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HomeMy WebLinkAbout1988-183-04.25.1988 RESOLUTION No . 1988-183 RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF INDUSTRIAL DEVELOPMENT REVENUE BOND PURSUANT TO CHAPTER 419 , CODE OF IOWA, TO PROVIDE FUNDS TO BE LOANED TO ALBERT TROSTEL & SONS COMPANY FOR INDUSTRIAL DEVELOPMENT PROJECT BE IT RESOLVED by the City Council of the City of Waterloo , Iowa (the "City" ) , as follows : 1. Authority. The City is, by the Constitution and Laws of the State of Iowa, including Chapter 419 , Code of Iowa, as amended (the "Act" ) , authorized to issue and sell its revenue bonds for the purpose of financing the cost of authorized projects and to enter into contracts necessary or convenient in the exercise of the powers granted by the Act and to pledge revenues of a project and otherwise secure such bonds . 2 . Authorization of Bond . The City Council hereby determines that it is desirable and expedient to authorize, and the City Council does hereby authorize, the issuance of its $8 , 000 , 000 City of Waterloo Industrial Development Revenue Bond (Albert Trostel & Sons Company Project) , in substantially the form attached hereto as Exhibit 1 (the "Bond" ) , pursuant to the Act, to provide funds to be loaned to Albert Trostel & Sons Company, a Wisconsin corporation (the "Borrower" ) , to acquire and improve certain land in the City and to construct and equip thereon a building to be used as a leather processing facility and for related business purposes (the "Project") . The Project will be located on a parcel of land located on the north side of Newell Street, approximately one-half mile east of the intersection of Newell Street and Elk Run Road, in the City of Waterloo . 3 . Documents Presented. Forms of the following documents relating to the Bond and the Project have been submitted to and examined by the City Council and are now on file in the office of the City Clerk: (a) Loan and Purchase Agreement (the "Loan Agreement") , dated as of April 29 , 1988, by and among the City, the Borrower and The Prudential Insurance Company of America (the "Lender") , whereby, among other things, the City agrees to sell and the Lender agrees to purchase the Bond, the City agrees to make a loan to the Borrower of the proceeds of the sale of the Bond and the Borrower covenants to complete the Project and to pay amounts sufficient to provide for the prompt payment of the principal of, premium, if any, and interest on the Bond; and -3- (b) Escrow Agreement dated as of April 29 , 1988 , among the Municipality, the Borrower, the Lender, and First Wisconsin Trust Company, a Wisconsin banking corporation, as Escrow Agent, whereby the Lender agrees to deposit with the Escrow Agent the entire proceeds of sale of the Bond and the Escrow Agent, in accordance with the provisions of the Escrow Agreement is to make periodic advances to the Borrower at its request for the payment or reimbursement of Project Costs, as provided therein; and (c) Combination Mortgage, Security Agreement and Fixture Financing Statement (the "Mortgage") dated as of April 29 , 1988 , from the Borrower, as mortgagor, to the Lender, whereby the mortgagor grants to the Lender a mortgage lien on and security interest in the property described therein, as security for the Bond (this document not to be executed by the City) ; and (d) Assignment and Pledge Agreement (the "Pledge Agreement" ) , dated as of April 29 , 1988 , whereby the City assigns to the Lender all of its interest in the Loan Agreement and Loan Repayments of the Borrower payable thereunder (except its rights under Sections 5 . 02, 7 . 01, 8 . 04 and 8 . 05) , for the purpose of securing the Bond. 4 . Findings . It is hereby found, determined and declared that: (a) The Project, as described in paragraph 2 hereof and in the Loan Agreement, based upon the representations of the Borrower, constitutes a project authorized by and described in the Act . (b) The purpose of the Project is and the effect thereof will be to stimulate and develop the general economic welfare and prosperity of the State through the promotion and advancement of industrial , commercial, manufacturing or agricultural activities; to encourage and assist in the location of new business and industry in the State or the expansion of existing business development; and to promote the economic stability of the State by providing greater employment opportunities and diversification of industry, thus promoting the general welfare of the citizens . (c) The Project has been approved by a preliminary resolution of the City Council duly adopted on September 28 , 1987. (d) A public hearing on the proposal to issue