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HomeMy WebLinkAbout2002-113 - Investigation, Confidentiality, and Escrow AgreementB[LL NO. 2002-113 ORDINANCE NO. 2002-113 AN ORDINANCE AUTHORIZING THE EXECUTION OF AN INVESTIGATION, CONFIDENTIALITY AND ESCROW AGREEMENT BETWEEN THE CITY OF RIVERSIDE, MISSOURI, KESSINGER/HUNTER & COMPANY, AND FARMERS EXCHANGE BANK, AND FURTHER AUTHORIZING AND APPROVING THE PAYMENT OF CERTAIN FUNDS INTO ESCROW PURSUANT THERETO WHEREAS, the City of Riverside, Missouri (the "City") and Kessinger/Hunter & Company ("Kessinger/Hunter") are parties to a Letter of Intent, dated August I0, 2002 (the "Letter of Intent"), and approved by the City August 27, 2002, concerning negotiations for, and discussion of, a collaboration for the development of certain property (the "Property") owned by the City within the levee currently being constructed by the Riverside-Quindaro Bend Levee District, Platte County, Missouri (the development of the Property is hereinafter referred to as the "Project"); and WHEREAS, the City and Kessinger/Hunter, during the discussions and negotiations (the "Negotiations") regarding: (i) the Project (ii) the potential collaboration fior developing the Project; and (iii) the investigation of the Property, will deliver or disclose to one another confidential or proprietary information; and WHEREAS, the CiCy and Kessinger/Hunter each desire to perform certain investigations on the Property to determine Che feasibility of the Project (the "Investigations"); and WHEREAS, the City and Kessinger/Hunter, as provided in the Letter of Intent, desire to share the costs of the Investigations on a 50/50 basis; and WHEREAS, the City and Kessinger/Hunter each desire to enter into an investigation, confidentiality and escrow agreement which governs the Investigations, the confidentiality of information shared during the Negotiations, and the payment of certain funds into escrow for the costs of the Investigations, NOW, THEREFORE, be it ordained by the Board of Aldermen of the City of Riverside, Missouri, as follows: Section 1. The City of Riverside shall enter into an agreement governing: (i) the Investigations; (ii) the duties and obligations of the City and Kessinger/Hunter regarding confidentiality of all information shared during the Negotiations; and (iii) the payment of $50,000.00 into escrow by the City, held by escrow agent Farmers Exchange Bank ("Esa•ow Agent"), for costs of the Investigation (the "Agreement"). Section 2. The execution and delivery of the Agreement, in substantially the form attached hereto as Exhibit A, is approved and the Mayor of the City is authorized to execute the Agreement and to take such other actions reasonably necessary to carry out the intent of this Ordinance on behalf of the City, the execution of the Agreement being conclusive evidence of such approval. Section 3. The City shall pay into escrow, to the Escrow Agent, the amount of $50,000.00 for costs of the Investigation, pursuant to the Agreement. Section 4. This Ordinance shall be in full force and effect from and after its passage and approval. Passed this 17th day of September, 2002. ~~ y IJdC~~ ~~lCC~,I Mayor ATTE .ty Clerk ~~~i ~~~ i INVESTIGATION, CONFIDENTIALITY AND ESCROW AGREEMENT TIIIS INVESTIGATION, CONFIDENTIALITY AND ESCROW AGREEMENT (hereinafter referred to as this "Agreement"), is made and entered into as of the day of 2002, by and among City of Riverside, a fourth class Missouri municipality (referred to herein as "Owner"), Farmers Exchange Bank, a Missouri banking corporation (referred to herein as "Escrow Agent"), and Kessinger/Hunter & Company, a Missouri corporation (referred to herein as "Developer"); RECITALS WHEREAS, Owner owns certain real property described more particularly on the attached EXHIBIT A (the "Property"); WHEREAS, Owner and Developer mutually desire to enter into confidential discussions and negotiations concerning future business transactions with each other in comlection with the development of the Property ("Project") (collectively, the "Transactions"); WHEREAS, Owner and Developer are party to that certain Letter of hltent, dated August 10, 2002 and approved by the Owner on August 27, 2002, concerning the Transactions (the "LOI"), which calls for the execution of a development agreement (the "Development Agreement"), upon the terms and conditions contained therein; WHEREAS, during the course of such discussions and negotiations, it is anticipated that the parties will deliver or otherwise disclose to each other certain confidential or proprietary information; WHEREAS, Owner and Developer