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HomeMy WebLinkAboutLoan Agreement LOAN AGREEMENT This Loan Agreement is entered into as of the 30th day of December, 2025, by and between the City of Waterloo, State of Iowa(the "City") acting by and through its Board of Trustees of the Municipal Communications Utility(the "Board") and Western Alliance Business Trust, a Delaware statutory trust, and a wholly owned affiliate of Western Alliance Bank, of Phoenix,Arizona(the "Lender"). Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the hereinafter defined Resolution. The parties agree as follows: 1. The Lender shall loan to the City by the purchase of the hereinafter defined Notes in the sum of$60,000,000, and the City's obligation to repay such loan shall be evidenced by the issuance of Communications Utility Revenue Capital Loan Notes, Series 2025, in the aggregate principal amount of$60,000,000 (the "Notes")pursuant to the Resolution. 2. The loan proceeds shall be used to provide funds to pay the costs of acquisition, construction, improving, equipping and designing of all or part of the Municipal Communications Utility, including the acquisition, installation and construction of a fiber-to-the- premise communications system and related infrastructure, equipment and facilities, including conduit, fiber,vaults,pedestals, fiber management frame, FDH and splitter cabinets, multiport service terminals, handholes, splice cases, customer premise electronics, customer connections to fiber system infrastructure,the acquisition of vehicles,trucks and construction and maintenance equipment,the construction of a new communications building or the acquisition, reconstruction and remodeling of a communications building, the furnishing and equipping thereof, computer system hardware and software, billing system, related site improvements including parking, and other miscellaneous improvements, extensions and equipment purchases to benefit the Utility. Any remaining loan proceeds, including accrued interest, if any, shall be deposited in the Communications Utility Revenue Fund(defined in the Resolution hereinafter referred to) and shall be held therein and used,along with other amounts therein,to pay interest or principal on the Notes on the next payment date. 3. The City agrees to repay the loan and interest thereon as hereinafter provided. The Notes, in substantially the form set forth in the Resolution hereinafter referred to, shall be executed and delivered to the Lender to evidence the City's obligation to repay the amounts payable hereunder. The Notes shall be dated December 30, 2025, shall bear interest at the rates set forth in the Resolution with interest payable June 1, 2026, and semiannually thereafter on each Interest Payment Date with principal due in full on the Maturity Date. 4. The Board has adopted a Resolution on December 22, 2025 (the "Resolution") authorizing and approving the form of this Loan Agreement and providing for the issuance and securing the payment of the Notes, and the terms of the Resolution are incorporated herein by reference, and the parties agree to abide by the terms and provisions of the Resolution. The Notes and the interest thereon shall be payable solely and only out of the net earnings of the System and shall be a first lien on the future Net Revenues of the System as provided in the Resolution. The Notes shall not be general obligations of the City nor shall they be payable in - 1 - any manner by taxation, and the City shall be in no manner liable by reason of the failure of the Net Revenues to be sufficient for the payment of the Notes. 5. The City may borrow additional money, enter into further Loan Agreements and issue additional Notes or Bonds secured by Net Revenues only in accordance with the terms and conditions in the Resolution. 6. In connection with its purchase of the Notes,the Lender has made certain representations as set forth in the Purchase Agreement which are hereby incorporated by reference into this Loan Agreement. 7. The Lender and the City represent and agree that no financial advisory relationship as defined by Rule G-23 of the Municipal Securities Rulemaking Board has existed between them with respect to this Loan Agreement or presently exists between them with respect to other similar matters, and that the Lender is acting solely in its capacity as a lender, for its own account, and that no employee of the Lender is an employee or official of the City. 8. The City represents and agrees as follows: a. The transaction contemplated herein is an arm's length commercial transaction between the City and the Lender and its affiliates; b. In connection with such transaction,the Lender and its affiliates are acting solely as a principal and not as an advisor including,without limitation, a "Municipal Advisor"as such term is defined in Section 15B of the Securities and Exchange Act of 1934, as amended, and the related final rules (the"Municipal Advisor Rules"); c. The Lender and its affiliates are relying on the bank exemption in the Municipal Advisor Rules; d. The Lender and its affiliates have not provided any advice or assumed any advisory or fiduciary responsibility in favor of the City with respect to the transaction contemplated hereby and the discussions,undertakings and procedures leading thereto; e. The Lender and its affiliates have financial and other interests that differ from those of the City; and f. The City has consulted with its own financial, legal, accounting,tax and other advisors, as applicable,to the extent it deemed appropriate. 9. The City shall pay the Lender a loan origination fee in an amount equal to 0.25% of the principal amount of the Notes at closing. -2 - 10. The City shall be responsible for all legal costs of Lender incurred in connection with the documentation and issuance of the Notes,which fees shall be payable at closing. The Lender will engage Kutak Rock LLP as its counsel ("Lender's Counsel")for the transaction. Lender's Counsel's legal fees are estimated at$35,000. 11. This Loan Agreement is executed pursuant to the provisions of Sections 384.24A and 384.83 of the City Code of Iowa,as amended, and shall be read and construed as conforming to all provisions and requirements of the statute. 12. The City and the Lender agree this Agreement and all documents related thereto and referenced herein may be entered into and provided for pursuant to and in accordance with Chapter 554D of the Code of Iowa(providing for electronic execution). IN WITNESS WHEREOF,we have hereunto affixed our signatures all as of the date first above written. CITY OF WATERLOO, by and through its Board of Trustees of the Municipal Communications Utility, State o Jowa Chairperson of the Boar of Trustees ATTEST: By: S cretary of th oard of Trustees (SEAS,) `( 4 -3 - WESTERN ALLIANCE BUSINESS TRUST By: (Signature) (Name) (Title) - 4 - 4909-0812-3779-1\24268-001 - 5 -