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HomeMy WebLinkAbout2010-1088-12/06/2010I / RESOLUTION NO. 2010-1088 RESOLUTION AUTHORIZING THE ISSUANCE $5,232,000 MIDWESTERN DISASTER AREA REV: I� BONDS (KNK ENTERPRISE, L.L.C. PROJ: SERIES 2010, WITH THE PROCEEDS FROM THE OF THE BONDS TO BE LOANED TO KNK ENTERPRISE, L.L.C., AN IOWA LIMITED LIABILITY COMPANY; THE EXECUTION AND DELIVERY OF A BOND PURCHASE AGREEMENT AND ASSIGNMENT TO SECURE SAID BONDS; THE EXECUTION AND DELIVERY OF A LOAN AGREEMENT BETWEEN THE CITY AND KNK ENTERPRISE, L.L.C.; THE ASSIGNMENT BY THE CITY TO THE ORIGINAL PURCHASER OF THE RIGHTS AND INTEREST OF THE CITY IN AND TO SAID LOAN AGREEMENT; THE SALE OF SAID BONDS; AND RELATED MATTERS. WHEREAS, the City of Waterloo, Iowa, (hereinafter "Issuer") a political subdivision organized and existing under the Constitution and laws of the State of Iowa, a municipal corporation organized and existing under the Constitution and laws of the State of Iowa, is authorized and empowered by Chapter 419 of the Code of Iowa, as amended, (hereinafter "Act") to issue Midwestern Disaster Area revenue bonds and loan the proceeds from the sale of said bonds to one or more parties to be used to defray all or a portion of the cost of acquiring, constructing and improving land, buildings and improvements for a "project," as that term is defined in the Act specifically including a project which is suitable for a purpose that is eligible for financing from Midwestern Disaster Area bonds authorized under the federal Emergency Economic Stabilization Act of 2008, Pub. L. No. 110-185, together with any other financing necessary or desirable in connection with such purpose within or within eight (8) miles of Issuer in order to create jobs and employment opportunities and to improve the welfare of the residents of the Issuer and of the State of Iowa; and WHEREAS, the Issuer has been requested by KNK Enterprise, L.L.C., a limited liability company organized under Chapter 489 of the laws of Iowa (hereinafter "Borrower"), to authorize and issue its Midwestern Disaster Area Revenue Bonds (the "Bonds") pursuant to the provisions of the Act for the purpose of financing all or a portion of the cost of acquiring, constructing and improving approximately 8 acres of land and a 54,000 square foot building, including extensive remodeling of said building, and constructing an additional 30,000 square foot retail building located at 1411 Flammang Drive, Waterloo, Iowa, together with all incidental items and paying the costs of issuance of the Bonds (hereinafter "Project") which Project will be owned and operated by Borrower; and WHEREAS, it is necessary and advisable that provisions be made for the issuance of Midwestern Disaster Area Revenue Bonds, Series 2010 (KNK Enterprise, L.L.C. Project), of the Issuer in an aggregate principal amount not to exceed $5,232,000 (the "Bonds") as authorized and permitted by the Act to finance the cost of the Project to that amount; and N. Resolution No. 2010-1088 Page 2 WHEREAS, the Issuer will loan the proceeds of the Bonds to the Borrower pursuant to the provisions of the Loan Agreement dated as of December 1, 2010, (the "Loan Agreement") between the Issuer and the Borrower the obligation of which will be sufficient to pay the principal of, redemption premium, if any, and interest on the Bonds as and when the same shall be due and payable; and WHEREAS, the Bonds will be sold pursuant to and secured as provided by a Bond Purchase Agreement and Assignment to be dated as of December 1, 2010, (the "Bond Purchase Agreement") by and between the Issuer and Farmers State Bank (the "Original Purchaser"); and WHEREAS, the rights of the Issuer in and to the Loan Agreement are assigned to the Original Purchaser under the Bond Purchase Agreement; and WHEREAS, notice of intention to issue the Bonds has been published and the City Council has conducted a public hearing pursuant to such published notice, all as required by the Act and Section 147(f) of the Internal Revenue Code of 1986, and has determined that it is necessary and advisable to proceed with the financing of the Project; and WHEREAS, Borrower has represented to the Issuer that it has received, on November 24, 2010, an allocation of Midwestern Disaster Area Bonds from the Iowa Finance Authority and a determination that Borrower will use the Project and is replacing a trade or business that suffered a loss as result of the flooding of 2008 included in Presidential Declaration of Disaster No. 1763 dated May 27, 2008, as amended June 13, 2008. WHEREAS, the Issuer, at the direction of the Borrower, has arranged for the sale of the Bonds to the Original Purchaser; NOW, THEREFORE, BE IT RESOLVED by the City Council of the Issuer, as follows: Section 1. Authorization of the Bonds. In order to finance the cost of the Project, the Bonds shall be and the same are hereby authorized, determined and ordered to be issued in an aggregate principal amount not to exceed $5,232,000. The Bonds shall initially be issued as a single fully registered Bond, numbered R-1, and shall be dated as of the date of issuance and delivery thereof and shall be executed, shall be in such form, shall be payable, shall have such prepayment provisions, shall bear interest at such rates, and shall be subject to such other terms and conditions as are set forth therein and in the Bond Purchase Agreement and Loan Agreement. The Bonds and the interest thereon do not and shall never constitute an indebtedness of or a charge against the general credit or taxing power of the Issuer, but are limited obligations of the Issuer