mutually desire to enter into this Agreement in order to assure the confidentiality of such information, except as otherwise permitted hereunder; WHEREAS, before entering into the Transactions, Owner and Developer desire to cause certain investigations of the Property to be undertaken and to further examine the feasibility of the Project contemplated by the Transactions (collectively, the "Investigations"); and WHEREAS, Owner and Developer desire to split the costs of the Investigations, as provided herein. Now, THEREFORE, in consideration of the foregoing recitals, the mutual promises, covenants and agreements set forth in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: ARTICLE 1~ONFIDENTIALITY 1.1 PROPRIETARY INFORMATION. The term "Proprietary Information" shall mean (A) all information concerning the Transactions identified by one party to the other as confidential or proprietary; and (B) any and all information resulting from the Investigations, other than information derived from the public record. 1.2 DISCLOSURE OF PROPRIETY INFORMATION. Each party hereby agrees to keep confidential all Proprietary Information that it obtains or receives, and shall not, without the other party's prior written consent in each instance, use, divulge, or disclose to any third party the Proprietary Information, except for disclosures to its officers, directors, employees, attorneys, accountants, contractors and consultants and its affiliates, who have a need to know such information and agree to comply with the terms of this Agreement or otherwise have an obligation of confidentiality to such party. Each party hereby acknowledges and agrees that the Proprietary Information is a valuable asset of the parties hereto and that any unauthorized disclosure thereof could cause irreparable harm and loss to the other party. Each party hereby represents and warrants that it has the right and authority to disclose the Proprietary Information to the other party; provided, however, that (A) the neither party makes any representation or warranty, express or implied, as to the quality, accuracy or completeness of the Proprietary Information disclosed hereunder; and (B) neither party nor any of its affiliates shall have any liability whatsoever with respect to the use or reliance upon any of the Proprietary Information by the other party or any of its affiliates. Nothing contained herein shall prevent Owner from complying with its obligations under the Missouri Sunshine Law to disclose certain information to the public, and any such disclosure by Owner in accordance with the requirements of the Missouri Sunshine Law shall not constitute a violation of this provision.. 1.3 LIMITATION ON OBLIGATIONS. The dunes and obligations of the each party under this Agreement shall not apply to Proprietary Information that: (A) is, at the time of disclosure, in the public domain or available to the public or enters the public domain at a later date through no fault of either party; (B) is in the possession or knowledge of the party receiving such information before disclosure thereof by the other party; (C) is disclosed at any time to the party receiving such information by an independent third party who has a right to make such disclosure to a person who is not a party to this A~neement without breaching any obligation of confidentiality owed by such third party to either of the parties hereto; or (D) is required by law or other governmental authority to be disclosed by a party, except that such party shall promptly notify the other party of any such required disclosure and shall reasonably cooperate with the other party in any attempt to obtain an order or other reliable assurance that confidential treatment will be accorded the Proprietary Information. ARTICLE 2 INVESTIGATIONS Z.1 INVESTIGATIONS. In connection with the proposed Transactions, each of the Owner and the Developer intend to undertake the Investigations, which are more particularly described on the attached EXHIBIT B. Owner and Developer shall cooperate to develop and mutually approve, within twenty (20) days after the date hereof, a timeline for the perforn~ance of the Investigations, which timeline shall include a designation of the party that will be responsible for engaging the specific consultants and contractors to perform each Investigation (provided, however, that the terms of any such contract, the scope of work to be performed -2- thereunder and the cost of such contract shall be subject to the mutual approval of both parties). From time to time, the Owner and the Developer may propose to expand the scope of the Investigations and each agrees to negotiate in good faith to expand the scope of such Investigations to include any other investigations or inquiries that are commercially reasonable in light of the contemplated Transactions, provided the cost thereof does not exceed the unbudgeted amount, if any, available in the Escrow Fund. All reports, studies, analyses, assessments, surveys and other information obtained by either party in connection with or pursuant to the Investigations shall be shared in full by such party with the other party. 