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HomeMy WebLinkAboutS6-81 ORDINANCE NO. S6-81 AN ORDINANCE AUTHORIZING THE FINANCING OF BUILDINGS, MACHINERY, EQUIPMENT AND RELATED FACILITIES CONSTITUTING A "PROJECT" WITHIN THE MEANING OF ORDINANCE NO. S2-80; AUTHORIZING THE ISSUANCE OF $3,500,000 INDUSTRIAL DEVELOPMENT REVENUE BONDS (FLENDER CORPORATION PROJECT) SERIES 1981 AND $5,000,000 INDUSTRIAL DEVELOPMENT REVENUE BONDS (FLENDER CORPORATION PROJECT) SERIES 1981 A IN CONNECTION THEREWITH; AUTHORIZING THE EXECUTION AND DELIVERY OF LOAN AGREEMENTS BETWEEN THE CITY OF ELGIN, ILLINOIS AND FLENDER CORPORATION; AUTHORIZING THE EXECUTION AND DELIVERY OF INDENTURES OF TRUST SECURING SAID BONDS AND RELATED MATTERS. WHEREAS, the City of Elgin, Kane County, Illinois (the "Issuer") is authorized by its home rule powers and Ordinance S2-80, duly adopted February 13, 1980 (the "Act" ) , to issue industrial revenue bonds to finance any "project" , as defined in the Act; and WHEREAS, the Issuer has by resolution duly adopted September 10, 1980 , as amended October 22, 1980, expressed its willingness to issue up to $10,000, 000 of its industrial revenue bonds to finance a portion of the cost of land, buildings and equipment in the City of Elgin constituting a manufacturing plant (the "Project") for use by Flender Corporation, an Illinois corporation (the "Company" ) ; and WHEREAS, said bonds are to be issued in two series, the " Industrial Development Revenue Bonds (Flender Corporation Project) Series 1981" in the principal amount of $3,500,000 (the "Series 1981 Bonds" ) and the "Industrial Development Revenue Bonds (Flender Corporation Project ) Series 1981 A" in the principal amount of $5, 000, 000 (the "Series 1981 A Bonds" ) ; and WHEREAS, in connection with the authorization of the Series 1981 Bonds and the Series 1981 A Bonds there have been presented to this meeting the following documents : (a) A Loan Agreement between the Issuer and the Company, dated as of December 1, 1981, relating to the Series 1981 Bonds (the "Series 1981 Agreement" ) ; (b ) An Indenture of Trust between the Issuer and Texas Commerce Bank National Association, as Trustee (the "Trustee" ) , dated as of December 1, 1981 relating to the Series 1981 Bonds (the "Series 1981 Indenture" ) ; (c ) A Loan Agreement between the Issuer and the Company, dated as of December 1, 1981 relating to the Series 1981 A Bonds (the "Series 1981 A Agreement" ) ; and • • (d) An Indenture of Trust between the Issuer and the Trustee dated as of December 1, 1981 relating to the Series 1981 A Bonds (the "Series 1981 A Indenture" ) ; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ELGIN KANE COUNTY, ILLINOIS, AS FOLLOWS : Section 1. The forms presented to this meeting of the Series 1981 Agreement and the Series 1981 A Agreement (collectively, the "Agreements" ) , providing for the financing of the acquisition, construction and improvement of the Project by the Issuer be, and the same are hereby authorized and approved; and the Mayor of the Issuer be, and he is hereby authorized to execute; the City Clerk of the Issuer be and he is hereby authorized to attest and affix the official corporate seal of the Issuer thereto; and each of such officers is hereby authorized to deliver the said Agreements , together with such changes in and additions thereto as shall be approved by the officers signing the same, including without limitation, such changes as shall be necessary to conform to the terms of the Bonds hereinafter authorized, such approval to be conclusively evidenced by such execution. Section 2. The form presented to this meeting of the Series 1981 Indenture and the Series 1981 A Indenture to finance the Project and securing the Bonds be, and the same are hereby authorized and approved; and the Mayor of the Issuer be , and he is hereby authorized to execute; the City Clerk of the Issuer be and he is hereby authorized to attest and affix the official corporate seal of the Issuer thereto; and each of such officers is hereby authorized to deliver the said Indentures, together with such changes in and additions thereto as shall be approved by the officers signing the same, including without limitation such changes as shall be necessary to conform to the terms of the Bonds hereinafter authorized , such approval to be conclusively evidenced by such execution. Section 3. The