the Bond was duly held on April 25, 1988 after published notice thereof . -4- (e) The issuance and sale of the Bond, the execution and delivery of the Loan Agreement, the Escrow Agreement and the Pledge Agreement and the performance of all covenants and agreements of the City contained in the Bond, the Loan Agreement, the Escrow Agreement and the Pledge Agreement and of all other acts and things required to make the Bond, the Loan Agreement, the Escrow Agreement and the Pledge Agreement valid and binding obligations of the City in accordance with their terms , are authorized by the Act . (f) There is no litigation pending or, to the best of its knowledge threatened, against the City relating to the Project or to the Bond or the Loan Agreement, or questioning the organization of the City or its power or authority to issue the Bond or execute and deliver the Loan Agreement, Escrow Agreement or the Pledge Agreement . (g) The execution, delivery and performance of the City' s obligations under the Bond, the Loan Agreement, the Escrow Agreement and the Pledge Agreement have been fully authorized by all requisite action, including adoption of this resolution, and do not and will not violate any order or judgment of any court or other agency of government in any litigation to which the City is a party or by which it is bound, or any indenture, agreement or other instrument to which the City is a party or by which it or any of its property is bound, or be in conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any such indenture, agreement or other instrument . (h) The Loan Agreement provides for payments by the Borrower to the Lender as Holder of the Bond for the account of the City of such amounts as will be sufficient to pay the principal of and interest on the Bond when due. No reserve funds are deemed necessary for this purpose. The Loan Agreement obligates the Borrower to provide for the operation and maintenance of the Project Facilities, including adequate insurance, taxes and special assessments . (i) Under the provisions of the Act, the Bond is not to be payable from nor charged upon any funds other than amounts payable by the Borrower pursuant to the Loan Agreement which are pledged to the payment thereof, and, in event of default, moneys derived from foreclosure of the Mortgage; no Holder of the Bond shall ever have the right to compel the exercise of the taxing power of the City to pay the Bond or the interest thereon, nor to enforce payment thereof against any property of the City; the Bond shall not constitute a charge, lien or -5- encumbrance, legal or equitable, upon any property of the City; and the Bond does not constitute an indebtedness of the City within the meaning of any constitutional, statutory or charter limitation. (j ) No member of the City Council ( i) has a direct or indirect interest in the Project, the Loan Agreement, or the Bond, (ii) owns any capital stock of or other interest in the Project or the Borrower, (iii) is an officer, director or employee of the Borrower, (iv) will be involved in supervising the completion of the Project on behalf of the Borrower, or (v) will receive any commission, bonus or other remuneration for or in respect of the Project, the Loan Agreement or the Bond. 5 . Approval and Execution of Documents . The forms of Loan Agreement, Escrow Agreement, Pledge Agreement and Mortgage referred to in paragraph 3 are approved. The Loan Agreement, Escrow Agreement and Pledge Agreement shall be executed in the name and on behalf of the City by the Mayor and the City Clerk, or shall be executed by other appropriate officers of the City authorized to execute documents on behalf of such officers , in substantially the form on file, but with all such changes therein, not inconsistent with the Act or other law, as may be approved by the officers executing the same, which approval shall be conclusively evidenced by the execution thereof . The form of Mortgage may contain such changes as may be approved by the Lender and the Borrower . 6 . Approval of Terms and Sale of Bond. The City shall proceed forthwith to issue the Bond, in the authorized principal amount of $8, 000, 000, substantially in the form, maturing, bearing interest, payable in the installments and otherwise containing the terms and provisions set forth in the form of Bond attached hereto as Exhibit 1, which terms and provisions are hereby approved and incorporated in this Bond Resolution and made a part hereof . A single Bond, substantially in the form of Exhibit 1 to this Bond Resolution, shall be issued and delivered to the Lender in the principal amount of $8 , 000, 000 as authorized by the Act, and the principal of and interest on the Bond shall be payable as set forth in the Bond. The proposal of the Lender to purchase the Bond as provided in the Loan Agreement at a purchase price of $8 , 000 , 000 (100% of par value) is hereby found and determined to be reasonable and is hereby accepted . Pursuant to the Loan Agreement, the proceeds of sale of the Bond will constitute the funds to be loaned by the City to the Borrower to pay the costs of the Project . 