2.2 COSTS FOR INVESTIGATIONS. Each of the Owner and the Developer agrees to be responsible for one-half of the Costs of the Investigations. The term "Costs" shall consist only ofout-of-pocket expenditures to third parties as set forth in the Investigations Budget (as hereinafter defined), which expenditures are directly related to the Investigations. Owner and Developer shall cooperate to develop and mutually approve, within twenty (20) days after the date hereof, a budget for the Costs of the Investigations, which budget shall not exceed an aggregate of $100,000 (the "Investigations Budget"). Upon the prior written consent of both of the Depositors the "Costs" in any instance may include specific expenditures in excess of the Investigations Budget and the "Costs" may be expanded to include internal costs or expenses of either of the Depositors, to the extent that employees of the party incurring such costs or expenses were involved (in whole or in part) in the Investigations. 2.3 ESCROW FUND. The Depositors shall have no obligations to pay for the Costs, until there are no remaining funds in the Escrow Fund. In the event the parties mutually agree to expend funds and incur Costs in excess of the unbudgeted amount, if any, available in the Escrow Fund, each party shall deposit into the Escrow Fund an amount equal to one-half of the amount of such excess Costs, which deposits shall become part of the Escrow Fund. ARTICLE 3-ESCROW FUND 3.1 ESTABLISHMENT OF ESCROW. Each of Owner and Developer (collectively, the "Depositors") shall within ten (10) days of this Agreement deposit Fifty Thousand and No/100 Dollars ($50,000.00) with the Escrow Agent and the Escrow Agent shall deliver a receipt therefor upon such deposit. Such amounts delivered to or held by the Escrow Agent under the terms hereof, and any interest thereon, less amounts distributed from time to time in accordance with SECTION 3.4 hereof, shall be referred to herein as the "Escrow Fund." The Escrow Fund shall be segregated from the other assets of the Escrow Agent and held in trust pursuant hereto. 3.2 INVESTMENTS. The Escrow Agent shall hold the Escrow Fund in a Federally insured interest bearing account or accounts, unless and until Escrow Agent receives joint instructions, signed by both Owner and Developer, to invest the Escrow Fund in a particular investment vehicle or vehicles, such as money market accounts, taxable and tax-free obligations unconditionally guaranteed as to principal and interest, if any, by the United States Government or any agency thereof, bank certificates of deposit or repurchase agreements fully collateralized by such obligations or certificates of deposit. 3.3 AMOUNTS EARNED ON ESCROW FUND; TAX MATTERS. Each Depositor will be treated as the transferor to the Escrow Agent of that party's one-half of the Escrow Fund and -3- each Depositor will include all amounts earned on one-half of the Escrow Fund in such Depositor's gross income for federal, state and local income tax (collectively, "income tax") purposes and pay any income tax resulting therefrom. For purposes of simplifying the calculation and reporting of the interest earned on each Depositor's portion of the Escrow Fund, Escrow Agent is hereby authorized to maintain the Escrow Fund in two sub-accounts, with each Depositor's deposit, and all interest earned thereon, being held in a separate sub-account. In the event Escrow Agent elects to establish two sub-accounts, Escrow Agent shall fund all payments made hereunder by drawing funds in equal amounts from each such sub-account. 3.4 PAYMENTS FROM THE ESCROW FUND. At any time or times prior to the expiration of this Agreement, payments shall be made from the Escrow Fund to pay Costs upon the specific written approval of both Owner and Developer. Such payments shall be made only pursuant to a Notice of Draw in form of EXHIBIT C attached hereto, executed by both Depositors and delivered to the Escrow Agent. No party should execute a Notice of Draw, unless it is executed in connection with Costs of Investigations. Upon receipt of a Notice of Draw executed by representatives of each of the Depositors, the Escrow Agent shall release that portion of the Escrow Funds necessary in accordance with the instructions provided in the Notice of Draw. If the amount of the requested draw exceeds the value of the Escrow Fund, the Escrow Agent shall have no liability or responsibility for any deficiency. 