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HomeMy WebLinkAbout2007-9-7328362 94001 ORDINANCE NO. 2007-9-7328 AN ORDINANCE OF THE CITY OF PADUCAH, KENTUCKY, APPROVING A FINANCING AGREEMENT AMONG THE CITY OF PADUCAH, KENTUCKY, THE COUNTY OF MCCRACKEN, KENTUCKY, AND THE GREATER PADUCAH ECONOMIC DEVELOPMENT COUNCIL, WITH RESPECT TO A PUBLIC PROJECT; AUTHORIZING THE EXECUTION OF VARIOUS DOCUMENTS RELATED TO SUCH FINANCING AGREEMENT. WHEREAS, the City of Paducah, Kentucky (the "City") has previously determined, and hereby further determines, that it is a public purpose to reduce unemployment in the City, to increase the City's tax base, to foster economic development within the City of Paducah and the County of McCracken and to promote the development of a skilled workforce, all to the benefit of the citizens and residents of the City; and WHEREAS, The City and the County of McCracken, Kentucky (the "County") have further determined that it is necessary and desirable to accomplish such public purposes that the City and the County must proceed at this time to provide certain financial assistance to the Greater Paducah Economic Development Council ("GPEDC") in order for GPEDC to acquire approximately 94 acres of real estate which will be converted and used in the development and construction of an intermodal industrial park (the "Project") which will accommodate industry and create jobs within the boundaries of the City of Paducah and McCracken County, Kentucky; and WHEREAS, The City, the County, and GPEDC find it necessary and advisable to set forth in summary form the financial assistance and its repayment to be provided to GPEDC by the City and the County; and WHEREAS, in order to further the above described public purposes, it is necessary and desirable that the City now authorize the Financing Agreement among the City, the County, and the GPEDC with respect to the Project and the financial assistance to be provided. NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF PADUCAH, KENTUCKY, AS FOLLOWS: SECTION 1. Recitals and Authorization. The City hereby approves the Financing Agreement by and among the City, the County and the GPEDC (the "AGREEMENT") in substantially the form attached hereto as Exhibit A and made part hereof. It is further determined that it is necessary and desirable and in the best interests of the City to enter into the AGREEMENT for the purposes therein specified, and the execution and delivery of the AGREEMENT is hereby authorized and approved. The Mayor of the City is hereby authorized to execute the AGREEMENT, together with such other agreements, instruments or certifications which may be necessary to accomplish the transaction contemplated by the AGREEMENT with such changes in the AGREEMENT not inconsistent with this Ordinance and not substantially adverse to the City as may be approved by the official executing the same on behalf of the City. — cai—hiA{ ...... I ' ..„a,_..1;x,1.1 363 The approval of such changes by said official, and that such are not substantially adverse to the City, shall be conclusively evidenced by the execution of such AGREEMENT by such official. SECTION 2. Severability. If any section, paragraph or provision of this Ordinance shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions of this Ordinance. SECTION 3. Compliance With Open Meetings Laws. The City Commission hereby finds and determines that all formal actions relative to the adoption of this Ordinance were taken in an open meeting of this City Commission, and that all deliberations of this City Commission and of its committees, if any, which resulted in formal action, were in meetings open to the public, in full compliance with applicable legal requirements. SECTION 4. Conflicts. All ordinances, resolutions, orders or parts thereof in conflict with the provisions of this Ordinance are, to the extent of such conflict, hereby repealed and the provisions of this Ordinance shall prevail and be given effect. SECTION 5. Emergency. Pursuant to KRS 83A.060, the City Commission suspends the requirement of a second reading of this Ordinance. As grounds therefor, the City Commission does hereby declare an emergency to exist as to the execution of the Financing Agreement and the lending of funds thereunder. Specifically, any delay in the execution of the Financing Agreement could adversely impact the Project and the acquisition of the necessary property for the project. SECTION 6. Effective Date. This Ordinance shall take effect from and after its passage, as provided by law. ATTEST: Tammara S. Brock, City Clerk Introduced and Adopted by the Board of Commissioners, September 17, 2007 Recorded by Tammara S. Brock, City Clerk, September 17, 2007 Published by The Paducah Sun, September 21, 2007 ord\emer-agree-GPEDC FINANCING II (94001) 110 EXHIBIT "A" cl 374 364 FINANCING AGREEMENT THIS FINANCING AGREEMENT, made and entered into as of the 18th day of September, 2007, by and among, the CITY OF PADUCAH, KENTUCKY, a city of the second class of the Commonwealth of Kentucky, (the "City"); MCCRACKEN COUNTY, KENTUCKY, a political subdivision of the Commonwealth of Kentucky, (the "County"); and GPEDC, INC., doing business under the assumed name of GREATER PADUCAH ECONOMIC DEVELOPMENT COUNCIL, INC., ("Borrower") is a Kentucky non-profit corporation organized and existing pursuant to the laws of the Commonwealth of Kentucky. CWITNESSETH: WHEREAS, the Borrower is a not for profit corporation duly organized under the laws of the Commonwealth of Kentucky, the establishment and existence of which have been approved by the City and the County in order to enable Borrower to assist the City and County in the acquisition, development and construction of industrial parks and other economic development projects within Paducah, McCracken County, Kentucky; and WHEREAS, the Borrower is desirous of causing the development and construction of an intermodal industrial park (the "Project") which will accommodate industry and create jobs in Paducah, McCracken County, Kentucky; WHEREAS, the Borrower desires to acquire approximately 94 acres of real estate (more particularly described on attached Exhibit A) (the "Phase II Property"), which Phase II Property will be converted and developed as apart of the Project; and WHEREAS, the Borrower desires to borrow money from the City and the County for the purpose of financing the costs of acquiring (the Acquisition Costs") the Phase II Property and for that purpose, desires to issue, execute and deliver to the City a promissory note in the principal amount of $600,000.00, (the "City Note") and issue, execute and deliver to the County a promissory note in the principal amount of $600,000.00, (the "County Note")(the City Note and I' the County Note shall be collectively referred to as the "Notes"); and WHEREAS, the City and the County are willing to consummate such loans, subject to the terms and provisions herein, to which Borrower is agreeable; NOW, THEREFORE, for and in consideration of the foregoing premises, and for other valuable consideration, the legal adequacy and sufficiency of which is acknowledged by all parties hereto, the parties do covenant and agree as follows: ARTICLE 1. DEFINITIONS Section 1.01. Definitions. Unless the context requires otherwise, as used herein, the following terms shall have the following respective meanings: "Acquisition Costs" means and includes the following: (a) filing and recording fees and incidental title expenses; (b) the costs of acquiring the real estate to be utilized and developed for the Project; (c) the cost of publishing any proceedings, if any, as may be required by law; (d) the out-of-pocket expenses of the City and the County and the fees and out-of- pocket expenses of the Borrower's counsel; (e) all other costs and expense, necessary to be incurred in connection with the acquisition, development, construction, and/or financing of the Project. "Board" or "Board of Directors" refers to the Board of Directors of the Borrower. KZ:1-i "City" refers to the City of Paducah, Kentucky. "City Note" refers to the note issued, executed and delivered by Borrower to the City in the principal amount of $600,000.00, and dated September 18, 2007. "County" refers to the County of McCracken, Kentucky. "County Note" refers to the note issued, executed and delivered by Borrower to the County in the principal amount of $600,000.00, and dated September 18, 2007. "Date of Delivery" refers to September 18, 2007. "Entity" refers collectively to the City and the County or to their Governing Bodies acting on behalf of the Entity. "Financing Agreement" refers to this Financing Agreement among the County and the Borrower, dated as of September 18, 2007. "Governing Body" refers in respect to the County, its Fiscal Court, and in respect to the City, its City Commission. "Indebtedness" refers to all items of indebtedness, obligations or liability, whether matured or unmatured, liquidated or unliquidated, direct or contingent, joint or several. "Notes" refers collectively to the City Note and the County Note. "Mortgage" refers to the Mortgage by and between the Borrower, the City, and the County dated September 18, 2007, which secures the City Note and the County Note. "Phase 11 Property" refers to the approximately 94 acres of real estate (more particularly described on attached Exhibit A) (the "Phase II Property"), which Phase H Property will be acquired, converted, and developed by the Borrower as a part of the Project. "Project" refers to the project generally titled "Borrower West") and is the development of over 1,500 acres in West McCracken County into an intermodal industrial park designed for heavy industrial users requiring water and/or railway access and transport for purposes of encouraging industry and creating jobs in Paducah, McCracken County, Kentucky. Section 1.02 Words of Masculine Gender; Plural as Well as Singular Form. Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders. Unless the context shall otherwise indicate, words and terms herein defined shall be equally applicable to the plural as well as the singular form of any of such words and terms. All words and terms used in this Financing Agreement and not defined herein shall, if defined in this Financing Agreement, have the meaning set forth therein. Unless otherwise indicated, references to Articles or Sections refer to those in this Financing Agreement. ARTICLE 2. EXECUTION AND DELIVER OF NOTE; APPLICATION OF PROCEEDS OF NOTE Section 2.01 Term Loan: Subject to the full satisfaction of all of the condition precedents which are hereinafter set forth, the City shall extend to the Borrower a term loan in the principal amount of $600,000.00 for a term of six months and the County shall extend to the Borrower a term loan in the principal amount of $600,000.00 for a term of six months. Such term loans shall be evidenced by the Notes which shall contain such terms, and conditions, as acceptable to the City and the County. Section 2.02 Condition Precedents to Loans. The condition precedents which must be satisfied prior to the consummation of the loans are as follows: (A) Borrower shall provide and have delivered to the City and the County the following documents: 366 (1) A duly executed term City Note and County Note; (2) A duly executed Mortgage, wherein the City and the County have been conveyed a first and superior mortgage interest in and to the Phase II Property owned by the Borrower, and all other improvements, fixtures, and appurtenances relating thereto, with terms as acceptable to the City and the County; (3) A duly executed Resolution of the Board of Directors of the Borrower, which authorizes the consummation of the term loans, and the execution of the documents as herein described; (4) Evidence that the hazard and casualty insurance relating to the assets has been procured by Borrower with the City and the County named as an additional insured; (5) Title opinions prepared by a competent attorney which certifies that upon closing, the City and the County shall have a first and superior mortgage interest to the Phase II Property, and the improvements, fixtures, and appurtenances located thereon; and (6) Any other documents which may be requested by the City and the County at time of closing. Section 2.03 Failure of Condition Precedents. In the event of any of the aforesaid condition precedents are not fully satisfied and complied with, the City and the County shall not have any obligation to consummate the loans. Section 202. Application of Proceeds of Notes. The parties agree that when the Notes are issued and delivered, the proceeds thereof shall be disposed of as to finance the Acquisition Costs of the Phase II Property. ARTICLE 3. PAYMENT OF THE NOTES f Financing Section 3.01. Terms o g Agreement. (A) The Borrower promises and agrees to promptly pay to the order of the City the principal sum of SIX HUNDRED THOUSAND AND 00/100 DOLLARS ($600,000.00), in United States Currency, with no interest. The entire principal amount of the City Note shall be due and payable in full on the 17th day of March, 2008. (B) The Borrower promises and agrees to promptly pay to the order of the County the principal sum of SIX HUNDRED THOUSAND AND 00/100 DOLLARS ($600,000.00), in United States Currency, with no interest. The entire principal amount of the County Note shall be due and payable in full on thel7th day of March, 2008. Section 3.02. Prepayment. The parties hereto specifically agree that immediately upon the occurrence of any of the following events, all obligations under both of the Notes and otherwise, whether hereunder or otherwise, shall immediately become due and payable without further action of any kind: (i) the sale of all or any portion of the Phase II Property or (ii) the sale of that certain real property located in the Paducah Information Age Park, Paducah, McCracken County, Kentucky, and generally referred to as the Resource Center to the American Justice School of Law or its lawful successor and assigns and the approval of the Kentucky Economic Development Finance Authority ("KEDFA") to the application of the net proceeds from such sale to the unpaid principal amount due on the Notes. The Borrower shall be liable for the prompt payment of all obligations upon demand: (A) The Borrower shall not contract to sell, sell, transfer, or convey the Phase II without the written consent of the City and the County. In the event the Borrower should receive any bona fide offer, which Borrower desires to accept for the purchase of all or any portion of the Phase R Property, Borrower shall obtain the consent of the City and the County to the sale of the Phase II Property and shall notify the City and the County in writing of the price and other material terms and condition of such offer, and Borrower shall cause to be delivered to the City and the County, together with such written notice, copies of all documents exchanged 367 between any such offeror and Borrower which contain, interpret, or amplify the terms, conditions and provisions of such offer. (B) Within 30 days after such written notice is given and such documents have been delivered