Gilmore &
Bell, P.C.
Draft – May 10, 2006
For
Discussion Purposes Only
BILL NO. 3776 ORDINANCE NO. _____
AN ORDINANCE AUTHORIZING THE CITY OF WEST PLAINS, MISSOURI, TO ENTER INTO A LEASE PURCHASE TRANSACTION TO PROVIDE FUNDS TO PAY THE COSTS OF CERTAIN CAPITAL IMPROVEMENT PROJECTS; AND AUTHORIZING AND APPROVING CERTAIN DOCUMENTS AND ACTIONS IN CONNECTION THEREWITH.
WHEREAS, the City Commission finds and determines that it is advantageous and in the best interests of the City of West Plains, Missouri (the “City”), that the City enter into a lease purchase transaction with Commerce Bank, National Association, as trustee (the “Trustee”), for the purpose of providing funds to pay the costs of (a) expanding and improving the City’s civic center, (b) expanding the senior citizens center, (c) constructing a police station, (d) converting the existing combined police and fire station into a single purpose fire station, (e) demolishing an existing fire station and constructing a new fire station at a different site, (f) renovating City Hall, and (g) acquiring park equipment (collectively, the “Project”); and
WHEREAS, in order to facilitate the foregoing and to pay the cost thereof, it is necessary and desirable for the City to take the following actions:
1. Enter into a Ground Lease (the “Ground Lease”) with the City, as lessor, and the Trustee, as lessee, pursuant to which the City will lease to the Trustee the real property upon which a portion of the Project will be situated (together with all improvements now or hereafter situated thereon, the “Leased Property”), on the terms and conditions set forth therein, a form of which is attached hereto;
2. Enter into an annually renewable Lease Purchase Agreement (the “Lease”) with the Trustee, pursuant to which the City will lease Leased Property, including that portion of the Project to be situated thereon, on a year-to-year basis from the Trustee, with an option to purchase the Trustee’s interest in the Project, a form of which is attached hereto; and
3. Approve a Declaration of Trust (the “Declaration of Trust”), by the Trustee, pursuant to which Certificates of Participation (as defined below) will be executed and delivered, a form of which is attached hereto;
4. Approve an Official Statement respecting Certificates of Participation (City of West Plains, Missouri, Lessee), Series 2006 (the “Certificates of Participation”), evidencing proportionate interests of the owners thereof in Base Rentals to be made by the City under the Lease, to be in substantially the same form as the Preliminary Official Statement respecting the Certificates of Participation attached hereto (the “Preliminary Official Statement,” and together, the “Official Statement”);
5. Enter into a Continuing Disclosure Certificate (the “Continuing Disclosure Certificate”), pursuant to which the City agrees to provide certain financial and other information with respect to the Certificates of Participation, a form of which is attached hereto;
6. Enter into a Tax Compliance Agreement (the “Tax Compliance Agreement”) with the Trustee pursuant to which the City makes certain representations and covenants with respect to the tax-exemption of the Lease and the Certificates of Participation, a form of which is attached hereto; and
7. Enter into a Certificate Purchase Agreement (the “Purchase Agreement”) among the City, the Trustee and Edward D. Jones & Co., L.P. (the “Underwriter”), a form of which is attached hereto;
the Ground Lease, the Lease, the Continuing Disclosure Certificate, the Tax Compliance Agreement and the Purchase Agreement being referred to together herein as the “City Documents”; and
WHEREAS, Ambac Assurance Corporation (the “Certificate Insurer”) has agreed to issue its financial guaranty insurance policy guaranteeing the scheduled payment of the principal and interest components of the base rentals distributable to the owners of the Certificates of Participation, when due.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF WEST PLAINS, MISSOURI, AS FOLLOWS:
Section 1. Authorization and Approval of Documents. The City Documents and the Declaration of Trust are hereby approved in substantially the forms submitted to and reviewed by the City Commission on the date hereof, with such changes therein as shall be approved by the Mayor, the Mayor’s execution of the City Documents to be conclusive evidence of such approval.
The obligation of the City to pay Base Rentals (as defined in the Lease) under the Lease is subject to annual appropriation, and shall constitute a current expense of the City, and shall not in any way be construed to be an indebtedness or liability of the City in contravention of any applicable constitutional or statutory limitation or requirement concerning the creation of indebtedness or liability by the City, nor shall anything contained in the Lease constitute a pledge of the general tax revenues, funds or moneys of the City, and all provisions of the Lease shall be construed so as to give effect to such intent.