7 . Execution and Delivery of Bond. The Bond may be in typewritten or printed form and shall be executed by the -6- manual signatures of the Mayor and the City Clerk and the official seal of the City may be affixed thereto . When so prepared and executed, the Bond shall be delivered to the Lender upon payment of the purchase price, and upon receipt of the signed legal opinion of Faegre & Benson, of Minneapolis , Minnesota, bond counsel, pursuant to the Loan Agreement. The Bond shall contain a recital that it is issued pursuant to the Act, and such recital to the extent permitted by law shall be conclusive evidence of the validity and regularity of the issuance thereof . 8 . Registration Records . The City Clerk, as bond registrar, shall keep a bond register in which the City shall provide for the registration of the Bond and for transfers of the Bond. The principal of and interest on the Bond shall be paid to the registered owner as provided in the Bond. 9 . Mutilated, Lost , Stolen or Destroyed Bond. If the Bond is mutilated, lost, stolen or destroyed, the City may execute and deliver to the Holder a new Bond of like amount, date, number and tenor as that mutilated, lost, stolen or destroyed; provided that, in the case of mutilation, the mutilated Bond shall first be surrendered to the City, and in the case of a lost, stolen or destroyed Bond, there shall be first furnished to the City and the Borrower evidence of such loss , theft or destruction satisfactory to the City and the Borrower, together with indemnity satisfactory to them. The City and the Borrower may charge the Holder with their reasonable fees and expenses in replacing any mutilated, lost , stolen or destroyed Bond. 10 . Transfer of Bond; Person Treated as Holder . The Bond shall be transferable by the Holder on the bond register of the City, upon presentation of the Bond for notation of such transfer thereon at the office of the City Clerk, as bond registrar, accompanied by a written instrument of transfer in form satisfactory to the City Clerk duly executed by the Holder or its attorney duly authorized in writing . The Bond shall continue to be subject to successive transfers, at the option of the Holder of the Bond. No service charge shall be made for any such transfer, but the City Clerk may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The person in whose name the Bond shall be issued or, if transferred, shall be registered from time to time shall be deemed and regarded as the absolute Holder thereof for all purposes, and payment of or on account of the principal of and interest on the Bond shall be made only to or upon the order of the Holder thereof, or its attorney duly authorized in writing, and neither the City, the City Clerk, the Borrower, nor the Lender shall be affected by any notice to the contrary. All such payments shall be valid and effectual to satisfy and discharge the liability upon the Bond -7- to the extent of the sum or sums so paid. The Bond initially shall be registered in the name of the Lender . 11 . Amendments , Changes and Modifications to Loan Agreement , Pledge Agreement and Bond Resolution. Except pursuant hereto and to Section 9 . 03 of the Loan Agreement, the City shall not enter into or make any change, modification, alteration or termination of the Loan Agreement, Escrow Agreement, Pledge Agreement or this Bond Resolution. 12 . Pledge to Lender. Pursuant to the Pledge Agreement, the City shall pledge and assign to the Lender all interest of the City (other than certain rights to indemnity and repayment of advances and expenses) in the revenues of the Project and the Project Facilities, including all Loan Repayments to be made by the Borrower under the Loan Agreement . All collections of moneys by the City in any proceeding for enforcement of the obligations of the Borrower under the Loan Agreement (other than as indemnity or repayment of advances or expenses) shall be received, held and applied by the City for the benefit of the Holder of the Bond. 13 . Covenants with Holders ; Enforceability. All provisions of the Bond and of this Bond Resolution and all representations and undertakings by the City in the Loan Agreement are hereby declared to be covenants between the City and the Lender and its successor Holders of the Bond and shall be enforceable by the Lender or any Holder in a proceeding brought for that purpose, provided that no such covenant , representation or undertaking shall ever give rise to any general liability of the City, its employees, officers or agents or constitute a charge against its general credit or taxing powers . 