in accordance with paragraph A of Section 3.02 hereof, the City and the County shall give written notice of their intent to consent to the sale of the Phase H Property according to the terms and conditions embodied in such bona fide offer. Upon the consent of the City and County to such sale, Borrower may complete said sale but only upon the terms and conditions in said bona fide offer. If the City and County do not provide their notice of intent to consent within the time period provided, Borrower shall be free to accept the bona fide offer as long as Borrower provided notice to the City and the County pursuant to paragraph A of Section 3.02 hereof, and completes the sale at the price and upon the terms and conditions set forth in said bona fide offer. If for any reason the sale of the Phase H Property to such bona fide offeror is not consummated, Borrower shall thereafter obtain the prior written consent of the City and County to the sale of the Phase H Property. (C) Upon the consummation of the sale as provided above, the proceeds from such sale shall be applied to the Indebtedness on a pro -rata basis between the City Note and the County Note, unless another distribution of the sale proceeds shall be mutually agreed to by and among the parties. Section 3.04. Collateral. The collateral for the Notes shall be a first and superior mortgage held by the City and the County to the Phase Il Property. The Indebtedness owed by the Borrower to the City and the County shall be of equal priority and shall be paid on a pro rata basis from the collateral securing the Notes. The Mortgage shall at all times remain in full force and legal effect and be held by the jointly by the City and the County until all Indebtednesses hereunder have been fully satisfied. All rights and privileges accorded to the City and the County in the collateral documents shall be in addition to the rights and privileges accorded to City and the County herein. The Mortgage held by the City and the County shall at all times be a first and prior lien. ARTICLE 4. DEFAULT; FORECLOSURE; Section 4.01. Events of Default. The occurrence of any one or more of the following events shall constitute an Event of Default hereunder: (A) The Borrower shall fail to pay when due the principal under either of the Notes or other obligation payable hereunder and such failure shall continue for a period of thirty (30) days from due date; (B) The Borrower shall fail to strictly observe or perform, or otherwise be in default of any other obligation to be observed or performed by it hereunder or under the Mortgage, and such failure shall continue for fifteen (15) days after notice of such failure from the City or the County. (C) Proceedings in Bankruptcy, or for reorganization of the Borrower or for the readjustment of any their debts, under the Bankruptcy Act, as amended, or any part thereof, or under any other laws, whether state or federal, for the relief of debtors, now or hereafter existing, be commenced by the Borrower or shall be commenced against the Borrower and shall not be discharged within thirty (30) days of their commencement; (D) A receiver or trustee is appointed for the Borrower for any substantial part of their assets, or any proceedings shall be instituted for the dissolution or the full or partial liquidation of the Borrower, and such receiver or trustee shall not be discharged within thirty (30) days of his/her appointment, or such proceedings shall not be discharged within thirty (30) days of their commencement, or the Borrower shall discontinue business or materially change the nature of its business; (E) A judgment creditor of the Borrower shall obtain possession of or file execution against any of the collateral upon which the City and the County has a mortgage interest by any means, including, but without limitation, levy, distraint, replevin or self-help; (F) The validity or enforceability of this Financing Agreement, the Notes or the Mortgage be contested by the Borrower or the Borrower shall deny that it has any further liability or obligation hereunder or thereunder; (G) The dissolution or liquidation of the Borrower or a discontinuance of the operation of the Project. Section 4.02 Acceleration. Immediately upon the occurrence of an Event of Default specified in the foregoing paragraphs, all obligations under both of the Notes and otherwise, whether hereunder or otherwise, shall immediately become due and payable without further action of any kind. The Borrower shall be liable for the prompt payment of all obligations upon demand. Borrower further grants to the City and the County a contractual possessory security interest in, and hereby assigns, conveys, delivers, pledges, and transfers to the City and the County all Borrower's right, title and interest in and to, the City and the County's annual appropriations to Borrower. Borrower authorizes the city and the County, to the extent permitted by applicable law, to charge or setoff all sums owing on the Indebtedness against such annual appropriations until the