3.5 DUTIES AND RESPONSIBILITIES OF ESCROW AGENT. (A) The parties hereto acknowledge and agree that the Escrow Agent (i) acts hereunder as depository only and shall not be responsible for any other agreement referred to herein but shall be obligated only for the performance of such duties as are specifically set forth in this Agreement; (ii) shall not be obligated to take any legal or other action hereunder which might in its good faith judgment involve any expense or liability unless it shall have been furnished with indemnification reasonably satisfactory to it; and (iii) may rely on and shall be protected in acting or refraining from acting upon any written notice, instruction, instrument, statement, request or document furnished to it hereunder and believed by it in good faith to be genuine and to have been signed or presented by the proper person. (B) Neither the Escrow Agent nor any of its directors, officers or employees shall be liable to anyone for any action taken or omitted to be taken by it or any of its directors, officers or employees hereafter except in the case of gross negligence or willful misconduct. ARTICLE 4-MISCELLANEOUS 4.1 No BUSINESS OBLIGATION. It is expressly understood and agreed that neither party shall have any legal duty or obligation to the other party with respect to entering into any future business transaction, including but not limited to any joint venture, lease, sale, or other arrangement involving the Transactions or the Property. The parties hereby further understand and agree that, except as expressly set forth herein, neither party shall have any rights or licenses, expressed or implied, as a result of entering into this Agreement. 4.2 APPLICABLE LAW. This Agreement shall be governed by the internal laws of the State of Missouri. -4- 4.3 TERMINATION. This Agreement will terminate upon the earlier of: (A) The mutual written agreement of both of the Depositors; or (B) The failure of the Depositors to execute the Development Agreement on or before the date that is ninety (90) days after the date hereof (notwithstanding anything to the contrary contained in the LOI), or on such later date as the parties may mutually agree and designate. 4.4 EFFECT OF TERMINATION. (A) Upon termination of this Agreement under SECTION 4.3: (i) all right, title and interest to the Proprietary Information, upon payment by Owner to Developer of the amounts, if any, due under subparagraph (iii) below, shall be automatically transferred to the Owner, which shall have the unrestricted right to use such information; (ii) the rights of the Owner, and the obligations of the Developer, under Article 1 will survive for a period of five (5) years following such termination; (iii) the balance of the Escrow Fund shall be released and split evenly between the Depositors, and Owner shall reimburse to Developer an amount equal to the amount of Developer's portion of the Escrow Fund that was expended in accordance with this Agreement; (iv) the Developer shall hold, and shall cause all parties that have received Proprietary Information through or from Developer to hold, any Proprietary Information in confidence in accordance with Article 1 above for a period of five (5) years following the date of termination; and (v) except as set forth above in this Section 4.4, neither party shall have any continuing obligation to the other under this Agreement. 4.5 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the benefit of the parties hereto, including their respective representatives, successors and assigns; provided, however, this Agreement may not be assigned by either party without the prior written approval in each instance of the other party. 4.6 SEVERABILITY. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable. 4.7 ENTIRE AGREEMENT. Except for the LOI, this Agreement supersedes and cancels all prior or contemporaneous discussions, negotiations, representations or agreements between Owner and Developer with respect to its subject matter and (along with the Recitals and -5- Exhibits) constitutes a complete and exclusive statement of the agreements between the parties with respect to its subject matter. 