14 . Election under Internal Revenue Code. The City hereby elects that the provisions of Section 144 (a) (4) of the Internal Revenue Code of 1986 and Regulation §1. 103-10 (b) (2) (vi) thereunder, permitting the issuance of tax-exempt industrial development bonds in amounts of up to $10, 000 , 000 under certain conditions, shall apply to the Bond. 15 . Definitions and Interpretation. Terms not otherwise defined in this Bond Resolution but defined in the Loan Agreement shall have the same meanings in this Bond Resolution and shall be interpreted herein as provided therein. Notices may be given as provided in Section 9 . 01 of the Loan Agreement . In case any provision of this Bond Resolution is for any reason illegal or invalid or inoperable, such illegality or invalidity or inoperability shall not affect the remaining provisions of this Bond Resolution, which shall be construed or enforced as if such illegal or invalid or inoperable provision were not contained herein. -8- 16 . Certifications . The Mayor, City Clerk, and other officers of the City are authorized and directed to prepare and furnish to Faegre & Benson, bond counsel, to the Borrower and to the Lender, certified copies of all proceedings and records of the City relating to the Project and the Bond, and such other affidavits and certificates as may be required to show the facts appearing from the books and records in the officers ' custody and control or as otherwise known to them; and all such certified copies, certificates and affidavits , including any heretofore furnished, shall constitute representations of the City as to the truth of all statements contained therein. 17 . Effective Date. All resolutions or parts thereof in conflict herewith are hereby repealed, and this resolution shall be effective forthwith upon its passage and approval . Passed and approved April 25, 1988 . 4)-(.11,1„(1.4( Ma or , Berrd L. McKi e Y Attest : t C rk , La P. Burger 1291f -9- STATE OF IOWA ) ) SS . COUNTY OF BLACKHAWK) I , Larry P. Burger, being first duly sworn, do hereby depose and certify that I am the duly appointed, qualified and acting City Clerk of the City of Waterloo, in Blackhawk County, Iowa, and that as such I have in my possession or have access to the official records of said City and of its officials and that I have compared the transcript hereto attached with said official records and that the same constitutes a true, correct and complete copy of such official records showing the action taken by the City Council of said City on April 25 , 1988 , including a public hearing and adoption of a resolution giving final approval to an industrial development project undertaken by the City and Albert Trostel & Sons Company, a Wisconsin corporation, and the issuance of bonds therefor, in an amount not to exceed $8, 000, 000 . WITNESS my official signature and the seal of said City at Waterloo, Iowa, this 27 day of April, 1988 . i CJ rk Larry . Burg (SEAL) -10- Subscribed and sworn to before me this day, the date last above written. titl/V,t/ Notary Public in and for the State of Iowa (Notarial Seal) 1291f -11- EXHIBIT 1 TO BOND RESOLUTION UNITED STATES OF AMERICA STATE OF IOWA COUNTY OF BLACKHAWK CITY OF WATERLOO Industrial Development Revenue Bond (Albert Trostel & Sons Company Project) Series 1988 No . R-1 $8, 000, 000 The City of Waterloo, a municipal corporation in the County of Blackhawk and State of Iowa (the "City" ) , for value received, hereby promises to pay, but solely from the sources and in the manner hereinafter provided, to The Prudential Insurance Company of America (the "Lender") , or registered assigns , the principal sum of Eight Million Dollars . ($8, 000, 000) , on April 15, 1998, upon the presentation and surrender hereof, and to make prepayment of said principal sum in quarterly installments as hereinafter provided, and to pay to the owner hereof interest on the outstanding and unpaid balance of such principal sum from the date hereof until said principal sum or principal prepayment amount is due, at a rate equal to 7 . 75% per annum, or, in the event of a Determination of Taxability, if the Bond shall remain outstanding, the interest rate shall be equal to 10 . 