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HomeMy WebLinkAboutS4-83 1111 ORDINANCE NO. S4'83 AN ORDINANCE PROVIDING FOR THE FINANCING BY THE CITY OF ELGIN, KANE AND COOK COUNTIES, ILLINOIS, OF AN INDUSTRIAL PROJECT CONSISTING OF LAND, BUILDINGS, IMPROVEMENTS, EQUIPMENT AND RELATED PROPERTY IN ORDER THAT HINCKLEY & SCHMITT MAY BE PROVIDED WITH FACILITIES TO RELIEVE CONDITIONS OF UNEMPLOYMENT WITHIN THE CITY THEREBY REDUCING THE EVILS ATTENDANT UPON UNEMPLOYMENT; AUTHORIZING THE ISSUANCE OF $1, 000,000 INDUSTRIAL DEVELOPMENT REVENUE BONDS (HINCKLEY & SCHMITT PROJECT) , SERIES 1983 IN CONNECTION THEREWITH; AUTHORIZING THE EXECUTION AND DELIVERY OF A LOAN AGREEMENT BETWEEN THE CITY OF ELGIN, KANE AND COOK COUNTIES, ILLINOIS AND HINCKLEY & SCHMITT; AUTHORIZING THE EXECUTION AND DELIVERY OF AN INDENTURE OF TRUST SECURING SAID BONDS; AND AUTHORIZING THE EXECUTION OF A BOND PURCHASE AGREEMENT PROVIDING FOR THE SALE OF SAID BONDS TO THE PURCHASER THEREOF AND RELATED MATTERS. WHEREAS, the City of Elgin, Kane and Cook Counties, Illinois (the "Issuer" ) , a municipality duly organized and validly existing under the Constitution and laws of the State of Illinois is a home rule unit of government pursuant to Section 6(a) of Article VII of the 1970 constitution of the State of Illinois; and WHEREAS, the Issuer is authorized by Ordinance No. S2-80, as amended (the "Act") to issue its revenue bonds to finance the costs of industrial projects to the end that the Issuer may be able to relieve conditions of unemployment, to maintain existing levels of employment and to encourage the increase of industry and commerce within the State of Illinois, thereby reducing the evils attendant upon unemployment and provide for the public safety, benefit and welfare of the residents of the State of Illinois; and WHEREAS, as a result of negotiations among the Issuer and Hinckley & Schmitt (the "Company" ) and in reliance upon a resolution duly adopted by the City Council of the Issuer on July 11 , 1983, and in reliance upon a Memorandum of Agreement between the Issuer and the Company dated July 11 , 1983, the Company has entered into contracts for the acquisition, construction and installation of certain facilities for the processing and distribution of bottled water (hereinafter referred to as the "Project" ) , which will be of the character and accomplish the purposes provided by the Act, and the Issuer is willing to issue its revenue bonds to finance the cost of the Project and to enter into a loan agreement with the Company upon terms which will produce revenues and receipts sufficient to provide for the prompt payment at maturity of the principal , interest and redemption premiums, if any, on such revenue bonds , all as set forth in the details and provisions of the Loan Agreement hereinafter identified; and WHEREAS, it is necessary and proper for the interests and convenience of the Issuer and its inhabitants to authorize the financing of the Project ; and WHEREAS, it is necessary to authorize the execution of a Loan Agreement between the Issuer, and the Company under the terms of which the Issuer will loan the proceeds of the sale of the revenue bonds to the Company to enable it to acquire, construct and install the Project for use as a facility for processing and distributing bottled water to be located within the corporate boundaries of the Issuer, the payments to be paid by the Company to the Issuer in repayment of the loan to be sufficient to pay at maturity the principal , interest and redemption premiums, if any, on the revenue bonds hereinafter authorized; and -2- WHEREAS, it is necessary for the Issuer to authorize, execute and deliver an Indenture of Trust to American National Bank and Trust Company of Chicago, Trustee (the "Trustee") for the bond- holders pursuant to which the said revenue bonds will be issued; and WHEREAS, it is necessary to authorize the sale of said revenue bonds and to execute a Bond Purchase Agreement in connection therewith; and WHEREAS, the Issuer has caused to be prepared and presented to this meeting the following documents, which the Issuer proposes to enter into: 1 . The Loan Agreement dated as of September 15, 1983, between the Issuer and the Company (the "Loan Agreement" ) ; 2. The Indenture of Trust dated as of September 15, 1983 (the "Indenture") , between the Issuer and the Trustee, setting forth terms, conditions and security requirements for the proposed bond issue to finance the Project and containing the form of the Issuer' s Industrial Development Revenue Bonds (Hinckley & Schmitt Project) , Series 1983 (the "Bonds") to be issued in the aggregate principal amount of $1 ,000,000; and 3. The Bond Purchase Agreement to be dated as of the date hereof (the "Bond Purchase Agreement") , among the Issuer, the Company and American National Bank and Trust Company of Chicago, as Purchaser (the "Purchaser" ) ; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ELGIN, KANE AND COOK COUNTIES, ILLINOIS, AS FOLLOWS: Section 1 . That the form, terms and provisions of the proposed Loan Agreement and Indenture be, and they hereby are, -3- in all respects approved , and that the Mayor and the City Clerk of the Issuer be, and they are hereby authorized , empowered and directed to execute and deliver such