Indebtedness due and owing the City and the County are paid in full. ARTICLE 5. REPRESENTATIONS AND WARRANTIES Section 5.01. Original. To induce the City and the County to enter into this Financing Agreement, the Borrower represents and warrants to the City and the County as follows: (A) The Borrower is a corporation duly organized and validly existing and in good standing under the Laws of the State of Kentucky; the Borrower has the lawful power to own its properties and to engage in the business it intends to conduct, and it is duly qualified and in good standing in the jurisdictions wherein the nature of the business transacted by it or property owned by it makes such qualifications necessary; (B) The Borrower is not in default with respect to any of its existing indebtedness, and the making and performance of this Agreement. (C) The Borrower has the power and authority to enter into and perform this Agreement, and the collateral documents, and to incur the obligations herein and therein provided for, and has taken all action necessary to authorize the execution, delivery, and performance of this Agreement, and the collateral documents; (D) This Agreement and the Mortgage and the Notes will be valid, binding and enforceable in accordance with their respective terms; (E) At the time of the execution of this Agreement, there is no pending order, notice, claim, litigation, proceeding or investigation against or affecting the Borrower, whether or not covered by insurance; (F) The Borrower shall have good and marketable title to the real property and improvements, subject to no other mortgage interest, encumbrance or lien, or claim of any third person except for permitted liens; ARTICLE 6. MISCELLANEOUS Section 6.01 Construction. The provisions of this agreement shall be in addition to and supplement those of any loan commitment, the construction and term loan agreement, mortgage 'i agreements, security agreements, and notes or collateral agreements, all of which shall be construed as complementary to each other. Nothing herein contained shall prevent the City and the County from enforcing any notes, mortgages, security agreements, or other collateral document in accordance with their respective terms. Specifically, the agreement shall be deemed a supplement of the construction and term loan agreement. Section 6.02 Further Assurance. From time to time, the Borrower shall execute and deliver to the City and the County such additional documents and will provide such additional information as the City and the County may reasonably require to carry out the terms of this agreement and be informed of the Borrower's status and affairs. 369 Section 6.03 Enforcement and Waiver by the City and the County. The City and the County shall have the right at all times to enforce the provisions of this agreement and the collateral documents in strict accordance with the terms hereof and thereof, notwithstanding any conduct or custom on the part of the City and the County in refraining from so doing at any time or times. The failure of the City and the County at any time or times to enforce its rights under such provisions, strictly in accordance with the same, shall not be construed as having created a custom in any way or manner contrary to specific provisions of this agreement or as having in any way or manner modified or waived the same. All rights and remedies of the City and the County are cumulative and concurrent and the exercise of one right or remedy shall not be deemed a waiver or release of any other right or remedy. Section 6.04 menses of the City and the County. The Borrower shall pay all expenses, including the reasonable fees and expenses of legal counsel for the City and the County, incurred in connection with the preparation or enforcement of this Agreement and the collateral documents and the collection or attempted collection of the notes. Section 6.05 Notices. Any notices or consents required or permitted by this agreement shall be in writing and shall be deemed delivered if delivered in person or if sent by mail, postage prepaid, or telegraph, as follows, unless such address is changed by written notice hereunder: (A) If to the Borrower: Attention: President & CEO GPEDC, Inc. P.O. Box 1155 Paducah, KY 42002-1155 (B) If to the City Attention: City Manager City of Paducah P O Box 2267 Paducah, KY 42002-2267 (C) If to the County: Attention: Judge Executive McCracken County Courthouse 301 South 56th Street Paducah KY 42003 Section 6.06 Waiver and Release. To the maximum extent permitted by applicable laws, the Borrower: (A) Waives: (1) protest of all commercial paper at any time held by the City and the County on which the Borrower is any way liable; and (2) notice and opportunity to be heard, after acceleration in the manner provided herein before exercise by the City and the County of the remedies of self-help, set off, or of other summary procedures permitted by any applicable laws or by any agreement with the Borrower, and, except where required hereby or by any applicable laws, notice