The Mayor is hereby authorized and directed to execute and deliver the City Documents and to approve changes to the Declaration of Trust on behalf of and as the act and deed of the City. The City Clerk is hereby authorized to affix the City’s seal to the City Documents and attest said seal.
Section 2. Approval of Preliminary Official Statement; Preliminary Official Statement Deemed Final. The Preliminary Official Statement, a copy of which is attached hereto, has been submitted to the City Commission on the date hereof, and the final Official Statement, in substantially the form of the Preliminary Official Statement with such changes and additions thereto as are necessary to conform to and describe the transaction, and the public distribution of the same by the Underwriter are hereby approved for use in connection with the sale of the Bonds. The Mayor of the City is hereby authorized to execute and deliver the final Official Statement on behalf of and as the act and deed of the City.
For the purpose of enabling the Underwriter to comply with the requirements of Rule 15c2-12(b)(1) of the Securities and Exchange Commission, the City hereby deems the information regarding the City contained in the Preliminary Official Statement to be “final” as of its date, except for the omission of such information as is permitted by Rule 15c2-12(b)(1), and the appropriate officers of the City are hereby authorized, if requested, to provide the Underwriter a letter or certification to such effect and to take such other actions or execute such other documents as such officers in their reasonable judgment deem necessary to enable the Underwriter to comply with the requirement of such Rule.
Section 3. Further Authority. The City shall, and the officials and agents of the City are hereby authorized and directed to, take such actions, expend such funds and execute such other documents, certificates and instruments as may be necessary or desirable to carry out and comply with the intent of this Ordinance and to carry out, comply with and perform the duties of the City with respect to the City Documents, the other documents authorized or approved hereby. Without limiting the foregoing, the Mayor is hereby authorized, if required, to execute any certificate or agreement to allow the Underwriter to comply with Rule 15c2-12 of the Securities and Exchange Commission.
Section 4. Effective Date. This Ordinance shall take effect and be in full force from and after its passage by the City Commission and approval by the Mayor.
Passed by the City Commission of the City of West Plains, Missouri, and APPROVED by the Mayor this 15th day of May, 2006.
(SEAL) By:
Mayor
ATTEST:
By:
City Clerk
GILMORE & BELL,
P.C.
DRAFT #2 – MAY 10,
2006
FOR DISCUSSION PURPOSES ONLY
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above space is reserved for Recorder’s Certification.)
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TITLE OF DOCUMENT: |
GROUND LEASE |
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DATE OF DOCUMENT: |
May 1, 2006 |
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GRANTOR: |
CITY OF WEST PLAINS, MISSOURI |
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GRANTOR’S MAILING ADDRESS: |
P.O. Box 710 West Plains, Missouri 65775-0710 |
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GRANTEE: |
Commerce Bank, National Association, as Trustee |
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GRANTEE’S MAILING ADDRESS: |
Kansas City, Missouri 64106 |
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RETURN DOCUMENTS TO: |
Toni I. Stegeman, Esq. Gilmore & Bell, P.C. 211 North Broadway, Suite 2350 St. Louis, Missouri 63102 |
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LEGAL DESCRIPTION: |
See Exhibit A |
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GROUND LEASE
THIS GROUND LEASE (the “Ground Lease”), dated as of May 1, 2006, by and between the CITY OF WEST PLAINS, MISSOURI (the “City”), as lessor, and Commerce Bank, National Association, a national banking association duly organized and existing and authorized to conduct its operations under the laws of the United States of America (together with its successors, the “Trustee”), as trustee and lessee:
RECITALS
1. The City is a third-class city and political subdivision duly organized and existing under the laws of the State of Missouri with full lawful power and authority to enter into this Ground Lease.
2. The Trustee is a national banking association duly organized and existing and authorized to conduct its operations under the laws of the United States of America with full lawful power and authority to enter into this Ground Lease.
3. The City owns fee simple title to the real estate described on Exhibit A attached hereto, together with any improvements located or to be located thereon, upon which a portion of the Project (as defined below) will be situated (collectively, the “Leased Property”).