instruments in the name and on behalf of the Issuer, to cause the Loan Agreement to be delivered to the Company and to cause the Indenture to be delivered to the Trustee; that the Indenture shall constitute a lien for the security of the Bonds and upon all right, title and interest of the Issuer in and to the Loan Agreement (except for certain rights of the Issuer to indemnification and payment of expenses ) , the promissory note of the Company (the "Note" ) delivered pursuant thereto, and in and to the payments, revenues and receipts payable to the Issuer pursuant thereto, and said revenues are hereby and in the Indenture pledged for such purpose ; that the Loan Agreement and the Indenture are to be in substantially the respective forms thereof submitted to this meeting and hereby approved , with such changes therein as shall be approved by the officials of the Issuer executing the same, their execution thereof to constitute conclusive evidence of their approval of any and all changes or revisions therein from the forms of the Loan Agreement and the Indenture hereby approved; and that from and after the execution and delivery of such instruments , the officials, agents and employees of the Issuer are hereby authorized , empowered and directed to do all such acts and things and to execute all such documents as may be necessary to carry out and comply with the provisions of such instruments as executed. The Issuer recognizes that the Bonds are further secured by a Mortgage and Security Agreement dated as of September 15, 1983 from the Company to the Trustee, creating a mortgage lien on and security interest in the Project. -4- Section 2. That the form, terms and provisions of the proposed Bond Purchase Agreement, a copy of which is before this meeting , be, and it hereby is, in all respects approved, and that the Mayor and the City Clerk of the Issuer be, and they hereby are, authorized , empowered and directed to execute the Bond Purchase Agreement in the name and on behalf of the Issuer and thereupon to cause the Bond Purchase Agreement to be delivered to the Purchaser ; that the Bond Purchase Agreement is to be in substantially the form thereof submitted to this meeting and hereby approved , with such changes therein as shall be approved by the officials of the Issuer executing the same, their execution thereof to constitute conclusive evidence of their approval of any and all changes or revisions there- in from the form of such instrument hereby approved ; that the Bond Purchase Agreement shall be entered into with such Purchaser as is approved by the Company by its execution of such Bond Purchase Agreement ; and that from and after the execution and delivery of such instrument, the officials, agents and employees of the Issuer are hereby authorized , empowered and directed to do all such acts and things necessary to carry out and comply with the provisions of such instrument as executed . Section 3. That the Mayor or the City Clerk of the Issuer be and are hereby authorized , empowered and directed to cause to be prepared an issue of $1 , 000, 000 aggregate principal amount of the Bonds of the Issuer, bearing interest on the principal amount of the Bonds from time to time Unpaid at a rate, except in the circum- stances hereinafter provided , equal to 71% (the "Applicable Percentage" ) of the Prime Rate (as defined below) but not less than 7% per -5- annum nor greater than 11% per annum. In the event that the max- imum marginal federal income tax bracket for or as applied to corpo- rations pursuant to the Internal Revenue Code of 1954, as amended , or any future United States internal revenue or similar law applic- able to corporations (hereinafter, the "Tax Rate" ) is more than or less than 46%, the Applicable Percentage to be applied to the Prime Rate in order to determine the interest rate on the Bonds will be arrived at by multiplying the difference between 100% and the then applicable Tax Rate by 1. 3148% (said Applicable Percentage fluctuating accordingly with changes from time to time in the Tax Rate) . In the event there shall be a Determination of Taxability (as defined in the Loan Agreement) , the Bonds shall bear interest at a rate equal to the Prime Rate plus 2% per annum, such increased interest rate to become effective on the date of the Event of Taxability. Installments of principal of and interest on the Bonds which are overdue shall bear interest (to the extent such interest shall be legally enforce- able) until paid , at a rate per annum equal to the Prime Rate plus 1% per annum, and after a declaration of default and an acceleration of the Bonds pursuant to the Indenture, at a rate per annum equal to the Prime Rate plus 2% per annum. The principal of the Bonds is pay- able in fifty-seven consecutive quarterly installments each in the amount of $17,241 . 37, commencing on July 1 , 1984, and on each October 1, January 1 , April 1 and July 1 thereafter to and including July 1, 1998, and a fifty-eighth and final installment of $17, 241 . 