Series 1981 Bonds will (a) bear interest at a rate equal to 63% of the Prime Rate announced from time to time by Texas Commerce Bank National Association, in Houston, Texas ( "Texas Commerce Bank" ) , (b) be dated their date of delivery, ( c ) mature on December 1, 1993, (d ) be subject to optional and mandatory redemption prior to maturity, in accordance with the provisions of the Indenture , including mandatory sinking fund redemption at a redemption price of 100% of the principal amount thereof plus accrued interest to the redemption date, in the principal amounts and on the dates set forth in Schedule I attached hereto and (e) be in the form and have the content set forth in the Series 1981 Indenture . The issuance of the Series 1981 Bonds be , and the same is hereby authorized and approved; and the Mayor and the City Clerk of the Issuer are hereby authorized and directed to execute the Series 1981 Bonds —2— by their manual signatures , to procure their authentication by the Trustee and to deliver the same to the purchaser thereof upon payment of the purchase price. Section 4. The sale of the Series 1981 Bonds to Texas Commerce Bank at a purchase price of 100% of par without accrued interest is hereby authorized and approved. Section 5. The Series 1981 A Bonds will (a) bear interest at a rate equal to 63% of the rate as announced by Deutsche Bank AG, New York Branch ( "DBNY" ) from time to time as its prime lending rate for unsecured commercial loans within the United States; any change in the interest rate resulting from a change in the Prime Lending Rate to be effective on the effective date of each change in the prime lending rate announced by DBNY, (b) be dated as of December 1, 1981, ( c) mature on December 1, 1993, (d) be subject to optional and mandatory redemption prior to maturity, in accordance with the provisions of the Series 1981 A Indenture, including mandatory sinking fund redemption at a price of 100% of the principal amount thereof plus accrued interest to the redemption date, in the principal amounts and on the dates set forth in Schedule II attached hereto and (e) in the form and have the content set forth in the Series 1981 A Indenture be, and the same is hereby authorized and approved; and the Mayor and the City Clerk of the Issuer are hereby authorized and directed to execute the Series 1981 A Bonds by their manual signatures , and the coupons, if any attached thereto by their facsimile signatures, to procure the authenti— cation of the Series 1981 A Bonds by the Trustee and to deliver the same to the purchaser thereof upon payment of the purchase price. Section 6. The sale of the Series 1981 A Bonds to DBNY at a purchase price of 100% of par, plus accrued interest from December 1, 1981 to the date of delivery is hereby authorized and approved. Section 7. Texas Commerce Bank is hereby designated as Trustee, paying agent and bond registrar under Series 1981 Indenture and the Series 1981 A Indenture (the "Indentures" ) . Section 8. That the proper officers and employees of the Issuer and each of them is hereby authorized and directed to do and perform all such acts and things and to sign all • such instruments , documents and certificates as may be necessary or advisable or convenient and proper to carry out the intent of this Ordinance, the Loan Agreements and the Indentures. Section 9. 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. -3- Section 10. 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. Section 11. That this Ordinance shall be in full force and effect upon its approval by the Mayor. Adopted: December 2 , 1981. Approved: December 2 , 1981 . Vote : Yeas 7 Nays : 0 Approved: s/ Richard L. Verbic Mayor Attest: s/Marie Yearman Marie Yearman , City Clerk —4— SCHEDULE I The Series 1981 Bonds are subject to mandatory redemption in part prior to maturity, at a redemption price of 100% of the principal amount thereof plus accrued interest to the redemption date , in the principal amounts and on the dates set forth below : PRINCIPAL DATE AMOUNT June 1 , 1985 $ 250, 000 December 1, 1985 250,000 June 1 , 1986 250,000 December 1, 1986 250,000 June 1, 1987 250,000 December 1, 1987 250,000 June 1, 1988 250,000 December 1, 1988 250,000 June 1 , 1989 250,000 December 1, 1989 250,000 June 1 , 1990 150, 000 December 1, 1990 150,000 June 1 , 1991 150,000 December 1, 1991 150,000 June 1, 1992 