4. The City desires to lease the Leased Property to the Trustee for the rental payments and upon the terms and conditions herein set forth for the purpose of providing funds to pay the costs of (a) expanding and improving the City’s civic center, (b) expanding the senior citizens center, (c) constructing a police station, (d) converting the existing combined police and fire station into a single purpose fire station, (e) demolishing an existing fire station and constructing a new fire station at a different site, (f) renovating City Hall, and (g) acquiring park equipment (collectively, the “Project”). The Leased Property will include all of the real property and improvements thereto that are part of the Project, other than the senior citizens center. The park equipment will not constitute Leased Property.
5. The Trustee proposes to execute a Declaration of Trust of even date herewith (the “Declaration”), under which the Trustee will deliver Certificates of Participation (City of West Plains, Missouri, Lessee), Series 2006, in the aggregate principal amount of $9,130,000 (the “Series 2006 Certificates” and, collectively with any Additional Certificates hereafter delivered under the Declaration, the “Certificates”) to provide funds (i) to pay the costs of the Project, (ii) to fund a debt service reserve fund for the Series 2006 Certificates and (iii) to pay the costs of delivering the Series 2006 Certificates; and to lease the Leased Property (including that portion of the Project to be located thereon) back to the City pursuant to a Lease/Purchase Agreement of even date herewith (the “Lease”).
6. Ambac Assurance Corporation has agreed to issue its insurance policy (the “Certificate Insurance Policy”) guaranteeing the scheduled payment of the Principal Components and the Interest Components represented by the Series 2006 Certificates, when due.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein set forth, the City and the Trustee do hereby covenant and agree as follows:
Section 1. Representations by the City. The City represents, warrants and covenants as follows:
(a) The lease of the Leased Property to the Trustee and the lease of the Leased Property by the Trustee to the City, as provided in the Lease, is necessary, desirable and in the public interest and the City hereby declares its current need for the Project;
(b) The City has the power and authority to enter into the transactions contemplated by this Ground Lease and the Lease and to carry out its obligations hereunder and thereunder, and has been duly authorized to execute and deliver this Ground Lease and the Lease and by proper action has duly authorized the execution and delivery of this Ground Lease and the Lease;
(c) Neither the execution and delivery of this Ground Lease nor the Lease, nor the fulfillment of or compliance with the terms and conditions hereof or thereof, nor the consummation of the transactions contemplated hereby or thereby, conflicts with or results in a breach of the terms, conditions or provisions of any restriction or any agreement or instrument to which the City is now a party or by which the City or the Leased Property is bound;
(d) The City has good and merchantable fee title to the Leased Property;
(e) All taxes, assessments or impositions of any kind with respect to the Leased Property, except current taxes, if any, have been paid in full;
(f) The City has not made, done, executed or suffered, and warrants that it will not make, do, execute or suffer, any act or thing whereby the City’s interests in any property now or hereafter included in the Leased Property will be or may be impaired, changed or encumbered in any manner whatsoever except as permitted by this Ground Lease and the Lease; and
(g) There is no proceeding pending or to the City’s knowledge threatened in any court or before any governmental authority or arbitration board or tribunal relating to the Leased Property or challenging the validity of the proceedings of the City authorizing this Ground Lease and the Lease or the power or authority of the City to enter into the Lease or this Ground Lease or the validity or enforceability of the Lease or this Ground Lease or which, if adversely determined, would adversely affect the transactions contemplated by the Lease or this Ground Lease or the interest of the City under the Lease or this Ground Lease.
Section 2. Lease. The City hereby leases to the Trustee, and the Trustee hereby rents and leases from the City, the Leased Property on the terms and conditions hereinafter set forth.
Section 3. Term. The term of this Ground Lease will commence as of the date of the delivery hereof and will end on May 1, 2046, unless such term is sooner terminated as hereinafter provided.
Section 4. Rental. As and for rental hereunder and in consideration for the leasing of the Leased Property to the Trustee, the Trustee will, simultaneously with the delivery of this Ground Lease, enter into the Lease and following receipt of the net proceeds of the sale of the Series 2006 Certificates from the Purchaser deposit the net proceeds thereof in accordance with the Declaration.
Section 5. Assignments and Subleases. The Trustee may assign this Ground Lease and its rights hereunder or lease the Leased Property without the written consent of the City (i) if the Lease is terminated for any reason, or (ii) if an Event of Default has occurred.
Section 6. Termination; Partial Release of Leased Property.