91 due and payable on October 1, 1998. Interest on the Bonds shall be payable quarterly on each January 1, April 1 , July 1 and October 1, commencing January 1 , 1984, to and including October -6- 1 , 1998. "Prime Rate" shall mean the rate announced from time to time by American National Bank and Trust Company of Chicago at its principal office in Chicago, Illinois, as its prime rate. The Bonds shall be subject to mandatory and optional redemption as set forth in the Indenture, as executed . The Bonds shall be in such form and shall have the other terms and provisions specified in said Indenture (as executed and delivered) ; the Bonds shall be executed and attested in the name of the Issuer with the manual signature of the Mayor and the manual signature of the City Clerk of the Issuer; the seal of the Issuer shall be affixed thereto or imprinted thereon; the Mayor Mayor or City Clerk of the Issuer shall cause the Bonds , as so exe- cuted and attested , to be delivered to the Trustee for authentication and the Trustee is hereby requested to authenticate $1 ,000, 000 aggre- gate principal amount of the Bonds ; and the form of the Bonds submitted to this meeting as the same appears in the Indenture, subject to appropriate insertion and revision in order to comply with the provi- sions of said Indenture be, and the same hereby is, approved , and when the same shall be executed on behalf of the Issuer in the manner contemplated by the Indenture and this Ordinance in the aggregate principal amount of $1 ,000 ,000 , they shall represent the approved form of the Bonds of the Issuer. Section 4 . That the Mayor or City Clerk of the Issuer be and are hereby authorized , empowered and directed to issue and sell to the Purchaser $1 ,000,000 principal amount of the Bonds , at a price of 100% of the principal amount thereof, as provided in the Bond Purchase Agreement. Section 5 . That the Bonds are a limited obligation of the Issuer payable solely from payments of principal , premium, if any, -7- and interest made by the Company on the Note in substantially the form attached to the Loan Agreement, except to the extent that the principal of, premium, if any, and interest on the Bonds may be paid out of money attributable to Bond proceeds or from temporary investments, or from other moneys , if any, accruing to the Trustee for the benefit of the holders of the Bonds; that the Bonds do not and shall never constitute an indebtedness of the Issuer or a charge against the taxing power of the Issuer; that it shall be stated on the face of the Bonds that they have been issued under the provisions of the Act and that they do not constitute an indebtedness of the Issuer nor a loan of credit thereof within the meaning of any consti- tutional or statutory provision; and that by the Indenture, the Issuer will assign or pledge to the Trustee certain of the Issuer ' s rights under the Loan Agreement, including the right of the Issuer to receive payments under the Note, all as security for the payment of the Bonds . Section 6. That from and after the execution and delivery of said documents , the proper officials, agents and employees of the Issuer are hereby authorized, empowered and directed to do all such acts and things and to execute all such documents as may be necessary to carry out and comply with the provisions of said documents as executed and to further the purposes and intent of this Ordinance, including the preamble hereto. Section 7 . That all acts and doings of the officials of the Issuer which are in conformity with the purposes and intent of this Ordinance and in furtherance of the issuance and sale of the Bond in the aggregate principal amount of $1 ,000,000 and the financ- ing of the Project to that amount be, and the same hereby are, in -8- all respects, approved and confirmed. Section 8. That the provisions of this Ordinance are hereby declared to be separable, and if any section, phrase or provision shall, for any reason, be declared to be invalid, such declaration shall not affect the validity of the remainder of the sections , phrases or provisions. Section 9 . That 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 this Resolution shall be effective immediately upon its adoption and approval as provided by law. Introduced and filed with City Clerk: October 24 , 1983. Passed : October 24 , 1983. APPROVED: s/ Richard L. Verbic Mayor ATTEST: s/ Marie Yearman City Clerk -9- September 28, 1983 MEMORANDUM TO: Mayor and Members of City Council FROM: Erwin W. Jentsch, Corporation Counsel SUBJECT: Hinckley-Schmitt Industrial Development Revenue Bonds, Series 1983 The Tax Equity and Fiscal Responsibility Act of 1982 requires that a public hearing be held before approval of the bonds by the City Council. Assuming that the bond ordinance and related financing documents are in final form prior to October 24, 1983, the second regular meeting in October, the parties have requested that the City Council hold the required hearing on that date and pass the bond ordinance during the meeting. Notice of the meeting must be given by publication not later than 14 days prior to the hearing; therefore notice by publication will probably be given prior to the City Council Meeting of October 10, 1983, although the Council will not set the hearing until October 10, 1983. If you have any questions concerning is matter, please contact me. EWJ nr cc: Leo Nelson 1, . EXHIBIT A MEMORANDUM OF AGREEMENT THIS MEMORANDUM OF AGREEMENT is between the City of Elgin, Kane and Cook Counties, Illinois, party of the first part (hereinafter referred to as the "Issuer" ) and Hinckley & Schmitt, Inc. , an Illinois corporation, party of the second part (herein- after referred to as the "Company" ) . 