100, 000 December 1, 1992 100,000 June 1, 1993 100, 000 There will remain $100,000 principal amount of the Series 1981 Bonds to be paid at maturity unless previously redeemed. -5- SCHEDULE II The Series 1981 A Bonds are subject to mandatory redemption in part prior to maturity, at a redemption price of 100% of the principal amount thereof plus accrued interest to the redemption date , in the principal amounts and on the dates set forth below : PRINCIPAL DATE AMOUNT June 1 , 1985 $ 250, 000 December 1, 1985 250,000 June 1 , 1986 250, 000 December 1, 1986 250,000 June 1, 1987 250,000 December 1, 1987 250,000 June 1, 1988 250,000 December 1, 1988 250,000 June 1 , 1989 250,000 December 1, 1989 250,000 June 1 , 1990 350, 000 December 1, 1990 350,000 June 1 , 1991 300,000 December 1, 1991 300,000 June 1, 1992 300,000 December 1, 1992 300,000 June 1, 1993 300, 000 There will remain $100,000 principal amount of the Series 1981 A Bonds to be paid at maturity unless previously redeemed. -6- AMENDMENT TO MEMORANDUM OF AGREEMENT This Amendment to Memorandum of Agreement is between the City of Elgin, Illinois (the "Issuer" ) and Flender Corporation (the "Company") and amends that certain Memorandum of Agreement dated September 22, 1980 between the Issuer and the Company (the "Original Agreement") . 1. Paragraph 2(a) of the Original Agreement is hereby amended in its entirety 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, in an aggregate principal amount of up to $10,000,000 (or such other amount necessary to finance the Project) to pay costs of financing the Project. " 2. Except as set forth in paragraph 1. above, the Original Agreement shall remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have entered into this Amendment to Memorandum of Agreement by their off ce s !hereunto duly authorized as of the £ day of , 1980. CITY OF ELGIN, ILLINOISS l By )(2"4-de Its Mayor FLEND R ,C PORATION By Its resid MEMORANDUM OF AGREEMENT THIS MEMORANDUM OF AGREEMENT is between the City of Elgin, Illinois, party of the first part (hereinafter referred to as the "Issuer" ) and Flender Corporation, an Illinois corpora- tion, party of the second part (hereinafter 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 or buildings and equipment for use as a manufacturing facility (the "Project") . (b) In view of rising construction costs it is con— sidered essential that construction of the Project be commenced at the earliest practicable date. At the same time, the Company wishes to commence acquisition and construction of the Project only after satisfactory assurances from the Issuer that the proceeds of the sale of the revenue bonds of the Issuer will be made available to finance the Project. (c ) The Issuer considers that the financing 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, in an aggregate principal amount of up to approximately $8, 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 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 authori-.. zation, issuance and sale of the 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 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 sufficient 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 appropriate 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 bonds in an aggregate principal amount necessary to pay costs of financing the Project. (b) That it will construct the Project, which is expected to create 60 to 800 new jobs. (c) That contempraneously with the delivery of the 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 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 tre conditions that on or before two years 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 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. (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 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 obli- gations hereunder, and this Agreement shall thereupon terminate. -2- (c) At the option of the Company, it may cause an affiliate or subsidiary to enter into the Financing Agreement on its behalf ; provided that the Company shall operate the Project. IN WITNESS WHEREOF, the parties hereto have entered into this Agreement by t it// officers thereunto duly authorized as of the J2"' day of 54in , 1980. CITY OF ELGIN, ILLINOIS • B y ii-vc---44-4"'i'f - -7.)--e-A%-t- Its Mayor FLEND C ORATION I By Its Pr ident , / -3-