Title
A Resolution of the Lexington-Fayette Urban County Government authorizing and acknowledging the execution and delivery of (1) a Fifth Amendment to Bond Purchase and Loan Agreement among the Lexington-Fayette Urban County Government, Central Bank & Trust Co., a Ky. Banking Corporation, and the Lexington Christian Academy, Inc. and (2) any and all other related documents necessary thereto. [Mayor's Office, Atkins]
Summary
Authorization to approve Fifth Amendment to the Bond Purchase and Loan Agreement for Lexington Christian Academy's previous Industrial Revenue Bond issuance that will also authorize an Amended and Restated Note and an Amended and Restated Bond reflecting the new interest rate and prepayment provision. (L0820-14)(Atkins)
This is a request to approve Fifth Amendment to the Bond Purchase and Loan Agreement for Lexington Christian Academy's previous Industrial Revenue Bond issuance that will also authorize an Amended and Restated Note and an Amended and Restated Bond reflecting the new interest rate and prepayment provision. There are no costs or liability to Lexington-Fayette Urban County Government as result of this action.
Budgetary Implications: NO
Advance Document Review: Law/Risk Management
Fully Budgeted: No
Account Number:
This Fiscal Year Impact: $
Annual Impact: $
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Body
A. The Lexington-Fayette Urban County Government, an urban county government of the Commonwealth of Kentucky pursuant to Chapter 67A of the Kentucky Revised Statutes (the "Urban County Government" or the "Issuer"), is authorized by the Industrial Buildings for Cities and Counties Act, as amended, Sections 103.200 to 103.285 of the Kentucky Revised Statutes (the "Act"), to issue industrial building revenue bonds and to loan the proceeds thereof to any person to finance the cost of any "industrial building" (as defined in the Act), including specifically land, buildings, improvements, equipment, machinery, and other facilities suitable for any nonprofit educational institution in any manner related to or in furtherance of the educational purposes of such institution, including but not limited to classroom, laboratory, housing, administrative, physical educational and medical research and treatment facilities, in order to accomplish the public purposes of promoting the economic development of the Commonwealth of Kentucky (the "Commonwealth"), relieving conditions of unemployment, and encouraging the increase of industry therein.
B. In 2009 the Issuer authorized the issuance of its Educational Building Revenue Refunding and Improvement Bonds, Series 2009 (The Lexington Christian Academy, Inc. Project), in the original principal amount of up to $12,800,000.00 (the "Bonds").
C. At that same time, the Issuer authorized the execution and delivery of a Bond Purchase and Loan Agreement (the "Original Loan Agreement") among the Issuer, The Lexington Christian Academy, Inc. (the "School" or the "Borrower") and Central Bank & Trust Co., a Kentucky banking corporation (the "Bondholder"), dated as of September 1, 2009.
D. The Issuer thereafter issued $12,800,000.00 in principal amount of Bonds and executed and delivered the Original Loan Agreement and all necessary related documents.
E. The Original Loan Agreement was amended by that certain First Amendment to Bond Purchase and Loan Agreement dated January 4, 2010 (the "First Amendment"), that certain Second Amendment to Bond Purchase and Loan Agreement dated November 19, 2010 (the "Second Amendment"), that certain Third Amendment to Bond Purchase and Loan Agreement dated July 2, 2012 (the "Third Amendment"), and that certain 2 0116527.0565319 4848-6653-8524v1
Fourth Amendment to Bond Purchase and Loan Agreement dated July 16, 2013 (the "Fourth Amendment," together with the Original Loan Agreement, First Amendment, Second Amendment, and Third Amendment, the "Loan Agreement").
F. The Borrower has requested the Issuer to authorize the execution of a Fifth Amendment to Bond Purchase and Loan Agreement which would amend the Loan Agreement to (i) permit the adjustment of the interest rate on the Series 2012 Promissory Note, the Series 2012 Bond and the Series 2012 Reimbursement Note to a fixed rate of interest equal to 4.25% through September 2, 2019, the First Interest Rate Change Date; and on the First Interest Rate Change Date to rate of interest equal to Two and One Half Percent (2.50%) per annum plus the prior month's 5 Year Average Constant Maturity Treasury Rate, as published in the Federal Reserve Specific Interest Rate Release H.15 until September 2, 2024, the Second Interest Rate Change Date, provided, however, the interest rate shall never fall below 4.25% per annum; and on Second Interest Rate Change Date to rate of interest equal to Two and One Half Percent (2.50%) per annum plus the prior month's 5 Year Average Constant Maturity Treasury Rate, as published in the Federal Reserve Specific Interest Rate Release H.15 until September 2, 2029; provided, however, the interest rate shall never fall below 4.25% per annum; and (ii) other amendments contained in the Fifth Amendment to Bond Purchase and Loan Agreement.