4625% per annum, calculated . on the basis of a year of 12 30-day months . If a principal prepayment or the principal sum to be paid on the Bond at maturity is not paid when due, such amount shall bear interest (to the extent not prohibited by applicable law) at the rate of —� the higher of 1% plus the interest rate applicable on the date on which such amount is due or at the Prime Rate (as defined in the Loan and Purchase Agreement) (or at such lesser rate of interest as may be the maximum not prohibited by applicable law) . Interest accruing from the date hereof shall be payable quarterly on the 15th day of each July, October, January and April , commencing July 15 , 1988 , to maturity. The principal of this Bond is payable in quarterly installments commencing April 15 , 1989 , and continuing on the 15th day of each July, October, January and April thereafter to and including April 15 , 1998 , as follows : April 15, 1989 , through October 15 , 1991, in the amount of $250, 000 each; January 15 , 1992 , through January 15, 1994 , in the amount of $300, 000 each; April 15 , 1994 , through January 15 , 1998, in the amount of $150 , 000 each; and on April 15 , 1998, a final installment equal to the entire unpaid principal of and interest on this Bond shall be paid. Principal , interest and any yield maintenance amount shall be paid to the registered owner hereof in lawful money of the United States as provided in the Loan Agreement mentioned below, and if not so provided, at its address set forth on the bond register of the City. This Bond is issued pursuant to Chapter 419 , Code of Iowa, as amended (the "Act" ) , and in conformity with the provisions , restrictions and limitations thereof . This Bond shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City; no holder of this Bond shall ever have the right to compel the exercise of the taxing power of the City to pay this Bond or the interest hereon, nor to enforce payment hereof against any property of the City; and this Bond shall never constitute an indebtedness of the City, within the meaning of any state constitutional provision or statutory limitation, and shall not constitute nor give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers . This Bond is not to be payable from nor charged upon any funds other than amounts payable by Albert Trostel & Sons Company, a Wisconsin corporation (the "Borrower" ) , pursuant to the Loan Agreement, which are pledged to the payment hereof, and, in event of default , moneys derived from foreclosure of the Mortgage, described below. This Bond is a special obligation bond in the principal amount of $8 , 000, 000, which has been authorized by law to be issued and has been issued for the purpose of funding a loan from the City to the Borrower to finance costs of acquiring certain land in the City and constructing and equipping thereon a building to be used by the Borrower as a facility for the processing of leather and for related business purposes (the "Project" ) . This Bond is issued pursuant to a Loan and Purchase Agreement dated as of April 29 , 1988 (the "Loan Agreement") , by and among the City, the Borrower and the Lender, and a Bond Resolution of the City duly adopted by its City Council on April 25 , 1988 . Pursuant to an Assignment and Pledge Agreement dated as of April 29 , 1988 (the "Pledge Agreement" ) , the City has assigned its interests in the Loan Agreement (except its rights to indemnity and repayment of expenses and advances under Sections 5 . 02 , 7 . 01 , 8 . 04 and 8 . 05 thereof) to the Lender . The proceeds of this Bond are to be disbursed pursuant to an Escrow Agreement dated as of April 29 , 1988 (the "Escrow Agreement" ) by and among the City, the Borrower , the Lender and First Wisconsin Trust Company, as escrow agent . This Bond is secured by the Loan Agreement, the Pledge Agreement, the Bond Resolution, the Escrow Agreement and a Combination Mortgage, Security Agreement and Fixture -2- Financing Statement dated as of April 29 , 1988 (the "Mortgage" ) , from the Borrower, as mortgagor, to the Lender, to which Loan Agreement, Escrow Agreement, Pledge Agreement , Bond Resolution and Mortgage and amendments thereof reference is hereby made for a description and limitation of the revenues and funds pledged and appropriated to the payment of this Bond, the nature and extent of the security thereby created, the rights of the Holder of this Bond, and the rights , immunities and obligations of the City thereunder . Certified copies of the Bond Resolution and executed counterparts of the Loan Agreement , the Escrow Agreement, the Pledge Agreement and the Mortgage are on file at the office of the City Clerk. This Bond shall be subject to prepayment on any required principal prepayment date on or after April 15 , 1989 , at the option of the Borrower, in whole or in part, as provided in Section 5 . 