCor caused several improvements to be constructed on said
tracts of land and then leased (with option to purchase) all of same to
the KERR COUNTY JUVENILE BOARD ("Board") as agent for KERB COUNTY,
TEXAS, ("County"), all as more fully set forth in the LEASE-PURCHASE
AGREEMENT effective the 31st day of March, 1994, between ReCor, as
Lessee, and the Board, as Lessor ("Lease"). Such property and
improvements was to be used and has been used as a juvenile detention
center. The purchase of said tracts, the construction of the buildings
and improvements, and the purchase of all equipment and supplies for a
48 bed secure, regional, juvenile detention center ("JDF") was financed
by an assignment of the Lease to CHICORP FINANCIAL SERVICES, INC., a
Delaware Corporation ("ChiCorp") which is now known as ABN AMRO CHICAGO
CORPORATION, all as more fully set forth in the various financing
documents, including but not limited to the Lease, the Deed of Trust of
record at Vol. 0771, Page 037, Real Property Records of Kerr County,
the Financing Statement of record at Vol. 0771, Page 047, Real
Property Records of Kerr County, the Financing Statement filed of
record by the Secretary of State of the State of Texas on October 28,
1994 at file #211716, the Assignment of Lease Agreement from ReCor to
1
ChiCorp, the Escrow Agreement, dated as of March 31, 1994, between
ChiCorp, ReCor, the Board, and The Chicago Corporation, and all the
notices, resolutions, orders, and related documents (collectively
hereinafter the "Financing Documents") to which documents reference is
here made for all purposes. In this Agreement, the words "Deed of
Trust", "Escrow Agreement" and "Assignment" shall mean and include such
respective named documents as referenced above and included within the
definition of Financing Documents.
The Board entered into an OPERATION AND MANAGEMENT AGREEMENT
("OMA") dated July 14, 1994 whereby ReCor would manage and operate the
JDF upon certain terms and conditions all as fully set forth in said
OMA and related documents all of which are, by reference, made a part
hereof for all purposes. The Board and County have given ReCor notice
of Termination pursuant to said OMA and a related escrow agreement,
said notice being dated May 13, 1997.
Various disputes between ReCor and County have arisen. County
insists that ReCor cease operating said JDF and that County take over
possession and operate same effective June 16, 1997. ReCor hereby
agrees to terminate said OMA effective on said date, upon the following
times and conditions, to-wit:
1. ReCor will completely cease operating said JDF in the City of
Kerrville in Kerr County, Texas, on the 16th day of June A.D., 199'x;
and
2. Kerr County, in consultation with the Board, is causing a
public non-profit, Art. 7175, public facility corporation, the KERR
COUNTY JUVENILE DETENTION CORPORATION, INC. ("Corporation"), to be
2
created for the purpose of taking legal title to the JDF, and for the
purpose of taking and holding any and all remaining legal and/or
equitable interest whatsoever that ReCor may have in and to the JDF,
from ReCor. The Corporation will take, accept and hold such title
subject to the rights and interest of ChiCorp, its successors and
assigns, and subject to the Lease and the other Financing Documents,
the Corporatior~ shall d°liver deed per paragraph 9 hereof and Bill of
Sale per paragraph 6 hereof of the JDF to the Board only upon ChiCorp
providing the Corporation with written notice that the County and/or
the Board has exercised and fully complied with the option to purchase
provided in the Lease; and
3. The Board will operate the JDF directly, or indirectly through
an operation and management agreement entered into between the Board
and a qualified third party. Any such operation and management
agreement shall comply with the Lease and be entered into in compliance
with State law; and
4. ReCor hereby authorizes County acting by and through its
county auditor, Mr. Tommy Tomlinson, to take all appropriate actions as
may be necessary to collect any funds or debts owed by anyone or any
entity to the Kerrville ReCor location, and to add those funds to the
existing balance of any funds previously held and administered by the
said Kerr County Auditor pursuant to said escrow agreement, for the
purpose of paying and securing to be paid, all debts, obligations, and
encumbrances of the Kerrville location of ReCor; and
5. Said debts, obligations, and encumbrances shall be paid in the
priority order listed below, first to the obligations set forth in
3
sub-paragraph A below, then in sub-paragraph B in the order mentioned
in sub-paragraph B; and
A. The funds referred to in paragraph 4 hereof shall be used
to pay debts and obligations of ReCor-Kerrville set forth in paragraphs
5B, 5C, 5D, 5E (when due, if due), 5F, 5G, 5H, 8, 9, and 12 hereof; and
B. All of the accounts payable of ReCor, including but not
limited to the current balance of the items listed on Exhibit "B"