(a) This Ground Lease will terminate upon the completion of the term set forth in Section 3 hereof. However, if the City pays the Option Price or pays all of the Basic Rent and Supplemental Rent provided for in Article III of the Lease and exercises its option to purchase the Trustee’s interest in the Leased Property pursuant to Article XII of the Lease, then this Ground Lease will be considered assigned to the City and terminated through merger of the leasehold interest hereunder with the fee interest of the City if the City is the owner of the fee interest.
(b) If an Event of Default (which includes any grace period contained therein) under the Lease occurs or if an Event of Nonappropriation occurs, the Trustee will have the right to possession of the Leased Property for the remainder of the term of this Ground Lease and will have the right to sublease the Leased Property or sell its interest in the Leased Property and this Ground Lease upon whatever terms and conditions it deems prudent; provided, however, that for the remainder of the term of this Ground Lease the Trustee (or, if the Trustee has assigned its rights hereunder, its then current assignee instead of the Trustee) will provide the City with public liability insurance covering the premises for the remainder of the term of this Ground Lease and will furnish the City with evidence thereof so long as the Leased Property is producing revenues sufficient to pay the premiums for such insurance; provided that if the Leased Property is not producing revenues sufficient to pay the premiums for such insurance, the City shall be responsible for maintaining such public liability insurance. Upon any termination of the Lease, the City will have no further responsibility or liability to the Trustee under the Lease with respect to the Leased Property except as provided in the Lease and this Ground Lease.
(c) Notwithstanding the foregoing, on May 2, 2013, the Trustee shall execute and deliver to the City such documents as are necessary to release from this Ground Lease that portion of the Leased Property on which the City’s civic center is now located, which is identified as Parcel ___ on Schedule I hereto (the “Civic Center Property”), provided that there has not occurred an Event of Default or an Event of Nonappropriation under the Declaration or the Lease, and the City has filed with the Trustee (1) written request for the release of the Civic Center Property from this Ground Lease, together with a form of the release documents requested to be executed and delivered by the Trustee, and (2) a certificate of the City’s Mayor and City Clerk, stating that as of the date of such certificate, no event or condition has happened or existed and is continuing, or is happening or existing, which constitutes, or which, with notice or lapse of time or both, would constitute, an Event of Default under the Declaration or the Lease, and there has not occurred an Event of Nonappropriation.
Section 7. Default. Notwithstanding any default by the Trustee hereunder, the City may not exclude the Trustee from the Leased Property or take possession of the Leased Property (other than pursuant to the Lease) or terminate this Ground Lease prior to the expiration of its term as set forth in Section 3 hereof. However, if, upon the exercise of the option to purchase the Trustee’s interest in the Leased Property granted to the City in Article XII of the Lease and after the payment of the purchase price specified therein and other sums payable under the Lease, the Trustee fails to convey its interest in the Leased Property to the City pursuant to said option, then the City will have the right to terminate this Ground Lease, such termination to be effective 30 days after delivery of written notice of such termination to the Trustee. In the event of any default by the Trustee hereunder, the City may maintain an action for damages or, if permitted in equity, for specific performance. In no event will the Trustee be liable for consequential or punitive damages.
Section 8. Quiet Enjoyment. At all times during the term of this Ground Lease, the Trustee will peaceably and quietly have, hold and enjoy all of the Leased Property, subject to the rights of the City under the Lease.
Section 9. No Merger. No union of the interests of the City and the Trustee herein will result in a merger of this Ground Lease and the title to the Leased Property, except as described in Section 6 hereof.
Section 10. Taxes and Assessments. The City covenants and agrees to pay, and to hold harmless and indemnify the Trustee from and against, any and all assessments, charges or taxes of any kind or character levied or assessed upon or against the Leased Property. The indemnities arising under this Section shall survive the termination of the Lease.
Section 11. Covenants Regarding Environmental Matters. The City hereby covenants that it has carried and agrees to continue to carry on the business and operations at the Leased Property in a manner that complies in all respects, and will remain in compliance, with all applicable federal, state, county, regional, city or local laws, statutes, rules, orders, regulations or ordinances, concerning public health, safety, hazardous substances or the environment. In addition to the foregoing, Section 10.03 of the Lease is hereby incorporated herein by reference.
Section 12. Waiver of Personal Liability.
(a) All obligations or liabilities under this Ground Lease on the part of the Trustee are solely obligations or liabilities of the Trustee as corporate trustee of the Trust Estate, and, to the extent permitted by law, the City hereby releases each and every director, officer, agent, attorney or employee of the Trustee of and from any personal or individual liability under this Ground Lease. No director, officer, agent, attorney or employee of the Trustee will at any time or under any circumstances be individually or personally liable under this Ground Lease for anything done or omitted to be done by the Trustee hereunder.
(b) All obligations or liabilities under this Ground Lease on the part of the City are solely obligations or liabilities of the City as a political subdivision of the State of Missouri, and, to the extent permitted by law, the Trustee hereby releases each and every official, member, employee or agent of the City of and from any personal or individual liability under this Ground Lease. No official, member, employee or agent of the City will at any time or under any circumstances be individually or personally liable under this Ground Lease for anything done or omitted to be done by the City hereunder.
Section 13. Eminent Domain; Title Insurance. If the whole or any part of the Leased Property is taken by eminent domain proceedings, the interest of the Trustee is required to be recognized. The proceeds of the condemnation will be applied as provided in Article VIII of the Lease. The City hereby assigns to the Trustee its interest in any condemnation award or title insurance proceeds respecting the Leased Property to the extent necessary to provide for the payment of the Certificates and to discharge the Declaration in accordance with Article VIII thereof. Any proceeds from said title insurance will be deposited with the Trustee and used to pay principal of and interest on the Certificates and to discharge the Declaration to the extent required and, thereafter, any excess will be paid to the City.
Section 14. Leaseback to the City. Contemporaneously herewith, the Trustee and the City will execute the Lease whereby the Trustee subleases back to the City and the City subleases from the Trustee the Leased Property, all in accordance therewith. The Lease includes in Article XII thereof the option of the City, upon payment of the specified purchase price, to purchase the Trustee’s interest in the Leased Property.
Section 15. Partial Invalidity. If any one or more of the terms, provisions, covenants or conditions of this Ground Lease is to any extent declared invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, the finding or order or decree of which becomes final, none of the remaining terms, provisions, covenants and conditions of this Ground Lease will be affected thereby, and each provision of this Ground Lease will be valid and enforceable to the fullest extent permitted by law.
Section 16. Indemnification. The City shall, subject to the availability of appropriations of funds to it therefor and other money legally available for the purpose, indemnify and hold harmless the Trustee from and against any and all claims, damages, losses, liabilities, costs or expenses (including attorney’s fees and expenses) whatsoever which the Trustee may incur (or which may be claimed against the Trustee by any person or entity whatsoever) and which are not caused by the negligence or willful misconduct of the Trustee. Notwithstanding anything in this Ground Lease to the contrary, the provisions of this Section shall survive the termination of this Ground Lease.
Section 17. Notices. All written notices to be given under this Ground Lease will be given by mail to the party entitled thereto as set forth in the Declaration.
Section 18. Definitions. In addition to words and terms defined elsewhere in this Ground Lease, capitalized words and terms used in this Ground Lease have the meanings given to such words and terms in Section 1.01 of the Declaration.
Section 19. Section Headings. All section headings contained herein are for convenience of reference only and are not intended to define or limit the scope of any provision of this Ground Lease.
Section 20. Amendments, Changes and Modifications. This Ground Lease may be amended only in the manner provided in Article VI of the Declaration. Any waiver of any provision of this Ground Lease or any right or remedy hereunder must be affirmatively and expressly made in writing and may not be implied from inaction, course of dealing or otherwise.
Section 21. Applicable Law. This Ground Lease will be governed by and construed in accordance with the laws of the State of Missouri.
Section 22. Execution. This Ground Lease may be executed in any number of counterparts, each of which is deemed to be an original but all together constitute but one and the same Ground Lease. It is also agreed that separate counterparts of this Ground Lease may be executed by the Trustee and the City all with the same force and effect as though the same counterpart had been executed by both the Trustee and the City.
Section 23. Successors. This Ground Lease will be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
Section 24. Complete Agreement. This written agreement is a final expression of the agreement between the parties hereto and such agreement may not be contradicted by evidence of any prior oral agreement or of a contemporaneous oral agreement between the parties hereto. No unwritten oral agreement between the parties exists.
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IN WITNESS WHEREOF, the Trustee and the City have caused this Ground Lease to be signed by their respective officers hereunto duly authorized, all as of the day and year first above written.
CITY OF WEST PLAINS, MISSOURI,
as Lessor and Grantor
By:
Name: Joe Evans
Title: Mayor
(SEAL)