04 of the Loan Agreement, at a prepayment price equal to the principal amount hereof to be prepaid, plus accrued interest thereon, plus a yield maintenance amount, all as more fully provided in Section 5 . 04 of the Loan Agreement . This Bond shall also be subject to prepayment, as a whole but not in part, at par plus accrued interest, in certain events of damage to or destruction or condemnation of the Project, all as further provided in Section 5 . 04 of the Loan Agreement . In the event of a Determination of Taxability, as provided in Section 5 . 05 of the Loan Agreement, the Borrower shall have the option to cause this Bond to be prepaid, upon the conditions, at the prepayment price and on the interest payment date set forth in said Section 5 . 05 . In any event, upon a Determination of Taxability, the Borrower agrees in said Section 5 . 05 to pay an amount equal to the amount of certain interest , penalties and additions to Federal income tax resulting from the Determination of Taxability. In the event that the Borrower does not cause this Bond to be prepaid upon a Determination of Taxability, the Borrower is required under said Section 5 . 05 to pay interest on this Bond at a revised rate equal to 10 .4625% per annum from the date on which the interest on this Bond became subject to taxation as a result of such Determination of Taxability to the date of maturity or prepayment, all as further provided in said Section 5 . 05 . Notice of any such prepayment shall be given to the owner of this Bond by certified or registered mail , addressed to it at its registered address , not less than thirty (30) days prior to the date fixed for prepayment , and shall be published only if and to the extent publication is required by law. At the date fixed for prepayment, funds shall be paid to the owner hereof at its registered address as set forth on the bond register, or as specifically provided in the Loan Agreement, -3- sufficient to pay this Bond, or the principal amount hereof to be prepaid, accrued interest hereon, and a yield maintenance amount ( if any) . Upon the happening of the above conditions, the principal portion of this Bond thus called and prepaid shall not bear interest after the date of prepayment . This Bond is transferable, as provided in the Bond Resolution, only upon the bond register of the City Clerk, as bond registrar, by the owner hereof in person or by his duly authorized attorney, as provided in the Bond Resolution. In case an Event of Default, as defined in the Loan Agreement , occurs , this Bond and the Loan Repayments thereafter to become due under the Loan Agreement may become immediately due and payable, in the manner and with the effect and subject to the conditions provided in the Loan Agreement . The Holder of this Bond shall have the right to enforce the provisions of the Bond Resolution, Loan Agreement, Escrow Agreement and Mortgage, in accordance with the terms thereof . The terms and provisions of the Bond Resolution, Loan Agreement , Pledge Agreement, Escrow Agreement and Mortgage or of any instrument supplemental thereto, may be modified or altered pursuant to Section 9 . 03 of the Loan Agreement and paragraph 11 of the Bond Resolution. It is hereby certified and recited and the City Council has found: That the Project is an eligible "project" defined in the Act; that the issuance of this Bond and the acquisition and construction of the Project will promote the public welfare and carry out the purposes of the Act ; and that all acts , conditions and things required to be done precedent to and in the issuance of this Bond have been properly done, have happened and have been performed in regular and due time, form and manner as required by law. IN WITNESS WHEREOF, the City of Waterloo, by its City Council , has caused this Bond to be signed in its behalf by the manual signatures of its Mayor and City Clerk, and sealed with the corporate seal of the City, all as of the day of , 1988 . CITY OF WATERLOO By Mayor And by City Clerk (SEAL) -4- Authentication Certificate This is the Bond described in the within-mentioned Bond Resolution of the City. CITY OF WATERLOO By Its City Clerk (Assignment Record) For value received, the undersigned owner does hereby assign and transfer the foregoing Bond to the named Assignee, and the undersigned City Clerk of the City of Waterloo as bond registrar hereby certifies that the foregoing Bond has been transferred and registered on the bond register in the name of such Assignee. Signature Date of Name of Signature of of City Transfer on Assignee Owner Clerk Bond Register 1187f -5-