attached hereto and made a part hereof for all purposes, will be paid,
by the said Kerr County Auditor, insofar as is possible, by first
paying any mortgage payments due ChiCorp and then paying the first item
on said Exhibit "B", then paying the second item on said Exhibit "B",
and so on until all of the current balance of said debts, obligations,
and encumbrances are paid or all of the said funds are exhausted, or
held as security for the payment of any obligations until the liability
for payment of same is determined (such as ad valorem taxes and the
liens of record against ReCor in Kerr County and the Texas Secretary of
State's office); and
C. The sum of TWO THOUSAND FIVE HUNDRED THIRTEEN DOLLARS AND
SIXTY CENTS ($2,513.60) which was paid to an employee who did not work
at the Kerrville facility, shall be promptly paid to the Kerr County
Juvenile Detention Corporation, Inc. because said payment was made in
violation of the OMA and escrow agreement; and
D. A sum of money approximating ONE THOUSAND SIX HUNDRED
DOLLARS ($1,600.00} was withheld from ReCor's employees' salaries and
wages for the purpose of purchasing insurance for said employees. The
insurance was not purchased. Each and every such employee will be
4
reimbursed for such withheld funds; and
E. Ad valorem taxes together with the penalty and interest,
and attorney's fees as well as other expenses, due on the ReCor,
Kerrville facility and personal property, shall either be paid in
accordance with Section 4.16 of the OMA, or a sum of FIFTY-NINE
THOUSAND SEVEN HUNDRED FORTY-TWO DOLLARS AND 61 CENTS ($59,742.61)
shall be retained by the County Auditor as security for the payment of
all said delinquent ad valorem taxes until there is a final
determination that said ad valorem taxes are payable (in which event
said County Auditor shall pay same) or same are judicially declared not
due and payable or until the taxing authorities waive same; and
F. All liens of record in the Kerr County Courthouse and the
Secretary of State of Texas, against ReCor, Inc. and/or the Kerrville
location of ReCor, Inc. as of the date ReCor deeds said facility per
paragraph 9 hereof, shall be paid from said funds as set forth in
paragraph 5 hereof, or shall be held by said County Auditor until all
of said liens have either been paid, released or have been judicially
declared null and void as against said ReCor, Inc. - Kerrville
location; and
G. ReCor hereby agrees to deliver to the JDF ten (10) new
computers that match the specifications contained on Exhibit E attached
hereto. Additionally, ReCor shall purchase for the benefit of Counfiy
an educational software system that is at least comparable to that
system that was previously supplied to the JDF except that this new
system shall operate on the ten (10) computers. The said ten (10) new
computers shall be installed and operable at the JDF on or before June
5
20, 1997. In addition thereto ReCor agrees to pay to the County the
sum of FOUR THOUSAND ONE HUNDRED DOLLARS ($4,100.00} as compensation
for a photocopy machine that was previously removed from the JDF. In
the event that the said computers are not installed and operable on or
before June 20, 1997, and in the event that the County has not received
proof of purchase of the hereandabove described software on or before
June 20, 1997, then the Board shall thereafter not accept these items
and the sum of FORTY-FIVE THOUSAND DOLLARS ($45,000.00) shall be paid
to the County as compensation for the computers, equipment, software,
and photocopy machine out of the funds mentioned in paragraph 4 hereof;
and
H. Attorney's fees and expenses of Craig Leslie, rendered to
ReCor; and
6. All physical assets on the premises of the JDF are the
property and assets of the Board. All such assets shall be left and
remain on the premises of the JDF and shall\be promptly transferred to
the Corporation subject to the rights and interests of ChiCorp, and
subject to the Lease and the other Financing Documents, by a properly
executed Bill of Sale on the form attached hereto and marked as Exhibit
"C". Said Bill of Sale shall list, insofar as is possible, all of said
assets, from said inventory; and
7. ReCor does hereby authorize ReCor-Kerrville employees,
specifically Mr. Noel Montgomery, to immediately and forthwith prepare
W-2s for all ReCor-Kerrville employees to be furnished to said
employees with their final salary checks, or in the case of former
employees, by mailing same to said former employees at their last known
6
address; and
8. The County, the Board, and ReCor shall obtain an estoppel
letter from ChiCorp, its successors and assigns, which estoppel letter
will verify that all obligations arising out of or with respect to the
financing of the JDF are current and are not in default in any respect,
or, if not current, setting forth an itemization of the matters, issues
and/or ariounts in which such financing is not current in all respects.
In the event such estoppel letter shall show or establish that such
financing is not current with respect to any matter or issue for which
ReCor was responsible for performance, payment or reimbursement
pursuant to any contract or agreement with the County or the Board, or
shall show any balance, sum or amount owing which was to be paid or
reimbursed by ReCor from the Lease proceeds or facility revenues,
including but not limited to funds required to be on deposit with
ChiCorp as a rental reserve or rental deposit, then, in that event,
ReCor shall promptly perform any such duty and resolve any such
outstanding matter or issue. Any fuhds or monies specified by ChiCorp
being due and owing, including any sum or amount necessary to replenish
the rental reserve account, shall be promptly paid by ReCor or
thereafter withheld by the County and/or the Board from any funds that
may be otherwise payable or due to ReCor; and
9. A deed will be promptly delivered from ReCor to the Kerr
County Juvenile Detention Corporation, Inc. which shall be a General
Warranty Deed, conveying the properties listed on Exhibit "A" attached
hereto and made a part hereof for purposes, together with all
improvements thereon, to the Kerr County Juvenile Detention
7
Corporation, Inc. free and clear of all liens except for any liens in
favor of ChiCorp or it's successor; provided that such deed shall be
subject to the Lease and the other Financing Documents (all of which
documents shall be identified and specified individually in the deed}
shall be subject to the rights, titles and interest of ChiCorp, its
successors and assigns, and shall obligate and require the Corporation
to hold legal titl2 to the JDF subject to such rights, duties and
documents, and to deliver title to the JDF and to the County upon
ChiCorp certifying to the Corporation that the County and/or the Board
has exercised and complied in all respects with the option to purchase
provided in the Lease; and
10. All utility deposits in the name of ReCor, Inc. at its
Kerrville location, shall be immediately assigned to the Kerr County
Juvenile Detention Corporation, Inc.; and
11. ReCor hereby agrees to indemnify County, and hold County
harmless from all debts, obligations and encumbrances and expenses of
ReCor which arise out of, and were incurred as a result of, ReCor's
operations in Kerr or any other counties or states. Likewise, County
hereby agrees to indemnify ReCor from all debts and obligations of
County which arise out of, and are incurred, as a result of Counties'
operations of said JDF in Kerrville; and
12. ReCor hereby authorizes ReCor's employee, Noel Montgomery, to
prepare or cause to be prepared at ReCor's expense, all final payroll
tax returns to the federal government as may pertain to the Kerrville
facility (JDF) and all federal and state unemployment tax returns that
may be due for the Kerrville facility (JDF) and Kerr County Auditor
8
shall pay any such taxes from the funds referred to in paragraph 4
hereof; and
13. In order to secure and carry out all terms and conditions of
this agreement, ReCor hereby sets over and assign to Kerr County, all
accounts receivable due ReCor at its Kerrville location, to be
disbursed or authorized hereunder; and
14. Upon satisfaction cf alI debts, obligations, and encumbrances
of ReCor under the terms hereof, any remaining funds, if any shall be
paid to ReCor, Inc., c/o Mr. Bruce C. Williams, P. 0. Box 1985, Fort
Walton Beach, Florida 32549.
EXECUTED this ~~ day of ~u~ ~ A.D., 1997, in Kerrville,
Kerr County, Texas, in multiple originals, each of which shall be
considered an original.
KERR COUNTY JUVENILE BOARD RECOR, INC.
& KERR COUNTY COMMISSIONERS'
COU
By: By:
Name: obert son Name: UC WILLIAMS
Title: Kerr Coun y Judge Title: President & Sole Stockholder
i ~~ (~. ~ of All Shares of Stock
~` L~ ~C ~~
7
THE STATE OF FLORIDA
THE COUNTY OF ~ ~ Gc%~"
This instrument was acknowledged before me on thi t~~ ~ day
of °. 1 97 , , by BRU ~-:~.~WILLIAMS . ~~. ~~(;;~~~~ ~ !_ ``` Y~.~ ~ ~
i ~U
1 ~',4 ~.,.~,,
Notary Public ~f-i~~::a'~'~.1~~1.R~[
s~""•~°y' ~"~~°~~°" State of Florida
:~•
:.: ~ +~ MY COMMISSION ~ CC532781 EXPIRES
yc, February 14,2000
%~' PF ~~o°,.•' 90NDED TNRU TROY fAIN INSURANCE, INC.
9
THE STATE OF TEXAS
THE COUNTY OF KERR "'
is instrument was acknowledged before me on this the ~!~ day
of ~~-~" 1997, by ROBERT/I A. DENSON.
v
Notary Public
~s"•'~~F; CAROLE POLLAf~ State of Texas
_`~ '~ MY COMMISSION EXPIRES
~~;f.~ ~+" March 3, 2001
la
4-26-1995 4:57AM FROM P.1
~;
Kerr County Texas, is rnultipie origxnais, each of which shall be
.~
oon:idezad ~a original.
~+~
XS&R COU~fT ' NY$KILB ~0~1? RBCOR, INC.
~ KBBR COU Y C~I88Y011888'
CQURT ~ • ~ ~
I~
~Y~ li '' $y: .
lEalne: Rgbe ~. Aensoa Na~ms: tTCS TLLIAIrtS
Title: Bo=. County Judge Title: res d t ~ Sole Stoclcholdor
of A shares of Stock
TNB STa1T8 FLORIDFi "'
TBB COURTY ll~ P ~~ ~
I~
This ~ipstrumant was acknowledged befoxs me ea t is the ~ daY
of '~ .1997 b7~ $R~ICS WILLIAHS. ~ t ~~.
G~
~~~ N ary tib ENDS t ~ W ICS a rJ
N,N„~ ~i ~ R v Stato of Florida
e+1,r r ass~$s oc~s
~= I Fso,ury,~.2aoo
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