of any other action taken by the City and the County, (B) Releases the City and the County and its officers, attorneys, agents and employees from all claims for loss or damage caused by any act or omission on the part of any of them except willful misconduct; and 0 (C) Trial by jury. Section 6.07 Priority of Loan Ajreement. It is agreed that the terms and provisions of this Loan Agreement, and the collateral documents pertaining thereto, shall take priority over and supplant any contrary or inconsistent terms and provisions of any agreement executed by the Borrower and the City and the County. Section 6.08 Applicable Law. The substantive laws of the Commonwealth of Kentucky shall govern the construction of this agreement and the rights and remedies of the parties hereto. Section 6.09 Binding Effect, Assignment and Entire Agreement. This agreement shall inure to the benefit of, and shall be binding upon, the respective successors and permitted assigns of the parties hereto. The Borrower has no right to assign any of its rights or obligations hereunder without the prior written consent of the City and the County. This agreement, and the documents executed and delivered pursuant thereto, constitute the entire agreement between the parties, and may be amended only by a writing signed on behalf of each party. Section 6.10 Severability. If any provision of this Agreement shall be held invalid under any applicable laws, such invalidity shall not affect any other provision of this agreement, that can be given effect without the invalid provision, and, to this end, the provisions hereof are severable. Section 6.11 Counterparts. This agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument. Section 6.12 The effective date of this Loan Agreement shall be the date first above written. Section 6.13. Captions of Clauses. The captions of this instrument are for convenience only and are not to be construed as part of this instrument nor as defining or limiting in any way the scope or intent to the provisions hereof. 370 371 IN TESTIMONY WHEREOF, the County has caused this instrument to be executed for and on its behalf by its duly authorized County Judge/Executive, the City has caused this instrument to be executed on its behalf by its duly authorized Mayor, and the Borrower has caused this instrument to be executed by its Treasurer and attested by its Secretary, pursuant to the respective proceedings of the Governing Body of the County and the Board of Directors of the Borrower. Attest: Nora Rikel, Secretary COUNTY OF MCCRACKEN, KENTUCKY UA County Judge/Executive Van Newberry CITY OF PADUCAH, KENTUCKY R -A Mayor Pro Tem Robert Coleman GPEDC, INC. Title N STATE OF KENTUCKY ) )SS COUNTY OF MCCRACKEN ) On this _ day of September, 2007, personally appeared before the undersigned, a Notary Public in and for the State and County aforesaid, Van Newberry, County Judge/Executive of the County of McCracken (the "County"), personally known to me and personally known by me to be such officer, and to be the same person who executed as such officer, respectively, the within and foregoing Financing Agreement, and such person duly acknowledged before the \ undersigned the execution of the same to be his act and deed and the act and deed of said County for the uses and purposes therein stated, duly authorized by Order of the County. WITNESS my signatures this day of September, 2007. My commission expires: Notary Public STATE OF KENTUCKY ) )SS COUNTY OF MCCRACKEN ) On this _ day of September, 2007, personally appeared before the undersigned, a Notary Public in and for the State and County aforesaid, Robert Coleman, Mayor Pro Tem of the City of Paducah, Kentucky (the "City"), personally known to me and personally known by me to be such officer, and to be the same person who executed as such officer, respectively, the within and foregoing Financing Agreement, and such person duly acknowledged before the undersigned the execution of the same to be his act and deed and the act and deed of said City for the uses and purposes therein stated, duly authorized by Ordinance of the City. WITNESS my signatures this day of September, 2007. My commission expires: Notary Public 372 373 STATE OF KENTUCKY ) )SS COUNTY OF MCCRACKEN ) On this day of September, 2007, personally appeared before the undersigned, a Notary Public in and for the State and County aforesaid, , (title) of GPEDC, INC., GPEDC, Inc., doing business under the assumed name of GREATER PADUCAH ECONOMIC DEVELOPMENT COUNCIL, INC., (the "Borrower"), and Nora Rikel, Secretary of said Borrower, personally known by me to be such officers, and to be the same persons who executed as such officers, respectively, the within and foregoing Financing Agreement, and such persons duly acknowledged before the undersigned the execution of the same to be their act and deed and the act and deed of said Borrower for the uses and purposes therein stated, duly authorized by Resolution of the Borrower. WITNESS my signatures this day of September, 2007. My commission expires: Notary Public