G. Section 13.14 of the Original Loan Agreement provides that it may be amended or supplemented with the prior written consent of the Bondholder, the Issuer and the Borrower.
H. The Issuer has determined that it is in the best interest of the Issuer to enter into the Third Amendment to Bond Purchase and Loan Agreement.
NOW, THEREFORE, BE IT RESOLVED by the Lexington-Fayette Urban County Government as follows:
1. Fifth Amendment to Bond Purchase and Loan Agreement. The Mayor of the Issuer is hereby authorized, empowered and directed to execute, acknowledge and deliver on behalf of the Issuer, and have attested by the Clerk of the Urban County Government, the Fifth Amendment to Bond Purchase and Loan Agreement, to be dated effective as of ____________, 2014, which is hereby approved, authorized and adopted in substantially the form submitted with this Resolution and designated Exhibit A with such changes therein as the officials including the Mayor and the Clerk of the Urban County Government, may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof.
2. Authority to Consummate Transactions in Connection with the Third Amendment to Bond Purchase and Loan Agreement. The Mayor of the Issuer, Clerk of the Urban County Government and all other appropriate officials, are hereby separately authorized, empowered and directed to do and undertake any and all things necessary to carry out the authority conferred by this Resolution, and further to execute all customary papers, documents, certificates or other instruments that may be required for the effectuation of the authority conferred by this Resolution, including, but not limited to, the Amended and Restated Promissory Note, the Amended and Restated Series 2014 Bond and the Amended and Restated Series 2014 Reimbursement Note, all dated effective as of ____________, 2014, and to execute and
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otherwise take all action necessary to the full realization of the rights, accomplishments and purposes of the Issuer under the Fifth Amendment to Bond Purchase and Loan Agreement and to discharge all of the obligations of the Issuer thereunder. Further, to the extent legally permissible, the Mayor and the Clerk of the Urban County Government of the Issuer are hereby authorized to approve any and all other actions so deemed necessary for the approval by the Issuer and to consummate the terms and conditions of this Resolution.
3. Severability. The provisions of this Resolution are hereby deemed to be severable and, if any section, phrase or provision shall, for any reason, be declared invalid, such declaration of invalidity shall not affect the validity of the remainder of this Resolution.
4. Provisions in Conflict Repealed. All resolutions, orders, or parts thereof, in conflict with the provisions of this Resolution, are, to the extent of such conflict, hereby repealed.
5. Urban County Government Not Liable. No recourse shall be had for the payment of the principal of or premium or interest on any of the Series 2014 Bonds or for any claim based thereon or upon any obligation, covenant or agreement therein contained against any past, present or future officer, member, employee or agent of the Issuer or the Commonwealth of Kentucky or any agency or political subdivision thereof, as such, either directly or through the Issuer or the Commonwealth of Kentucky or any agency or political subdivision thereof, under any rule of law or equity, statute or constitution, or by the enforcement of any assessment or penalty or otherwise, and all such liability of any such officers, members, employees or agents as such shall be expressly waived and released as a condition of and consideration for the adoption of this Resolution and the issuance of such Series 2014 Bonds.
6. Captions of Resolution. The captions of this Resolution are for convenience only and are not to be construed as part of this Resolution nor as defining or limiting in any way the scope or intent of the provisions hereof.
7. Effective Date of Resolution. This Resolution shall be in full force and effect from and after its adoption and approval as provided by law.
ADOPTED at a regular meeting of the Lexington-Fayette Urban County Government held on _________ ___, 2014.
___________________________________
Jim Gray, Mayor
(SEAL)
Attest:
________________________________________________
Meredith Nelson, Clerk of the Urban County Government