1. Preliminary Statement. Among the matters of mutual inducement which have resulted in the execution of this Agreement are the following: (a) That the Issuer is authorized and empowered by Ordinance No. S2-80 , as amended, (the "Act" ) , to issue revenue bonds for the purpose of financing all or a portion of a project for the Company comprising land, a building and equipment for use as a facility for the processing and distribution of bottled water (the "Project" ) . (b) It is considered essential that construction of the Project be commenced at the earliest practicable date, but the Company wishes to commence acquisition, construction and equipping of the Project only after satisfactory assur- ances from the Issuer that the proceeds of the sale of the revenue bonds of the Issuer will be made available to finance costs of the Project. (c) The Issuer considers that the financing of costs of the Project by the Issuer for the Company will promote and further the purposes of the Act and the public purposes of the Issuer. 2. Undertakings on the Part of the Issuer. Subject to the conditions above stated, the Issuer agrees as follows : (a) That it will authorize the issuance and sale of its revenue bonds, pursuant to the terms of the Act as then in force or other applicable law, in an aggregate principal amount of approximately $1,000 ,000 (or such other amount necessary to finance the Project) to pay costs of financing the Project. (b) That it will cooperate with the Company to endeavor to find a purchaser or purchasers for the revenue bonds, and if purchase arrangements satisfactory to the Company and the Issuer can be made, it will adopt such proceedings and authorize the execution of such documents as may be necessary or desirable for the authorization, issuance and sale of the revenue bonds and the financing of the Project by the Issuer, as aforesaid, all as shall be authorized by law and mutually satisfactory to the Issuer and the Company. • (c) That the aggregate basic amounts to be used to pay the principal, interest and premium, if any, on the revenue bonds payable under the instrument or instruments whereby the Project shall be financed for the Company, shall be paid by the Company and such sums shall be suffi- cient to pay the principal of and interest and premium, if any, on the bonds as and when the same shall become due and payable. ( d) That it will take or cause to be taken such other acts and adopt such further proceedings as may be required to implement its aforesaid undertakings or as it may deem appro- priate in pursuance thereof. 3. Undertakings on the Part of the Company. Subject to the conditions above stated, the Company agrees as follows : (a) That it will use all reasonable efforts to find one or more purchasers for the revenue bonds in an aggregate prin- cipal amount necessary to pay costs of financing the Project. (b) That it will acquire, construct, install and operate the Project, which is expected to create 10 to 11 new jobs and potentially up to 37 new jobs . ( c) That contemporaneously with the delivery of the revenue bonds, the Company will enter into a loan, sale, financing, lease or other agreement (hereinafter called the "Financing Agreement") with the Issuer under the terms of which the Company will obligate itself to pay to the Issuer sums sufficient in the aggregate to pay the principal of, interest and premium, if any, on the revenue bonds as and when the same shall become due and payable, such Financing Agreement to contain provisions required by law and such other provisions as shall be mutually acceptable to the Issuer and the Company. ( d) That it will take such further action and adopt such proceedings as may be required to implement its aforesaid undertakings or as it may deem appropriate in pursuance thereof. 4. General Provisions. (a) All commitments of the Issuer under paragraph 2 hereof and of the Company under paragraph 3 hereof are subject to the conditions that on or before 365 days from the date hereof (or such other date as shall be mutually satisfactory to the Issuer and the Company) , the Issuer and the Company shall have agreed to mutually acceptable terms for the revenue bonds and of the sale and delivery thereof, and mutually acceptable terms and conditions of the Financing Agreement and the proceedings referred to in paragraphs 2 and 3 hereof. -2- (b) If the events set forth in (a) of this paragraph do not take place within the time set forth or any extension thereof and the revenue bonds are not sold within such time, the Company agrees that it will reimburse the Issuer for all reasonable and necessary direct out-of-pocket expenses which the Issuer may incur at the Company' s request arising from the execution of this Agreement and the performance by the Issuer of its obligations hereunder, and this Agreement shall thereupon terminate. IN WITNESS WHEREOF, the parties hereto have entered into this Agreement by their officers thereunto duly authorized as of the \\ day of July, 1983. CITY OF ELGIN, ILLINOIS B 7/ . y d Its Mayor HINCKLEY & SCHMITT, INC. i By - ��� Its President -3- T-798(A)-1