payable solely from revenues and other amounts derived from the Loan Agreement and the Project and shall he secured by an assignment of the Loan Agreement and the Project and the revenues derived therefrom. Forms of the Bond Purchase Agreement, the Bond and the Loan Agreement are before this 3 Resolution No. 2010-1088 Page 3 meeting and are by this reference incorporated in this Bond Resolution, and the City Clerk is hereby directed to keep them on file. Section 2. Bond Purchase Agreement; Sale of the Bonds. In order to provide for the sale of the Bonds to the Original Purchaser and the conditions with respect to the delivery thereof, the Mayor and City Clerk shall execute, acknowledge and deliver in the name and on behalf of the Issuer, the Bond Purchase Agreement in substantially the form submitted to the City Council, which is hereby approved in all respects. The sale of the Bonds to the Original Purchaser is hereby approved and the Mayor and City Clerk are hereby authorized and directed to deliver the Bonds to the Original Purchaser. The periodic advancing by the Original Purchaser of funds on behalf of the Issuer from time to time at the office of the Original Purchaser shall constitute payment in full for the Bonds pursuant to Section 5.03 of the Bond Purchase Agreement. The Original Purchaser shall be authorized as the Issuer's depository and agent to make such advances pursuant to the Bond Purchase Agreement to effect the making of the loan of the proceeds of sale of the Bonds to the Borrower pursuant to Section 5.03 of the Bond Purchase Agreement. Section 3. Repayment of Loan. The Loan Agreement requires the Borrower in each year to pay amounts as loan payments sufficient to pay the principal of, redemption premium, if any, and interest on the Bond when and as due and the payment of such amounts by the Borrower to the Original Purchaser pursuant to the Loan Agreement is hereby authorized, approved and confirmed. Section 4. Loan Agreement. In order to provide for the loan of the proceeds of the Bonds to acquire, construct and improve the Project and the payment by the Borrower of an amount sufficient to pay the principal of and premium, if any, and interest on the Bonds, the Mayor and City Clerk shall execute, and deliver in the name and on behalf of the Issuer the Loan Agreement in substantially the form submitted to the City Council, which is hereby approved all respects. Section 5. Miscellaneous. The Mayor, Mayor Pro Tempore, City Clerk and any Deputy City Clerk are hereby authorized and directed to execute, attest, seal and deliver any and all documents and do any and all things deemed necessary to effect the issuance and sale of the Bonds and the execution and delivery of the Loan Agreement and the Bond Purchase Agreement, and to carry out the intent and purposes of this resolution, including the preamble hereto. Section 6. Severability. The provisions of this resolution are hereby declared to be separable and if any section, phrase or provisions shall for any reason be declared to be invalid, such declaration shall not affect the validity of the remainder of the sections, phrases and provisions. Section 7. Repealer. All resolutions and parts thereof in conflict herewith are hereby repealed to the extent of such conflict. It. Resolution No. 2010-1088 Page 4 Section 8. Effective Date. This resolution shall become effective immediately upon adoption. PASSED AND ADOPTED this 6th day of December, 2010. Ernest G. Clark, Mayor ATTEST: < � � f, �1-' Suzy S hares, CMC City Clerk Resolution No. 2010-1088 Page 5 CITY CLERK'S CERTIFICATE I, Suzy Schares, do hereby certify that I am the duly appointed, qualified and acting City Clerk of the City of Waterloo, State of Iowa; that as such I have in my possession, or have access to, the complete corporate records of said City and of its City Council and officers; that I have carefully compared the transcript hereto attached with the aforesaid corporate records; and that said transcript hereto attached is a true, correct and complete copy of all the corporate records showing the action taken by the City Council of said City at a meeting open to the public on December 6, 2010, for the purpose of considering a Resolution authorizing the issuance of not to exceed $5,232,000 aggregate principal amount of Midwestern Disaster Area Revenue Bonds (KNK Enterprise, L.L.C. Project) Series 2010, of the City of Waterloo, Iowa; the execution and delivery of a Bond Purchase Agreement and Assignment, the execution and delivery of a Loan Agreement between the City and KNK Enterprise, L.L.C., the Assignment by the City of the rights and interest of the City in and to said Loan Agreement, the sale of said Bonds, and related matters; that said proceedings remain in full force and effect and have not been amended or rescinded in any way; that said meeting and all action thereat was duly and publicly held, with members of the public in attendance, in accordance with a notice of meeting and tentative agenda, a copy of which was timely served on each member of the City Council and posted on a bulletin board or other prominent place easily accessible to the public and clearly designated for that purpose at the principal office of the Council pursuant to the local rules of the Council and the provisions of Chapter 21, Iowa Code, and upon reasonable advance notice to the public and media at least twenty-four hours prior to the commencement of the meeting as required by said law. Witness my hand and the Corporate Seal of said City hereto affixed this 6th day of December, 2010. SEAL A :��IA_ Suzy S ares, CMC City Clerk