4.8 ATTORNEYS' FEES. In any litigation, arbitration, or legal proceedings arising out of this Agreement, the prevailing party shall recover its reasonable attorneys' fees, court costs, and related expenses from the other party. 4.9 NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer any rights or remedies upon any person or entity other than the parties and their respective successors and permitted assigns. Owner and Developer hereby agree and confirm that each party is and shall remain an independent party and nothing contained herein shall he construed to create an agency relationship or partnership between the parties hereto. 4.10 COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. 4.11 HEADINGS. The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. 4.12 NOTICES. All notices, requests, demands, claims, and other communications hereunder will be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given if (and then two business days after) it is sent by registered or certified mail, return receipt requested, postage prepaid, and addressed to the intended recipient as set forth below: If to the Owner Citv of Riverside Missouri Attention: City Administrator 2950 Vivion Road Riverside, Missouri 64150 Telecopv No. 816-746-8349 Copy to: Steve Crustal Esg Armstrong Teasdale LLP 2345 Grand Blvd., Suite 2000 Kansas Cit Missouri 64108 Telecopv No. 816-221-0786 If to the Developer Kessinger/Hunter & Compan~_ Attn: John DeHardt 2600 Grand Blvd. Suite 700 Kansas Citv Missouri 64108-4600 Telecopv No. 816-421-5659 -6- copy to: William A. Hirsch Esg Stinson Morrison Hecker LLP 2600 Grand Boulevard Kansas City, MO 64108-4606 Telecopy No. 816-474-4208 If to the Escrow Agent: Farmers Exchange Bank Attn: Brick J. Porter, President 12 East 15t Street Parkville, MO 64152 Telecopy No. 816-741-0114 Any party may send any notice, request, demand, claim, or other communication hereunder to the intended recipient at the address set forth above using any other means (including personal delivery, expedited courier, messenger service, telecopy, telex, ordinary mail, or electronic mail), but no such notice, request, demand, claim, or other communication shall be deemed to have been duly given unless and until it actually is received by the intended recipient. Any party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other party notice in the manner herein set forth. 4.13 Authorized Agent. Owner and Developer shall, within twenty (20) days after the date hereof; designate in writing the individual who shall have the authority to bind such party with respect to all decisions made pursuant to this Agreement, and the other party shall be entitled to rely upon such designated individual's authority. 4.13 AMENDMENTS AND WAIVERS. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by the Developer and the Owner. No waiver by any party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affcet in any way any rights arising by virtue of any prior or subsequent such occurrence. 4.14 CONSTRUCTION. The parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. The word "including" shall mean including without limitation. 4.15 INCORPORATION OF EXHIBITS AND RECITALS. The Exhibits and Recitals identified in this Agreement are incorporated herein by reference and made a part hereof. -7- IN WITNESS WHEREOF, each of the parties hereto have caused this Agreement to be duly executed and delivered as of the date and year hereinabove first set forth. OWNER: CITY OF RIVERSIDE ~~ -r~ ~~ By: _ ~ ~ ~~ ~~.~~~~~ Printed Nam :_/3r Tr y ~ ~ ~ ~,1-t Title: h1 ~ ~ i, ESCROW AGENT: FARMERS EXCHANGE BANK By: Printed Name: Title: DEVELOPER: KESSINGER/HUNTER & COMPANY By: Printed N Title: -8- EXHIBIT A LEGAL DESCRIPTION OF PROJECT PROPERTY -9- EXHIBIT B INVESTIGATIONS Title Report Survey Soils Engineering Envirorunental Assessment (Phase I and, as necessary, Phase II) Market Analysis Master Development Plan Infrastructure Engineering Study Drainage Study -10- EXHIBIT C NOTICE OF DRA W 200 Farmers Exchange Bank Attn: Brick J. Porter, President 12 East ls` Street Parkville, MO 64152 Re: Notice of Draw under the Investigation, Confidentiality and Escrow Agreement, dated (the "Agreement'). Dear Sirs: The undersigned hereby requests that ("Escrow Agent') issues a check payable to " " in the amount of $ in order to pay certain Costs directly related to Investigations (as those terms are defined in the Agreement). Each of the undersigned hereby certifies that such payment will pay Costs directly related to Investigations pursuant to the Agreement. Owner: Developer: CITY OF RIVERSIDE y: ~ f~ i ~ z <~ ~~~; Printed Name: ~E TTY 13142 c Ev _ Title: (~~ ,,~~ ~,_ KESSINGER/HUNTER & COMPANY By: Printed N Title: