Loading...
HomeMy WebLinkAboutS7-85 Ordinance No. S7-85 AN ORDINANCE authorizing the issuance of a $900,000 principal amount Industrial Development Revenue Bond (Component Plastics, Inc. Project) , Series 1985, of the City of Elgin, Cook and Kane Counties, Illinois; authorizing the issuance of said bond under Ordinance No. S2-80, as amended and supplemented, for the purpose of making a loan to American National Bank and Trust Company of Chicago, as Trustee under a Trust Agreement dated October 18, 1978, and known as Trust No. 45052; authorizing the execution and delivery of a Bond Agreement securing said bond; authorizing the execution and delivery of a Loan Agreement with said Trustee and Component Management Group; confirming the sale of said bond to the purchaser thereof pursuant to a Bond Purchase Agreement; approving related documents; authorizing the execution and delivery of related documents; and prescribing other matters related thereto. WHEREAS, the City of Elgin, Cook and Kane Counties, Illinois, ( the "Issuer" ) , is an Illinois home rule municipality authorized under the provisions of Article VII, Section 6, of the Illinois Constitution of 1970, and Ordinance No. S2-80 adopted by the City Council of the Issuer on February 13, 1980, as supplemented and amended (the "Enabling Ordinance" ) , to finance in whole or in part the cost of the acquisition, purchase, construction, reconstruction, improvement, equipping, betterment or extension of economic development projects in order to encourage economic development within or near the Issuer; to lease, sell or finance the same to or for any person; and to provide for the issuance of revenue bonds in conjunction therewith; and WHEREAS, pursuant to the terms of a Resolution of the Issuer adopted August 26, 1985, the Issuer entered into a Memorandum of Agreement by which it agreed to issue its revenue bond in an amount not exceeding $900,000 for the benefit of Component Management Group, an Illinois general partnership (the "Owner" ) , or a trust established for its benefit , purpose of financing for the all or a portion of the costs of acquiring, constructing, developing and improving an addition to the manufacturing, warehousing and office facility located at 700 Tollgate Road, Elgin, Illinois ( the "Project" ) , which Project shall be leased to Component Plastics, Inc. , c. , an Illinois corporation ( the "Company") , for use in its business as a custom molder of thermoplastics and for subleasingto other industrial and business entities; and WHEREAS, the Owner has since that date determined to have title to the Project acquired by La Salle National Bank, a national banking association, as trustee under a trust agreement dated October 18, 1978, and known as Trust No. 45052 (the "Mortgagor" ) ; and WHEREAS, the Project constitutes a "Project" as defined in the Enabling Ordinance; and WHEREAS, it is now proposed that the Issuer issue its Industrial Development Revenue Bond (Component Plastics, Inc. Project ) , Series 1985, under the provisions of the Enabling Ordinance in the principal amount of $900, 000 ( the "Bond" ) to provide moneys to make a loan to the Mortgagor for the benefit of the Owner pursuant to the Enabling Ordinance for the purpose of financing a portion of the costs of the acquisition, construction and equipping of the Project; and WHEREAS, the Issuer is empowered under the Enabling Ordinance to finance the acquisition, construction and equipping of the Project through the issuance of the Bond; and WHEREAS, a public hearing has been held by this City Council after reasonable public notice as required by Section 103 (k ) of the Internal Revenue Code of 1954, as amended (the "Code" ) ; and WHEREAS, the Bond will be issued under and pursuant to a Bond Issuance and Security Agreement dated as of October 1 , 1985 ( the "Bond Agreement" ) , by and between the Issuer and American National Bank and Trust Company of Chicago, a national banking association, as the registered owner of the Bond ( the "Bondholder" ) and as Fiscal Agent ( the "Fiscal Agent" ) ; and WHEREAS, it is proposed that the Issuer will make a loan of the proceeds of the Bond to the Mortgagor for the benefit of the Owne r as provide d in the Enabling Ordinance pursuant to a Loan Agreement dated as of October 1 , 1985 ( the "Loan Agreement" ) , by and between the Issuer, the Mortgagor and the Owner; and WHEREAS, there have been re ared this p and presented to meeting the following documents: 1 . The form of the Bond Agreement , including the form of the Bond; 2 . The form of the Loan Agreement, including the form of the promissory note of the Mortgagor ( the "Promissory Note" ) and the form of the Issuer ' s endorsement of the Promissory Note ( the "Endorsement of the Promissory Note" ) , which are attached to the Loan Agreement as exhibits; 4 3. The form of the Guaranty Agreement dated as of October 1, 1985 (the "Guaranty" ) , from the Owner, Frank Killough, Joseph Valente, Austin Hester and the Company (the "Guarantors" ) , to the Bondholder pursuant to which the Guarantors, jointly and severally, will unconditionally guarantee, among other things, the full and prompt payment of the principal installments of and premium, if any, and interest on the Promissory Note; and 4 . The form of the Mortgage and Security Agreement dated as of October 1 , 1985 ( the "Mortgage" ) , from the Mortgagor , the Owner and American National Bank and Trust Company of Chicago, as trustee under a Trust Agreement dated March 21 , 1973, and known as Trust No. 77712 ( the "Additional Mortgagor" ) , to the Bondholder granting a mortgage upon certain real estate owned by the Mortgagor and upon certain real estate owned by the Additional Mortgagor and a security interest in certain fixtures owned by the Mortgagor, the Additional Mortgagor and the Owner , all as security for the payment of the principal of and premium, if any, and interest on the Promissory Note and and as security for certain other obligations of the Mortgagor , the Additional Mortgagor and the Guarantors; 5 . The form of the Assignment of Rents and Leases dated as of October 1, 1985 (the "Assignment" ) , from the Mortgagor and the Owner to the Bondholder to be delivered as additional security for the payment of the principal of and premium, if any, and interest on the Promissory Note and and as security for certain other obligations of the Mortgagor and the Owner ; and 6 . The form of the Collateral Assignment of Beneficial Interest dated as of October 1 , 1985, from the Owner to the Bondholder (the "Collateral Assignment" ) to be delivered as additional security for the payment of the principal of and premium, if any, and interest on the Promissory Note and and as security for certain other obligations of the Mortgagor , the Additional Mortgagor and the Guarantors; and 7. The form of the Bond Purchase Agreement dated as of October 1 , 1985 (the "Bond Purchase Agreement" ) , to be entered into by and among the Issuer , the Owner and American National Bank and Trust Company of Chicago, an national banking association, (the "Purchaser" ) , pursuant to which the Issuer agrees to sell the Bond to the Purchaser and the Purchaser agrees to purchase the same from the Issuer; and 8. The form of the Arbitrage Regulation Agreement dated as of October 1, 1985 (the "Arbitrage Agreement" ) , to be i entered into by and between the Issuer and the Owner providing for the deposit of certain sums and the performance of certain acts with respect to arbitrage earnings on the proceeds of the Bond; and 9 . The form of a Deposit Agreement dated as of October 1 , 1985 (the "Deposit Agreement" ) , to be entered into by and between the Company and the Purchaser; NOW, THEREFORE, BE AND IT IS HEREBY RESOLVED by the City Council of the City of Elgin, Cook and Kane Counties, Illinois , as follows : Section 1 . Findings . It is hereby found, determined and declared by the City Council of the Issuer that : (a ) the Project will provide increased job opportunities, and will retain existing jobs, within the City of Elgin, Cook and Kane Counties, Illinois; (b) the Project , the financing of the Project , and the issuance of the Bond, are determined to be in accordance with the purposes of the Enabling Ordinance and are approved; (c) the Project constitutes a "Project" within the meaning of and authorized by the Enabling Ordinance; (d) the Project , the issuance and sale of the Bond to finance the same, the execution and delivery of the Bond Agreement , the Loan Agreement , the Endorsement of the PromisEDry Note, the Bond Purchase Agreement and the Arbitrage Agreement , and the performance of all covenants and agreements of the Issuer contained therein and of all other acts and things required under the Constitution and laws of the State of Illinois to make the Bond Agreement , the Loan Agreement , the Endorsement of the Promissory Note, the Bond Purchase Agreement, the Arbitrage Agreement and the Bond valid and binding obligations of the Issuer in accordance with their terms, are authorized by the Enabling Ordinance; (e) it is desirable that the Bond in the principal amount of $900 , 000, initially dated the date of the original issuance thereof, be issued by the Issuer upon the terms set forth in the Bond Agreement , under the provisions of which the Issuer 's interest in the Loan Agreement, the Promissory Note and the payments due the Issuer thereunder will be pledged and assigned to the Bondholder as security for the payment of principal of, premium, if any, and interest on the Bond; (f) the principal amount of the Bond does not exceed the estimated cost of the acquisition, construction and equipping of the Project, financing charges, interest which it is estimated will accrue on the Bond during the construction period and costs of the issuance of the Bond; (g) the payments required to be made by the Mortgagor under the Promissory Note and by the Owner under the Loan Agreement are in such amounts as will be sufficient to provide for prompt payment of all of the principal of and premium, if any, and interest on the Bond when due; (h) under the provisions of the Enabling Ordinance, and as provided in the Bond Agreement , the Bond, together with interest thereon and premium, if any with respect thereto, shall not be or become an indebtedness or obligation of the Issuer , the State of Illinois or any political subdivision thereof within the purview of any constitutional limitation or provision; the Bond and the interest and premium, if any, payable thereon shall be special , limited obligations of the Issuer , payable solely and only from Revenues (as defined in the Bond Agreement ) , including revenues and receipts derived from and pursuant to the Loan Agreement and the Mortgage; and it shall be stated on the face of the Bond that it does not constitute such an indebtedness or obligation of the Issuer but is payable solely from such Revenues; and ( i ) the principal amount of the Bond, its maturity dates an: annual interest rate are as set forth in Section 2 hereof . ( j ) No member of the City Council of the Issuer or officer , agent or employee of the Issuer has any interest , financial , employment or other , in the Mortgagor , the Owner , the Additional Mortgagor or the Company or in the transactions contemplated hereby or by the Bond Agreement , the Loan Agreement or the Bond Purchase Agreement or the issuance and sale of the Bond. Section 2 . Terms of the Bond. For the purpose of financing the acquisition, construction and equipping of the Project , there is hereby authorized to be issued the Bond in the principal amount of $900 , 000, which bond shall be designated "City of Elgin, Illinois Industrial Development Revenue Bond (Component Plastics, Inc. Project ) , Series 1985" ; shall bear interest from its date; shall be issuable only as a registered bond without coupons in the denomination of $900,000; shall be initially dated the date of delivery thereof when originally issued; and shall mature as to principal in sixty (60) consecutive principal installments payable quarterly on February 1, 1986, and on the first day of each February, May, August and November thereafter to and including November 1 , 2000, each such installment to be in the amount of Fifteen Thousand Dollars ($15, 000. 00) . Subject to the provisions of the following three paragraphs, the Bond shall bear interest from the date thereof at a variable rate, which rate shall be equal to seventy-five percent (75% ) ( the "Applicable Percentage" ) of the Prime Rate in effect from time to time ( the rate so determined being the "Applicable Rate" ) ; provided, however , that unless the provisions of any of the following three paragraphs shall apply, the Applicable Rate as determined under the foregoing provisions shall not be less than five percent ( 5% ) per annum or greater than thirteen percent (13% ) per annum. Interest thereon shall be computed as if a calendar year consisted of three hundred sixty ( 360) days and charged on a daily basis, and shall be payable on the first day of February, 1986 , and on the first day of each February, May, August and November thereafter until the principal sum of the Bond is paid. Any overdue principal and premium and ( to the extent that such interest shall be legally enforceable) any overdue installment of interest on this Bond shall bear interest prior to a Determination of Taxability (as defined in the Bond Agreement ) at a rate which is two percent (2% ) in excess of the Prime Rate and from and after a Determination of Taxability at a rate which is three percent ( 3%) in excess of the Prime Rtze. While American National Bank and Trust Company of Chicago, Chicago, Illinois , is the Bondholder , in the event that at any time or times , by reason of a change in applicable law, the maximum marginal tax rate at which said bank could be taxed for federal income tax purposes pursuant to applicable provisions of the Internal Revenue Code of 1954 , as amended ( the "Code" ) , or any future United States internal revenue or similar law applicable to said bank (hereinafter referred to as the "Tax Rate" ) is other than forty-six percent ( 46%) , the Applicable Percentage utilized to determine the Applicable Rate during such time or times, unless the provisions of the following paragraph shall govern the rate of interest, shall be the percentage arrived at by multiplying the difference between one hundred percent (100% ) and the then applicable Tax Rate, by one hundred thirty-nine percent ( 139% ) . If while a financial institution to which Section 291 (a) (3) of the Code, or any successor provision thereto ( "Section 291 (a) ( 3) " ) , applies is the Bondholder , there is a change ( "Change" ) in the TEFRA Disallowance Deduction (as hereafter defined) , the Applicable Rate (as determined by the Applicable Percentage giving effect to any changes required by the preceeding sentence) shall automatically be adjusted as of and on the effective date of any such Change by adding thereto a percentage equal to ninety ( 90) times (the TEFRA Disallowance Deduction in effect after such Change minus the TEFRA Disallowance Deduction in effect immediately prior to such Change) times the Tax Rate times the Prime Rate, with the TEFRA Disallowance Deduction and the Tax Rate being expressed as decimals and the Tax Rate being that which is in effect on the effective date of such Change. "TEFRA Disallowance Deduction" as used herein shall mean the percentage of reduction set forth in Section 291 (a) ( 3) with respect to any financial institution preference item. The Bond shall bear interest from and after the date of a Determination of Taxability at a variable rate, which rate shall be equal to the Prime Rate in effect from time to time plus two percent ( 2% ) . The Bond shall be subject to redemption prior to maturity as provided in Article III of the Bond Agreement. The Bond shall be a special , limited obligation of the Issuer as more fully provided in Section 1 (h) of this Ordinance. As required by the Enabling Ordinance and as provided in Section 1 (h) of this Ordinance, it shall be plainly stated on the face of the Bond that it is a special , limited obligation of the Issuer -as more fully provided in said Section 1 (h) hereof. Section 3. Execution of the Bond. The Bond shall be executed on behalf of the Issuer by the manual or facsimile signature of its Mayor and attested by the manual or facsimile signature of its City Clerk , provided that one of such signatures shall be manual ; shall have the seal of the Issuer affixed thereto; and shall be authenticated by the certificate of the Fiscal Agent . Section 4 . Form of the Bond. The Bond and the Fiscal Agent ' s certificate of authentication to appear on the Bond shall be in substantially the forms set forth in the Bond Agreement , with necessary or appropriate variations, omissions and insertions, as permitted or required by the Bond Agreement. Section 5. Compliance with the Enabling Ordinance. The Bond shall be issued in compliance with and under authority of the provisions of the Enabling Ordinance, this Ordinance and the Bond Agreement. Section 6. Approval of Bond Agreement , Loan Agreement , Promissory Note and Arbitrage Agreement . The form, terms and provisions of the proposed Bond Agreement, Loan Agreement, Promissory Note and Arbitrage Agreement are in all respects approved, and the Mayor and the City Clerk of the Issuer are hereby authorized, empowered and directed to execute, acknowledge and deliver the the Bond Agreement, the Loan Agreement , the Endorsement of the Promissory Note and the Arbitrage Agreement in the name and on behalf of the Issuer, and thereupon to cause the Bond Agreement to be executed, acknowledged and delivered by the Bondholder, and the Bond Agreement shall constitute an assignment by the Issuer of the Security for the Bond, as defined therein. The Bond Agreement , the Loan Agreement , the Endorsement of the Promissory Note and the Arbitrage Agreement as executed and delivered, shall be in substantially the form now before this meeting and hereby approved, or with such changes therein as shall be approved by the officers of the Issuer executing the same, their execution thereof to constitute conclusive evidence of the Issuer ' s approval of any and all changes or revisions therein from the form of such documents now before this meeting. From and after the execution and delivery of the Bond Agreement , the Loan Agreement , the Endorsement of the Promissory Note and the Arbitrage Agreement , the officers, agents and employees of the Issuer are 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 documents as executed. Section 7. Approval of the Mortgage, the Assignment , the Guaranty, the Collateral Assignment and Deposit Agreement . The form, terms and provisions of the proposed Mortgage, the Assignment , the Guaranty, the Collateral Assignment and the Deposit Agreement are in all respects hereby approved, with such changes therein as shall be approved by the parties executing such documents. Section 8. Approval of Bond Purchase Agreement. The sale of the Bond to the Purchaser pursuant to the Bond Purchase Agreement is hereby approved and confirmed, and the Mayor and City Clerk of the Issuer are hereby authorized, empowered and directed to execute, acknowledge and deliver the Bond Purchase Agreement in the name and on behalf of the Issuer. The Bond Purchase Agreement, as executed and delivered, shall be in substantially the form now before this meeting and hereby approved, or with such changes therein as shall be approved by the officers of the Issuer executing the same, their execution thereof to constitute conclusive evidence of the Issuer 's approval of any and all changes or revisions therein from the form of Bond Purchase Agreement now before this meeting. From and after the execution and delivery of the Bond Purchase Agreement, the officers, agents and employees of the Issuer are 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 the Bond Purchase Agreement as executed. Section 9. Delegation. The Mayor and City Clerk of the Issuer, for and on behalf of the Issuer , are hereby authorized, empowered and directed to do any and all things necessary to effect the execution and delivery of the Bond Agreement , the Loan Agreement, the Endorsement of the Promissory Note, the Arbitrage Agreement and the Bond Purchase Agreement, the performance of all obligations of the Issuer under and pursuant to the Bond Agreement, the Loan Agreement , the Endorsement of the Promissory Note, the Arbitrage Agreement and the Bond Purchase Agreement , the execution and delivery of the Bond, and the performance of all other acts of whatever nature necessary to effect and carry out the authority conferred by this Ordinance and by the Bond Agreement, the Loan Agreement, the Endorsement of the Promissory Note, the Arbitrage Agreement and the Bond Purchase Agreement. The Mayor and the City Clerk of the Issuer are further authorized, empowered and directed, for and on behalf of the Issuer, to execute all papers, documents, certificates and other instruments that may be required in order to carry out the authority conferred by this Ordinance and by the Bond Agreement, the Loan Agreement , the Endorsement of the Promissory Note, the Arbitrage Agreement and the Bond Purchase Agreement, or to evidence the said authority and its exercise. Section 10 . Proceedings of the Issuer. The Mayor , City Clerk and other officers of the Issuer are hereby authorized, empowered and directed to prepare and furnish to the Purchaser certified copies of all proceedings and records of the Issuer relating to the Bond, and such other affidavits and certificates as may be required to show the facts relating to the legality of the Bond as such facts appear from the the books and records in the officers ' custody and control or as otherwise known to them. Section 11 . Arbitrage Certificate. The Mayor, City Clerk and any other officer of the Issuer having responsibility with respect to issuance of the Bond are hereby authorized, empowered and directed to give an appropriate certificate for inclusion in the transcript of proceedings with respect to the Bond, upon receipt of appropriate assurances in writing from the Owner, setting forth the facts, estimates and reasonable expectations pertinent under Section 103(c) of the Code and the regulations promulgated thereunder . Section 12. Section 103(b) ( 6) (D) Election. The Issuer hereby elects to have the provisions as to the $10,000, 000 limit in Section 103(b) ( 6) (D) of the Code applied to the Bond, and the Mayor and City Clerk of the Issuer are hereby authorized, empowered and directed to take any and all further action which may be required to implement and effectuate such election, including, without limitation, the preparation and filing of such statement or statements or other document or documents as may be deemed by them to be necessary or advisable in order to comply with the procedure set forth in Section 1 . 103-10 (b) ( 2) (vi ) of the Income Tax Regulations (26 CFR Part 1 ) under Section 103 of the Internal Revenue Code of 1954 , as amended; and all acts heretofore taken by them in this connection are hereby ratified and confirmed. Section 13 . Filing Form 8038. The Mayor and City Clerk of the Issuer are hereby authorized, empowered and directed to take any and all action which may be required to comply with the information reporting requirements of Section 103 ( 1 ) of the Code including, without limitation, the execution and filing of IRS Form 8038. Section 14 . Bond Registrar . The Issuer shall cause books for the registration and transfer of the Bond as provided in the Bond Agreement to be kept by the Fiscal Agent which is hereby constituted and appointed the Bond Registrar of the Issuer . The duties of the Fiscal Agent as such Bond Registrar shall be as set forth in the Bond Agreement . Section 15 . Expiration. This Ordinance and each of the provisions hereof and the approvals made and the powers and authorities granted hereunder shall expire and become null and void in the event that the Bond is not originally issued on or prior to December 31 , 1985 . Section 16 . Severability. The provisions of this Ordinance are hereby declared to be severable 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 and provisions hereof . Section 17. Repealer . All ordinances and resolutions and parts thereof—in conflict with the provisions of this Ordinance are, to the extent of such conflict , hereby repealed. Section 18. Allocation. The adoption of this Ordinance by the City Council of the Issuer shall be deemed to constitute an allocation to the Bond of $900, 000 of the Issuer ' s share of the private activity bond limit of the State of Illinois under Section 103(n) of the Code, and the Mayor of the Issuer is authorized to execute a certificate under penalty of perjury, as required by Section 103(n) (12) of the Code, that such allocation was not made in consideration of any bribe, gift , gratuity, or direct or indirect contribution to any political campaign. Section 19 . Effective Date. This Ordinance shall become effective nmediately upon its adoption. s/ Richard L . Verbic Richard L. Verbic, Mayor Presented: November 25, 1985 Passed: November 25 , 1985 Vote: Yeas 7 Nays 0 Recorded: Published: Attest: s/ Marie Yearman Marie Yearman, City Clerk B12382-C 5/28/80 LG: jo CITY OF ELGIN to THE ELGIN NATIONAL BANK PLEDGE AND ASSIGNMENT with ACKNOWLEDGMENT thereof by COMPONENT PLASTICS, INC . THIS PLEDGE AND ASSIGNMENT CONSTITUTES A SECURITY AGREEMENT UNDER THE ILLINOIS UNIFORM COMMERCIAL CODE Dated as of June 1, 1980 THIS PLEDGE AND ASSIGNMENT (the "Assignment" ) , dated as of June 1, 1980 , from the CITY OF ELGIN (the "Issuer" ) , as assignor, a municipal corporation and a home rule unit duly organized and validly existing under the Constitution and laws of the State of Illinois, to THE ELGIN NATIONAL BANK, and its successors and assigns , as assignee, a banking institution duly organized and validly existing under the laws of the United States, and qual- ified to do business in, and in good standing under the laws of, the State of Illinois (the "Bond Purchaser" ) , is being entered into in order to secure the payment of the principal of, redemp- tion premium, if any, and interest on the Bonds, as hereinafter defined, and the performance and observance by the Issuer of all of the Issuer' s covenants, agreements, representations and war- ranties expressed or implied herein, in the Loan Agreement, as hereinafter defined, and in the Bond Ordinance, as hereinafter defined. Section 1 . Preliminary Statement. The Bond Purchaser is simultaneously with the execution of this Assignment purchas- ing the Issuer' s $1,400, 000 aggregate principal amount of Economic Development Revenue Bonds, Series 1980 (Component Plastics, Inc . Project) (the "Bonds" ) , issued under and pursuant to Article VII , Section 6 of the 1970 Constitution of the State of Illinois and Ordinance No . S2-80, duly adopted by the Issuer on February 13 , 1980 (the "Enabling Ordinance" ) , and an ordinance duly adopted by the Issuer on , 1980 (the "Bond Ordinance" ) . The Bonds are being issued for the purpose of financing the acquisi- tion, construction and equipping of a facility for commercial use, located on certain real property described in Exhibit A attached hereto, said facility constituting an economic develop- ment project within the meaning of the Enabling Ordinance (the "Project" ) . This Assignment is being made by the Issuer for the purpose of securing both the Bonds of the Issuer, and the perfor- mance and observance by the Borrower of all of the covenants , agreements, representations and warranties expressed or implied herein, in the Loan Agreement, as hereinafter defined, and in the Bond Ordinance. Section 2 . Pledge and Assignment the Issuer to the Bond Purchaser. For value received, the receipt of which T hereby acknowledged, the Issuer hereby presently and irrevocably pledges, assigns, grants and conveys a security interest in, transfers and sets over to the Bond Purchaser, and its successors and assigns, as owner of the Bonds : (i ) all of the Issuer ' s right, title and interest (but excluding the Issuer' s Unassigned Rights, as defined in the hereinafter defined Loan Agreement) in, to and under the Loan Agreement, dated as of June 1, 1980 (the "Loan Agreement" ) , by and between the Issuer, as lender, and Component Plastics, Inc. , an Illinois corporation, as borrower (the "Borrower" ) , including, without limitation, the Issuer ' s right, title and interest in and to the income, revenues, receipts and other moneys payable thereunder (but excluding amounts payable to the Issuer pursuant to its Unassigned Rights , as defined in the Loan Agreement) ; (ii ) the proceeds of the Bonds to be held by the Fiscal Agent (as hereinafter defined) in the Construction Fund, as defined in the Loan Agreement, until disbursed in accor- dance with the provisions of the Fiscal Agent Agreement, as hereinafter defined, the Bond Ordinance and the Loan Agreement; ( iii ) the amounts on deposit from time to time in any other trust fund established under the Bond Ordinance and the Loan Agreement, and to be held by The Elgin National Bank in its capacity as fiscal agent for the Issuer (the "Fiscal Agent" ) , pursuant to a certain Fiscal Agent Agreement, dated as of June 1, 1980 (the "Fiscal Agent Agreement" ) , by and between the Issuer and the Fiscal Agent, and all other amounts from time to time held by the Fiscal Agent pursuant to the Fiscal Agent Agreement, the Bond Ordinance and/or the Loan Agreement; ( iv) any and all personal property (or rights therein) , of every kind and nature, hereto- fore or hereafter by delivery, writing or otherwise conveyed, sold, pledged, assigned, transferred or set over as and for additional security hereunder by the Issuer, or by any Person ( as defined in the Loan Agreement) , firm or corporation on its behalf or with its consent, to the Bond Purchaser, which is hereby authorized to receive any and all such personal property (and interests therein) at any time, and at all times is authorized to hold and to apply the same, subject to the terms and provisions hereof; (v) proceeds and products of any of the personal property (or rights therein) pledged hereby; and (vi ) all related claims , rights, powers, privileges, benefits and remedies on the part of the Issuer arising under the Loan Agreement, or by constitution, statute, at law, in equity or otherwise with respect to the Loan Agreement, whether or not consequent on any failure by the Bor- rower to perform or comply with any term of the Loan Agreement, and all rights of the Issuer to exercise any election or option, or to give or receive any notice, demand, consent, request, waiver, approval, receipt, certificate or other instrument under or with respect to the Loan Agreement, or to accept any surrender of the real estate, buildings, improvements, structures, machinery, equipment, fixtures and related property (whether real, personal or mixed) , or rights therein, acquired, constructed or installed with the proceeds of the Bonds . The terms and provisions of the Fiscal Agent Agreement, the Bond Ordinance and the Loan Agreement are hereby agreed to, and by this reference thereto are incorporated herein. Not- withstanding any provision of this Assignment to the contrary, the parties hereto agree to be bound in every respect by the terms and provisions of the Fiscal Agent Agreement, the Bond Ordinance and the Loan Agreement. Section 3 . Particular Covenants of Issuer. Until the principal of, redemption premium, if any, and interest on the Bonds is fully paid, and until the Borrower' s obligations under the Loan Agreement are fulfilled, the Issuer covenants and agrees, subject to the provisions of Section 5 hereof not to amend, modify, alter, waive or cancel the Bond Ordinance or the Loan Agreement, or any part of either thereof, except in accordance -2- with the terms and provisions of the Bond Ordinance and the Loan Agreement; and upon default by the Borrower under the Loan Agree- ment, to give prompt notice thereof to the Bond Purchaser, and not without the prior written consent of the Bond Purchaser to exercise any of the remedies provided to the Issuer by the Loan Agreement. Section 4. Limitation on Duties of the Bond Purchaser. The Bond Purchaser shall not be required or obligated in any manner to fulfill or perform any obligation, covenant, term or condition of or under the Loan Agreement, or to make any inquiry as to the nature or sufficiency of any payment received by it, or to present or file any claim, or to take any other action to collect or enforce the payment of any amounts which may have been assigned to it, or to which it may be entitled hereunder at any time or times . Section 5 . Limitation of the Issuer' s Liability. Anything contained in this Assignment to the contrary notwith- standing, the performance by the Issuer of all of the duties and obligations imposed upon it hereby, the carrying out of all of the covenants, agreements and promises made by it hereunder, and the liability of the Issuer for all of the warranties and repre- sentations herein made shall be limited as provided in the Enabl- ing Ordinance and the Bond Ordinance solelyto the revenues and d receipts, and other personal property ( and rights therein) , pledged and assigned hereunder, and the Issuer shall not be required to effectuate any of its duties, obligations , powers or covenants hereunder except to the extent of the rights, personal property and interests pledged and assigned hereunder with respect to the Project. The Bonds secured by the Bond Ordinance, the Loan Agreement and this Assignment have been issued pursuant to the Enabling Ordinance, and are special obligations of the Issuer. It is understood and agreed by the parties hereto that, anything contained in the Bond Ordinance, this Assignment or the Loan Agreement to the contrary notwithstanding, any obligation that the Issuer may incur for the payment of money shall not create a general obligation of the Issuer, the State of Illinois or any political subdivision thereof, or a debt of the Issuer, the State of Illinois or any political subdivision thereof; and neither the Issuer, the State of Illinois nor any -political subdivision thereof shall be liable on any obligation so incurred other than as in the Enabling Ordinance and the Bond Ordinance provided, but any such obligation shall be a special obligation of the Issuer payable solely from the revenues and receipts , and other personal property (and rights therein) , pledged and assigned in this Assignment. All covenants, stipulations and agreements of the Issuer contained in the Bond Ordinance, this Assignment, the Loan Agreement and the Fiscal Agent Agreement shall be deemed to be the covenants, stipulations and agreements of the Issuer to the -3- full extent authorized and permitted by law, and all such cove- nants , stipulations and agreements shall be binding upon the Issuer and its successors and assigns , and upon any board or body to which any powers or duties affecting such covenants , stipula- tions or agreements shall be transferred by or in accordance with law; and, except as otherwise provided in this Assignment or in the other instruments contemplated hereby to which the Issuer is or is to be a party, all rights, powers and privileges conferred, and all duties and liabilities imposed, upon the Issuer by the provisions of this Assignment, or the other instruments contem- plated hereby to which the Issuer is or is to be a party, shall be executed or performed by the Issuer or its successors and assigns , or by such officers, board or body as may be required by law to exercise such powers and perform such duties . No covenant, stipulation, obligation or agreement herein contained, or contained in the other instruments contem- plated hereby to which the Issuer is or is to be a party, shall be deemed to be a covenant, stipulation, obligation or agreement of any officer, agent or employee of the Issuer, nor shall any officer executing the Bonds be liable personally on the Bonds or be subject to any personal liability or accountability solely by reason of the issuance thereof. Section 6 . Grant of Powers to the Bond Purchaser. The Issuer hereby grants to the Bond Purchaser as owner of the Series 1980 Bond, for its own use and benefit, the power, to the full extent permitted by law, to, in the name of the Issuer, its own name or otherwise, ask, demand, require, receive, collect, compound and give discharges and releases of all claims for any and all moneys due or to become due under or arising out of the Loan Agreement (except for claims arising with respect to the Unas- signed Rights of the Issuer, as defined therein) , and to endorse any checks , notes , drafts and other instruments or orders in con- nection therewith, and, if any default shall occur with respect to the Bonds or the other instruments contemplated hereby to which the Issuer is or is to be a party, to (a) settle, compromise, compound and adjust any such claim; (b) exercise and enforce any and all claims, rights, powers and remedies of the Issuer under or arising out of the Loan Agreement (except for the Unassigned Rights of the Issuer, as defined in the Loan Agreement) ; (c ) file, commence and prosecute any suit, action or proceeding at law or in equity in any court of competent jurisdiction to col- lect any such sums assigned to the Bond Purchaser hereunder, and to enforce any right in respect thereto, and all other claims , rights , powers and remedies of the Issuer under or arising out of the Loan Agreement; and (d) sell, assign, transfer, pledge, make any agreement with respect to, and otherwise deal with, any of such claims , rights, powers and remedies as fully and completely as though the Bond Purchaser were the absolute owner thereof for all purposes, and at such times and in such manner as may seem to the Bond Purchaser to be necessary or advisable in its absolute discretion. -4- Section 7 . Instruments of Further Assurance; Receipt of Moneys by the Bond Purchaser. The Issuer covenants and agrees that, at any time and from time to time upon the written request of the Bond Purchaser, it will promptly and duly execute and deliver any and all such further instruments and documents as the Bond Purchaser may deem desirable in order to obtain the full benefits of this Assignment, and of all of the rights and powers herein granted. All moneys due and to become due under or pursuant to the Loan Agreement (excluding moneys due or to become due pursuant to the Issuer' s Unassigned Rights, as defined in the Loan Agree- ment) , and all claims assigned hereby, shall be paid directly to the Bond Purchaser, at such address as the Bond Purchaser may designate to the Borrower and the Issuer in writing from time to time, but initially at the address set forth in Section 9 . 1 of the Loan Agreement. The Borrower by its acknowledgment hereof agrees to pay, or to cause to be paid, all amounts due the Issuer under the Loan Agreement directly to the Bond Purchaser for the account of the Issuer. The Bond Purchaser agrees to comply with all of the terms and provisions of the Fiscal Agent Agreement, the Bond Ordinance, this Assignment and the Loan Agreement relating to the application of revenues and receipts payable under the Loan Agreement, or with respect to the Project, which are received by it, including, but not limited to, the application of insurance and condemnation proceeds as provided in the Fiscal Agent Agree- ment, the Bond Ordinance and the Loan Agreement. Section 8 . Present and Unconditional Assignment. The pledge and assignment effected hereby shall be effective imme- diately upon the execution hereof, and is not conditioned upon the occurrence or subsistence of any default or event of default under the Bond Ordinance, the Loan Agreement, the Bonds or the Fiscal Agent Agreement, or upon the occurrence or subsistence of any default or event of default under any other instrument contem- plated hereby to which the Issuer is or is to be a party, or upon any other condition or event. This Assignment shall be binding upon the Issuer and its successors and assigns , and shall inure to the benefit of the Bond Purchaser and its successors and assigns as owner of the Bonds . Section 9 . Amendments ; Application of Moneys by the Bond Purchaser. For the purposes of this Assignment, the Issuer covenants and agrees that it will not, without the prior written consent of the Bond Purchaser, ( a) except as provided in the Bond Ordinance, modify or in any way alter the terms of the Bond Ordinance, the Fiscal Agent Agreement or the Loan Agreement; (b) terminate the term of the Loan Agreement or accept a surrender thereof; or (c) waive or release the Borrower from any of its obligations under the Loan Agreement. -5- The Issuer and the Bond Purchaser agree that all reven- ues and receipts, and personal property (or rights therein) , pledged and assigned hereunder are to be applied to the payment of the principal of, redemption premium, if any, and interest on the Bonds , as more fully provided in the Bond Ordinance . The Bond Purchaser agrees that upon payment in full of the principal of, redemption premium, if any, and interest on the Bonds, and upon payment in full of all amounts due the Bond Purchaser under the Bond Ordinance, the Fiscal Agent Agreement, the Loan Agreement and this Assignment, and upon the discharge and termination of the lien of this Assignment, any excess moneys held by the Bond Purchaser in connection with the Project will be paid, if all amounts due the Issuer and the Fiscal Agent under the Loan Agreement and the Fiscal Agent Agreement shall have been paid, to the Borrower as an adjustment of an overpayment of amounts due under the Loan Agreement. Section 10 . Defaults and Remedies . If any of the following events (herein called "events of default" ) shall occur: (a) A default in the due and punctual payment of the interest on any Bond, or in the payment of the principal or redemption premium of any Bond when the same shall become due and payable at maturity, by acceleration or otherwise; (b ) The failure by the Issuer to comply with the terms hereof, and such failure shall continue after written notice is given to the Borrower in the manner provided in Section 12 hereof; (c ) An event of default shall occur and continue beyond any period of grace therein provided under the Loan Agreement; the Bond Ordinance; that certain Collateral Security Agreement, dated as of June 1, 1980 , from the Borrower, as pledgor, to the Bond Purchaser, as pledgee of the Borrower' s interest in the personal property and fix- tures ( and rights therein) described in part in Exhibit B attached hereto (the "Collateral Security Agreement" ) ; that certain Mortgage, dated as of June 1, 1980 (the "Mortgage" ) , from American National Bank and Trust Company of Chicago as land trustee and mortgagor, to the Bond Purchaser, as mort- gagee of the interest in the real property (including the improvements located thereon) described in Exhibit A attached hereto; or the Fiscal Agent Agreement; or (d) The Borrower shall file a petition in bankruptcy under the federal bankruptcy law (Title 11 of the United States Code) , as amended, or under any similar state or federal law, or shall file an answer admitting its insolven- cy or inability to pay its debts generally as they come due, or shall fail to obtain a vacation or stay of involuntary proceedings within fifteen (15 ) days of their institution, or shall be adjudicated a bankrupt, or shall have a trustee, -6- receiver, liquidator or conservator appointed for it or any of its property (and such trustee, receiver, liquidator or conservator shall not be discharged within fifteen (15 ) days of appointment) , or shall make an assignment for the benefit of its creditors, or shall admit in writing its inability to pay its debts generally as they become due; then and at any time thereafter, and provided that written notice of such default shall have been given to the Borrower in the manner provided in Section 12 hereof, unless and until the event of default shall have been cured or shall have been waived by the Bond Purchaser, as provided in the Bond Ordinance, to the extent permitted by law and in accordance with the Bond Ordinance, the Bond Purchaser may, subject to the provisions of Section 5 hereof, take any or all of the following actions in such combination or sequence as it may elect. The Bond Purchaser may, to the full extent permitted by law, enforce in the name of the Issuer all rights and remedies provided in the Loan Agreement and the Bond Ordinance, including acceleration of the debt evidenced by the Bonds . The Bond Purchaser shall also have, then and at any time thereafter, all of the rights under the State of Illinois Uniform Commercial Code, of a secured party with a prior perfected secur- ity interest in the personal property (and rights therein) pledged and assigned hereby, including, but not limited to, the following: the right to reduce any claim hereunder to judgment, and to foreclose or otherwise enforce the security interest herein granted by any available judicial procedure; the right to take possession of the personal property pledged hereby, which may be in the possession or control of the Issuer or any of its agents , without judicial process if no breach of the peace would occur, and by judicial process in all other cases; and the right to sell, lease or otherwise dispose of any or all of the personal property (or interests therein) pledged hereby, by public or private proceedings, by way of one or more contracts , in one unit or in parcels , at any time or place, and on any terms , subject only to the requirements of Section 9-504 or of the State of Illinois Uniform Commercial Code. Section 11 . Satisfaction and Discharge. If the Bor- rower shall pay or cause to be paid, or there shall otherwise be paid to the owner of the Bonds, the principal of, redemption premium, if any, and interest to become due thereon, at the times and in the manner stipulated therein and in the Bond Ordinance, and if the Borrower on behalf of the Issuer shall keep, perform and observe all and singular the covenants and promises in the Bonds, the Bond Ordinance, the Fiscal Agent Agreement, the Loan Agreement and this Assignment expressed as to be kept, performed and observed by it or on its part, and shall pay or cause to be paid to the Bond Purchaser, or there shall otherwise be paid to the Bond Purchaser, all sums of money due or to become due accor- ding to the provisions of the Bonds , the Bond Ordinance, the Fiscal Agent Agreement, the Loan Agreement and this Assignment, then this Assignment and the estate and rights hereby, by the Loan Agreement and by the Bond Ordinance granted shall cease, -7- determine and be void, and thereupon the Bond Purchaser shall cancel and discharge the lien and security interest of this Assignment, and shall execute and deliver to the Issuer and the Borrower, and record in all offices in which this Assignment shall have been recorded, if any, such instruments in writing as shall be requisite to the release of the lien and security inter- est hereof, and shall reconvey, release, assign and deliver unto the Issuer, or at the Issuer' s direction to the Borrower, any and all of the estate, right, title and interest in and to any and all revenues and receipts, and other personal property ( and rights therein) , conveyed, sold, transferred, assigned or pledged hereunder to the Bond Purchaser, or otherwise subject to the lien and security interest of this Assignment, except for those amounts held by the Bond Purchaser for the payment of the principal of, redemption premium, if any, and interest on the Bonds, and/or for the payment of the fees of the Issuer and the Fiscal Agent, and/or other amounts to be paid under the Loan Agreement, the Fiscal Agent Agreement and the Bond Ordinance. Section 12 . Notices . All notices , requests , demands, directions and other communications hereunder shall be in writing and shall be deemed sufficiently given when sent by United States of America certified or registered mail, postage prepaid, return receipt requested, addressed to the Issuer, the Bond Purchaser and the Borrower, as the case may be, at their respective addres- ses as specified in Section 9 . 1 of the Loan Agreement. Section 13 . Severability. If any provision of this Assignment shall be held or be deemed to be, or shall in fact be, invalid, inoperative or unenforceable as applied in any partic- ular case in any jurisdiction because it conflicts with any other provision hereof, or any constitution, statute or rule of law, equity or public policy, or for any other reason, such circum- stances shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or cir- cumstance, or of rendering any other provision herein contained inoperative, invalid or unenforceable to any extent whatsoever. The invalidity of any phrase, sentence, clause or section of this Assignment shall not affect the remainder of this Assignment, or any portion hereof. Section 14. Governing Law. This Assignment shall in all respects be governed by and be construed in accordance with the laws of the State of Illinois including all matters of con- struction, validity and performance . Section 15 . Amendment of this Assignment. This Assign- ment may not be amended or terminated, except in accordance with the Bond Ordinance. Section 16 . Assignment. This Assignment may be as- signed by the Bond Purchaser without the necessity of obtaining the consent of the Issuer or the Borrower, but only upon giving fifteen ( 15 ) days ' prior written notice of such assignment to the -8- Issuer and the Borrower, and recording such assignment in every office in which this Assignment shall have been recorded. Section 17 . Recording. The Issuer shall cause this Assignment to be recorded and to be kept recorded in the Office of the Recorder of Deeds for Kane County, Illinois , and/or in such other offices as may be provided by law as the proper places for the recordation hereof. Section 18 . Headings . The section headings contained in this Assignment are for convenience of reference only, and shall not define or limit the provisions hereof. IN WITNESS WHEREOF, the Issuer has caused this Assign- ment to be duly executed, the Bond Purchaser has caused this Assignment to be duly accepted, and the Borrower has caused this Assignment to be duly acknowledged, all as of the date first above written. CITY OF ELGIN By Its : Mayor ( SEAL) Attest: By Its : City Clerk -9- STATE OF ss : COUNTY OF ) I , , a Notary Public in and for the said County in the State aforesaid, do hereby certify that and personally known to me to be the same persons whose names are, respectively, as the Mayor and the City Clerk of the CITY OF ELGIN ( the "Issuer" ) , subscribed to the foregoing instrument (Assignment) , appeared before me this day in person and severally acknowledged that they, being thereunto duly authorized, signed, sealed with the seal of said Issuer, and delivered the said instrument as the free and voluntary act of the said Issuer, and as their own free and voluntary act, for the uses and purposes therein set forth. GIVEN under my hand and notarial seal this day of , 19 Notary Public in and for County, ( SEAL) My Commission expires : -10- I • Acceptance: The Elgin National Bank (the "Bond Purchaser" ) , hereby accepts the foregoing Assignment, and agrees to fulfill all of the duties and obligations imposed on the Bond Purchaser under the provisions of all instruments contemplated hereby to which the Bond Purchaser is or is to be a party, by signature, accep- tance, acknowledgment or intent of the parties thereto . IN WITNESS WHEREOF, the Bond Purchaser has caused this Acceptance to be duly executed, all as of June 1, 1980 . THE ELGIN NATIONAL BANK By Its : Vice-President ( Seal ) Attest: By Its : Assistant Cashier -11- STATE OF ss : COUNTY OF ) I , , a Notary Public in and for the said County in the State aforesaid, do hereby certify that and , personally known to me to be the same persons whose names are, respectively, as the Vice-President and an Assistant Cashier of THE ELGIN NATIONAL BANK (the "Bond Purchaser" ) , subscribed to the foregoing instru- ment (Acceptance of Assignment) , appeared before me this day in person and acknowledged that they being thereunto duly authorized, signed, sealed with the seal of said Bond Purchaser, and delivered the said instrument as the free and voluntary act of said Bond Purchaser and as their own free and voluntary act, for the uses and purposes therein set forth. GIVEN under my hand and notarial seal this day of , 19 Notary Public in and for County, (SEAL) My Commission expires : -12- ACKNOWLEDGMENT BY THE BORROWER OF THE ASSIGNMENT OF THE ISSUER' S RIGHTS UNDER LOAN AGREEMENT The undersigned, COMPONENT PLASTICS , INC. (the "Bor- rower" ) , hereby acknowledges receipt of a copy of the Pledge and Assignment, dated as of June 1, 1980 (the "Assignment" ) , from the City of Elgin (the " Issuer" ) , to The Elgin National Bank (the "Bond Purchaser" ) , of certain of the Issuer' s rights, interests , properties and remedies under that certain Loan Agreement (the "Loan Agreement" ) , dated as of June 1, 1980 , by and between the Issuer, as lender, and the Borrower, as borrower, including the right to collect and receive all revenues and receipts payable by the undersigned thereunder, and of certain of its rights and remedies with respect to certain items of personal property ( and rights therein) , all as more fully described in the Assignment. The undersigned, intending to be legally bound, hereby agrees ( i ) to pay directly to the Bond Purchaser, under the Assignment and said Loan Agreement, all revenues and receipts due and to become due the Issuer from the undersigned under said Loan Agreement (but excluding amounts due and to become due the Issuer pursuant to its Unassigned Rights, as defined in the Loan Agreement) , without any right of set-off, counterclaim or deduction for any reason whatsoever, (ii ) not to seek to recover from the Bond Purchaser any revenues and receipts paid to it pursuant to the Loan Agreement and the Assignment, except such revenues and receipts to which the Borrower shall be entitled pursuant to the terms and provisions of the Loan Agreement, (iii ) to perform for the benefit of the Bond Purchaser, as if the Bond Purchaser was the Issuer, all of the duties and undertakings of the undersigned under the Loan Agreement, ( iv) to permit the Bond Purchaser to enforce, as if the Bond Purchaser was the Issuer, each and every remedy made available to it in the Assignment and the Loan Agree- ment should an event of default occur and subsist thereunder, and (v) except as otherwise provided in the Assignment, that the Bond Purchaser shall not be obligated by reason of the Assignment, or otherwise, to perform or be responsible for the performance of any of the duties, undertakings or obligations of the Issuer under the Loan Agreement. IN WITNESS WHEREOF, the undersigned has caused this Acknowledgment to be duly executed as of June 1, 1980 . COMPONENT PLASTICS , INC. By Its : President (SEAL) Attest: By Itst Secretary -13- STATE OF ) ss : COUNTY OF ) I , , a Notary Public in and for the said County in the State aforesaid, do hereby certify that and , personally known to me to be the same persons whose names are, respectively, as the President and Secretary of COMPONENT PLASTICS, INC . (the "Borrower" ) , subscribed to the foregoing instrument (Acknowledg- ment of Assignment) , appeared before me this day in person and acknowledged that they, being thereunto duly authorized, signed, sealed with the seal of said Borrower, and delivered the said instrument as the free and voluntary act of said Borrower and as their own free and voluntary act, for the uses and purposes therein set forth. GIVEN under my hand and notarial seal this day of , 19 Notary Public in and for County, ( SEAL) My Commission expires : -14- f A12382-A 5/29/80 LG:maj CITY OF ELGIN AND COMPONENT PLASTICS, INC. LOAN AGREEMENT Dated as of June 1, 1980 THIS LOAN AGREEMENT CONSTITUTES A SECURITY AGREEMENT UNDER THE ILLINOIS UNIFORM COMMERCIAL CODE The interest of the City of Elgin (exclusive of Unas- signed Rights as defined herein) , under the within-contained Loan Agreement has been assigned to The Elgin National Bank, Elgin, Illinois , pursuant to a certain Pledge and Assignment, dated as of June 1, 1980 . This instrument was prepared by: Lewis Greenbaum Borge and Pitt 120 South LaSalle Street Chicago, Illinois 60603 LOAN TABLE OF CONTENTS Page Parties 1 Preambles 1 ARTICLE I Definitions Section 1 . 1 Use of Defined Terms 1 Section 1 .2 Definitions 1 Section 1 . 3 Certain Words Used Herein 5 Section 1 .4 References to Articles, Etc. 5 Section 1 . 5 Headings 5 ARTICLE II Representations Section 2 . 1 Representations of the Issuer 5 Section 2 .2 Representations and Agreements of the Borrower 7 ARTICLE III Acquisition, Construction and Equipping of the Project; Issuance of the Bonds Section 3 . 1 Agreement to Acquire, Construct and Equip the Project; Title; Disclaimer of Warranty or Representation of Con- dition or Suitability by the Issuer. . . 9 Section 3 . 2 Agreement to Issue the Series 1980 Bonds; Application of Bond Proceeds; Additional Bonds 9 Section 3 .3 Disbursements from the Construction Fund 10 Section 3 .4 Obligation of the Parties to Cooperate in Furnishing Documents; Fiscal Agent Reliance 14 Section 3 . 5 Establishment of Completion Date 14 Section 3 . 6 Obligation of Borrower to Complete Project in Event Construction Fund Insufficient 15 Section 3 . 7 Enforcement of Remedies Against Contractors , Subcontractors and their Sureties 15 Section 3 .8 Investment of Moneys in the Construction Fund and Other Trust Funds 15 Section 3 . 9 Special Arbitrage Covenants 16 (i) w r Page ARTICLE IV The Loan; Loan Repayments ; the Mortgage; the Collateral Security Agreement; and Other Payments Section 4. 1 The Loan 17 Section 4.2 Loan Repayments 17 Section 4 .3 Obligation of Borrower hereunder Un- Conditional 18 Section 4.4 Assignment of Issuer' s Rights 19 Section 4. 5 The Mortgage; the Collateral Security Agreement 19 Section 4. 6 Other Payments 20 Section 4. 7 Interest on Overdue Payments 21 Section 4.8 Defeasance 21 ARTICLE V Special Covenants, Representations and Agreements Section 5 . 1 Issuer' s, Fiscal Agent' s and Bond Purchaser' s Right of Access to the Project 21 Section 5 .2 Borrower to Maintain its Existence; Conditions Under Which Exceptions Permitted 22 Section 5 .3 Indemnification Covenants 23 Section 5 .4 Records and Financial Statements of the Borrower 24 Section 5 . 5 Tax-Exempt Status of the Series 1980 Bonds 24 Section 5 . 6 Maintenance and Modification of the Project 26 Section 5 . 7 Taxes, Charges and Assessments 27 Section 5 .8 Permitted Contests 27 Section 5 . 9 Insurance Required 28 Section 5 . 10 Damage and Destruction 29 Section 5 . 11 Condemnation 31 Section 5 . 12 Damage, Destruction or Condemnation of Borrower-Owned Property 33 Section 5 . 13 Qualification in State 33 Section 5 . 14 Covenant with Holders and Owners of Bonds 33 Section 5 . 15 Removal of Personal Property 33 Section 5 . 16 Installation of Borrower' s Own Machinery, Equipment, Fixtures and Other Personal Property 35 Section 5 . 17 Borrower' s Right to Lease Project; Re- striction or Sale of Property by Borrower 35 (ii ) • Page ARTICLE VI Events of Default and Remedies Section 6 . 1 Events of Default 36 Section 6 .2 Remedies on Default 37 Section 6 .3 No Remedy Exclusive 37 Section 6 .4 No Additional Waiver Implied by One Waiver 37 Section 6 . 5 Agreement to Pay Attorneys ' Fees and Expenses 37 ARTICLE VII Prepayment Section 7 .1 Optional Prepayment 38 Section 7 .2 Mandatory Prepayment 38 Section 7 .3 Manner of Prepayment 39 Section 7 .4 Redemption of Bonds with Prepayment Moneys 40 ARTICLE VIII Financing Statements 40 ARTICLE IX Miscellaneous Section 9 . 1 Notices 42 Section 9 .2 Assignments 42 Section 9 .3 Severability 42 Section 9 .4 Execution of Counterparts 42 Section 9 . 5 Amendments , Changes and Modifications . 42 Section 9 . 6 Governing Law 43 Section 9 .7 Authorized Issuer and Borrower Representatives 43 Section 9 .8 Payments Under this Agreement 43 Section 9 . 9 Term of this Agreement 43 Section 9 . 10 Advances by Bond Purchaser 43 Section 9 . 11 Reference to Bonds Ineffective After Bonds Paid 44 Section 9 . 12 Binding Effect 44 Section 9 . 13 Limitation on Interest 44 TESTIMONIUM 45 SIGNATURES AND SEALS 45 ACKNOWLEDGMENTS 47 EXHIBIT A Real Property 49 EXHIBIT B Personal Property 50 (iii ) LOAN AGREEMENT THIS LOAN AGREEMENT, made and entered into as of June 1, 1980, by and between the CITY OF ELGIN (the "Issuer" ) , a municipal corporation and a home rule unit of the State of Illi- nois, and COMPONENT PLASTICS , INC. , an Illinois corporation (the "Borrower" ) , WITNESSET H: In consideration of the respective representations and agreements herein contained, the parties hereto agree as follows (provided that in the performance of the agreements of the Issuer herein contained, any obligation it may thereby incur for the payment of money shall neither constitute an indebtedness or loan of credit, nor give rise to a pecuniary liability of the Issuer, the State of Illinois or any political subdivision thereof, or constitute or give rise to a charge against their general credit or taxing powers, but any such obligation shall be payable solely from the revenues and receipts derived from this Loan Agreement, from the proceeds derived from the sale of the Series 1980 Bonds referred to in Section 3 .2 hereof, and from the insurance pro- ceeds and condemnation awards as herein provided) : ARTICLE I Definitions Section 1 . 1 Use of Defined Terms . Certain terms used in this Loan Agreement are defined herein. When used herein such terms shall have the meanings given to them by the language em- ployed in this Article I , unless the context clearly indicates otherwise: Section 1 .2 . Definitions . The following are defined terms under this Loan Agreement: "Additional Bonds" means the additional parity Bonds authorized to be issued by the Issuer pursuant to the Bond Ordi- nance. "Agreement" or "Loan Agreement" means the within-con- tained Loan Agreement, by and between the Issuer, as lender, and the Borrower, as borrower, as the same may, from time to time, be supplemented and amended in accordance with the terms and provi- sions hereof and of the Bond Ordinance. "Assignment" means the Pledge and Assignment, dated as of June 1, 1980 , from the Issuer, as assignor, to the Bond Pur- chaser, as assignee, pursuant to which the Issuer assigns its rights hereunder to the Bond Purchaser (except for the Issuer' s Unassigned Rights ) . "Authorized Borrower Representative" means the individ- ual at the time designated to act on behalf of the Borrower, as provided in Section 9 . 7 hereof, by written certificate furnished to the Issuer, the Bond Purchaser and the Fiscal Agent, contain- ing the specimen signature of such individual, and signed on behalf of the Borrower by a duly authorized officer thereof. Such certificate, or any subsequent or supplemental certificate so executed, may designate an alternate or alternates . "Authorized Issuer Representative" means the individual at the time designated to act on behalf of the Issuer, as pro- vided in Section 9 . 7 hereof, by written certificate furnished to the Borrower, the Bond Purchaser and the Fiscal Agent, containing the specimen signature of such individual, and signed on behalf of the Issuer by a duly authorized officer thereof. Such certi- ficate, or any subsequent or supplemental certificate so executed, may designate an alternate or alternates . "Bonds" means the Issuer' s bonds of all series issued from time to time under the Bond Ordinance, or any duly autho- rized supplement thereto . "Bond Counsel" means an attorney-at-law or firm of attorneys-at-law (of nationally recognized standing in matters pertaining to the tax-exempt nature of interest on bonds issued by states and their political subdivisions ) duly admitted to the practice of law before the highest court of any state of the United States of America or of the District of Columbia. "Bond Ordinance" means Ordinance No. of the Issuer, duly adopted by its City Council on , 1980, authorizing the issuance of the Series 1980 Bonds . "Bond Purchaser" means The Elgin National Bank, Elgin, Illinois, and its successors and assigns . "Borrower" means Component Plastics, Inc. , an Illinois corporation, and its successors, assigns and transferees . "Code" means the Internal Revenue Code of 1954, as amended. "Collateral Security Agreement" means the Collateral Security Agreement, dated as of June 1, 1980, from the Borrower, as pledgor, to the Bond Purchaser, as pledgee, by which both payment of the Bonds and fulfillment of the Borrower' s obliga- tions hereunder are secured. "Completion Date" means the date of completion of the Project, as that date shall be certified in accordance with Section 3 . 5 hereof. -2- "Component Management Group" means the Illinois part- nership consisting of Frank Killough, Joseph Valente and Austin Hester, as partners, and their assigns , successors and trans- ferees with respect to property of said partnership . "Construction Fund" means the trust fund created in the Bond Ordinance. "Construction Period" means the period between the beginning of construction of the Project, or the date on which Bonds are first delivered to the Bond Purchaser (whichever is earlier) , and the Completion Date. "Cost of the Project" means the sum of the items autho- rized to be paid from the Construction Fund pursuant to the provisions of Section 3 .3 (a)-(j ) , inclusive, hereof. "Enabling Ordinance" means Ordinance No . S2-80 , duly adopted by said City Council on February 13 , 1980 . "Fiscal Agent" means The Elgin National Bank and any successor appointed pursuant to the provisions of the Fiscal Agent Agreement. "Fiscal Agent Agreement" means the Fiscal Agent Agree- ment, dated as of June 1, 1980, by and between the Issuer and the Fiscal Agent. "Independent Counsel" means an attorney-at-law duly admitted to the practice of law before the highest court of any state of the United States of America or of the District of Columbia. "Independent Engineer" means an engineer or architect, or an engineering or architecture firm, registered and qualified to practice the profession of engineering or architecture under the laws of the State, and who or which is neither a full-time employee of the Issuer nor the Borrower. "Issuer" means the City of Elgin, and any successor body to the duties or functions of the Issuer. "Land Trust" means that certain trust agreement, dated October 18, 1978 and known as Trust no. 45052 , relating to the Real Property, under which American National Bank and Trust Com- pany of Chicago acts as trustee for the beneficial interest of the Component Management Group. "Mortgage" means the Mortgage, dated as of June 1, 1980, from the Land Trust, as mortgagor, to the Bond Purchaser, as mortgagee, by which both payment of the Bonds and fulfillment of the Borrower' s obligations hereunder are secured. -3- "Mortgaged Property" means the Real Property and the Personal Property, and rights therein, mortgaged and pledged to the Bond Purchaser as security for the Bonds under the Mortgage and the Collateral Security Agreement. "Net Proceeds" means, when used with respect to any insurance or condemnation award, the proceeds from the insurance or condemnation award with respect to which that term is used remaining after payment of all expenses incurred in the collec- tion of such proceeds . "Permitted Encumbrances" means , as of any particular time, (i ) liens for ad valorem taxes and special assessments not then delinquent, (ii ) this Agreement, the Bond Ordinance, the Assignment, the Collateral Security Agreement and the Mortgage, (iii ) utility, access and other easements and rights-of-way, flood rights, mineral rights, encroachments, leases , licenses , restrictions and exceptions which will not interfere with or impair the operation of the Project, (iv) any mechanic ' s , la- borer' s, materialmen' s, supplier' s or vendor ' s liens or right in respect thereof if payment is not yet due and payable under the contract in question, (v) such minor defects, irregularities , encumbrances, easements, rights-of-way and clouds on title as normally exist with respect to properties similar in character to the Project, and as do not, in the opinion of Independent Coun- sel , materially impair the marketable value or utility of the property affected thereby for the purpose for which it was ac- quired or is held by the Borrower, or materially reduce its value, (vi ) mechanics ' , materialmen' s or other liens or rights to liens not filed or perfected in the manner provided by State law, as in effect on the date hereof or otherwise, and (vii ) any tax, charge, fee, rate, imposition, assessment, lien, security inter- est or encumbrance being contested as provided in Section 5 .8 of this Agreement. "Person" means an individual, partnership, corporation, trust, unincorporated association or government, or any agency or political subdivision thereof. "Personal Property" means the machinery, equipment, fixtures and other personal property (and rights therein) fi- nanced with Bond proceeds, and described in part in Exhibit B hereto. "Project" means , collectively, the Real Property and the Personal Property financed with Bond proceeds, and all addi- tions and accessions thereto, and replacements therefor, but not including the Borrower' s own equipment, machinery, fixtures and personal property installed anywhere on the Real Property in ac- cordance with Section 5 . 16 hereof, which Real Property and Per- sonal Property is being mortgaged and pledged to the Bond Pur- chaser under the Mortgage and the Collateral Security Agreement as security for both the Bonds and the performance of the Bor- rower hereunder. -4- "Real Property" means the real estate and improvements thereon (and rights therein) financed with Bond proceeds, as described in part in Exhibit A hereto. "Regulations" means the Income Tax Regulations (26 CFR Part 1 ) promulgated under and pursuant to the Code. "Series 1980 Bonds" means the $1,400, 000 aggregate principal amount of Economic Development Revenue Bonds, Series 1980 (Component Plastics, Inc. Project) , of the Issuer to be issued under and pursuant to the Enabling Ordinance and the Bond Ordinance. "State" means the State of Illinois . "Unassigned Rights" means the rights of the Issuer to issue Additional Bonds, to execute and deliver (subject to the provisions of this Agreement and the Bond Ordinance) supplements and amendments to this Agreement, to be held harmless, to be reimbursed for its expenses, and to be indemnified hereunder. Section 1 .3 . Certain Words Used Herein. The words "hereof, " "herein, " "hereunder, " and other words of similar import and meaning refer to this Agreement as a whole, and not solely to the particular portions of this Agreement in which such words are used. The defined terms used in this Agreement include both the singular and the plural however used in this Agreement; any pronoun shall be deemed to include both the singular and the plural, and to cover all genders . Section 1 .4. References to Articles, Etc. References to articles , sections and other subdivisions of this Agreement are to the designated articles, sections and other subdivisions of this Agreement as originally executed. Section 1 . 5 . Headings. The headings of this Agreement are included herein for convenience only and not with the inten- tion of defining or limiting the provisions hereof. ARTICLE II Representations Section 2 . 1 . Representations of the Issuer. The Issuer makes the following representations as the basis for the undertakings on its part herein contained: (a) The Issuer, a municipal corporation and a home rule unit, duly organized and validly existing under the Constitution and laws of the State, is authorized and em- powered by the Enabling Ordinance and the Bond Ordinance to enter into the transactions contemplated by this Agreement -5- and to carry out its obligations hereunder, and by proper action of its governing body has been duly authorized to execute and deliver this Agreement and issue the Series 1980 Bonds . The Project constitutes an economic development project within the meaning of the Enabling Ordinance. (b) The Issuer recognizes and agrees that the Project will, through the Assignment, the Mortgage, the Collateral Security Agreement, the Bond Ordinance, the Fiscal Agent Agreement and this Agreement, secure the payment of the principal of, premium, if any, and interest on the Bonds . (c) Heretofore, the Issuer and the Borrower did agree that the Issuer would finance the Cost of the Project through the issuance of economic development bonds of the Issuer payable solely from the revenues of the Project. The Bor- rower has estimated that the Project will cost not less than $1, 400 , 000 , and on that basis the Issuer now proposes to issue $1,400, 000 aggregate principal amount of its Series 1980 Bonds, which Series 1980 Bonds will be dated, mature, bear interest, be redeemable and have the other terms and provisions set forth in the Bond Ordinance. The proceeds of the Series 1980 Bonds will be loaned to the Borrower to finance the Cost of the Project, all for the purposes set forth in the Enabling Ordinance and the Bond Ordinance. (d) The Bonds are to be issued under, secured by, and sold to the Bond Purchaser pursuant to the Bond Ordinance. Certain of the Issuer' s interest in this Agreement will be assigned to the Bond Purchaser under the Assignment; and the Borrower' s interests in the Project will be mortgaged and pledged to the Bond Purchaser pursuant to the Mortgage and the Collateral Security Agreement. All of the foregoing will be done as security for payment of the principal of, premium, if any, and interest on the Bonds . (e) The Issuer has not assigned or pledged, and will not assign or pledge, the revenues and receipts derived from the Project or its interest in this Agreement other than as provided in the Assignment to secure the Bonds . ( f) The Issuer is not in violation of any of the laws of the State which would affect its existence or its powers referred to in this Section. (g) Under existing statutes and decisions no taxes on income or profits are imposed on the Issuer. (h) Nothing in this Agreement or the Assignment shall be construed to require the Issuer to operate the Project as lessor or owner thereof. (i ) The Project is to be located within the corporate boundaries of the Issuer. -6- Section 2 .2 . Representations and Agreements of the Borrower. The Borrower represents and agrees as the basis for the undertakings on its part herein contained as follows : (a) The Borrower is a corporation duly organized, validly existing and in good standing under the laws of the State of Illinois . The Borrower has power to enter into this Agreement and the Collateral Security Agreement under its Articles of Incorporation and By-Laws and the laws of the State of Illinois, and by proper corporate action has been duly authorized to execute and deliver this Agreement and the Collateral Security Agreement. The partners of the Component Management Group are the only stockholders of the Borrower. (b) Neither the execution and delivery of this Agree- ment, the Collateral Security Agreement or the Mortgage, the consummation of the transactions contemplated hereby and thereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement, the Collateral Security Agreement or the Mortgage, conflicts with or results in a breach of any of the terms, conditions or provisions of any restriction, agreement or instrument to which the Borrower is now a party, or by which it or any of its property is bound, or constitutes, or will constitute, a default under any of the foregoing, or results in, or will result in, the creation or imposition of any lien, charge or encumbrance ' whatsoever, other than Permitted Encumbrances, upon any of the property or assets of the Borrower under the terms of any instrument or agreement. (c) The Project consists and will consist of the Real Property and the Personal Property, and all additions and accessions thereto and replacements therefor, and is or will be located within the corporate boundaries of the City of Elgin. (d) The financing of the Project by the Issuer through the issuance of the Series 1980 Bonds will induce the Bor- rower to locate the Project in the City of Elgin, thereby creating approximately 20 new jobs in the City of Elgin. (e) The Borrower intends to operate, or cause to be operated, the Project in such manner, fashion and form as to maintain the Project' s status as an economic development project within the meaning of the Enabling Ordinance through the date on which the Bonds shall have been fully paid and are no longer outstanding. (f) Substantially all (within the meaning of Section 103 of the Code and the Regulations ) of the Project consti- tutes and will constitute either land or property of a character subject to the allowance for depreciation under Section 167 of the Code, and substantially all (within the -7- meaning of Section 103 of the Code and the Regulations ) of the expenditures for the Project and the Cost of the Project will be charged to a capital account for federal income tax purposes . (g) The estimated Cost of the Project is $1,400, 000 , which amount has been determined in accordance with sound valuation, engineering and accounting principles, and all of the proceeds of the loan made hereunder will be used to defray the Cost of the Project. (h) In estimating the Cost of the Project, no substan- tial part (within the meaning of Section 103 of the Code and the Regulations ) has been included which, under the federal income tax laws , must be deducted by the Borrower in the year in which paid or incurred, except through an allowance for depreciation. (i ) No substantial part (within the meaning of Section 103 of the Code and the Regulations ) of the proceeds of the Bonds will be used to provide working capital, or to finance inventory, for the Borrower within the meaning of Section 103 (b ) of the Code and the Regulations . (j ) No part of the Project was acquired or constructed by the Borrower before December 12, 1979, the date upon which the Issuer adopted an initial resolution agreeing to issue its Bonds for the purpose of financing the Project. (k) The Borrower will indemnify and hold harmless the Issuer, the Bond Purchaser and the Fiscal Agent, and any officers of either of them, from and against any and all losses, costs, charges, expenses, judgments, and liabilities incurred by any or all of them while acting in good faith to carry out the transactions contemplated by this Agreement. The Borrower will indemnify and hold harmless the Issuer from all expenses, including legal fees , incurred in selling the Bonds . (1 ) The Land Trust has acquired good and marketable fee title to the Real Property, or will acquire good and marketable fee title to the Real Property, which constitutes a part of the Project, as contemplated by this Agreement. The Borrower has acquired good and marketable title to the Personal Property, or will acquire good and marketable title to the Personal Property, which constitutes a part of the Project, as contemplated by this Agreement. All of the foregoing being for the purposes set forth in the Enabling Ordinance, to wit: to create or maintain employment oppor- tunities in the City of Elgin. (m) The Project, as designed, complies with all pre- sently applicable rules, regulations, resolutions and laws , of whatever origin and kind. The Borrower hereby waives any and all rights to contest the validity of any statute or -8- ordinance now in effect and relating to the construction of the Project. ARTICLE III Acquisition, Construction and Equipping of the Project; Issuance of the Bonds Section 3 . 1 . Agreement to Acquire, Construct and Equip the Project; Title; Disclaimer of Warranty or Representation of Condition or Suitablity by the Issuer. The Borrower agrees that it will complete the acquisition, construction and equipping of the Project as promptly as is practicable, substantially in accordance with plans and specifications for the Project as such plans and specifications are identified filed with the City Clerk, approved by the Issuer and further detailed in the work orders or contracts of the Borrower relating to the Project, including any and all supplements, amendments and additions to such plans and specifications, work orders or contracts, and in accordance with change orders or contract amendments approved in writing by the Borrower from time to time prior to the Completion Date. The Borrower warrants that the Land Trust has acquired, or will acquire, good and marketable fee simple title to the Real Property, free from all encumbrances other than Permitted Encum- brances . The Borrower will promptly obtain, or cause to be obtained, title insurance in the form of an ALTA construction loan policy, or appropriate binder, in the name of the Bond Purchaser and in the face amount of $1,400, 000 or such lesser amount as agreed to by the Bond Purchaser and will furnish a copy of such policy or binder to the Issuer and the Bond Purchaser. Any Net Proceeds payable to the Bond Purchaser under such policy shall, at the Borrower' s option, be either (a) used to acquire and construct replacement or substitute property for that to which title has been lost, and such property shall be subject to the lien of the Mortgage, or (b ) used to redeem Bonds at the earliest „possible date pursuant to the provisions of the Bond Ordinance. THE ISSUER MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE MERCHANTABILITY, CONDITION OR WORK- MANSHIP OF ANY PART OF THE PROJECT, OR THAT THE PROJECT WILL BE SUITABLE FOR THE BORROWER' S PURPOSES OR NEEDS . Section 3 .2 . Agreement to Issue the Series 1980 Bonds ; Application of Bond Proceeds; Additional Bonds . The Issuer, in order to provide funds to loan to the Borrower to finance the Cost of the Project, as provided in Section 4. 1 hereof, agrees to issue, sell and deliver under and pursuant to the Enabling Ordi- nance and the Bond Ordinance, to the Bond Purchaser its Series 1980 Bonds in the aggregate principal amount of $1,400, 000, bearing interest at the rates and maturing at the times set forth -9- in the Bond Ordinance. The Issuer will thereupon loan the pro- ceeds of the Bonds to the Borrower by depositing the proceeds received from the sale of the Bonds in the Construction Fund. Additional Bonds may be issued by, and at the sole discretion of, the Issuer to provide funds to pay any one or more of the following: (i) the cost of completing the Project; (ii ) the cost of repairing, replacing or restoring the Project in the event of damage, destruction or condemnation of the Project should the Net Proceeds of insurance or condemnation awards be insufficient therefor; (iii ) the cost of making such additions and alterations in, on or to the Project as the Borrower may deem necessary or desirable, as will not impair the nature of the Project as an economic development project within the meaning of the Enabling Ordinance, and as will become a part of the Mort- gaged Property; and/or (iv) the cost of refunding any series of Bonds; and, in each such case, the cost of the issuance and sale of the Additional Bonds, capitalized interest for a maximum of the period allowed by the Enabling Ordinance, and other costs reasonably related to the financing as shall be agreed upon by the Borrower and the Issuer. If the Borrower is not in default hereunder or under the Collateral Security Agreement and the Land Trust is not in default under the Mortgage, the Issuer may, from time to time, use its best efforts to issue the amount of Addi- tional Bonds requested by the Borrower; provided that the terms of such Additional Bonds, the purchase price to be paid therefor, and the manner in which the proceeds therefrom are to be dis- bursed shall have been approved in writing by the Borrower; and provided further that the Borrower and the Issuer shall have entered into an amendment to this Agreement to provide for addi- tional payments in an amount at least sufficient to pay the principal of and interest on the Additional Bonds when due, and the Issuer shall have otherwise complied with the provisions of the Bond Ordinance with respect to the issuance of such Addi- tional Bonds . Notwithstanding the foregoing the Issuer shall not be obligated to issue Additional Bonds . Section 3 .3 . Disbursements from the Construction Fund. By the terms of the Fiscal Agent Agreement, the Fiscal Agent is authorized and directed to disburse the moneys in the Construc- tion Fund upon receipt of written requisitions from the Autho- rized Borrower Representative for the following purposes : (a) Payment of the fees for recording the Mortgage, the Collateral Security Agreement, the Assignment, financing statements and any title curative documents that either the Issuer, the Bond Purchaser, the Borrower, Bond Counsel or Independent Counsel may deem desirable to file for record in order to perfect or protect the lien or security interest of the Bond Ordinance, this Agreement, the Assignment, the Collateral Security Agreement or the Mortgage on the Pro- ject; and the fees and expenses in connection with any actions or proceedings that either the Issuer, the Bond Purchaser, the Borrower, Bond Counsel or Independent Counsel may deem desirable to bring in order to perfect or protect -10- the lien or security interest of the Bond Ordinance, the Mortgage, the Collateral Security Agreement, this Agreement or the Assignment on the Project. (b ) Payment to the Borrower and the Issuer, as the case may be, of such amounts, if any, as shall be necessary to reimburse the Borrower and the Issuer in full for all advances and payments made by them or either of them prior to or after the delivery of the Series 1980 Bonds for expen- ditures in connection with (i ) the acquisition by the Bor- rower of the Personal Property, including, but not limited to, the cost thereof, and the preparation of plans and specifications for the Project ( including any preliminary study or planning of the Project or any aspect thereof) , (ii ) clearing the Real Property, the construction of all improvements constituting a part of the Real Property, the acquisition and installation of the Personal Property, and all construction, acquisition and installation expenses required to provide utility services or other facilities, and all real or personal properties deemed necessary in connection with the Project (including architectural, en- gineering and supervisory services with respect to any of the foregoing) , and ( iii ) any other costs and expenses relating to the Project. (c) Payment of the cost of legal, financial and ac- counting fees and expenses, title insurance premiums , and printing and engraving costs incurred in connection with the authorization, sale and issuance of the Bonds , the prepara- tion of the Bond Ordinance, this Agreement, the Fiscal Agent Agreement, the Collateral Security Agreement, the Mortgage, the Assignment, all costs and expenses of the Issuer includ- ing legal and fiscal advisory fees, and all other documents in connection herewith and therewith, and in connection with the acquisition of title to the Real Property and the Per- sonal Property. (d) Payment for labor, services, materials and sup- plies used or furnished in site improvement and in the acquisition, construction and equipping of the Project, including all costs incident thereto, payment for the cost of the construction, acquisition and installation of utility services or other facilities , and all real and personal property deemed necessary in connection with the Project, and payment for the miscellaneous expenses incident to any of the foregoing items, including, but not limited to, the premium on any surety bond. (e) Payment of the fees or out-of-pocket expenses of the Borrower, if any, including, but not limited to, archi- tectural, engineering and supervisory services with respect to the Project. ( f) Payment to the Fiscal Agent, as such payments become due, of the fees and expenses of the Fiscal Agent -11- incurred under the Fiscal Agent Agreement that may become due during the Construction Period, or reimbursement thereof if paid by the Borrower. (g) To such extent as they shall not be paid by a contractor or subcontractor for construction or installation with respect to any part of the Project, payment of the premiums on all insurance required to be taken out and main- tained during the Construction Period under this Agreement, or reimbursement thereof if paid by the Borrower. (h) Payment of the taxes, assessments and other charges, if any, referred to in Section 4. 6 hereof that may become payable during the Construction Period, or reimbursement thereof if paid by or on behalf of the Borrower. (i ) Payment of expenses incurred in seeking to enforce any remedy against any contractor, subcontractor or surety in respect of any default under a contract relating to the Project. (j ) Payment of any other cost or expense relating to the Project, including, but not limited to, capitalized interest during the Construction Period. (k) All proceeds of the Bonds, including moneys earned pursuant to the provisions of Section 3 .8 hereof, remaining in the Construction Fund on the Completion Date, established pursuant to Section 3 . 5 hereof, and after payment of all other items provided for in the preceding subsections ( a) through ( j ) , inclusive, of this Section 3 .3 , then due and payable (the "Surplus Construction Fund Money" ) , shall at the direction of the Authorized Borrower Representative be, to the extent permitted by law, used by the Fiscal Agent: (i ) for the payment of any cost of construction not then due and payable; (ii ) to purchase Bonds (provided that if Bonds are purchased at a premium, the Borrower must pay the pre- mium out of other funds ) for the purpose of cancella- tion as directed by the Borrower; and/or (iii ) for application to such purposes as, in the opinion of Bond Counsel, will not under applicable statutes and regulations impair the exemption from federal income taxation of the interest on the Bonds . Each of the payments referred to in this Section 3 .3 shall be made only upon receipt by the Fiscal Agent of: (A) a written requisition signed by the Authorized Borrower Representative certifying: -12- (1 ) the portion of the Project to which the payment relates; (2 ) the payee, which may be the Bond Purchaser in the case of a requisition for the payment of interest on the Bonds, and which may be the Borrower in the case of (i ) work performed by the Borrower' s person- nel, or (ii ) reimbursement for payments advanced by the Borrower for the Project; (3 ) the amount; (4) that the payment is due, is a proper charge against the Construction Fund, and has not been the basis for any previous withdrawal from the Construction Fund; (5 ) that he has no notice of any vendor' s, mech- anic ' s or other liens or right to liens , chattel mort- gages or conditional sales contracts , or other con- tracts or obligations which should be satisfied or discharged before such payment is made; provided, however, that if any such contracts or obligations exist, the requisition shall be accompanied by lien waivers acceptable to the Fiscal Agent; and provided further that the Fiscal Agent may delegate examination of lien waivers to any licensed title insurance company or bank; (6 ) that the requisition contains no item repre- senting payment on account of any retained percentages which, as of the date of the requisition, are entitled to be retained; and (7 ) that all of the funds being requisitioned are being used in compliance with Section 103 (b) (2 ) of the Code and the Regulations, and that substantially all (i . e. , at least 90%) of such funds are being used for the acquisition, construction or installation of land or property of a character subject to the allowance for depreciation, as prescribed by Section 103 (b) (6 ) (A) of the Code and the Regulations; and (B) with respect to any such requisition or payment for work, materials , supplies or equipment, a certificate, signed by an Independent Engineer, certifying that insofar as such obligation was incurred for work, material, supplies or equipment in connection with the construction of the Project, such work was actually performed, or such materi- als , supplies or equipment were actually used in or about the construction, or delivered at the site of the Project -13- for that purpose . Notwithstanding any of the foregoing, such certificate shall state that it is given without pre- judice to any rights against third parties which exist as of the date of such certificate, or which may subsequently come into being. Each requisition will be consecutively numbered and ac- companied by copies of invoices or other appropriate documenta- tion supporting the payments or reimbursements therein requested. Each requisition will be accompanied by proof of filing of State Uniform Commercial Code financing statements with both the Secre- tary of the State and the Recorder' s Office of Kane County, Illinois , when payment or reimbursement is sought for Personal Property. In the case of any contract providing for the retention of a portion of the contract price, there shall be paid from the Construction Fund prior to the Completion Date only the net amount remaining after deduction of any such portion until such retention is payable, in which event payment may be made therefor from the Construction Fund. Section 3 .4. Obligation of the Parties to Cooperate in Furnishing Documents; Fiscal Agent Reliance . The Issuer agrees to cooperate with the Borrower in furnishing to the Fiscal Agent the documents referred to in Section 3 .3 hereof that are required to effect payments out of the Construction Fund. Such obligation of the Issuer is subject to any provisions of the Bond Ordinance and the Fiscal Agent Agreement requiring additional documentation with respect to payments, and shall not extend beyond the moneys in the Construction Fund available for payment under the terms hereof, of the Bond Ordinance, and of the Fiscal Agent Agreement. In making any such payment from the Construction Fund, the Fiscal Agent may, should it do so in good faith, rely on any such orders and certifications delivered to it pursuant to Section 3 .3 hereof. Section 3 . 5 . Establishment of Completion Date. The Completion Date shall be evidenced to the Fiscal Agent, the Is- suer and the Bond Purchaser by a certificate of occupancy issued by the City of Elgin and by a certificate signed by the Autho- rized Borrower Representative stating both the Cost of the Pro- ject and that (i ) acquisition, construction and equipping of the Project has been completed substantially in accordance with the plans, specifications, work orders or contracts therefor, and all labor, services , materials and supplies used in such construction have been paid for, and (ii ) the Project so constructed, acquired and installed is suitable and sufficient for the efficient opera- tion for the purposes specified in Section 2 . 2 hereof. Notwith- standing the foregoing, such certificate may state that it is given without prejudice to any rights against third parties which exist as of the date of such certificate or which may subse- quently come into being. The Borrower agrees to cause such certificate to be furnished to the Fiscal Agent, the Issuer and the Bond Purchaser within a reasonable period after the Project shall have been completed. -14- Section 3 . 6 . Obligation of Borrower to Complete Project in Event Construction Fund Insuffic ent. In the event that the moneys in the Construction Fund available for payment of the Cost of the Project should not be sufficient to pay the costs thereof in full, the Borrower agrees to pay directly, or to pay to the Fiscal Agent for deposit in the Construction Fund, moneys suffi- cient in aggregate amount to pay such costs of completing the Project as will , or may be, in excess of the moneys available therefor in the Construction Fund. THE ISSUER DOES NOT MAKE ANY WARRANTY OR REPRESENTATION, EITHER EXPRESS OF IMPLIED, THAT THE MONEYS WHICH WILL BE PAID INTO THE CONSTRUCTION FUND, AND WHICH, UNDER THE PROVISIONS OF THIS AGREEMENT, WILL BE AVAILABLE FOR PAYMENT OF THE COST OF THE PROJECT, WILL BE SUFFICIENT TO PAY ALL OF THE COSTS WHICH WILL BE INCURRED IN THAT CONNECTION. The Borrower agrees that, if after exhaustion of the moneys on de- posit in the Construction Fund the Borrower should pay directly, or pay to the Fiscal Agent for deposit in the Construction Fund, any moneys for the payment of any portion of the Cost of the Project pursuant to the provisions of this Section, it shall not be entitled to any reimbursement therefor from the Issuer, the Fiscal Agent or the Bond Purchaser, nor shall it be entitled to any diminution or abatement of the amounts payable by it under Section 4.2 hereof. The obligation of the Borrower to complete the Project shall survive termination of this Agreement. Section 3 . 7 . Enforcement of Remedies Against Contrac- tors, Subcontractors and their Sureties . The Borrower covenants that it will enforce, or cause to be enforced, all performance bonds and labor and materials payment bonds, if any, and will take such action and institute such proceedings as shall be necessary to cause and require all contractors, subcontractors and materials suppliers to complete their contracts diligently and in accordance with the terms of said contracts, including, without limitation, the correcting of any defective work, with all expenses incurred by the Borrower in connection with the performance of its obligations under this Section to be con- sidered as part of the Cost of the Project referred to in Section 3 .3 ( i ) hereof. Any amounts recovered by way of damages , refunds , adjustments or otherwise in connection with the foregoing prior to the Completion Date, less any unreimbursed legal expenses incurred in order to collect the same, shall be paid into the Construction Fund; and after the Completion Date shall be paid to the Bond Purchaser and applied to the prepayment of the Bonds in the inverse order of the due dates of the principal installments hereunder, and within any installment by lot. Section 3 . 8 . Investment of Moneys in the Construction Fund and Other Trust Funds . Any moneys held as a part of the Construction Fund or any other trust fund shall be invested or reinvested by the Fiscal Agent, to the extent permitted by the Enabling Ordinance and the Bond Ordinance, at the written direc- tion of the Authorized Borrower Representative, in ( i ) bonds or other obligations which as to principal and interest constitute direct obligations of, or are unconditionally guaranteed by, the -15- United States of America or any instrumentality thereof; (ii ) obligations of the Federal National Mortgage Association; (iii ) obligations of the Federal Intermediate Credit Banks ; ( iv) obli- gations of Federal Banks for Cooperatives ; (v) obligations of Federal Land Banks; (vi ) obligations of Federal Home Loan Banks ; (vii ) obligations of the Federal Financing Bank; (viii ) time certificates of deposit of banks , organized under the laws of any state of the United States of America and national banks which have a combined capital and surplus of at least $10 , 000 , 000 . Any such securities may be purchased at the offering or market price thereof at the time of such purchase . The Fiscal Agent may make any and all such investments through its own bond or trust depart- ment. The investments so purchased shall be held by the Fiscal Agent and shall be deemed at all times to be a part of the Construction Fund or other trust fund, as the case may be, and any interest accruing thereon and any profit realized therefrom shall be credited to such trust fund, and any net losses result- ing from such investment shall be charged to such fund and paid by the Borrower from it' s own funds . The Borrower covenants that it will not direct the Fiscal Agent to make any investment which would cause the Bonds to be deemed to be "arbitrage bonds" within the meaning of Sec- tion 103 (c) of the Code and the Regulations , or which would in any way adversely affect the tax-exempt status of the Bonds for federal income tax purposes . Section 3 . 9 . Special Arbitrage Covenants . The Bor- rower and the Issuer certify and covenant with the Bond Purchaser and the holders and owners of the Bonds from time to time out- standing that, as long as any of the Bonds remain outstanding, moneys on deposit in any trust fund or account in connection with the Bonds , whether or not such moneys were derived from the proceeds of the sale of the Bonds or from any other source, will not be used in any manner which will cause the Bonds to be deemed to be "arbitrage bonds" within the meaning of the Code and the Regulations as in effect and applicable to obligations issued on the date of issuance of such Bonds or at any time that the Bonds are outstanding. The Borrower and the Issuer reserve the right, however, to make any investment of such moneys permitted by this Agreement, the Enabling Ordinance, the Bond Ordinance and the laws of the State, if, when and to the extent that said Section 103 (c) or the Regulations shall be replaced, repealed, relaxed or held void by final judgment of a court of competent jurisdiction, but only if any such investment made by virtue of such repeal, relaxation or decision would not, in the written opinion of Bond Counsel, result in making the interest on the Bonds subject to federal income taxation. -16- ARTICLE IV The Loan; Loan Repayments; the Mortgage; the Collateral Security Agreement; and Other Payments Section 4 . 1 . The Loan. The Issuer agrees , upon the terms and conditions set forth in this Agreement, to lend to the Borrower the proceeds received by the Issuer from the sale of the Series 1980 Bonds , as may be required by the Borrower to pay the Cost of the Project. Pursuant to said Agreement, the Issuer will issue the Series 1980 Bonds upon the terms and conditions con- tained in the Enabling Ordinance, the Bond Ordinance and this Agreement, and will cause the Series 1980 Bond proceeds to be applied as provided in Article III hereof. Such proceeds shall be disbursed on behalf of the Issuer by the Fiscal Agent as provided in Section 3 . 3 hereof. To repay the loan, the Borrower agrees to make all payments when due to the Bond Purchaser, for the account of the Issuer, pursuant to the Assignment, as pro- vided in Section 4. 2 hereof and said Assignment. Section 4 .2 . Loan Repayments . The Borrower shall pay directly to the Bond Purchaser at the address set forth in Sec- tion 9 . 1 hereof (pursuant to the assignment of certain of the Issuer' s rights in the Assignment) , as repayment of the loan evidenced hereby, the following amounts on the following dates : ( a) With respect to Bonds outstanding, no later than 10 a.m. on each interest payment date ( i . e . , any date on which the interest on any Bond shall become due, whether by matur- ity, redemption or acceleration) with respect to such Bonds , a sum in immediately available funds which will equal the interest to be paid on such outstanding Bonds on such inter- est payment date; and (b ) With respect to Bonds outstanding, no later than 10 a.m. on each principal payment date ( i .e . , any date on which the principal of any Bonds shall become due, whether by maturity, redemption or acceleration) with respect to such Bonds, a sum in immediately available funds which will equal the sum of: ( i ) the principal of such outstanding Bonds which will become due and payable on such date, (ii ) any applicable redemption premium with respect to such Bonds, and ( iii ) accrued interest, if any, which will become due and payable on such date with respect to such Bonds . In the event that any prepayment made by the Borrower hereunder shallpursuanttothe d r be applied bythe Bond Purchaser PP Bond Ordinance for the purchase or redemption of Bonds , the Borrower shall be entitled to a credit for the principal amount of the Bonds so redeemed against the amount due under the provi- sions hereof; provided that any partial prepayment shall be applied in inverse order of the due dates of the principal in- stallments hereunder and within any installment by lot. -17- The Borrower hereby covenants and agrees that it will execute the Collateral Security Agreement and will cause the Mortgage to be executed in order to secure its obligations here- under and the Issuer' s obligations as evidenced by the Bonds . Upon a declaration of acceleration by the Bond Pur- chaser, an amount equal to the aggregate principal amount of all of the then outstanding Bonds , together with accrued interest, if any, thereon, shall become immediately due and payable. If the date when any of the payments required by this Section 4 . 2 shall be a Saturday, Sunday, legal holiday or other day on which the Bond Purchaser is authorized by law to close, then such payments need not be made on such date, but may be made on the next succeeding business day not a Saturday, Sunday, legal holiday or day upon which the Bond Purchaser is authorized by law to close, with the same force and effect as if made on the date originally due, and no interest shall accrue for the period between such original due date and the actual payment date . In the event that the Borrower shall fail to make any payment required of it in this Section, the payment so in default shall continue as an obligation of the Borrower until the amount in default shall have been fully paid, and the Borrower agrees to pay, on demand, the same with interest thereon at the rate of ten percent (10%) per annum, but should such rate exceed the maximum permitted by the laws of the State, then at the maximum so permit- ted. Section 4. 3 . Obligation of Borrower hereunder Uncondi- tional . The obligation of the Borrower to make the payments re- quired hereunder, and to perform and observe the other agreements on its part contained herein, shall be absolute and uncondi- tional, without any abatement, diminution, defense or right of set-off, recoupment or counterclaim the Borrower may otherwise have against anyone else except as expressly provided herein. Until such time as the payments of the principal of, and interest and premium, if any, on, the Bonds shall have been made in accor- dance with the Bond Ordinance, the Borrower ( i ) will not suspend or discontinue any payments provided for in Section 4 .2 hereof, ( ii ) will perform and observe all of its other agreements con- tained in this Agreement, and (iii ) except as otherwise provided herein, will not terminate the term of this Agreement for any cause, including, without limitation, failure of the Borrower to complete the Project, the occurrence of any acts or circumstances that may constitute failure of consideration, eviction or con- structive eviction, destruction of or damage to the Project, the taking by eminent domain of title to or the temporary use of all or any part of the Project, commercial frustration of purpose, any change in the tax or other laws of the United States of America, the State or any political subdivision of either there- of, or any failure of the Issuer to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or in connection with this Agreement. -18- Nothing contained in this Section 4.3 shall be construed to release the Issuer from the performance of any of the agreements on its part herein contained; and in the event that the Issuer should fail to perform any such agreement on its part herein contained, the Borrower may institute such action against the Issuer as the Borrower may deem necessary to compel performance thereof by the Issuer, as long as such action does not abrogate the Borrower' s obligations contained in the first sentence of this Section 4 .3 . The Borrower may, however, at its own cost and expense, and in its own name or in the name of the Issuer (to the extent permitted by law) , prosecute or defend any action or proceeding, or take any other action involving third persons, which the Borrower deems reasonably necessary to secure or pro- tect its right of possession, occupancy and use of the Project; and in such event the Issuer and the Borrower agree to cooperate so far as is lawful , and to take action to effect the dismissal of the Issuer as a party, or the substitution of the Borrower for the Issuer in any such action or proceeding. Provided that the Issuer shall not be obligated to cooperate in action which it deems to be adverse to its governmental interests . Section 4 .4. Assignment of Issuer' s Rights . As secur- ity for the payment of its Bonds and the performance of the parties hereto, the Issuer will by the Assignment assign to the Bond Purchaser certain of the Issuer' s rights under this Agree- ment (but none of the Issuer ' s Unassigned Rights ) , including the right to receive certain payments hereunder; and the Issuer hereby directs the Borrower to deliver such payments directly to the Bond Purchaser at the address set forth in Section 9 . 1 here- of, to be applied for the account of the Issuer. The Issuer will direct the Bond Purchaser in the Bond Ordinance and the Assign- ment to apply such payments to the payment of the principal of, premium, if any, and interest on the Bonds when due. The Bor- rower hereby consents to such assignment, and agrees to make payments directly to the Bond Purchaser at the address set forth in Section 9 . 1 hereof, without any defense or right of set-off, recoupment or counterclaim by reason of any dispute between the Borrower and the Bond Purchaser, or between the Borrower and the Issuer. Section 4. 5 . The Mortgage; the Collateral Security Agreement. Concurrently with, or prior to, the sale and delivery by the Issuer of the Series 1980 Bonds , American National Bank and Trust Company of Chicago, as trustee under the Land Trust will, as mortgagor, execute and deliver the Mortgage and the Borrower, as pledgor, will execute and deliver the Collateral Security Agreement to the Bond Purchaser as mortgagee and pledgee . The Mortgage and the Collateral Security Agreement shall consti- tute additional security for the payment of the Bonds and the performance by the Borrower of this Agreement. -19- Section 4. 6 . Other Payments . (a) The Borrower will pay, or cause to be paid, as the same shall become due, in addition to all other amounts pay- able hereunder, all taxes and governmental charges of any kind whatsoever that may at any time be lawfully assessed or levied against or with respect to the Project or any machin- ery, equipment, fixtures or other personal property of the Borrower installed thereon (including, without limiting the generality of the foregoing, any taxes levied upon or with respect to the revenues and receipts derived by the Issuer from this Loan Agreement, which if not paid will become a lien on the Project prior to or on a parity with the lien of the Assignment, the Bond Ordinance, this Loan Agreement, the Collateral Security Agreement or the Mortgage, or a charge thereon, and the pledges or assignments thereof to be cre- ated and made herein, in the Bond Ordinance, the Mortgage, the Collateral Security Agreement and the Assignment) , all utility and other charges incurred in the operation, main- tenance, use, occupancy and upkeep of the Project, and all assessments and charges lawfully made by any governmental body for public improvements that may be secured by a lien on the Project; provided that with respect to special asses- sments or other governmental charges that may lawfully be paid in installments over a period of years , the Borrower shall be obligated by the terms of this Agreement to pay only such installments as accrue during the term of this Loan Agreement, irrespective of when payment thereof is due . If the Borrower shall first notify the Issuer and the Bond Purchaser of its intention so to do, the Borrower or the trustee under the Land Trust or Component Management Group may, at its own expense and in its own name and be- half, in good faith contest any such taxes , assessments and other charges, in accordance with Section 5 .8 hereof. Provided however that the Borrower and the Component Manage- ment Group hereby waive their right to contest the annual budget of the Issuer, the annual appropriation ordinance of the Issuer and the annual tax levy ordinance for corporate purposes of the Issuer. (b ) The Borrower also agrees to pay, upon the written request of the Issuer or the Fiscal Agent, all reasonable fees , expenses and charges of the Issuer and the Fiscal Agent related to the transactions contemplated by this Agreement, the Bond Ordinance, the Mortgage, the Collateral Security Agreement and the Assignment which are not other- wise required to be paid by the Borrower under the terms of this Agreement, the Bond Ordinance, the Mortgage, the Col- lateral Security Agreement or the Assignment, including, without limitation, all reasonable legal fees of the Issuer and the Fiscal Agent. -20- Section 4. 7 . Interest on Overdue Payments . Should the Borrower fail to make any of the payments required hereunder on its part to be made, and except as otherwise expressly provided herein, the item or installment so in default shall continue as an obligation of the Borrower until the amount in default shall have been fully paid, and the Borrower agrees to pay, on demand, the same with interest thereon at the rate of ten percent (10%) per annum, but should such rate exceed the maximum permitted by the laws of the State, then at the maximum so permitted. Section 4 .8 . Defeasance. If the Borrower shall pay and discharge, or provide in a manner satisfactory to the Bond Purchaser for the payment and discharge of, the whole amount of the principal of and interest on the loan made hereunder at the time owing, and shall pay or cause to be paid all other sums payable hereunder, or shall make arrangements satisfactory to the Bond Purchaser for such payment and discharge, then and in that event all property, rights and interests hereby, in the Bond Ordinance, the Assignment, the Collateral Security Agreement and the Mortgage conveyed, assigned or pledged shall revert to the Borrower and the Land Trust as their respective interests re- quire, and the estate, right, title and interest of the Issuer and the Bond Purchaser therein shall thereupon cease, determine and become void; and this Agreement, the Assignment and the Mortgage, and the covenants and agreements of the Borrower and the Land Trust and the Component Management Group contained herein and therein, shall be discharged, and the Issuer and the Bond Purchaser in such case, on demand of the Borrower and at the Borrower' s cost and expense, shall execute and deliver to the Borrower a proper instrument or proper instruments acknowledging the satisfaction and termination of this Agreement, the Bond Ordinance, the Assignment, the Collateral Security Agreement and the Mortgage, and shall convey, assign and transfer, or cause to be conveyed, assigned or transferred, and shall deliver, or cause to be delivered, to the Borrower, all property, including money, then held by the Issuer, the Fiscal Agent or the Bond Purchaser, other than moneys deposited with the Bond Purchaser or the Fiscal Agent for the payment of the principal of or interest on the Bonds . r ARTICLE V Special Covenants , Representations and Agreements Section 5 . 1 . Issuer ' s , Fiscal Agent' s and Bond Pur- chaser' s Right of Access to the Project. The Borrower agrees that during the term of this Agreement the Issuer, the Fiscal Agent and the Bond Purchaser, and their duly authorized agents , shall have the right at all reasonable times to enter upon the Real Property and examine and inspect the Project, including such rights of access to the Project as may be reasonably necessary for the proper maintenance of the Project in the event of the failure of the Borrower to perform its obligations hereunder in -21- relation thereto . The Borrower agrees that the Issuer in the exercise of its police power may enter upon the Real Property for the purpose of enforcing state statutes and municipal ordinances relating to the construction of the Project. The Borrower agrees that the Issuer, the Fiscal Agent and the Bond Purchaser, and their duly authorized agents, shall have, subject to such limita- tions, restrictions , and requirements as the Borrower may reason- ably prescribe in order to preserve secret processes and formulae, including, but not limited to, the Borrower' s standard plant visitor agreement, such rights of access to the Project as may be reasonably necessary to determine that the Borrower has acquired, constructed and equipped the Project, and is using the Project or causing the Project to be used, in such a manner as to constitute an economic development project within the meaning of the Enabl- ing Ordinance. However, nothing contained in this Section 5 . 1 or in any other provision of this Agreement shall be construed to entitle the Issuer, the Fiscal Agent or the Bond Purchaser to any information or inspection involving the confidential materials of the Borrower. Section 5 .2 . Borrower to Maintain its Existence; Con- ditions Under Which Exceptions Permitted. The Borrower agrees that, during the term of this Agreement, it will maintain its corporate existence, will not dissolve or otherwise dispose of all or substantially all of its assets , and will not consolidate with or merge into another business entity or permit one or more other business entities to consolidate with or merge into it; provided that the Borrower may, without violating the agreement contained in this Section 5 .2 , consolidate with or merge into another domestic business entity (that is, a business entity organized and existing under the laws of the United States of America, one of the states of the United States of America, or the District of Columbia) , or permit one or more other domestic business entities to consolidate with or merge into it, or sell or otherwise transfer to another domestic business entity all or substantially all of its assets as an entirety and thereafter dissolve; provided that the surviving, resulting or transferee business entity, as the case may be, (i ) assumes in writing all of the obligations of the Borrower herein expressed or implied, and ( ii ) has a consolidated tangible net worth following such consolidation, merger, sale or transfer which is equal to or greater than the lesser of (a) the consolidated tangible net worth of the Borrower at the time of the execution of this Agree- ment, or (b ) the consolidated tangible net worth of the Borrower at the time of such consolidation, merger, sale or transfer; and further provided that no "Event of Taxability" (as defined in Section 7 . 3 hereof) has theretofore occurred or will occur or result from such sale, transfer, consolidation or merger; and further provided that no event of default has occurred and is continuing hereunder. The term "consolidated tangible net worth" as used in this Section 5 .2 shall mean the amount obtained by subtracting total consolidated liabilities (not including as a liability any capital or surplus item) from total consolidated tangible assets of the Borrower. Prior to any such sale, trans- fer, consolidation or merger, the Bond Purchaser and the Issuer -22- shall be furnished with a certificate from the chief_ financial officer of the Borrower, stating that in the opinion of such officer none of the covenants in this Loan Agreement, or in the Collateral Security Agreement and the Assignment contained will be violated as a result of said sale, transfer, consolidation or merger. Section 5 . 3 . Indemnification Covenants . (a) The Borrower shall, and hereby does agree to, indemnify and save the Issuer, the Fiscal Agent and the Bond Purchaser harmless against and from any and all claims by or on behalf of any person arising from the conduct or manage- ment of, or from any work or thing done on, the Project during the term of this Agreement, and against and from all claims arising during the term of this Agreement from (i ) any condition of the Project, (ii ) any breach or default on the part of the Borrower in the performance of any of its obligations under this Agreement, the Collateral Security Agreement or of the trustee under the Land Trust or the Component Management Group with respect to the Mortgage, ( iii ) any act of, or omission to act by, the Borrower, the Component Management Group or the trustee under the Land Trust or of any of their agents, contractors, servants, employees or licensees, or (iv) any act of, or omission to act by, any assignee or lessee of the Borrower, the Compo- nent Management Group or the trustee under the Land Trust, or of any agents, contractors, servants , employees or li- censees of any assignee or lessee of the Borrower, the Component Management Group or the trustee under the Land Trust. The Borrower shall indemnify and save the Issuer, the Fiscal Agent and the Bond Purchaser harmless from and against all costs and expenses incurred in, or in connection with, any such claim arising as aforesaid in subsections ( i ) , (ii ) , (iii ) or ( iv) of this paragraph, or in connection with any action or proceeding brought thereon; and upon notice from the Issuer, the Fiscal Agent or the Bond Pur- chaser, the Borrower shall defend all or any of them in any such action or proceeding. (b ) Notwithstanding the fact that it is the intention of the parties hereto that the Issuer shall not incur any pecuniary liability by reason of the terms of this Agree- ment, the undertakings required of the Issuer hereunder, the issuance of the Bonds, the adoption of the Bond Ordinance, the execution of the Fiscal Agent Agreement and the Assign- ment, the performance of any act required of it by this Agreement, or the performance of any act requested of it by the Borrower, including, without limitation, all claims , liabilities or losses arising in connection with the viola- tion of any statutes or regulations pertaining to the fore- going; nevertheless, if the Issuer should incur any such pecuniary liability, then and in such event the Borrower shall indemnify and hold harmless the Issuer against all -23- claims by or on behalf of any Person arising out of the same, and all costs and expenses incurred in connection with any such claim, or in connection with any action or proceed- ing brought thereon; and upon notice from the Issuer, the Borrower shall defend the Issuer in any such action or proceeding or in lieu thereof, when the interests of the Borrower and the Issuer in such action or proceeding are adverse, the Issuer may, at its own expense, retain indepen- dent counsel . Section 5 .4. Records and Financial Statements of the Borrower. The Issuer, the Bond Purchaser and the Fiscal Agent shall be permitted at all reasonable times during the term of this Agreement to examine, and make copies of, the books and records maintained by the Borrower with respect to the Project. The Borrower agrees to furnish to the Issuer, the Fiscal Agent and the Bond Purchaser (within ninety (90 ) days after the close of the Borrower' s fiscal year) a balance sheet and statement of income showing the consolidated financial posi- tion of the Borrower at the close of each fiscal year, and the results of the consolidated operations of the Borrower for each fiscal year, accompanied by a report or opinion of the Borrower' s regular independent certified public accountants . Section 5 . 5 . Tax-Exempt Status of the Series 1980 Bonds . The Issuer covenants that it shall, prior to the issuance of the Series 1980 Bonds, duly elect to have the provisions of Section 103 (b) (6 ) (D) of the Code apply to such issue, and such election shall be made in accordance with the Regulations and the applicable procedures of the Internal Revenue Service. The Borrower covenants that it shall furnish to the Issuer whatever information is necessary for the Issuer to make such election, and shall file all supplemental statements and other information required by the Regulations and the procedures of the Internal Revenue Service. In order to effectuate such election and to continue the same in full force and effect as long as any of the Series 1980 Bonds shall remain outstanding, the Borrower agrees to: (1 ) attach a copy of the Issuer' s statement of election to the Borro- wer' s income tax return for the taxable year during which the election is made, in accordance with Section 1 . 103-10 (b) (2 ) (vi ) (a) of the Regulations ; (2 ) file or cause to be filed the supplemental statements required by Section 1 . 103-10(b) (2 ) (vi ) (c) of the Regulations, and (3 ) take such further action, and file or cause to be filed such further instruments, documents, statements or reports with the United States Treasury Department or other authorized governmental agency, and at such office or offices, as may from time to time be required by applicable law or regulation in connection therewith. The Borrower understands that the term "capital expen- ditures" as used in this Agreement and in the Bond Ordinance, as of the date of execution of this Agreement, means any expenditure -24- made by any person which, under any rule or election under the Code, may be treated as a capital expenditure (whether or not such expenditure is so treated) and determined without regard to any rule of the Code which permits expenditures properly charge- able to a capital account to be treated as current expenses, unless such expenditure is an "excluded expenditure" within the meaning of Section 1 . 103-10 of the Regulation. The Borrower covenants that: (i ) the proceeds of the Series 1980 Bonds are to be used with respect to facilities to be located within the corporate boundaries of the City of Elgin; ( ii ) the Borrower will be the principal user of the Project to be acquired, constructed and equipped with the proceeds of the Series 1980 Bonds, within the meaning of Section 103 (b ) ( 6 ) of the Code; and (iii ) there are no outstanding obligations of any state, territory or possession of the United States of America, or of any political subdivision of any of the foregoing or of the District of Columbia, constituting "exempt small issues" within the meaning of Section 1 . 103-10 of the Regulations , the proceeds of which have been or are to be used primarily with respect to facilities located within the corporate boundaries of the City of Elgin, and which are to be used primarily by the Borrower ( includ- ing any related person within the meaning of Section 103 (b ) (6 ) (C) of the Code) , other than the Series 1980 Bonds . The Borrower further covenants that it will not make, or allow to be made, any capital expenditure which will cause the interest on the Series 1980 Bonds to become subject to federal income taxation pursuant to the provisions of Section 103 (b) of the Code as long as any of the Series 1980 Bonds are outstanding under the Bond Ordinance. The Borrower further covenants that it will neither take any other action nor permit any other action to be taken which would cause the interest on the Series 1980 Bonds to become subject to federal income taxation, provided that the Borrower shall not have violated this covenant if the interest on any of the Series 1980 Bonds becomes taxable to a person who is a substantial user of the Project or a related person, pursuant to the provisions of Section 103 (b) (8 ) of the Code. The Borrower further covenants that it shall furnish to both the Issuer and the Bond Purchaser (i ) at the time of the issuance of the Series 1980 Bonds, a statement of the aggregate amount of capital expenditures made or incurred within the cor- porate limits of the City of Elgin ( "Included Capital Expendi- tures" ) , during the period beginning three (3 ) years before the date of such issue, ( ii ) within ninety (90 ) days following each anniversary of the date of the issuance of the Series 1980 Bonds for three (3 ) years after the issuance of the Series 1980 Bonds, a statement of the aggregate amount of Included Capital Expendi- tures made or incurred during the period beginning with the date of issuance or of the last statement filed with the Issuer and the Bond Purchaser, whichever is later, and ending on such anni- versary date, and ( iii ) within thirty (30 ) days after it has made or incurred total capital expenditures of $5 , 000, 000 with respect to the Project or any other property or facilities located in the -25- City of Elgin, Illinois , a statement to that effect. Each such statement shall set forth (A) a description of those expenditures which are capital expenditures under Section 103 (b ) (6 ) (D) (ii) of the Code, and shall take into account facilities referred to in Section 103 (b) (6 ) (E) in computing such capital expenditures , and (B) a description, and the reason for the exclusion, of any capital expenditures which the Borrower has made, but has not taken into account under Section 103 (b) (6 ) (F) of the Code. This covenant shall survive the termination of this Agreement. Section 5 . 6 . Maintenance and Modification of the Project. Until the principal of and interest on the Bonds shall be fully paid, the Borrower agrees that it will, at its own expense: (i ) keep the Project in as reasonably safe a condition as its operations shall permit; (ii ) keep the Project in good repair and in good operating condition, ordinary wear, tear and obsolescence excepted, making from time to time all necessary repairs thereto, and renewals and replacements thereof; (iii ) not create or permit to be created or remain, and promptly discharge, all liens, security interests, encumbrances and charges on the Project or any part thereof, other than Permitted Encumbrances , subject to the contests permitted by Section 5 . 8 hereof, exhibit- ing satisfactory discharge of same to the Issuer and the Bond Purchaser upon either the Issuer' s or the Bond Purchaser' s writ- ten request; ( iv) complete within a reasonable time the acquisi- tion, construction and equipping of the Project; (v) comply with all present and future laws, ordinances, orders , decrees, rules , regulations and requirements of every duly constituted govern- mental entity, authority, commission and court, and the officers thereof, of which the Borrower has notice, and the failure to comply with which would materially and adversely affect the Project, or the use, occupancy or condition thereof, subject to the contests permitted by Section 5 . 8 hereof; (vi ) not make any material alteration of the Project without the prior written consent of the Issuer and the Bond Purchaser, except as required by law or municipal ordinance; with the further exception that the Borrower, at its own expense and from time to time, may make any alterations, additions, modifications or improvements to the Project (which shall be the sole property of the Borrower, free from the interest of the Issuer and the Bond Purchaser under this Agreement, the Bond Ordinance, the Assignment, the Collateral Security Agreement and the Mortgage) as it shall deem desirable for its business purposes, as long as such alterations, addi- tions, modifications or improvements do not adversely affect or substantially reduce the integrity of the Project, its intended use or its value; and (vii ) promptly notify the Issuer and the Bond Purchaser of any damage or destruction to the Project, any pending or threatened proceedings for the taking (by eminent domain or otherwise) of any part thereof, any notice from any governmental authority alleging violation of any building code, zoning ordinance or other governmental requirement, or any other event or condition which might materially and adversely impair, affect or reduce the integrity of the Project, its intended use or value. -26- Section 5 . 7 . Taxes, Charges and Assessments . The Borrower covenants and agrees , subject to the provisions of Section 5 .8 hereof, to pay, or to cause to be paid, when the same shall become due and payable: ( a) all legally assessed taxes and charges on account of the ownership, use, occupancy or operation of the Pro- ject, including, but not limited to, all sales, use, occu- pation, real and personal property taxes , all permit and inspection fees , occupation and license fees , and all water, gas, electric or other utility charges assessed or charged on or against the Project, or on account of the Borrower' s use or occupancy thereof, or on account of the activities conducted thereon or therein; and (b ) all taxes , assessments and impositions, general and special, ordinary and extraordinary, of every name and kind, which shall be lawfully taxed, levied, imposed or assessed upon all or any part of the Project, or the inter- est of the Borrower therein. If under applicable law any such tax, charge, fee, rate, imposition or assessment may at the option of the taxpayer be paid in installments, the Borrower, the Component Management Group or the Land Trust may exercise such option. The Borrower shall remain liable for, and be obligated to pay, all such amounts which accrue during the term hereof, irrespective of when such amount comes due. Nothing contained herein shall be deemed to constitute an admission by the Borrower that the Borrower is liable for any tax, charge, fee, rate, imposition or assessment. Section 5 .8 . Permitted Contests . The Borrower shall not be required to pay any tax, charge, fee, rate, imposition or assessment required to be paid hereunder, nor shall the Borrower be required to remove any lien, security interest, encumbrance or charge required to be removed by it hereunder, nor shall the Borrower be required to comply with any law, ordinance, order, decree, rule, regulation or requirement referred to herein, as long as the Borrower, the Component Management Group or the Land Trust shall in good faith, and at its own cost and expense, con- test the amount or the validity thereof, or take other appropri- ate action with respect thereto, in an appropriate manner or by appropriate proceedings which shall operate during the pendency thereof to prevent the collection of or other realization upon the tax, charge, fee, rate, imposition, assessment, lien, secur- ity interest or encumbrance so contested, and the sale, for- feiture or loss of the Project, or any part thereof, to satisfy the same; provided that no such contest or action shall subject the Issuer, the Bond Purchaser or the Fiscal Agent to any liabil- ity, unless the Borrower properly indemnifies the Issuer, the Bond Purchaser or the Fiscal Agent, as the case may be, therefor. While any such matters are pending, the Borrower shall have the -27- right to pay, remove or cause to be discharged or marked exempt the tax, charge, fee, rate, imposition, assessment, lien, se- curity interest or encumbrance being contested, and the Issuer, the Fiscal Agent and the Bond Purchaser shall have the right to require the Borrower at the Issuer' s, the Fiscal Agent' s or the Bond Purchaser' s written direction to place in escrow an amount equal to the contested amount. Each such contest shall be promptly prosecuted to final conclusion or settlement, and the Borrower will pay or cause to be paid, and save the Issuer, the Fiscal Agent and the Bond Purchaser harmless against all losses, judg- ments, decrees and costs (including attorneys ' fees and expenses in connection therewith) , and will, promptly after the final determination or settlement of such contest or action, pay and discharge the amounts which shall be levied, assessed or imposed, or determined to be payable therein, together with all penalties, fines, interest, costs and expenses thereon or in connection therewith. The foregoing is qualified only to the extent that, if the Bond Purchaser or the Issuer should notify the Borrower that, in the opinion of Independent Counsel , by any such contest the lien of this Agreement, the Assignment, the Collateral Secur- ity Agreement, the Mortgage or the Bond Ordinance will be materi- ally endangered, or the Project or any material part thereof will be subject to imminent loss or forfeiture, such contest shall be terminated, and the tax, charge, fee, rate, imposition, assess- ment, lien, security interest or encumbrance shall be promptly satisfied. The Issuer, the Bond Purchaser and the Fiscal Agent will cooperate fully with the Borrower in any such contest. Anything to the contrary notwithstanding, no contest shall be made against the annual budget, annual appropriation ordinance or the annual tax levy ordinance for corporate purposes of the Issuer, or against any statute or ordinance now in effect and relating to the construction of the Project. Section 5 . 9 . Insurance Required. During the Construc- tion Period and throughout the term of this Agreement, the Bor- rower shall keep the Project, or cause the same to be kept, continuously insured against such risks as are customarily in- sured against by businesses of like size and type, paying, or causing to be paid, as the same shall become due, all premiums with respect thereto, including, but not necessarily limited to : (a) Insurance upon the repair or replacement basis if available, and otherwise to the full insurable value, of the Project (with deductible provisions not to exceed $100 in any one casualty) , against loss or damage by fire and light- ning, with uniform standard extended coverage endorsement limited only as may be provided in the standard form of extended coverage endorsement at the time in use in the State, provided that such insurance need not be taken out until the construction of the Project has commenced, or materials for such construction or installation have been stored on the Real Property, whichever is earlier. -28- (b ) Boiler explosion insurance on steam boilers , pressure vessels and pressure piping in an amount not less than repair or replacement cost (with deductible provisions not to exceed $100 ) , provided that such insurance need not be taken out until the steam boilers, pressure vessels and pressure piping have been installed in the Project. (c) Insurance to the extent of $500, 000 per occurrence and $500, 000 in the aggregate against liability for bodily injury, including death resulting therefrom, and to the extent of $500 , 000 per occurrence against liability for damage to property, including loss of the use thereof, occurring on or in any way related to the Project or any part thereof. (d) During the Construction Period and throughout the term of this Agreement, such workmen' s compensation coverage as is required by the laws of the State . The Net Proceeds of the insurance carried pursuant to the provisions of (a) and (b ) hereof shall be paid and applied as provided in Section 5 . 10 hereof, and the Net Proceeds of insur- ance carried pursuant to the provisions of (c) , (d) and (e) hereof shall be applied toward the extinguishment or satisfaction of the liability with respect to which such insurance proceeds shall have been paid. All insurance required in this Section 5 . 9 shall be taken out and maintained in generally recognized responsible insurance companies qualified to do business in the State, as selected by the Borrower. All policies evidencing such insurance shall name the Issuer, the Borrower and the Bond Purchaser as insureds, and shall contain a provision or provisions stating that all property losses are to be adjusted with the Borrower, subject to the written approval of the Bond Purchaser, which written approval will not be unreasonably withheld, and subject to standard mortgagee loss-payable clauses providing for all payments made pursuant to such property losses, after adjustment, to be in the name of the Bond Purchaser. A certificate or certi- ficates of the insurer or insurers that such insurance is in force and effect shall be deposited with the Issuer and the Bond Purchaser; and, prior to the expiration of any such policy, the Borrower shall furnish to the Issuer and the Bond Purchaser evidence satisfactory to the Issuer and the Bond Purchaser that each such policy has been renewed or replaced, or is no longer required by this Agreement. In lieu of separate policies, the Borrower may maintain one or more blanket policies of insurance having the aggregate coverage required by this Section 5 . 9 . All policies of insurance required by this Section 5 . 9 shall provide that cancellation or termination thereof is subject to ten (10 ) days ' prior written notice to the Issuer and the Bond Purchaser. Section 5 . 10 . Damage and Destruction. If prior to the full payment of the Bonds the Project is destroyed (in whole or -29- in part) or damaged by fire or other casualty to such an extent that the claim for loss under the insurance required to be car- ried pursuant to Section 5 . 9 hereof resulting from such destruc- tion of, or damage to, the Project is not greater than $70 , 000 , the Borrower (i ) will promptly repair, rebuild or restore the property damaged or destroyed to substantially the same condition as existed prior to the event causing such damage or destruction, with such changes , alterations and modifications (including the substitution and addition of other property which shall become subject to the lien hereof, of the Bond Ordinance, the Mortgage, the Collateral Security Agreement and the Assignment) as may be desired by the Borrower, and as will not impair the value, oper- ating unity, productive capacity or character of the Project as an economic development project within the meaning of the Enabl- ing Ordinance, ( ii ) will apply for such purpose as much of such proceeds as may be necessary therefor, and (iii ) will promptly given written notice thereof to the Issuer and the Bond Purchaser. All Net Proceeds of insurance resulting from such claims for losses not in excess of $70, 000 shall be paid by the Bond Pur- chaser directly to the Borrower for application as herein pro- vided. If prior to the full payment of the Bonds the Project is destroyed (in whole or in part) or damaged by fire or other casualty to such an extent that the claim for loss under the insurance required to be carried pursuant to Section 5 . 9 hereof resulting from such destruction or damage to the Project is in excess of $70, 000, the Borrower shall promptly give written notice thereof to the Issuer, the Bond Purchaser and the Fiscal Agent. All Net Proceeds of insurance resulting from such claims ( for losses in excess of $70, 000 ) shall be paid to the Bond Purchaser and held by the Bond Purchaser, or its designee, in a separate trust fund, whereupon the Borrower shall have the option of prepaying the debt evidenced by this Agreement (or a portion thereof) as specified in Article VII hereof, but without premium, or shall take the following steps : ( i ) the Borrower will proceed promptly to repair, rebuild or restore the property damaged or destroyed to substantially the same condition as existed prior to the event causing such damage or destruction, with such changes, alterations and modifications (including the substitution and addition of other property) as may be desired by the Borrower, and as will not impair the value, operating unity, productive capacity or character of the Project as an economic development project within the meaning of the Enabling Ordinance, and ( ii ) the Bond Purchaser, or its designee, will make disbursements from such separate trust fund in accordance with the terms , condi- tions, provisions and requirements of Section 3 .3 hereof, as if such Net Proceeds of insurance were part of the Construction Fund referred to therein. In the event that the Net Proceeds of such insurance are not sufficient to pay in full the cost of any such repair, rebuilding or restoration, the Borrower shall nonetheless com- plete said work and pay from its own funds that portion of the cost thereof in excess of the amount of said Net Proceeds . -30- The Borrower shall not, by reason of the payment of such excess costs, be entitled to any reimbursement from the Issuer, the Fiscal Agent or the Bond Purchaser, or to any abate- ment or diminution of the amounts payable under Section 4 . 2 hereof. Any repair, rebuilding or restoration carried out by or at the direction of the Borrower under this Section 5 . 10 shall be free of mechanics ' , materialmen' s and other liens ; provided that the Borrower may in good faith, upon complying with Section 5 .8 hereof, contest any mechanics ' , materialmen' s or other liens filed, established or remaining against the Project for labor or materials furnished in connection with any repair, rebuilding or restoration so made by it, or at its direction. Any moneys held by the Bond Purchaser, or its designee, under the provisions of this Section 5 . 10 , shall, at the written request of the Authorized Borrower Representative, be invested or reinvested by the Bond Purchaser, or its designee, as specified by the Authorized Borrower Representative in such request in investments enumerated in Section 3 .8 hereof. Any earnings or profits on such investments shall be considered as part of the Net Proceeds, and the Borrower shall pay on demand to the Bond Purchaser, or its designee, the amount of any losses on such investments from its own funds . Notwithstanding the foregoing provision of this Sec- tion, the Borrower may, in the event of the damage or destruction of the Project, elect to redeem all of the Bonds then outstanding pursuant to the provisions of Section 7 . 1 hereof. Section 5 . 11 . Condemnation. Unless title to or the temporary use of all or substantially all, or any material por- tion, of the Project shall have been taken by condemnation (or unless all or substantially all, or any material portion, of the Project shall have been sold under threat of condemnation) and the Borrower shall have elected to exercise its prepayment option pursuant to Section 7 . 1 hereof, in the event that title to, or the temporary use of, the Project (or any part thereof) shall be taken under the exercise of the power of eminent domain by any governmental body, or by any person, firm or corporation acting under governmental authority (or unless the Borrower shall sell the Project, or any part thereof, under threat of the exercise of the power of eminent domain) , the Borrower shall be obligated to continue to make the payments specified in Section 4 .2 hereof. The Borrower, the Bond Purchaser and the Fiscal Agent will cause the Net Proceeds received by them or any of them from any award made in such eminent domain proceedings (or the proceeds of any sale entered into under the threat of the exercise of the power of eminent domain) to be paid to and held by the Bond Purchaser, or its designee, in a separate trust account, to be applied in one or more of the following ways as shall be directed in writing by the Borrower: -31- ( a) To the restoration of the Project to substantially the same condition thereof as existed prior to the exercise of the said power of eminent domain. (b) To the acquisition of other suitable land, and the acquisition by construction or otherwise, in the name of the Borrower, of improvements consisting of a building or build- ings , facilities, machinery, equipment or other properties suitable for the Borrower' s operations at the Project, and which improvements shall be deemed a part of the Project, and available for use and occupancy by the Borrower without the payment of any amount other than as herein provided, to the same extent as if such real and personal properties were specifically described herein; provided that such real and personal properties shall be acquired by the Borrower sub- ject to no liens or encumbrances- prior to or on a parity with the lien of the Assignment, the Mortgage, the Colla- teral Security Agreement, this Agreement or the Bond Ordi- nance, other than Permitted Encumbrances . (c) Redemption of the principal of any of the Bonds , together with accrued interest thereon to the date of re- demption and any applicable premium; provided that no part of any such condemnation award may be applied for such redemption unless (1 ) all of the Bonds are to be redeemed in accordance with the Bond Ordinance, or (2 ) in the event that less than all of the Bonds are to be redeemed, the Borrower shall furnish the Issuer, the Fiscal Agent and the Bond Purchaser with a certificate of an Independent Engineer stating ( i ) the property forming a part of the Project that was taken by such condemnation proceedings is not essential to the Borrower' s use or occupancy of the Project, (ii ) that the Project has been restored to the same condition as existed prior to the taking by such condemnation prodeed- ings , or (iii ) that improvements have been acquired which are suitable for the Borrower' s operations at the Project as contemplated by the foregoing subsection (b) of this Section 5 . 11 . (d) In the event that the Borrower does not elect to apply the Net Proceeds in accordance with the provisions of subsections ( a) , (b) or (c) of this Section 5 . 11, and if no Bonds then remain outstanding under the terms of the Bond Ordinance, to the Borrower. Within ninety (90 ) days from the date of entry of a final order in any eminent domain proceeding granting condemna- tion, the Borrower shall direct the Issuer, the Fiscal Agent and the Bond Purchaser in writing as to which of the ways specified in this Section the Borrower elects to have the condemnation award applied. The Issuer, the Fiscal Agent and the Bond Purchaser shall cooperate fully with the Borrower in the handling and -32- conduct of any prospective or pending condemnation proceeding, and shall, to the extent that they may lawfully do so, permit the Borrower to litigate in any such proceeding in their name and on their behalf. The provisions of the foregoing sentence shall not apply to the Issuer when the condemnation proceeding is untaken pursuant to its governmental authority. In no event shall the Fiscal Agent or the Bond Purchaser voluntarily settle or consent to the settlement of any prospective or pending condemnation proceeding with respect to the Project or any part thereof with- out the written consent of the Borrower. Notwithstanding any other provision of this Section, in any event of condemnation when no Bonds are then outstanding and unpaid, there shall be no obligation on the part of the Borrower to rebuild, restore or repair the Project, and any such award shall, after payment of collection expenses, be property of the Borrower if the Borrower is then in good standing with respect to the payments to be made by it hereunder, and shall have paid to the Issuer, the Fiscal Agent and the Bond Purchaser all other sums due and owing hereunder. Section 5 . 12 . Damage, Destruction or Condemnation of Borrower-Owned Property. The Borrower shall be entitled to the Net Proceeds of any condemnation award or portion thereof made for damage to, or condemnation of, any Borrower-owned property not included in the Project. Section 5 . 13 . Qualification in State. The Borrower warrants that it is, and throughout the term of this Agreement it will continue to be, duly qualified to do business in the State. Section 5. 14. Covenant With Holders and Owners of Bonds . The Issuer and the Borrower agree that this Loan Agree- ment is executed in part to induce the purchase by the Bond Pur- chaser of the Series 1980 Bonds, and accordingly all covenants and agreements on the part of the Issuer and the Borrower as set forth in this Loan Agreement are hereby declared and intended to be for the benefit of the Bond Purchaser and any subsequent or other holders and owners from time to time of the Bonds . Section 5 . 15 . Removal of Personal Property. Neither the Issuer nor the Bond Purchaser shall be under any obligation to renew, repair or replace any inadequate, obsolete, worn out, unsuitable, undesirable or unnecessary Personal Property. If no event of default under this Agreement shall have happened and be continuing, in any instance where the Borrower in its discretion determines that any items of Personal Property have become inad- equate, obsolete, worn out, unsuitable, undesirable or unneces- sary, subject to the provisions of Section 5 . 5 hereof, the Bor- rower may remove such items of Personal Property from the Project and sell, trade-in, exchange or otherwise dispose of them ( as a whole or in part) without any responsibility or accountability to the Issuer or the Bond Purchaser therefor, provided that the Borrower shall either: -33- (a) Substitute and install anywhere on the Real Pro- perty other machinery, equipment, fixtures or related per- sonal property having equal or greater value (but not ne- cessarily having the same function) in the operation of the Project for the purpose for which it is intended, provided such removal and substitution shall not impair the nature of the Project as an economic development project within the meaning of the Enabling Ordinance, all of which substituted machinery, equipment, fixtures or related personal property shall be free of all liens and encumbrances (other than Permitted Encumbrances ) and shall become a part of the Personal Property; or (b) Not make any such substitution and installation, provided that (i) in the case of the sale of any such Per- sonal Property or in the case of the scrapping thereof, and ( ii ) in the case of the trade-in of such Personal Property for other machinery, equipment, fixtures or related personal property not to be installed on the Real Property, the Lessee shall pay to the Bond Purchaser the proceeds of such, trade-in, exchange or other disposition. The removal from the Project of any portion of the Personal Property pursuant to the provisions of this Section 5 . 15 shall not entitle the Borrower to any abatement or diminution of the amounts payable under Section 4. 2 hereof. All amounts paid to the Bond Purchaser pursuant to the provisions of this Section 5 . 15 shall be applied in the inverse order of the due dates of the principal installments hereunder, and within any installment by lot. In the event that prior to such removal of items of Personal Property from the Project, the Borrower has acquired and installed machinery, equipment, fixtures or other personal pro- perty with its own funds which becomes part of the Personal Property, the Borrower may take credit to the extent of the amount so spent by it against the requirement that it either substitute and install other machinery, equipment, fixtures or other personal property having equal or greater value or that it make payment to the Bond Purchaser, provided that the provisions of this sentence shall not relieve the Borrower of its obligation under the first sentence of Section 5 . 6 hereof. The Borrower shall promptly report to the Issuer and the Bond Purchaser each such removal, substitution, sale and other disposition and shall pay to the Bond Purchaser such amounts as are required by the provisions of the preceding subsection (b ) of this Section 5 . 15 promptly after the sale, trade-in or other disposition requiring such payment; provided that no such report and payment need be made until the amount to be paid to the Bond Purchaser on account of all such sales , trade-ins or other dis- positions not previously reported aggregates at least $25, 000 . The Borrower shall not remove, or permit the removal of, any of the Personal Property from the Project except in accordance with the provisions of this Section 5 . 15 . -34- Section 5 . 16 . Installation of Borrower' s Own Machinery, Equipment, Fixtures and Other Personal Property. The Borrower may from time to time, in its sole discretion and at its own expense, install machinery, equipment, fixtures and other per- sonal property anywhere on the Real Property, and which may be attached or affixed thereto. All such machinery, equipment, fixtures and other personal property shall remain the sole pro- perty of the Borrower, and the Borrower may remove the same from the Real Property at any time, in its sole discretion and at its own expense; provided that any damage to the Project resulting from any such removal shall be repaired at the expense of the Borrower. The Borrower may create any mortgage, encumbrance, lien or charge on any such machinery, equipment, fixtures or other personal property, provided that the same will not diminish or impair the security intended to be given by or under this Agreement, the Bond Ordinance, the Assignment, the Collateral Security Agreement or the Mortgage . Neither the Issuer nor the Bond Purchaser shall have any interest in or landlord' s lien on any such machinery, equipment, fixtures or other personal pro- perty so installed pursuant to this Section. All such machinery, equipment, fixtures and other personal property shall be and remain identified as the property of the Borrower by appropriate tags or other markings . Section 5 . 17 . Borrower' s Right to Lease Project; Re- striction on Sale of Project by Borrower. The Borrower may lease the Project in whole or in part, without the necessity of obtain- ing the consent of either the Issuer or the Bond Purchaser, subject, however, to each of the following conditions : (a) No lease shall relieve the Borrower from primary liability for any of its obligations hereunder; and in the event of any such lease, the Borrower shall continue to remain primarily liable for the payments specified in Sec- tion 4. 2 hereof, and for the payment, performance and ob- servance of the other obligations and agreements on its part herein provided to be performed and observed by it. (b ) The lessee shall assume in writing concurrent primary liability for the obligations of the Borrower here- under to the extent of the interest leased. (c) The Borrower shall, within thirty (30 ) days after the execution and delivery thereof, furnish or cause to be furnished to the Issuer and to the Bond Purchaser: ( i ) a true and complete copy of each such lease, and (ii ) a cer- tificate of an independent certified public accountant of recognized national standing satisfactory to the Bond Pur- chaser, an opinion of Independent Counsel or Bond Counsel, or a ruling of the Internal Revenue Service to the effect that nothing in the transaction so done has resulted, or will result, in the occurrence of an "Event of Taxability" ( as defined in Section 7 .2 hereof) . -35- (d) The Borrower will not use or allow the Project to be used in any manner that would cause the Project not to be characterized as an economic development project within the meaning of the Enabling Ordinance or would cause the Project or the site thereof to become exempt from taxation by the Issuer. The Borrower agrees that, except as otherwise provided herein, in the Bond Ordinance, the Collateral Security Agreement and the Mortgage, it will not sell, convey, mortgage, encumber or otherwise dispose of any part of, or interest in, the Project during the term of this Agreement or permit any such sale, con- veyance, mortgage, encumbrance or disposal . ARTICLE VI Events of Default and Remedies Section 6 . 1 . Events of Default. If any of the follow- ing events occur, it is hereby defined as, and declared to be and to constitute, an "event of default" under this Agreement: ( a) Failure of the Borrower to pay the amounts re- quired to be paid under Section 4. 2 of this Agreement in the manner and at the times specified therein. (b) Failure of the Borrower to observe and perform any covenant, condition or agreement in this Agreement on the part of the Borrower to be observed or performed, other than as referred to in subsection (a) of this Section 6 . 1, for a period of thirty (30 ) days after written notice specifying such failure and requesting that it be remedied, given to the Borrower by the Issuer, the Fiscal Agent or the Bond Purchaser, unless the Issuer and the Bond Purchaser shall jointly agree in writing to an extension of such time prior to its expiration. (c) To the extent that any of the following occur- rences should, in the opinion of the Bond Purchaser, be of such consequence as will impair the Borrower ' s ability to carry out its obligations under this Agreement, the Colla- teral Security Agreement or the obligations of the Land Trust and the Component Management Group under the Mortgage: the filing by the Borrower of a voluntary petition in bank- ruptcy; the failure by the Borrower promptly to lift any execution, garnishment or attachment; the commission by the Borrower of any act of bankruptcy; the adjudication of the Borrower as a bankrupt; an assignment by the Borrower for the benefit of any creditor; the entry by the Borrower into an agreement of composition with the Borrower' s creditors ; or the approval by a court of competent jurisdiction of a petition applicable to the Borrower in any proceeding for an -36- arrangement or reorganization of the Borrower' s debts insti- tuted under the provisions of the federal bankruptcy law, as amended (Title 11 of the United States Code) , or under any similar act, whether state or federal, which may now be in effect or may be hereafter enacted. (d) An event of default under the Bond Ordinance, the Collateral Security Agreement, the Fiscal Agent Agreement, the Mortgage or the Assignment. Section 6 . 2 . Remedies on Default. Whenever any event of default shall have happened and be subsisting, the Issuer and the Bond Purchaser shall each have the right, exercisable upon the delivery of notice in writing to the Borrower, to declare all amounts due, from time to time, under this Loan Agreement to be immediately due and payable, and such amounts shall thereupon become and be immediately due and payable; in addition to the foregoing right of acceleration, the Issuer and the Bond Pur- chaser shall each have such other remedies as may be permitted by law. If the Series 1980 Bonds shall become due and payable after the occurrence of "Event of Taxability, " as defined in Section 7 .2 hereof, the amount due and payable hereunder shall be the amount set forth in Section 7 .2 hereof; and this covenant shall survive this Agreement. Section 6 .3 . No Remedy Exclusive . No remedy herein conferred upon or reserved to the Issuer or the Bond Purchaser is intended to be exclusive of any other available remedy, but each and every such remedy shall be cumulative and shall be in addi- tion to every other remedy given under this Agreement, the Bond Ordinance, the Assignment, the Collateral Security Agreement and the Mortgage, or now or hereafter existing at law, in equity, by constitution or by statute . No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power, or shall be construed to be a waiver thereof, but any such right or power may be exercised from time to time, and as often as may be deemed expedient. In order to entitle the Issuer and the Bond Purchaser to exercise any remedy reserved to them in this Agreement, it shall not be necessary to give any notice other than such notice as may be herein expressly required. The Bond Purchaser and the other or subsequent owners and holders of the Bonds shall be deemed to be, and are intended to be to the full extent of their interests herein, third party beneficiaries of all covenants and agreements herein contained. Section 6 .4 . No Additional Waiver Implied by One Waiver. In the event that any agreement contained in this Agree- ment should be breached by either party hereto, and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived, and shall not be deemed to be a waiver of any other breach hereunder. Section 6 . 5 . Agreement to Pay Attorneys ' Fees and Expenses . In the event that the Issuer, the Fiscal Agent or the -37- Bond Purchaser should employ attorneys or incur other expenses in connection with the preparation, operation, administration or enforcement of this Loan Agreement, the Bond Ordinance, the Fiscal Agent Agreement, the Assignment, the Collateral Security Agreement or the Mortgage, or for the collection of the payments due hereunder, or for the enforcement of performance or obser- vance of this Agreement, the Fiscal Agent Agreement, the Bond Ordinance, the Mortgage, the Assignment, the Collateral Security Agreement or any other obligation or agreement on the part of the Borrower, the Component Management Group or the Land Trust herein or therein contained, or otherwise owing, the Borrower agrees that it will on demand therefor pay to the Issuer, the Fiscal Agent and the Bond Purchaser, or any or all of them, the reason- able fees and expenses of such attorneys , and such other expenses so incurred by the Issuer, the Fiscal Agent and the Bond Pur- chaser, and any or all of them. ARTICLE VII Prepayment Section 7 . 1 . Optional Prepayment. The Borrower shall also have, and is hereby granted, the option to prepay the indebt- edness hereunder on any date, in whole or in part in the manner provided in Section 7 . 3 hereof. The amount payable by the Bor- rower in the event of its exercise of the option granted in this Section shall be the sum of: (a) the redemption prices, expressed as percentages of the principal amount of the Bonds to be redeemed, with the payments made pursuant to this Section and determined in accordance with the provisions of the Bond Ordinance, plus accrued interest to the next redemption date; plus (b ) the expenses incurred or to be incurred by the Issuer, the Fiscal Agent and the Bond Purchaser in connec- tion with the prepayment of the indebtedness hereunder and the redemption of the Bonds . Section 7 .2 . _ Mandatory Prepayment. Should there occur a "Determination of Taxability" as hereinafter defined, the Borrower shall be required to prepay the indebtedness hereunder, and hereby covenants and agrees to prepay the indebtedness here- under, in the manner provided in Section 7 .3 hereof, and agrees to pay the sum of the following: (a) The principal amount of all Series 1980 Bonds then outstanding, plus accrued interest to the date of redemption, plus a premium equal to one (1 ) year' s interest borne by such Series 1980 Bonds for each twelve ( 12 ) month period or part thereof elapsed between the "Event of Taxability, " as such term is hereinafter defined, and the date of redemp- tion, and -38- (b) An amount equal to one (1 ) year' s interest borne by each Series 1980 Bond not then outstanding, but which was outstanding at the time of the "Event of Taxability, " as such term is hereinafter defined, for each twelve (12 ) month period or part thereof elapsed between the "Event of Tax- ability, " as such term is hereinafter defined, and the date that such Series 1980 Bond was paid or redeemed. Said sums described in (a) and (b) of this Section 7.2 shall be in satisfaction of the Borrower' s obligation to make the payments required of it under Section 4.2 hereof. An "Event of Taxability" shall mean the occurrence of the circumstances described in Section 103 (b ) (6 ) (D) of the Code, which circumstances the "Determination of Taxability, " as such term is hereinafter defined, shall have found to have occurred, with the result that the interest payable on the Series 1980 Bonds becomes includable in the gross income of the owners of the Series 1980 Bonds (other than an owner who is "substantial user" or "related person, " as such terms are defined in the Code) . A "Determination of Taxability" shall mean (a) the issuance of a statutory notice of deficiency by the Internal Revenue Service which holds, in effect, that the interest payable on any of the Series 1980 Bonds is includable in the gross income of an owner thereof (other than an owner who is a "substantial user" of the Project or a "related person, " as such terms are defined in the Code ) as a result of the limitations prescribed in Section 103 (b ) (6 ) of the Code having been exceeded, or (b ) the Borrower shall deposit with the Issuer and the Bond Purchaser a certificate of its chief financial officer to the effect that an Event of Taxability has occurred or will occur, and setting forth such date . A Determination of Taxability shall be deemed for all purposes of this Agreement to have occurred on the date borne by said statutory notice of deficiency or such certificate . The covenants made by the Borrower in this Section, and the Borrower' s obligations hereunder, shall survive the termina- tion of this Agreement. Section 7 .3 . Manner of Prepayment. To prepay the in- debtedness hereunder in accordance with this Article VII , the Borrower shall, within sixty (60 ) days following the event autho- rizing the exercise of such option, or giving rise to such obli- gation, give written notice to the Issuer and the Bond Purchaser. Such notice shall (i ) specify the event which has occurred which gave rise to the right of the Borrower to prepay the indebtedness hereunder, and the date upon which such event occurred, (ii ) direct the Issuer to give notice of redemption in accordance with the provisions of the Bond Ordinance, (iii ) specify the date for the prepayment of the indebtedness hereunder, which date shall be the same date as the redemption date for the Bonds, and (iv) in the event of the exercise of the option pursuant to Section 7 . 1 hereof, be signed by the chief financial officer of the Borrower. -39- Upon the exercise by the Borrower of its option to prepay the indebtedness hereunder pursuant to the provisions of Section 7 . 1 hereof, the Borrower must prepay the indebtedness hereunder within one hundred and twenty (120 ) days after the giving of the notice required by this Section 7.3 . Section 7 .4. Redemption of Bonds with Prepayment Moneys . By virtue of the assignment of the rights of the Issuer under this Loan Agreement to the Bond Purchaser as provided in Section 4.4 hereof, the Borrower shall pay any amount required to be paid by it under this Article VII directly to the Bond Pur- chaser. The Bond Purchaser shall use the moneys so paid to it by the Borrower to redeem the Bonds to be redeemed on the next applicable redemption date. If on the next applicable redemption date any of the Bonds to be redeemed shall then be unpaid, or provision for payment thereof shall not have been made in accor- dance with the provisions of the Bond Ordinance, the Borrower shall pay to the Bond Purchaser such additional moneys (in im- mediately available funds ) as shall be required to pay or redeem all of the Bonds to redeemed in accordance with the provisions of the Bond Ordinance. At such time as all of the Bonds shall be paid in accordance with the provisions of the Bond Ordinance, the indebtedness hereunder shall be deemed to be paid in full and discharged. The Issuer, at the request at any time of the Borrower, and if the same are then callable, shall forthwith take all steps that may be necessary under the applicable redemption provisions of the Bond Ordinance to effect redemption of all or part of the then outstanding Bonds, as may be specified by the Borrower, on the earliest redemption date on which such redemption may be made under such applicable provisions . ARTICLE VIII Financing Statements The security interests of the Issuer and the Bond Pur- chaser created herein shall be perfected in the manner required by the State Uniform Commercial Code in order to establish prior perfected status for the security interests created herein, in the Assignment and in the Collateral Security Agreement, and any outstanding security agreements and interests which might impair the prior perfected position of the Issuer or the Bond Purchaser shall be terminated or subordinated to the interest of the Issuer and the Bond Purchaser. The parties further agree that all necessary financing and continuation statements shall be filed by the Borrower, with proof thereof made to the Issuer and the Bond Purchaser, within the time prescribed by the State Uniform Com- mercial Code in order to establish or continue the prior per- fected position of the security interests created by this Agree- ment, the Collateral Security Agreement and the Assignment, to -40- the end that the respective rights of the Issuer, the Bond Pur- chaser and other or subsequent holders and owners of the Bonds shall be fully preserved as against creditors of, or purchasers for value from, the Borrower or the Issuer. On or before the first day of the month corresponding to the date of the Series 1980 Bonds in each calendar year com- mencing after the Completion Date, and as long as the Bonds have not been discharged under the Bond Ordinance, the Borrower shall file with the Issuer and the Bond Purchaser a certificate de- scribing, as of the first day of the immediately preceding month, each item of Personal Property not described in a previous simi- lar certificate which has been added to the Project, whether as a substitution, replacement or addition. In addition, the Borrower shall furnish to the Issuer and the Bond Purchaser, within thirty (30 ) days after filing such certificate, an opinion of Indepen- dent Counsel to the effect that (i ) all steps requisite to the perfection of the security interests of the Issuer and the Bond Purchaser in and to such Personal Property have been duly taken, including, without limitation, the execution, delivery and filing or recording of financing statements and of supplements to this Agreement, the Collateral Security Agreement and the Assignment for the purpose, among others, of adding such property to the description of the Project contained herein and therein, in the financing statements and in the continuation statements; and (ii ) by such steps security interests of first priority have been perfected in favor of the Issuer and the Bond Purchaser in and to such Personal Property. All such opinions shall specify the further refilings and renewals required in order to continue the perfection of such security interests for as long as any Bonds remain outstanding and unpaid, as well as the date or dates by which such further refilings and renewals are required. The Borrower will execute all instruments, including supplements to this Agreement, and financing and continuation statements , deemed necessary or advisable in the opinion of Independent Counsel for perfection and continuation of the perfection of such security interests as aforesaid. All obligations of the Borrower under this Section are subject to the condition that the Issuer and the Bond Purchaser shall execute all instruments and financing and continuation statements required of them in the opinion of'Inde- pendent Counsel . The Borrower shall file and record all such instruments and financing and continuation statements executed by the Issuer, the Borrower and the Bond Purchaser, or cause them to be filed and recorded, and shall continue the liens and security interests of all such instruments by appropriate refiling and renewals as may be specified in the opinion of such Independent Counsel, or cause them to be so continued, until all Bonds have been fully paid and discharged under the Bond Ordinance. -41- ARTICLE IX Miscellaneous Section 9 . 1 . Notices . All notices, certificates or other communications shall have been, and be deemed to be, suffi- ciently given when mailed by certified or registered mail, post- age prepaid, return receipt requested, addressed as follows : if to the Issuer, to the City of Elgin, City Hall, Elgin, Illinois , Attention: City Clerk; if to the Borrower, to Component Plastics , Inc . , 911 Davis Road, Elgin, Illinois , Attention: Frank L. Killough; if to the Fiscal Agent, to The Elgin National Bank, 24 East Chicago Street, Elgin, Illinois , Attention: William J. Westerman; and if to the Bond Purchaser, to The Elgin National Bank, 24 East Chicago Street, Elgin, Illinois, Attention: William J. Westerman. A duplicate copy of each notice, certificate or other communica- tion given hereunder by either the Issuer or the Borrower to the other shall also be given to the Bond Purchaser and the Fiscal Agent. The Issuer, the Borrower, the Fiscal Agent and the Bond Purchaser may, by written notice given hereunder, designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent. Section 9 .2 . Assignments . This Agreement may not be assigned by either party hereto without the prior written consent of the other and the Bond Purchaser, except that the Issuer is expressly authorized to assign to the Bond Purchaser certain of its rights under this Agreement pursuant to, and as provided in, Section 4.4 hereof, and the Borrower may without any consent assign to any transferee, surviving or resulting business entity its rights under this Agreement as provided by Section 5 . 2 hereof, and lease or sell the Project as provided in Section 5 . 17 hereof. Section 9 .3 . Severability. If any provision of this Agreement shall be held or deemed to be, or shall in fact be, illegal, inoperative or unenforceable, the same shall not affect any other provision herein contained, or render the same invalid, inoperative or unenforceable to any extent whatsoever. Section 9 .4 . Execution of Counterparts . This Agree- ment may be simultaneously executed in several counterparts , each of which shall be an original, and all of which shall constitute but one and the same instrument; provided, however, that for purposes of perfecting a security interest in this Agreement by the Bond Purchaser under the State Uniform Commercial Code, only the counterpart delivered, pledged and assigned to the Bond Purchaser shall be deemed the original . Section 9 . 5 . Amendments, Changes and Modifications . Except as otherwise provided in the Bond Ordinnce, subsequent to the initial issuance of Bonds and prior to their payment in full , this Agreement may not be effectively amended, changed, modified, altered or terminated without the prior written consent of the Bond Purchaser. -42- Section 9 . 6 . Governing Law. This Agreement shall be governed exclusively by, and be construed in accordance with, the applicable laws of the State. Section 9 . 7 . Authorized Issuer and Borrower Represen- tatives . Whenever under the provisions of this Agreement the approval of the Issuer or the Borrower is required, or the Issuer or the Borrower is required to take some action at the request of the other, such approval or such request shall be given for the Issuer by the Authorized Issuer Representative and for the Bor- rower by the Authorized Borrower Representative, and the parties to this Agreement, the Mortgage, the Collateral Security Agree- ment, the Assignment and the Fiscal Agent Agreement are hereby authorized to act on any such approval or request, and no party hereto or thereto shall have any complaint against the other as a result of any such action taken. Section 9 . 8 . Payments Under this Agreement. Any check or other form of draft, money order or other instrument given in payment of any monetary obligation of the Borrower hereunder may be accepted by the Issuer, the Fiscal Agent or the Bond Purchaser, and handled in collection in the customary manner; but the same shall not constitute a discharge, or diminish any rights of the Issuer, the Fiscal Agent or the Bond Purchaser, hereunder, except to the extent that actual cash proceeds of any such instrument are unconditionally received by the Issuer, the Fiscal Agent or the Bond Purchaser, and applied in the manner provided hereunder, in the Assignment, the Mortgage, the Collateral Security Agree- ment, the Fiscal Agent Agreement and the Bond Ordinance. Section 9 . 9 . Term of this Agreement. This 'Agreement shall become effective on its delivery, and shall be in full force and effect from the date thereof, and shall continue in full force and effect until the payment of the principal of, premium, if any, and interest on the Bonds, until all expenses of the Issuer, the Bond Purchaser and the Fiscal Agent shall have been paid, and until the Issuer and the Borrower shall have performed all of their covenants , promises and obligations here- under. Section 9 . 10 . Advances pa Bond Purchaser. In the event that the Borrower shall fail to maintain the full insurance coverage required by this Agreement, or shall fail to keep the Project in as reasonably safe a condition as its operating condi- tion will permit as required by this Agreement, or shall fail to keep the Project in good repair and good operating condition, the Bond Purchaser may (but shall be under no obligation to) take out the required policies of insurance and pay the premiums on the same, or make the required repairs , renewals and replacements ; and all amounts advanced therefor by the Bond Purchaser shall become an additional obligation of the Borrower to the one making the advancement, which amounts , together with interest thereon at the rate of ten percent (10%) per annum from the date thereof, or if such rate shall exceed the maximum rate permitted under the -43- applicable laws of the State, then at the maximum rate so allowed from the date thereof, the Borrower agrees to pay on demand. Section 9 . 11 . Reference to Bonds Ineffective After Bonds Paid. Upon and after payment—In full of the Bonds and all fees and charges of the Issuer, the Fiscal Agent and the Bond Purchaser, neither the Bond Purchaser nor any subsequent holder or owner of the Bonds shall have any rights hereunder, saving and excepting those that shall have theretofore vested. For purposes of this Agreement, the Bonds shall be deemed fully paid upon satisfaction of the conditions stated in the Bond Ordinance . Section 9 . 12 . Binding Effect. This Agreement shall inure to be benefit of, and shall be binding upon, the Issuer, the Borrower and their respective successors and assigns . Section 9 . 13 . Limitation on Interest. No provision of this Loan Agreement or of the Bond Ordinance shall require the payment or permit the collection of interest in excess of the maximum permitted by the laws of the State. If any excess of interest in such respect is herein or in the Bond Ordinance provided for, or shall be adjudicated to be so provided for herein or in the Bond Ordinance, neither the Borrower nor its successors or assigns shall be obligated to pay such interest in excess of the amount permitted by the laws of the State, and the right to demand the payment of any such excess shall be and hereby is waived, and this Section shall control any provision of this Loan Agreement, the Assignment and the Bond Ordinance incon- sistent with this Section. -44- • IN WITNESS WHEREOF, the Issuer has caused this Agree- ment to be executed in its corporate name and its corporate seal to be hereunto affixed and attested by its duly authorized offi- cers, and the Borrower has caused this Agreement to be executed in its corporate name and its corporate seal to be hereunto affixed and attested by its duly authorized officers, all as of the date first above written. CITY OF ELGIN By Its : Mayor (SEAL) Attest: By Its : City Clerk COMPONENT PLASTICS, INC . By Its : President Attest: By Its : Secretary The foregoing is hereby approved COMPONENT MANAGEMENT GROUP By General Partner -45- The interest of the City of Elgin, in this Agreement and all amounts receivable hereunder, except Unassigned Rights , has been assigned to The Elgin National Bank, Elgin, Illinois, pursuant to the Assignment. For purposes of Article 9 of the Illinois Uniform Commercial Code, the counterpart of this Agree- ment pledged, assigned and delivered to The Elgin National Bank, shall be deemed the original . This instrument was prepared by: Lewis Greenbaum Borge and Pitt 120 South LaSalle Street Chicago, Illinois 60603 -46- STATE OF ) ss : COUNTY OF I , , a Notary Public in and for the said County in the State aforesaid, do hereby certify that and , personally known to me to be the same persons whose names are, respectively, as President and Secretary of Component Plastics , Inc . (the "Borrower" ) , subscribed to the foregoing instrument (Loan Agree- ment) , appeared before me this day in person and severally ac- knowledged that they, being thereunto duly authorized, signed and delivered the said instrument as the free and voluntary act of said Borrower, and as their own free and voluntary act, for the uses and purposes therein set forth. GIVEN under my hand and notarial seal this day of , 19 Notary Public in and for County, (SEAL) My commission expires : -47- STATE OF ) ss : COUNTY OF ) I , , a Notary Public in and for the said County in the State aforesaid, do hereby certify that and , personally known to me to be the same persons whose names are, respectively, as Mayor and City Clerk of the City of Elgin (the "Issuer" ) , sub- scribed to the foregoing instrument (Loan Agreement) , appeared before me this day in person and severally acknowledged that they, being thereunto duly authorized, signed, sealed with the seal of said Issuer, and delivered the said instrument as the free and voluntary act of said Issuer, and as their own free and voluntary act, for the uses and purposes therein set forth. GIVEN under my hand and notarial seal this day of , 19 Notary Public in and for County, (SEAL) My commission expires : -48- EXHIBIT A DESCRIPTION OF REAL PROPERTY Attached to the Loan Agreement, dated as of June 1, 1980, from the City of Elgin, as lender, to Component Plastics, Inc. , as borrower. -49- EXHIBIT B DESCRIPTION OF PERSONAL PROPERTY Attached to the Loan Agreement, dated as of June 1, 1980, from the City of Elgin, as lender, to Component Plastics, Inc. , as borrower. -50- t C12382-A 6/2/80 LG/jo AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO, as Trustee to THE ELGIN NATIONAL BANK MORTGAGE THIS MORTGAGE CONSTITUTES A CONSTRUCTION MORTGAGE UNDER THE ILLINOIS UNIFORM COMMERCIAL CODE Dated as of June 1 , 1980 THIS MORTGAGE (the "Mortgage" ) , dated as of June 1, 1980, from AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO, trustee under the provisions of a Trust Agreement dated October 18, 1978 and known as Trust No. 45052 (the "Land Trust" ) , as mortgagor (the "Mortgagor" ) , to The Elgin National Bank, and its successors and assigns, as mortgagee (the "Bond Purchaser" ) , a banking institution duly organized and validly existing under the laws of the United States, and qualified to do business in, and in good standing under the laws of', the State of Illinois , is being entered into in order to secure the payment of the princi- pal of, redemption premium, if any, and interest on the $1,400, 000 aggregate principal amount of Economic Development Revenue Bonds, Series 1980 (Component Plastics , Inc . Project) (the "Bonds" ) , of the City of Elgin (the "Issuer" ) , and the performance and obser- vance by Component Plastics, Inc . , the borrower under the Loan Agreement hereinafter referred to (the "Borrower" ) of all of the Borrower' s covenants , agreements, representations and warranties expressed or implied herein and in the Loan Agreement. The Com- ponent Management Group ( "Component" ) , an Illinois partnership, is the beneficiary under the aforesaid Trust Agreement and the general partners of Component are the shareholders of the Bor- rower. The Borrower and Component are acting jointly in connec- tion with the issuance of the Bonds . The Bond Purchaser is simultaneously with the execution and delivery of this Mortgage purchasing the Bonds , issued under and pursuant to Article VII , Section 6 of the 1970 Constitution of the State of Illinois and Ordinance No. S2-80 duly adopted by the Issuer on February 13 , 1980 (the "Enabling Ordinance" ) and an ordinance duly adopted by the Issuer on , 1980 (the "Bond Ordinance" ) . The Bonds are being issued for the purpose of financing the acquisition, construction and equipping of a facility for commercial use, said facility being located on real property described in part in Exhibit A attached hereto and constituting an economic develop- ment project within the meaning of the Enabling Ordinance (the "Project" ) . To carry out the foregoing purposes, the Mortgagor hereby grants, conveys and mortgages to the Bond Purchaser the following real property (and interests therein) (collectively, the "Mortgaged Property" ) : I All of the interest of the Mortgagor in the real estate situated within the corporate boundaries of the Issuer, as de- scribed in Exhibit A attached hereto . All interests, from time to time, of the Mortgagor in the buildings, structures , additions , improvements and related real property interests now or hereafter located thereon. All interests , from time to time, of the Mort- gagor in the tenements, hereditaments , servitudes , appurtenances , rights, privileges and immunities belonging or appertaining to any of the foregoing. II All other real property and real property interests, from time to time, of the Mortgagor of every kind and nature, including, without limitation, all replacements and substitu- tions, or interests therein, or accessions, or interests therein, which will, from time to time, become the property of the Mort- gagor or the Borrower pursuant to the provisions of that certain Loan Agreement, dated as of June 1, 1980, by and between the Issuer, as lender, and the Borrower, as borrower (the "Loan Agreement" ) , and all other real property or improvements, or interests in real property or improvements, which under the terms of the Loan Agreement are to become the property of the Borrower, and are to be subjected to the lien of this Mortgage; and without limiting the generality of the foregoing, all of the real property or improvements, or interests in real property or improvements , of the Mortgagor, Component or the Borrower at any time installed or located on the real estate described in Exhibit A attached hereto. III Any and all other real property or improvements, or interests in real property or improvements, of every kind and nature which was heretofore or is hereafter by delivery or by writing of any kind conveyed, mortgaged, pledged, assigned or transferred as and for additional security hereunder by the Mort- gagor, or by any other person, firm or corporation with the con- sent of the Mortgagor, to the Bond Purchaser or any representa- tive of the owners of the Bonds, who or which is authorized to receive any and all such real property or improvements, or inter- ests in real property or improvements, at any time, and to hold and apply the same subject to the terms hereof. IV All rents, issues, and profits of every kind and nature derived from any of the Mortgaged Property, and all awards from any taking by eminent domain, all proceeds from any sale under threat of condemnation, and all proceeds of any insurance paid by reason of damage to or destruction of the Mortgaged Property. AND THE MORTGAGOR FURTHER COVENANTS AND AGREES as fol- lows : Section 1 . Borrower' s Indebtedness . The Mortgagor will not impair the payment of the indebtedness of the Borrower or the performance by the Borrower of its obligations under the Loan Agreement. The Mortgagor hereby represents that it is executing this Mortgage for the joint benefit of the Borrower and itself as additional security for the payment of the Bonds . -2- Section 2 . Insurance Premiums and Awards . In the event of foreclosure of this Mortgage, or any other transfer of title in lieu of foreclosure, all right, title and interest of the Mortgagor in and to any insurance policies then in force shall pass to the Bond Purchaser, and the Mortgagor hereby as- signs to the Bond Purchaser, and will effect such assignment on the records of the insurance company or companies issuing said policies, any and all unearned premiums and unpaid awards becom- ing due the Mortgagor, or to be paid to the Mortgagor or Borrower, on or after the cancellation of such policies . Section 3 . General Covenants of Mortgagor. Until the principal of the Bonds with interest and premium, if any, is fully paid, and until the Borrower fulfills all of its obliga- tions under the Loan Agreement, the Mortgagor covenants and agrees to : ( a) pay, or to cause to be paid, when due and payable, — and before interest and penalties accrue thereon, all taxes, water and sewer rents and charges , or claims which may be assessed against or levied upon the Project in the manner and at the time provided in the Loan Agreement; (b ) provide, or cause to be provided, insurance on the Project in the manner required by Section 5 . 9 of the Loan Agreement; (c ) maintain the Project, or cause the Project to be maintained, in good condition, wear and tear from reasonable use and obsolescence excepted, as required by the Loan Agreement; and (d) comply with all laws, ordinances , regulations and orders relating to the Project, whatever their origin and scope . Section 4. Events of Default; Remedies . If any of the following (hereinafter called "events of default" ) shall occur: (a) A default in the due and punctual payment of the interest on any Bond, or in the payment of the principal of any Bond, or any premium due upon redemption or prepayment of any Bond, when the same shall become due and payable at maturity, by acceleration or otherwise; (b ) The Mortgagor shall fail to comply with the terms and provisions hereof, and such failure shall continue after written notice thereof is given to the Mortgagor in the manner provided in Section 10 hereof; (c) An event of default shall occur and continue beyond any period of grace therein provided under the Bond Ordinance; the Loan Agreement; that certain Collateral Security Agreement, dated as of June 1 , 1980 (the "Col- -3- lateral Security Agreement" ) , from the Borrower, as pledgor, to the Bond Purchaser, as pledgee, of the Borrower ' s inter- est in the machinery, equipment, fixtures and other personal property (and rights therein) described in part in Exhibit B attached hereto; that certain Pledge and Assignment, dated as of June 1, 1980 (the "Assignment" ) , from the Issuer, as assignor, to the Bond Purchaser, as assignee, of certain of the Issuer' s rights and interests in the Loan Agreement; or that certain Fiscal Agent Agreement, dated as of June 1, 1980 (the "Fiscal Agent Agreement" ) , by and between the Issuer and The Elgin National Bank, as fiscal agent for the Issuer; (d) the Borrower shall file a petition in bankruptcy under the federal bankruptcy law (Title 11 of the United States Code) , as amended, or under any similar state or federal law; shall file an answer admitting its insolvency or inability to pay its debts generally as they come due; shall fail to obtain a vacation or stay of involuntary proceedings within fifteen (15 ) days of their institution; shall be adjudicated a bankrupt; shall have a trustee, receiver, liquidator or conservator appointed for it, or any of its property (and such trustee, receiver, liquidator or conservator shall not be discharged within fifteen (15 ) days of appointment) ; shall make an assignment for the benefit of its creditors; or shall admit in writing its inability to pay its debts generally as they become due; then and at any time thereafter, and provided that written notice of such default shall have been given to the Mortgagor in the manner provided in Section 10 hereof, unless and until the event of default shall have been cured or shall have been waived by the Bond Purchaser, as provided in the Bond Ordinance, to the extent permitted by law and in accordance with the Bond Ordinance, the Bond Purchaser may take any or all of the following actions in such combination or sequence as it may elect. The Bond Purchaser may cure such default on behalf of and at the cost of the Mort- gagor, may institute an action of mortgage foreclosure against the Mortgaged Property, or may take such other action for the enforcement hereof as the law may allow, and as shall be in accordance with the terms and provisions of the Bond Ordinance, and may proceed thereon to final judgment and execution for the entire unpaid balance of the principal of the Bonds, being in part or in whole the amount of the Borrower' s delinquency under the Loan Agreement, with interest thereon at the rates stipulated in the Bonds, together with all other sums due from the Borrower to the Bond Purchaser under the Bond Ordinance, the Collateral Security Agreement, the Fiscal Agent Agreement, the Loan Agree- ment and the Assignment, including, but not limited to, all sums advanced for taxes, payments in lieu of taxes, water and sewer rents , charges and claims, insurance or maintenance, repair or restoration of the Mortgaged Property. All costs of suit, to- gether with interest on any judgment obtained by the Bond Pur- chaser at the rate stipulated in the Bonds from and after the -4- date of any sale of the Mortgaged Property until actual payment is made on the Bonds, and under the Bond Ordinance, the Assign- ment, the Collateral Security Agreement, the Fiscal Agent Agree- ment and hereunder, of the full amount due the Bond Purchaser, shall be paid by the Borrower without further stay, any law, usage or custom to the contrary notwithstanding. The whole of the principal of, premium, if any, and interest on the Bonds shall become due in accordance with the Bond Ordinance on the occurrence of an event of default there- under at the option of the Bond Purchaser, after default in the payment of any installment of the principal of, premium, if any, or interest on the Bonds as provided in the Bond Ordinance. All moneys received by the Bond Purchaser from the Mortgagor for the Borrower' s account pursuant to any right given or action taken under the provisions of this Section 4 shall be applied as pro- vided in the Bond Ordinance. Section 5 . Waiver of Events of Default. An event of default hereunder shall be waived only in the manner provided in the Bond Ordinance. Section 6 . Discharge of Mortgage. If the Borrower shall pay, or shall cause to be paid, to the Bond Purchaser all sums payable hereunder, under the Collateral Security Agreement, the Bond Ordinance, the Assignment, the Fiscal Agent Agreement and the Loan Agreement by the Borrower, then and from thenceforth this Mortgage, and the estate hereby granted, shall cease, deter- mine and become void, anything herein contained to the contrary notwithstanding, and the Bond Purchaser shall execute and deliver to the Issuer and the Mortgagor, and record in all offices in which this Mortgage shall have been recorded, appropriate instru- ments of satisfaction. Section 7 . Maintenance of Improvements ; Right to Inspect Mortgaged Property. No improvement now or hereafter located on the real estate described in Exhibit A attached hereto shall be removed or demolished without the consent of the Bond Purchaser, and all improvements now or hereafter located on the real estate described in Exhibit A attached hereto shall be kept and maintained in a tenantable condition and in a good state of repair as provided in the Loan Agreement; and the Bond Purchaser shall have the right to inspect the Mortgaged Property at any reasonable time to insure compliance herewith, subject to the terms and conditions contained in Section 5 . 1 of the Loan Agree- ment. In the event that the Mortgaged Property becomes vacant or unoccupied, or is occupied by other than the Mortgagor or Bor- rower, and in the opinion of the Bond Purchaser the Mortgaged Property is in danger of damage or destruction by the elements or otherwise, the Bond Purchaser may, at its option, enter upon the Mortgaged Property and expend such sum or sums as it may in good faith deem necessary to protect the Mortgaged Property, and any expenses incurred in so doing shall be added to the debt secured by this Mortgage, and shall be due with the next payment due from the Borrower under the Loan Agreement and the Assignment. -5- Section 8 . Receiver. To the full extent permitted by Illinois law, the holder of this Mortgage in any action to fore- close shall be entitled to the appointment of a receiver without notice and without regard to the adequacy of any security for the debt secured hereby. Section 9 . Debt Statement. The Mortgagor, within five (5 ) business days upon request in person, or within ten (10 ) business days upon request by certified or registered mail, shall furnish a written statement, duly acknowledged, of the amount of the debt secured by this Mortgage, and whether any offsets or defenses exist against the debt secured by this Mortgage. Section 10 . Notice and Demand or Request. Notice and demand or request may be in writing, and may be served in person or by certified or registered mail addressed to the Mortgagor at 33 North LaSalle Street, Chicago, Illinois or at such other or additional address or addresses as may be furnished to the Bond Purchaser and the Issuer in writing by the Mortgagor. Section 11 . Foreclosure Sale. In the event of a foreclosure sale, to the full extent permitted by the laws of the State of Illinois, the Mortgaged Property, or so much thereof as may be then affected by this Mortgage, may be sold in one parcel or in separate lots , and at public or private sale . Section 12 . Indemnity. If any action or proceeding shall be commenced (except an action to foreclose this Mortgage, or to collect the debt secured hereby) , to which action or pro- ceeding the Bond Purchaser is made a party, or in which it be- comes necessary to defend or uphold the lien of this Mortgage, all sums paid by the Bond Purchaser for the expense of any liti- gation to prosecute or defend the rights and lien created by this Mortgage (including reasonable counsel fees ) , shall be paid on demand by the Mortgagor or the Borrower pursuant to the Loan Agreement, together with interest thereon at the rate borne by the Bonds, and any such sum and the interest thereon shall be a lien on said Mortgaged Property prior to any right or title to, interest in or claim upon said Mortgaged Property attaching or accruing subsequent to the lien of this Mortgage, and shall be deemed to be secured by this Mortgage as an addition to the in- debtedness which it secures . In any action or proceeding to foreclose this Mortgage or to collect the debt secured hereby, the provisions of law respecting the recovering of costs , dis- bursements and allowances shall prevail unaffected by this cov- enant. If an action is commenced to foreclose this Mortgage or to collect the debt secured hereby, the Bond Purchaser shall be entitled to recover, in addition to the foregoing, costs, dis- bursements , allowances and reasonable attorneys ' fees, and such amount shall be added to the principal balance then due, and shall be a lien on said Mortgaged Property prior to any right or title to, interest in or claim upon said Mortgaged Property attaching or accruing subsequent to the lien of this Mortgage, and shall be deemed to be secured by this Mortgage as an addition to the indebtedness which it secures . -6- Section 13 . Assignment; Possession. Subject in every respect to the terms and provisions of the Bond Ordinance, the Loan Agreement, the Collateral Security Agreement, the Fiscal Agent Agreement and the Assignment, the Mortgagor hereby assigns to the Bond Purchaser the rents , issues and profits of the Mort- gaged Property as further security for the payment of said in- debtedness, and the Mortgagor grants to the Bond Purchaser the right to enter upon and to take possession of the Mortgaged Property for the purpose of collecting the same, and to let the Mortgaged Property or any part thereof, and to apply the rents , issues and profits, after payment of all necessary charges and expenses, on account of said indebtedness . This assignment and grant shall continue in effect until the debt secured by this Mortgage is paid in full . Subject to the provisions of the Bond Ordinance, the Assignment, the Loan Agreement, the Fiscal Agent Agreement and the Collateral Security Agreement, the Bond Purcha- ser hereby waives its right to enter upon and take possession of said Mortgaged Property for the purpose of collecting said rents, issues and profits, and the Mortgagor shall be entitled to col- lect and receive said rents, issues and profits until the occur- rence of an event of default under this Mortgage, and agrees to use such rents, issues and profits in fulfillment of the Bor- rower' s obligations under the Loan Agreement, and in payment of such taxes , assessments , sewer rents , water rates and carrying charges as become due against said Mortgaged Property; but such right of the Mortgagor may be revoked by the Bond Purchaser upon the occurrence and subsistence of an event of default on five (5 ) days ' prior written notice, which written notice shall be effec- tive upon deposit in the mail if sent by United States of America certified or registered mail . Upon the occurrence and subsis- tence of an event of default under this Mortgage, the Mortgagor will pay monthly in advance to the Bond Purchaser, or to any receiver appointed to collect said rents, issues and profits , the fair and reasonable rental value for the use and occupation of said Mortgaged Property, or of such part thereof as may be in the possession of the Mortgagor; and upon default in any such payment will vacate and surrender the possession of said Mortgaged Pro- perty to the Bond Purchaser or to such receiver, and in default thereof may be evicted by summary proceedings . Section 14. Debt Secured. This Mortgage is given to secure a portion of the cost of the Mortgaged Property herein described. Section 15 . Sale of Mortgaged Property. Upon any sale or other transfer by the Mortgagor of the Mortgaged Property herein described, or any interest therein, except if undertaken in accordance with the Loan Agreement and the Bond Ordinance or to the Borrower, the entire unpaid balance of the debt evidenced by the Loan Agreement and secured hereby shall become due and payable, unless the prior written consent of the Bond Purchaser (which shall not be unreasonably withheld) to such sale or trans- fer has been obtained. -7- Section 16 . Issuer' s Assignment Acknowledged. The Bond Purchaser shall have, to the full extent permitted by law, and as provided in the Assignment and the Loan Agreement, all of the rights and remedies of the Issuer as set forth in the Loan Agreement (except Unassigned Rights as defined in the Loan Agree- ment) , and the Mortgagor recognizes and consents to such assign- ment. Section 17 . Lien of Mortgage . This Mortgage shall constitute a lien on the Mortgaged Property for the balance of the sum of $1,400 , 000 , which constitutes the initial amount of the debt secured hereby, plus any accrued interest thereon, which shall be unpaid from time to time, together with any other amounts payable by the Borrower, under the terms of the Bond Ordinance, the Assignment, the Fiscal Agent Agreement, this Mortgage, the Collateral Security Agreement and the Loan Agreement. Section 18 . Execution Authorization. The execution of this Mortgage has been duly authorized by the governing body of the Borrower pursuant to the Borrower' s Articles of Incorporation and By-Laws and the laws of the State of Illinois . Section 19 . Bond Purchaser' s Right to Assign. This Mortgage may be assigned by the Bond Purchaser without obtaining the consent of the Borrower or the Mortgagor, but only upon giving fifteen (15 ) days ' prior written notice of such assignment to the Issuer, the Mortgagor and the Borrower, and upon recording such assignment in every office in which this Mortgage may be recorded. Section 20 . Limitation on Interest. No provision of this Mortgage shall require the payment or permit the collection of interest in excess of the maximum permitted by the laws of the State of Illinois . If any excess of interest in such respect is herein provided for, or shall be adjudicated to be so provided for herein, neither the Borrower, the Mortgagor nor their succes- sors or assigns shall be obligated to pay such interest in excess of the amount permitted by the laws of the State of Illinois, and the right to demand the payment of any such excess shall be and hereby is waived. Section 21 . Severability. If any provision of this Mortgage shall be held or be deemed to be, or shall in fact be, invalid, inoperative or unenforceable as applied in any particu- lar case in any jurisdiction because it conflicts with any other provision hereof, or any constitution, statute or rule of law, equity or public policy, or for any other reason, such circum- stances shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or cir- cumstance, or of rendering any other provision herein contained inoperative, invalid or unenforceable in any other case or cir- cumstance, or of rendering any other provision herein contained inoperative, invalid or unenforceable to any extent whatsoever. The invalidity of any phrase, sentence, clause or section of this -8- Mortgage shall not affect the remainder of this or any portion hereof. Section 22 . Governing Law. This Mortgage shall in all respects be governed by and be construed in accordance with the laws of the State of Illinois, including all matters of construc- tion, validity and performance. Section 23 . Headings . The section headings contained in this Mortgage are for convenience of reference only, and shall not define or limit the provisions hereof. No covenant herein contained shall be deemed to consti- tute a debt of the State of Illinois, the County of Cook, the County of Kane or the City of Elgin, and neither the State of Illinois, the County of Cook, the County of Kane nor the City of Elgin, shall be liable on any covenant herein contained; nor shall the indebtedness secured by this Mortgage be payable out of any funds of the Issuer other than those of the Issuer pledged therefor under the Bond Ordinance, the Assignment and the Loan Agreement, though the liability of the Mortgagor and the Borrower therefor shall not be so limited; provided, however, that nothing herein contained shall affect the right of the Bond Purchaser to commence an action in equity to foreclose this Mortgage. This Mortgage may not be changed or terminated except as provided in the Bond Ordinance. All covenants, stipulations, obligations and agreements of the Mortgagor contained in this Mortgage shall be deemed to be the covenants, stipulations, obligations and agreements of the Mortgagor to the full extent authorized or permitted by law; and all such covenants, stipulations, obligations and agreements shall be binding upon the Mortgagor and its successors and as- signs from time to time, and upon any Person (as defined in the Loan Agreement) to which any powers or duties affecting such covenants, stipulations, obligations and agreements shall be transferred by or in accordance with law. The Mortgagor shall cause this Mortgage to be recorded and to be kept recorded in the appropriate office or offices as provided by law as the proper place or places for the recordation hereof. THIS MORTGAGE is executed by the American National Bank and Trust Company of Chicago, not personally but as Trustee as aforesaid in the exercise of the power and authority conferred upon and vested in it as such Trustee ( and said American National Bank and Trust Company of Chicago, hereby warrants that it pos- sesses full power and authority to execute this instrument) , and it is expressly understood and agreed that nothing herein or in the Bonds contained shall be construed as creating any liability on The Elgin National Bank or on said American National Bank and Trust Company of Chicago personally to pay the Bonds or any -9- interest that may accrue thereon, or any indebtedness accruing hereunder, or to perform any covenant either express or implied herein contained, all such liability, if any, being expressly waived by Mortgagee and by every person now or hereafter claiming any right or security hereunder, and that so far as the Mortgagee and its successors and said American National Bank and Trust Company of Chicago personally are concerned, the legal holder or holders of the Bonds and the owner or owners of any indebtedness accruing hereunder shall look solely to the premises hereby conveyed for the payment thereof, by the enforcement of the lien hereby created, in the manner herein and in the Bonds provided or by action to enforce the personal liability of the guarantor, if any. IN WITNESS WHEREOF, American National Bank and Trust Company of Chicago, not personally but as Trustee as aforesaid, has caused these presents to be signed by one of its Vice-Presi- dents, or Assistant Vice-Presidents , and its corporate seal to be hereunto affixed and attested by its Assistant Secretary, the day and year first above written. AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO, As Trustee as aforesaid and not personally, By Vice President ATTEST Assistant Secretary -10- STATE OF ILLINOIS ) SS COUNTY OF C O O K ) I , , a Notary Public, in and for said County, in the State aforesaid, DO HEREBY CERTIFY, that , Vice-President of the AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO, and , Assistant Secretary of said Company, who are personally known to me to be the same persons whose names are subscribed to the foregoing instrument as such Vice-President, and Assistant Secretary, respectively, appeared before me this day in person and acknowledged that they signed and delivered the said instrument as their own free and voluntary act and as the free and voluntary act of said Company, as Trustee as aforesaid, for the uses and purposes therein set forth; and the said Assistant Secretary then and there acknowledged that he, as custodian of the corporate seal of said Company, did affix the corporate seal of said Company to said instrument as his own free and voluntary act and as the free and voluntary act of said Company, as Trustee as aforesaid, for the uses and purposes therein set forth. GIVEN under my hand and notarial seal, this day of , A.D. 1980 . Notary Public -11- ACCEPTANCE: The Elgin National Bank (the "Bond Purchaser" ) , hereby accepts the foregoing Mortgage, and agrees to fulfill all of the duties and obligations imposed on the Bond Purchaser under the provisions of all instruments contemplated hereby to which the Bond Purchaser is or is to be a party, by signature, acceptance, acknowledgment or intent of the parties thereto. IN WITNESS WHEREOF, the Bond Purchaser has caused this Acceptance to be duly executed, all as of June 1, 1980 . THE ELGIN NATIONAL BANK By Its : Vice-President (SEAL) Attest: By Its : Assistant Cashier -12- STATE OF ) ss : COUNTY OF I , , a Notary Public in and for the said County in the State aforesaid, do hereby certify that and , personally known to me to be the same person whose names are, as and of THE ELGIN NATIONAL BANK (the "Bond Purchaser" ) , subscribed to the foregoing instrument (Acceptance of Mortgage) , appeared before me this day in person and acknowledged that they being thereunto duly authorized, signed, sealed with the seal of said Bond Pur- chaser, and delivered the said instrument as the free and volun- tary act of said Bond Purchaser and as their own free and volun- tary act, for the uses and purposes therein set forth. GIVEN under my hand and notarial seal this day of , 19 Notary Public in and for County, (SEAL) My Commission expires : -13- EXHIBIT A Description of Real Property Attached to the Mortgage, dated as of June 1, 1980 , from American National Bank and Trust Company of Chicago, as mortgagor, to The Elgin National Bank, as mortgagee. -14- y y EXHIBIT B Description of Personal Property Attached to the Mortgage, dated as of June 1, 1980, from American National Bank and Trust Company of Chicago, as mortgagor, to The Elgin National Bank, as mortgagee. -15- Ordinance No. S7-80 B12382-A 6/5/80 LG:jo CITY OF ELGIN Ordinance Authorizing an $1,400 , 000 Economic Development Revenue Bond, Series 1980 (Component Plastics, Inc. Project) Adopted: June 11, 1980 TABLE OF CONTENTS (This Table of Contents is not a part of the Bond Ordinance and is only for convenience of reference . ) Page Preambles 1 Section 1 . Definitions 2 Section 2 . Authority to Acquire, Construct and Equip the Project 3 Section 3 . Authorization of the Series 1980 Bond, and Security for the Bond 3 Section 4. Description and Details of the Series 1980 Bond 5 Section 5 . Prepayment of the Principal of the Series 1980 Bond 6 Section 6 . Notice of Prepayment 7 Section 7 . Person Treated as Owner 7 Section 8 . Method of Execution of the Series 1980 Bond 8 Section 9 . Form of the Series 1980 Bond 8 Section 10 . Execution and Delivery of the Series 1980 Bond; Deposit of Bond Proceeds; Designation of Fiscal Agent by Issuer. . 15 Section 11 . Construction Fund 15 Section 12 . Investments 16 Section 13 . Application of the Construction Fund. . 16 Section 14. Completion of the Project 16 Section 15 . Payment of Principal and Interest; Condition of the Issuer' s Obligations. . 17 Section 16 . Particular Covenants of the Issuer. . . . 18 Section 17 . Insurance and Condemnation Proceeds . . . 19 Section 18 . Amendments or Modifications 19 Section 19 . Enforcement 20 Section 20 . Events of Default 20 Section 21. Foreclosure and Enforcement of Remedies 21 Section 22 . Application of Revenues and Receipts After Default 22 Section 23 . Waivers of Events of Default; Actions by the Owner 22 Section 24. Effect of Discontinuance of Proceedings 22 Section 25 . Remedies Not Exclusive; Delay or Omission 22 Section 26 . Acceleration in the Event of Default. . . 22 ' Section 27 . Defeasance 23 Section 28 . Provisions Relating to the Fiscal Agent 23 Section 29 . Issuance of Additional Bonds 25 Section 30 . Delivery of Additional Bonds 26 Section 31 . Sale of Bond 27 Section 32 . Form, Execution and Authorization of Financing Documents 27 Section 33 . Execution of Other Instruments and Certificates 27 (i ) Page Section 34. Priority of Bond Ordinance, Assignment, Loan Agreement, Collateral Security Agreement and Mortgage 28 Section 35 . Creation of Lien; Indebtedness 28 Section 36 . Instruments of Further Assurance 28 Section 37 . Recording and Filing 29 Section 38 . Rights Under Loan Agreement 29 Section 39 . Provisions of this Bond Ordinance . . . 29 Section 40 . Covenants, Stipulations, Obligations and Agreements of the Issuer 29 Section 41 . Small Issue Election 30 Section 42 . Conflicting Ordinances 30 Section 43 . Effective Date 30 Signatures and Seals 31 Certification 32 • (ii) ORDINANCE NO. Ordinance authorizing the issuance of an $1 , 400 , 000 Economic Development Revenue Bond, Series 1980 (Component Plastics , Inc . Project) ; authorizing the execution and delivery of appropriate financ- ing documents relating thereto; and confirming the sale of the Bond to the purchaser thereof, and related matters . WHEREAS, the City of Elgin in (the "Issuer" ) , is a munic- ipal corporation and a home rule unit, under Section 6( a) of the Illinois Constitution of 1970, duly organized and validly exist- ing under the Constitution and laws of the State of Illinois , and is authorized and empowered by the provisions of Article VII , Section 6 of the 1970 Constitution of the State of Illinois and Ordinance No . S2-80, duly adopted by the Issuer on February 13 , 1980 (the "Enabling Ordinance" ) to acquire, construct and equip an economic development project within the meaning of said Ena- bling Ordinance; and WHEREAS , the Issuer is further authorized by the Ena- bling Ordinance to issue its revenue bonds payable solely from the revenues and receipts derived from such projects , and secured by a pledge of said revenues and receipts and by a mortgage on such projects , and the Enabling Ordinance provides that such revenue bonds shall have a lien on the revenues and receipts derived from such projects; and WHEREAS, the Issuer proposes to issue and sell its $1,400, 000 Economic Development Revenue Bond, Series 1980 (Com- ponent Plastics, Inc. Project) (the "Series 1980 Bond" ) , in order to finance a portion of the cost of the acquisition, construction and equipping of a facility for commercial use (the "Project" ) , and said Series 1980 Bond will be issued under, secured by and contain such terms and provisions as are set forth in this ordi- nance (the "Bond Ordinance" ) ; the proceeds derived from the sale of the Series 1980 Bond are to be deposited with The Elgin Na- tional Bank as fiscal agent (the "Fiscal Agent" ) , pursuant to a certain Fiscal Agent Agreement, dated as of June 1, 1980, by and between the Fiscal Agent and the Issuer (the "Fiscal Agent Agree- ment" ) , and disbursed ( i ) for the payment of the costs incurred in connection with the acquisition, construction and equipping of the Project, and ( ii) for such other purposes as are set forth herein; and WHEREAS, the cost of the Project will be not less than $1,400 , 000, and in order to finance a portion of said cost it is necessary and advisable that provision be made for the issuance, sale and delivery of the Series 1980 Bond in the principal amount of $1, 400, 000, all as authorized and permitted by the Enabling Ordinance; and WHEREAS, as a result of negotiations between the Issuer and Component Plastics, Inc. , an Illinois corporation (the "Bor- rower" ) , contracts have been or will be entered into by the Borrower for the acquisition, construction and equipping of the Project, to be owned by the Borrower and located within the corporate boundaries of the Issuer, it is proposed that the Issuer enter into a Loan Agreement, as hereinafter defined, with the Borrower pursuant to which the Issuer will lend the Borrower the proceeds derived from the sale of the Series 1980 Bond, constituting a sum sufficient, together with other moneys of the Borrower, to accomplish the purposes of the Enabling Ordinance, to wit: to create or maintain employment opportunities in the City of Elgin; and WHEREAS , the Project will create additional employment opportunities , increase the real estate tax and sales tax bases , and encourage capital investment in the City of Elgin, thereby fulfilling the purposes of the Enabling Ordinance; and WHEREAS, the Issuer proposes to sell the Series 1980 Bond upon a negotiated basis to The Elgin National Bank, Elgin, Illinois (the "Bond Purchaser" ) ; and WHEREAS , the Issuer has reviewed the following docu- ments proposed to be executed on behalf of the Issuer: 1. The form of Loan Agreement, dated as of June 1, 1980 , by and between the Issuer, as lender, and the Borrower, as borrower, attached hereto as Exhibit A. 2 . The form of Pledge and Assignment, dated as of June 1, 1980, from the Issuer, as assignor, to the Bond Pur- chaser, as assignee, attached hereto as Exhibit B and 3 . The form of Fiscal Agent Agreement, dated as of June 1, 1980, by and between the Issuer, as principal, and the Fiscal Agent, as agent for the Issuer, attached hereto as Exhibit C and WHEREAS , it appears that each of the instruments above referred to which are now before this meeting is in appropriate form and is an appropriate instrument to be executed and de- livered by this Issuer for the purpose intended: NOW, THEREFORE, Be It Ordained by the City Council of the City of Elgin, Illinois, as follows : Section 1 . Definitions . The terms defined in this Section 1 (except as herein expressly otherwise provided for, or unless the context clearly otherwise requires ) for all purposes of this ordinance and any ordinance amendatory hereof or supple- mental hereto shall have the respective meanings specified in this Section. Terms which are not defined in this Section shall have the meanings specified in Article I of the Loan Agreement -2- (except as herein otherwise expressly provided, or unless the context clearly requires otherwise) . "Bonds" means the Series 1980 Bond and any additional Bonds issued pursuant to Sections 29 and 30 of this Ordinance . "Outstanding" or "Bonds outstanding" means all Bonds which have been duly issued and delivered by the Issuer under this Bond Ordinance, except: (a) Bonds theretofore cancelled; (b) Bonds for the payment or redemption of which cash funds shall have been deposited with the Bond Purchaser (whether upon or prior to the maturity or redemption date of any such Bonds ) ; and (c) Bonds in lieu of which others have been issued and delivered hereunder. If the lien of this Bond Ordinance shall be discharged pursuant to Section 27 hereof, no Bonds shall be deemed to be outstanding within the meaning of this provision. "Owner" means the Person in whose name any Bond shall have been registered. Section 2 . Authority to Acquire, Construct and Equip the Project. Based upon representations made by the Borrower to the Issuer, the Issuer hereby determines that the Cost of the Project will be not less than $1, 400, 000; that the location of the Project within the corporate boundaries of the Issuer will promote the purposes of the Enabling Ordinance; that the financ- ing of the acquisition, construction and equipping of the Project by the Issuer through a loan of the proceeds of the Series 1980 Bond to the Borrower is in the public interest and in furtherance of the purposes of the Enabling Ordinance; and that such financ- ing is authorized by the Enabling Ordinance and this Bond Ordi- nance. It is hereby found and declared that the financing of the Cost of the Project, and the use of the Project by the Borrower as hereinafter provided, is necessary to accomplish the purposes of the Enabling Ordinance . Section 3 . Authorization of the Series 1980 Bond, and Security for the Bond. For the purpose of providing funds to finance a portion of the Cost of the Project, there shall be issued, and is hereby authorized and directed to be issued the Series 1980 Bond of the Issuer. The Series 1980 Bond and all interest thereon shall be paid solely from the revenues and receipts derived from the Loan Agreement (but excluding moneys received by the Issuer pursuant to its Unassigned Rights ) , and not from any other fund or source. The Bond shall be issued in compliance with, and under authority -3- of, the provisions of the Enabling Ordinance and this Bond Ordi- nance. The Issuer hereby pledges the revenues and receipts derived from the Loan Agreement to the payment of the principal of the Series 1980 Bond, and the interest and redemption premium, if any, thereon. The Series 1980 Bond shall be additionally secured by, among other things , the Assignment, the Collateral Security Agreement, the Mortgage, the Loan Agreement and the Construction Fund. The Series 1980 Bond shall be a limited obligation of the Issuer, the principal of and interest on which shall be payable solely from the sources specified in, and be secured as provided by, this Bond Ordinance. The Bond, and any interest and redemption premium thereon, shall never constitute a general obligation of the Issuer, nor shall the Bond ever constitute an indebtedness or loan of credit of the Issuer, the State or any other political subdivision thereof, within the meaning of any State constitutional provision or statutory limitation, and neither the Issuer, the State nor any other political subdivision thereof shall be liable thereon, and the Bond shall neither con- stitute nor give rise to a pecuniary liability or a charge against the general credit or taxing powers of the Issuer, the State or any other political subdivision thereof. Such limitation shall be plainly stated on the face of the Bond together with a recital that such Bond has been issued under and in compliance with the provisions of the Enabling Ordinance. Any payments on the Bond made to any owner thereof, or to any duly authorized representative of said owner, by the Borrower or the Issuer, or for the account of the Borrower or the Issuer, shall, for all purposes and in every respect, be deemed a payment of the Bond, and such payments shall be applied in ac- cordance with the provisions of this Bond Ordinance. Nothing in this Bond Ordinance, the Loan Agreement, the Mortgage, the Collateral Security Agreement, the Fiscal Agent Agreement or the Assignment shall be construed so as to create an obligation or commitment by the Issuer to expend any of its funds other than (i) the proceeds derived from the sale of the Bond, ( ii ) certain of the revenues and receipts to be received by the Issuer, or by any Person on the Issuer' s behalf, from the Loan Agreement, as provided herein, (iii ) any proceeds accruing to the Issuer, or to any Person on the Issuer' s behalf, from insurance on the Project, ( iv) any moneys accruing to the Issuer, or any Person on the Issuer' s behalf, on account of any taking or condem- nation of title to the whole or any part of the Project, and (v) any moneys arising out of the investment or reinvestment of said proceeds, income, rents, revenues, receipts or other moneys . It is hereby found, determined and declared by the Issuer that the aggregate amounts payable in each year under the Loan Agreement are the amounts necessary in such year to pay the principal of, premium, if any, and interest on the Series 1980 -4- Bond, and that the loan repayments and other monetary obligations undertaken by the Borrower in the Loan Agreement are sufficient to satisfy the monetary obligations required by the Enabling Ordinance to be undertaken by the user of an economic development project within the meaning of the Enabling Ordinance. Section 4. Description and Details of the Series 1980 Bond. The Series 1980 Bond shall be issued as one bond in fully registered form in the name of the Bond Purchaser, shall be num- bered R-1, shall be dated as of its date of delivery, shall be in the denomination of $1,400, 000 and shall mature on June 1, 1995 . The principal of and interest on the Series 1980 Bond shall be payable in quarter-annual installments , on March 1, June 1, September 1 and December 1 of each year (the "Payment Date" ) in the amount of $50 , 000 and in a remaining amount due June 1, 1995 . The Series 1980 Bond and the interest thereon shall be payable in lawful money of the United States of America to the registered owner thereof at the office of the Bond Purchaser. The Series 1980 Bond shall bear interest at the "Com- puted or Fixed Rate" (as herein defined) payable on each Payment Date. The "Computed Rate" shall be 2%, plus one-half of the prime commercial lending rate in effect at the Continental Illinois National Bank and Trust Company of Chicago on such Payment Date; provided, however, that if the rate determined as aforesaid exceeds 13% per annum then the Computed Rate shall be 13% and provided further, that if the rate determined as aforesaid is less than 8% per annum, then the Computed Rate shall be 8%. At the option of the Borrower exercised prior to March 31, 1981, the Bond shall thereafter bear interest at a Fixed Rate, such Fixed Rate to be the Computed Rate in effect on the date such option is exercised. The Borrower may exercise such option by filing a written notice with the registered owner of the Bond and with the City Clerk of the Issuer. The Series 1980 Bond shall not be sold, transferred or assigned except to an "Institutional Investor, " as such term is hereinafter defined, and then only for the investment account of such Institutional Investor. The costs and charges of any trans- fer shall be paid by the purchaser, transferee or assignee there- of. The term Institutional Investor as used herein means a bank, savings and loan association, insurance company or other such financial institution which has a combined capital and surplus of at least $5, 000 , 000 . In the event the Series 1980 Bond is sold, transferred or assigned, the purchaser, transferee or assignee thereof must notify the Issuer and the Borrower of the new ad- dress for payment thereof; absent such notification, such sale, transfer or assignment shall be ineffective as against the Issuer and the Borrower. The Series 1980 Bond shall bear on the face thereof the legend: "THIS SERIES 1980 BOND SHALL NOT BE SOLD, TRANSFERRED OR ASSIGNED EXCEPT TO AN "INSTITUTIONAL INVESTOR, " AS -5- SUCH TERM IS DEFINED IN THE BOND ORDINANCE, AND THEN ONLY FOR flit INVESTMENT ACCOUNT OF SUCH INSTITUTIONAL INVESTOR. " Section 5 . Prepayment of the Principal of the Series 1980 Bond. The principal installments of the Series 1980 Bond, over and above the payments required to be paid on a quarter- annual basis , shall be subject to prepayment at any time, at the option of the Issuer in whole or in part, but only after giving the notice specified in Section 6 of this Bond Ordinance, at an amount equal to the sum of the following: (1 ) an amount of money which will be sufficient to redeem the outstanding principal amount of the Bond on the next redemption date, including, without limitation, the principal amount thereof, all interest to accrue to said date, the applicable premium if any, and expenses incurred or to be incurred in connection with the prepayment of the indebtedness hereunder and the redemption of the Series 1980 Bond, ( 2 ) an amount of money equal to the Issuer' s , Bond Purchaser' s and Fiscal Agent' s fees , charges and expenses , if any, accrued and to accrue until the redemption date, and (3 ) an amount of money sufficient to discharge all other liabilities of the Borrower accrued under the Loan Agreement. Upon the giving of notice to the Bond Purchaser, or, if the Bond Purchaser is no longer the owner of the Series 1980 Bond, to the owner of the Series 1980 Bond at that time, all or any portion of the Series 1980 Bond may, in the manner set forth above, be prepaid. Such prepayment shall be valid upon payment of the amount thereof to the Bond Purchaser, or, if the Bond Purchaser is no longer the owner of the Series 1980 Bond, to the owner of the Series 1980 Bond at that time, and the Issuer shall be fully released and discharged from all liability to the extent of such payment, irrespective of whether such payment shall be endorsed upon the such Series 1980 Bond by the Bond Purchaser, or, if the Bond Purchaser is no longer the owner of the Series 1980 Bond, by the owner thereof at that time, and irrespective of any error or omission in such endorsement. The Series 1980 Bond is subject to mandatory redemption in the event that the Borrower is required to prepay the amounts payable under the Loan Agreement upon the occurrence of a "Deter- mination of Taxability, " as defined in Section 7 . 2 of the Loan Agreement. If called for redemption upon the occurrence of a Determination of Taxability, the Series 1980 Bond shall be sub- ject to redemption by the Issuer at any time in whole and not in part, at a redemption price equal to the unpaid principal amount thereof, plus accrued interest to the redemption date, plus a redemption premium equal to one (1) year' s interest borne by the Series 1980 Bond for each twelve (12 ) month period or part there- -6- of elapsed between the "Event of Taxability, " as defined in Section 7 .2 of the Loan Agreement, and the date of redemption, such aggregate amount constituting the total compensation due the Bond Purchaser, or, if the Bond Purchaser is no longer the owner of the Series 1980 Bond, the owner of the Series 1980 Bond at that time, as a result of an Event of Taxability. The owner of the Series 1980 Bond (or portion thereof) both at the time of an "Event of Taxability" ( as defined in Section 7 .2 of the Loan Agreement) and at the maturity or redemp- tion (in whole or in part) thereof prior to the aforesaid redemp- tion date resulting from an Event of Taxability shall , upon presentation to the Issuer and the Borrower in writing of proof satisfactory to the Issuer and the Borrower that he was the owner of the Series 1980 Bond (or portion thereof) at such times , be entitled to a redemption premium equal to one ( 1 ) year' s interest borne by the Series 1980 Bond for each twelve ( 12 ) month period or part thereof elapsed between the "Event of Taxability, " as defined in Section 7 .2 of the Loan Agreement, and the date of redemption, such amount constituting the total compensation due such owner of the Series 1980 Bond (or portion thereof) as a result of the Event of Taxability. Notice having been given in the manner provided in Section 6 hereof, the Series 1980 Bond or the principal portions thereof so called for redemption or prepayment pursuant to this Section shall become due and payable on the dates so designated at the price and upon presentation and surrender thereof at the office specified in such notice. The Series 1980 Bond or the principal portions thereof shall continue to bear interest until paid. Section 6 . Notice of Prepayment. Notice of any pre- payment shall be given in�the name of the Issuer by the Issuer or the Borrower to the owner of the Series 1980 Bond in the manner required for the giving of notice under the Loan Agreement, as specified in Section 9 . 1 thereof, such notice to be given only after adequate provision for payment of the amount to be redeemed has been made. Each such notice shall be mailed at least thirty (30 ) days and not more than ninety (90 ) days prior to the date fixed for prepayment, and shall specify the principal amount of the Series 1980 Bond to be prepaid, unless the giving of such notice is waived in writing by the owner of the Series 1980 Bond to be prepaid. Notice of any prepayment as herein provided shall be given only after written notification thereof from the Bor- rower to the Issuer has been given, and may only be given as long as the Borrower is not in default under the Loan Agreement. Failure to give such notice by mailing, or any defect therein, shall not affect the validity of the proceedings for such pre- payment. Section 7 . Person Treated as Owner. The person in whose name the Series 1980 Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all pur- -7- poses, and payment of or on account of the principal of or inter- est on the Series 1980 Bond shall be made only to or upon the order of the owner thereof, or his duly authorized legal repre- sentative, and neither the Issuer nor the Borrower shall be affected by any notice to the contrary. All such payments shall be valid and effectual to satisfy and discharge the liability upon the Series 1980 Bond to the extent of the sum or sums so paid. Subject to the restrictions on transfer provided in Section 4 hereof, title to the Series 1980 Bond is transferable by the owner thereof or by his attorney duly authorized in writ- ing. Section 8 . Method of Execution of the Series 1980 Bond. The Ser s 1980 Bond shall be executed for and on behalf of the Issuer by the manual signature of its Mayor, and attested to by the manual signature of its City Clerk, with the seal of the Issuer impressed thereon. Section 9. Form of the Series 1980 Bond. The Series 1980 Bond and the form of assignment attached thereto shall be in substantially the following form: -8- (FORM OF BOND) UNITED STATES OF AMERICA STATE OF ILLINOIS CITY OF ELGIN Economic Development Revenue Bond, Series 1980 (Component Plastics , Inc. Project) Number R- $1,400, 000 The CITY OF ELGIN, a municipal corporation and a home rule unit, duly organized and validly existing under the Consti- tution and laws of the State of Illinois (the "Issuer" ) , for value received promises to pay, but only from the sources and as hereinafter provided, to THE ELGIN NATIONAL BANK or registered assigns, the principal sum of ONE MILLION FOUR HUNDRED THOUSAND DOLLARS ($1,400, 000 ) , due June 1, 1995, and in like manner to pay interest on the unpaid portion thereof from the date hereof at the Computed Rate or the Fixed Rate, as hereinafter defined. The principal of and interest on this bond shall be payable in quarter- annual installments of $50, 000 due March 1 , June 1, September 1 and December 1 of each year (the "Payment Date" ) and in a remaining amount due June 1, 1995 or until said principal sum is paid, except as the provisions hereinafter set forth with respect to prepayment prior to maturity may become applicable hereto; prin- cipal of, premium, if any, and interest on this Series 1980 Bond being payable in lawful money of the United States of America at the address of the registered owner hereof provided to the Issuer and the Borrower, as hereinafter defined. In the event that the Issuer shall fail to make, or cause to be made, any of the pay- ments required herein to be made, the item or installment so in default shall continue as an obligation of the Issuer until the amount in default shall have been fully paid, and the Issuer agrees to pay_ the same, or to cause the same to be paid, on demand, with interest thereon at the rate of ten percent (10%) per annum, but if such rate should exceed the maximum rate al- lowed under the laws of the State of Illinois then at the maximum so allowed. Upon payment or prepayment of the principal of or interest on this Series 1980 Bond, the registered owner hereof shall note such payment on the Payment Record attached hereto and made a part hereof. The issuance of this Series 1980 Bond has been duly authorized by the Issuer, and this Series 1980 Bond constitutes the entire issue known as the "Economic Development Revenue Bond, Series 1980 (Component Plastics, Inc. Project) " of the Issuer in the principal amount of $1, 400, 000 , authorized for the purpose of financing the acquisition, construction and equipping of a facil- ity for commercial use within the corporate limits of the Issuer -9- (the "Project" ) , and paying necessary expenses incidental there- to, so as to fulfill the purposes of the Enabling Ordinance, as hereafter defined. This Series 1980 Bond has been issued under the Bond Ordinance, and along with the other bonds which may subsequently be issued under the provisions of the Bond Ordi- nance, as hereinafter defined, and any ordinance amendatory thereof or supplemental thereto (this Series 1980 Bond and such subsequent bonds hereinafter collectively referred to as the "Bonds" ) , are equally and ratably secured as to principal, pre- mium, if any, and interest pursuant to an ordinance duly adopted by the Issuer on June 11, 1980 (the "Bond Ordinance" ) , and are additionally secured by, among other things, a certain Loan Agreement (the "Loan Agreement" ) , dated as of June 1, 1980, by and between the Issuer, as lender, and Component Plastics, Inc. , an Illinois corporation, as borrower (the "Borrower" ) , a certain Pledge and Assignment (the "Assignment" ) , dated as of June 1, 1980, from the Issuer, as assignor, to The Elgin National Bank, Elgin, Illinois, as assignee (the "Bond Purchaser" ) , a certain Collateral Security Agreement (the "Collateral Security Agree- ment" ) , dated as of June 1, 1980, from the Borrower, as pledgor, to the Bond Purchaser, as pledgee, and a certain Mortgage (the "Mortgage" ) , dated as of June 1, 1980, from American National Bank and Trust Company of Chicago (a land trustee) , as mortgagor, to the Bond Purchaser, as mortgagee. Reference is hereby made to the Bond Ordinance, the Loan Agreement, the Assignment, the Collateral Security Agreement and the Mortgage for a description of the Project, the nature and extent of the security for the Bonds, and a statement of the terms and conditions upon which this Series 1980 Bond and the other Bonds are issued and secured, the rights of the owners hereof and thereof, and the other matters set forth therein. A loan of the proceeds of this Series 1980 Bond has been made, pursuant to the Loan Agreement to the Borrower for the purpose of financing the costs of the Project. Pursuant to the Loan Agreement, the Borrower must pay to the Issuer, or its assignee, such amounts as will always be sufficient in the aggre- gate to pay the principal of and interest on the Bonds as the same mature and become due; and under the Loan Agreement, it is the obligation of the Borrower to operate and maintain the Pro- ject in good repair, to keep it properly insured and to pay all taxes , assessments, depreciation charges and other charges levied or assessed against or with respect to the Project. This Series 1980 Bond is issued in full compliance with the Constitution and laws of the State of Illinois, including particularly Article VII , Section 6 of the 1970 Constitution of the State of Illinois and Ordinance No . S2-80, duly adopted by the Issuer on February 13 , 1980 (the "Enabling Ordinance" ) . THIS SERIES 1980 BOND SHALL NOT BE SOLD, TRANSFERRED OR ASSIGNED EXCEPT TO AN "INSTITUTIONAL INVESTOR, " AS SUCH TERM IS DEFINED IN THE BOND ORDINANCE, AND THEN ONLY FOR THE INVESTMENT ACCOUNT OF SUCH INSTITUTIONAL INVESTOR. -10- Subject to the preceding paragraph, this Series 1980 Bond may be sold, transferred or assigned by the owner hereof in person, or by his attorney duly authorized in writing, but only in the manner, subject to the limitations and upon payment of the charges provided in the Bond Ordinance. Upon such sale, transfer or assignment, the purchaser, transferee or assignee hereof shall be entitled, at such purchaser' s , transferee ' s or assignee ' s expense, to the issuance of a new bond. The Issuer may deem and treat the party in whose name this Series 1980 Bond is registered as the absolute owner hereof for the purpose of receiving payments of, or on account of, principal hereof, and premium, if any, and interest due hereon, and for all other purposes , and neither the Issuer nor the Bor- rower shall be affected by any notice to the contrary, except as provided in the Bond Ordinance. As of each Payment Date, the "Computed Rate" shall be 2%, plus one-half of the prime commercial lending rate in effect at the Continental Illinois National Bank and Trust Company of Chicago on such Payment Date; provided however, that if the rate determined as aforesaid exceeds 13% per annum then the Computed Rate shall be 13% and provided further, that if the rate deter- mined as aforesaid is less than 8% per annum, then the Computed Rate shall be 8% per annum. At the option of the Borrower (but only if exercised prior to March 31, 1981 ) this bond shall, after the filing of written notice with the registered owner and the City Clerk of the Issuer, bear interest at a Fixed Rate, such Fixed Rate to be the Computed Rate in effect on the date such option is exercised by filing as aforesaid. If such option is exercised evidence thereof shall be endorsed upon this bond. The principal installments due on this Series 1980 Bond shall be subject to prepayment at the option of the Issuer, in whole or in part at any time, but only after giving the notice specified below, at a redemption price equal to the principal amount thereof to be redeemed. This Series 1980 Bond is subject to mandatory redemp- tion in the event that the Borrower is required to prepay the amounts payable under the Loan Agreement upon the occurrence of a "Determination of Taxability, " as defined in Section 7 . 2 of the Loan Agreement. If called for redemption upon the occurrence of a Determination of Taxability, this Series 1980 Bond shall be subject to redemption by the Issuer at any time in whole and not in part at a redemption price of the unpaid principal amount hereof, plus accrued interest to the redemption date, plus a re- demption premium equal to one (1 ) year' s interest borne by this Series 1980 Bond for each twelve (12 ) month period or part there- of elapsed between the "Event of Taxability, " as defined in Section 7 .2 of the Loan Agreement, and the date of redemption, such aggregate amounts constituting the total compensation due the owner of this Series 1980 Bond as a result of an Event of Taxability. -11- Any person who was an owner of this Series 1980 Bond both at the time of an "Event of Taxability" (as defined in Section 7 . 2 of the Loan Agreement) and at the maturity or redemp- tion ( in whole or in part) hereof prior to the aforesaid redemp- tion date resulting from an Event of Taxability shall, upon presentation to the Issuer and the Borrower in writing of proof satisfactory to the Issuer and the Borrower that he was the owner of this Series 1980 Bond at such times , be entitled to an amount, as a redemption premium, equal to one (1 ) year' s interest borne by this Series 1980 Bond for each twelve ( 12 ) month period or part thereof elapsed between the "Event of Taxability, " as de- fined in Section 7 .2 of the Loan Agreement, and the date of redemption, such amount constituting the total compensation due the owner of this Series 1980 Bond as a result of an Event of Taxability. In the event any principal over and above the principal required to be paid on a quarter-annual basis is intended to be prepaid as aforesaid, notice thereof identifying the amount of principal to be prepaid shall be given in the name of the Issuer by the Borrower or the Issuer by mailing (by certified or regis- tered mail postage prepaid, return receipt requested) a copy of the prepayment notice at least thirty (30 ) days and not more than ninety ( 90 ) days prior to the date fixed for prepayment, to the owner of each Bond to be prepaid at the address furnished to the Issuer and the Borrower in writing by such owner, unless such notice is waived by the owner of the Bond; provided, however, that failure to give such notice by mailing, or any defect there- in, shall not affect the validity of any proceedings for the prepayment of principal with respect to which no such failure has occurred. The unpaid portions of the Bond shall continue to bear interest until paid. Payment will be made upon presentation and surrender of the Bond to be prepaid. If the Issuer shall default in the due and punctual payment of the interest on, or the principal of, or premium, if any, on any Bond when and as the same shall become due and pay- able, at maturity, by acceleration or otherwise, or if a default under the Bond Ordinance, the Loan Agreement, the Collateral Security Agreement, the Mortgage or the Assignment shall occur as provided therein, then, and at any time thereafter, unless and until the default shall have been cured or shall have been waived in the manner provided therein, the owner of this Series 1980 Bond may, upon written notice given by certified or registered mail to the Issuer and the Borrower, and to the owners of the remainder of the Bonds at the time outstanding under the Bond Ordinance, declare this Series 1980 Bond to be due and payable, and may proceed to enforce the rights embodied in this Series 1980 Bond, and any and all such other rights as the owner of this Series 1980 Bond may have, either by suit in equity or by action at law, or both. The Bond is payable solely from the revenues and receipts derived from the Loan Agreement and the Project, and otherwise as -12- provided in the Bond Ordinance, the Collateral Security Agreement, the Assignment, the Mortgage and the Loan Agreement. Pursuant to the provisions of the Loan Agreement amounts sufficient in the aggregate for the prompt payment when due of the principal of, premium, if any, and interest on the Bond is to be paid directly to the registered owner of such Bond for the account of the Issuer pursuant to the terms and provisions of the Assignment. Any payments on the Bond made to any registered owner or repre- sentative thereof by the Borrower or the Issuer, or for the account of the Borrower or the Issuer, shall for all purposes and in every respect be deemed a payment of the Bond, and such funds shall be applied to the payment of the Bond and shall satisfy and discharge the liability of the Issuer upon the Bond. The Bond is not, and shall not be deemed to constitute, either a general obligation or an indebtedness of the Issuer, or the State of Illinois or any other political subdivision thereof, or a loan of credit thereof within the meaning of any constitu- tional or statutory provision of the State of Illinois; but such Bond shall be payable solely from the funds provided therefor as provided in the Bond Ordinance. Neither the faith and credit nor the taxing power of the State of Illinois , the Issuer, or any other political subdivision of the State of Illinois is pledged to the payment of the principal of such Bond, the interest or any premium thereon, or other costs incidental thereto, and neither the State of Illinois, nor any other political subdivision of the State of Illinois shall be liable thereon. Neither the members of the Issuer nor any person executing the Bond shall be personally liable on the Bond solely by reason of issuance thereof. In certain events, on the conditions , in the manner and with the effect set forth in the Bond Ordinance, the principal of all of the Bonds issued under the Bond Ordinance, and then out- standing, may become or may be declared due and payable before the stated maturity thereof, together with interest accrued thereon. Modifications or alterations of the Bond Ordinance may be made only to the extent and in the circumstances permitted by the Bond Ordinance. IT IS HEREBY CERTIFIED, RECITE].) AND DECLARED that all acts, conditions and things required to exist, happen and be per- formed precedent to and in the passage and approval of the Bond Ordinance and the issuance of this Series 1980 Bond do exist, have happened and have been performed in due time, form and manner as required by law; and that the issuance of this Series 1980 Bond, together with all other obligations of the Issuer re- lating hereto, shall not constitute an indebtedness of the Is- suer, the State of Illinois or of any other political subdivision thereof within the meaning of any constitutional or statutory provision of the State of Illinois . -13- IN WITNESS WHEREOF, the City of Elgin, has caused this Series 1980 Bond to be executed in its name by the manual signa- ture of its Mayor, and attested by the manual signature of its City Clerk, and its seal to be impressed hereon, all as of , 1980 . CITY OF ELGIN By Its : Mayor (SEAL) Attest: By Its : City Clerk (FORM OF ASSIGNMENT) ASSIGNMENT For value received, the undersigned sells, assigns and transfers unto this Series 1980 Bond of the Is- suer. NO SALE, ASSIGNMENT OR TRANSFER HEREOF SHALL BE EFFECTIVE UNTIL NOTICE THEREOF SHALL HAVE BEEN GIVEN TO THE ISSUER AND THE BORROWER IN THE MANNER REQUIRED FOR THE GIVING OF NOTICES UNDER SECTION 9.1 OF THE LOAN AGREEMENT. THIS SERIES 1980 BOND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED EXCEPT TO AN "INSTITUTIONAL INVESTOR, " AS SUCH TERM IS DEFINED IN THE BOND ORDINANCE, AND THEN ONLY FOR THE INVESTMENT ACCOUNT OF SUCH INSTITUTIONAL INVES- TOR. Dated: Signed;, Witness : -14- (FORM OF PAYMENT RECORD) PAYMENT RECORD Name of Recipient, Principal Interest Title and Due Date Payment Payment Date Paid Signature Section 10 . Execution and Delivery of the Series 1980 Bond; Deposit of Bond Proceeds; Designation of Fiscal Agent la Issuer. The Mayor and the City Clerk of the Issuer are hereby authorized and directed to prepare and execute, in the manner hereinbefore specified, the Series 1980 Bond herein authorized, and to deliver the Series 1980 Bond to the purchaser thereof upon receipt of the purchase price therefor, namely 100% of the aggre- gate principal amount thereof. The Elgin National Bank is hereby designated Fiscal Agent for the Issuer for the purposes of, among other things, (i ) serving as the depository of the proceeds of the Series 1980 Bond as provided herein, (ii) establishing and maintaining the Construction Fund as provided in Section 13 hereof, and (iii) performing such other obligations and respon- sibilities as shall be provided herein, in the Loan Agreement, the Fiscal Agent Agreement, the Mortgage, the Collateral Security Agreement and the Assignment. The rights and duties of the Fiscal Agent are further specified in Section 28 of this Bond Ordinance. The proceeds of said Series 1980 Bond shall be de- posited with the Fiscal Agent and applied as provided in Section 3 .3 of the Loan Agreement and Section 13 hereof. Section 11 . Construction Fund. There is hereby autho- rized and ordered to be established in the custody of the Fiscal Agent, a separate trust fund designated the "City of Elgin, Component Plastics, Inc. Construction Fund" (the "Construction Fund" ) . The Fiscal Agent shall promptly deposit the proceeds derived from the sale of the Series 1980 Bond into the Construc- tion Fund. The Construction Fund shall be used for the. purpose of providing moneys to pay the Cost of the Project, in the manner and as provided in Section 3 .3 of the Loan Agreement. Any moneys not required for said purpose shall, when the Project is complete as provided in the Loan Agreement, be applied by the Fiscal Agent in the manner provided in Section 3 .3 (k) of the Loan Agreement. -15- Section 12 . Investments . As used herein, the term "Permitted Investments" shall mean those investments permitted by Section 3 .8 of the Loan Agreement. Moneys held in the Construction Fund or in any other trust fund, upon instructions from the Borrower, shall be in- vested by the Fiscal Agent in Permitted Investments . No invest- ment shall be made pursuant to this Section for a period longer than the time period, determined by the Fiscal Agent, for which said moneys are not required for the purpose for which they are intended. All proceeds of, interest on and profit realized from investments held in any trust fund shall accrue to and become a part of the appropriate trust fund, and any loss resulting from such investment should be charged to such fund and paid by the Borrower on demand from its own funds . Section 13 . Application of the Construction Fund. The Fiscal Agent is authorized and directed to apply the amounts in the Construction Fund to the payment or reimbursement of the Cost of the Project, as defined in the Loan Agreement. The Fiscal Agent is hereby authorized and directed to make payments and reimbursements from the Construction Fund upon a requisition submitted to the Fiscal Agent and signed by the Authorized Borrower Representative in conformance in all respects with the requirements contained in Section 3 .3 of the Loan Agree- ment. Each requisition shall certify each item thereof as cor- rect and proper under this Section, and that none of the items for which the requisition is made has formed the basis for any payment or reimbursement theretofore made from the Construction Fund, and shall have attached thereto proof of payment or an in- voice, and, if appropriate, a bill of sale therefor. The Fiscal Agent shall keep and maintain adequate records pertaining to the Construction Fund and all disbursements therefrom, and shall file an accounting thereof with the Issuer and the Borrower annually on the anniversary of the date of the issuance and delivery of the Series 1980 Bond until completion of the Project, as evidenced by the certificate required by Section 3 . 5 of the Loan Agreement. Section 14. Completion of the Project. The completion of the Project and the payment of all costs and expenses inci- dental thereto shall be evidenced by the filing with the Bond Purchaser, the Issuer and the Fiscal Agent of the certificate of the Authorized Borrower Representative required by the provisions of Section 3 . 5 of the Loan Agreement. As soon as is practicable, and in any event not more than sixty (60 ) days from the date of the certificate referred to in the preceding sentence, any balance remaining in the Construction Fund other than the amounts retained by the Fiscal Agent for the Cost of the Project not then due and payable (said balance being referred to in the Loan Agreement as "Surplus Construction Fund Money" ) shall be applied as provided in Section 3 .3 (k) of the Loan Agreement. -16- Section 15 . Payment of Principal and Interest; Condi- tion of the Issuer' s Obligations . The Issuer covenants that it will promptly pay, or cause to be paid, the principal of, pre- mium, if any, and interest on the Series 1980 Bond, including the payment of installments of principal required with respect there- to, at the place, on the dates and in the manner provided in this Bond Ordinance and in the Series 1980 Bond according to the true intent and meaning hereof and thereof. The principal of, premium, if any, and interest on the Bond is payable solely from the revenues and receipts derived from or in connection with the Loan Agreement and the Project (but excluding those amounts derived by the Issuer pursuant to its Unassigned Rights ) , which revenues and receipts are hereby specifically pledged to the payment thereof in the manner and to the extent specified in this Bond Ordinance and the Assignment. The Bond is further secured by, among other things, the Loan Agreement, the Mortgage, the Assignment, the Collateral Security Agreement and the Construction Fund. The Issuer shall not be required under this Bond Ordinance, the Mortgage, the Collateral Security Agreement, the Assignment or the Loan Agreement to expend any of its funds other than (i ) the proceeds derived from the sale of the Bond, ( ii ) the income, revenues, receipts and other moneys derived from the Loan Agree- ment or the Project (but excluding revenues and receipts derived by the Issuer pursuant to its Unassigned Rights) , (iii) any income or gains therefrom, and (iv) condemnation awards or insur- ance proceeds with respect to the Project. Each and every cove- nant herein made, including all covenants made in the various sections of this Bond Ordinance, is predicated upon the condition that any obligation for the payment of money incurred by the Issuer shall not constitute an indebtedness of the Issuer or a loan of credit thereof within the meaning of any constitutional or statutory provision, but shall be payable solely from the revenues and receipts derived from or in connection with the Project, including all moneys received by the Issuer (or its assignee under the Assignment) under the Loan Agreement, which revenues and receipts are hereby specifically pledged to the payment thereof in the manner and to the extent in this Bond Ordinance and the Assignment specified; and nothing in the Series 1980 Bond or this Bond Ordinance shall be considered to pledge any other funds or assets of the Issuer. Any provision of this Bond Ordinance to the contrary notwithstanding, the Issuer shall not be obligated to take any action or execute any instrument pursuant to any provision hereof (other than its obligations to pay principal of, premium, if any, and interest on the Bond) , unless (i ) it shall have been re- quested to do so by all of the owners thereof in writing, and (ii) if compliance with such request can reasonably be expected to result in the incurrence by the Issuer of any fees or ex- penses, it shall have received from the Borrower or the owner assurances reasonably satisfactory to the Issuer that the Issuer will be promptly reimbursed for the full amount of such fees and expenses ; provided, however, that no limitation on the obliga- tions of the Issuer contained herein by virtue of any lack of -17- assurances provided in (ii) above shall be deemed to prevent the occurrence of, and full force and effect of an event of default hereunder. Section 16 . Particular Covenants of the Issuer. Except as provided in Section 15 hereof, as long as any of the principal of, premium, if any, and interest on the Series 1980 Bond remains outstanding and unpaid, or until provision has been made for the payment thereof, the Issuer covenants with the owner of the Series 1980 Bond as follows : (a) The Issuer will comply fully with all the terms, provisions and conditions of the Loan Agreement, the Assignment, the Mortgage, the Collateral Security Agreement and the Fiscal Agent Agreement which require performance by, or impose duties on, the Issuer, and will not permit any default to occur on the part of the Issuer hereunder or thereunder; will fully and promptly enforce (but only upon full indemnification of all of its costs and expenses ) all of the terms, provisions and conditions of the Loan Agreement which require performance by, or impose duties on, the Borrower; and in the event of the occurrence of an event of default, as defined in the Loan Agreement, will, subject to the Assignment, the Mortgage and the Collateral Security Agreement, exercise, or cause the same to be exercised, all of the rights and remedies conferred upon the Issuer by the Loan Agreement for the full and complete protection of the security and rights of the owner of the Series 1980 Bond. (b) The Issuer will enforce collection of the loan repayments and the payment of other fees, expenses and charges in the amounts and at the time set forth in the Loan Agreement authorized hereby, and will not reduce, or cause or permit to be reduced, the loan repayments and other fees, expenses and charges fixed, established and required by the Loan Agreement, nor change or alter the time or times when the same are due and payable under said Loan Agreement. The Issuer' s obligation to pay the expenses of such enforcement shall be limited to funds made available to it for that purpose by the owner of the Series 1980 Bond, or other interested parties . (c) The Issuer will not consent to any change, amend- ment, modification or termination of the Loan Agreement, except otherwise as provided herein or therein. (d) The Issuer will not issue any other obligations payable from payments to be made by the Borrower pursuant to the Loan Agreement, nor voluntarily create or cause to be created any debt, lien, pledge, assignment, encumbrance or other charge on said payments or on the property and rights subject to the Loan Agreement, except as provided in Sections 29 and 30 hereof. (e) The Issuer covenants that it will faithfully per- form at all times any and all covenants , undertakings , stipula- tions and provisions contained in this Bond Ordinance, in the -18- Series 1980 Bond and in all proceedings pertaining hereto and thereto . The Issuer covenants that it is duly authorized under the Constitution and laws of the State of Illinois , including particularly and without limitation the Enabling Ordinance, to issue the Series 1980 Bond authorized hereby, to lend the Bor- rower the proceeds thereof by means of the Loan Agreement, and to pledge the revenues and receipts (and rights thereto) hereby authorized to be pledged and assigned in the manner and to the extent herein and in the Assignment set forth; that all action on its part for the issuance of the Series 1980 Bond and the adop- tion of this Bond Ordinance has been duly and effectively taken; and that the Series 1980 Bond will be a valid and enforceable special obligation of the Issuer according to the import thereof. Section 17 . Insurance and Condemnation Proceeds . The Loan Agreement provides for the assignment to the Bond Purchaser of certain insurance proceeds and condemnation awards , damages and compensation with respect to the Project. The Issuer hereby agrees to the application of such moneys in said manner. Section 18 . Amendments or Modifications . Any provi- sion of the Series 1980 Bond, this Bond Ordinance, the Loan Agreement, the Mortgage, the Assignment, the Fiscal Agent Agree- ment or the Collateral Security Agreement may be modified or amended in any respect with the written consent of the owner of the Series 1980 Bond and the owners of all Additional Bonds then Outstanding, provided that the Borrower shall have given its prior approval in writing to any such modification or amendment if the same would permit, or be construed to permit, any change in the obligations of the Borrower as set forth in the Loan Agreement, the Collateral Security Agreement or the Mortgage. Every amendment or modification of a provision of this Bond Or- dinance, the Loan Agreement, the Assignment or the Fiscal Agent Agreement shall be expressed in an ordinance of the Issuer amend- ing or supplementing the provisions of this Bond Ordinance, and shall be deemed to be a part of this Bond Ordinance. It shall not be necessary to note on any outstanding Bond any reference to such amendment or modification. No subsequent owner of the Series 1980 Bond shall have any right to object to such supplemental ordinance, or to object to any of the terms and provisions contained therein or the operation thereof, or in any manner to question the propriety of the adoption thereof, or to enjoin or restrain the Issuer from adopting the same or from taking any action pursuant to the provisions thereof. Upon the adoption of any supplemental ordinance pur- suant to the provisions of this Section, this Bond Ordinance shall be, and be deemed to be, modified and amended in accordance therewith, and the respective rights, duties and obligations under this Bond Ordinance of the Issuer, the Fiscal Agent, the Borrower and the owner of the Series 1980 Bond shall thereafter be determined, exercised and enforced under this Bond Ordinance, subject in all respects to such modifications and amendments . -19- • Section 19 . Enforcement. The provisions of this Bond Ordinance shall constitute a contract between the Issuer and the owner of the Series 1980 Bond. The owner of the Series 1980 Bond, in accordance with the provisions of Section 21 hereof and Section 10 of the Assignment, may sue in any action, either at law or in equity, to enforce or compel performance of all duties and obligations required by this Bond Ordinance to be done or performed by the Issuer or by the Borrower. Section 20 . Events of Default. Each of the following events is hereby defined as , and shall constitute, an "event of default" : (a) Default in the due and punctual payment of the principal of, premium, if any, or interest on the any Bond, whether at the stated maturity or required prepayment there- of, or upon proceedings for redemption thereof. (b) Default in the performance or observance of any other covenant, agreement or condition on the part of the Issuer in this Bond Ordinance or in the Series 1980 Bond contained, and the continuance thereof for a period of thirty (30 ) days after written notice to the Borrower and to the Issuer given by the owner of the Series 1980 Bond. (c) The occurrence of an "event of default" under the Loan Agreement, the Mortgage, the Assignment or the Colla- teral Security Agreement. Upon the happening and continuance of any event of default, and the giving of written notice to the Borrower and the • Issuer of such event, the owner of the Series 1980 Bond may, by notice in writing delivered to the Issuer and the Borrower, declare the principal of the Series 1980 Bond then Outstanding and the interest accrued thereon to be due and payable immedi- ately without presentment, demand, protest or other notice of any kind, which are hereby waived, and upon any such declaration the same shall become and be immediately due and payable, anything in this Bond Ordinance or in the Series 1980 Bond contained to the coltrary notwithstanding. The right of the owner to make any such declaration as aforesaid, however, is subject to the condi- tion that if, at any time after such declaration, all overdue installments of interest and the principal of the Series 1980 Bond which shall have matured by their terms , together with the reasonable and proper charges, expenses and liabilities of the owner, the Fiscal Agent and the Issuer, shall either be paid by or for the account of the Issuer, or provision satisfactory to the owner, the Fiscal Agent and the Issuer shall be made for such payment, and the mortgaged and pledged premises shall not have been sold as provided in this Bond Ordinance, the Mortgage and the Collateral Security Agreement, and all other existing de- faults shall have been cured, then, and in every such case, any such default and its consequences shall, ipso facto, be deemed to be annulled, but no such annulment shall extend to or affect any -20- other default, or impair or exhaust any right or power consequent thereon. The Issuer hereby grants to the Borrower full authority for the account of the Issuer to perform any covenant or obliga- tion, the non-performance of which is alleged in any notice received by the Borrower to constitute an event of default, in the name and place of the Issuer, with full power to do any and all things and acts to the same extent as the Issuer and perform any such things and acts with the power of substitution. For purposes of this Section, notice shall be deemed to have been given, if given in the manner required by Section 9 . 1 of the Loan Agreement for the giving of notices thereunder. Section 21 . Foreclosure and Enforcement of Remedies . Upon the happening and continuance of any event of default, and the giving of notice to the Borrower and the Issuer as provided in Section 20 hereof, then and in every case the owner of the Series 1980 Bond may proceed to protect and enforce its rights under the Enabling Ordinance, the Loan Agreement, the Assignment, the Mortgage, the Collateral Security Agreement and this Bond Ordinance forthwith by such suits, actions or special proceedings in equity or at law, or proceedings in the office of any board or officer having jurisdiction, whether for the specific performance of any covenant or agreement contained in this Bond Ordinance, the Loan Agreement, the Assignment, the Collateral Security Agreement, or the Mortgage, or in aid of the execution of any power granted herein, therein or in the Enabling Ordinance, or for the enforcement of any legal or equitable rights or remedies, including, with the prior written consent of all Bond owners , the sale of all or any part of the Project, subject to statutory requirements, if any, to the highest bidder and all right, title and interest, claim and demand therein and thereto, and all right of redemption thereof, as the owner shall determine. In the enforcement of any right or remedy under this Bond Ordinance, the Assignment, the Loan Agreement, the Mortgage, the Collateral Security Agreement, or the Enabling Ordinance, the owner of the Series 1980 Bond shall be entitled to sue for, enforce payment on and receive any and all amounts then due and unpaid or becoming due from the Issuer, for principal, interest or otherwise under any provision of this Bond Ordinance, the Enabling Ordinance, the Loan Agreement, the Assignment, the Collateral Security Agreement, the Mortgage, or the Series 1980 Bond, with interest on overdue payments at the rate or rates of interest specified in the Bonds, together with any and all costs and expenses of collection and of all proceedings hereunder and thereunder, without prejudice to any other right or remedy of the owner, and to recover and enforce judgment or decree against the Issuer, but solely as provided herein and therein, for any por- tion of such amounts remaining unpaid, with interest, costs and expenses, and to collect (but solely from the moneys available for said purpose) , in any manner provided by law, the moneys adjudged or decreed to be payable. -21- • Section 22 . Application of Revenues and Receipts After Default. All moneys received by the owner of the Series 1980 Bond pursuant to any right given or action taken under the provi- sions of this Bond Ordinance shall, after payment of the costs and expenses of the proceedings resulting in the collection of such money, and of the expenses, liabilities and advances in- curred or made by the owner, be applied to the payment of the Bond. Whenever the Series 1980 Bond shall have been paid un- der the provisions of this Section, and all expenses and charges of the owner of the Series 1980 Bond, the Fiscal Agent and the Issuer shall have been paid, any balance remaining shall be paid to or upon the order of the Borrower. Section 23 . Waivers of Events of Default; Actions lay the Owner. The owner of the Series 1980 Bond may waive any event of default hereunder. All rights of action under this Bond Ordinance, the Assignment, the Mortgage, the Loan Agreement, the Collateral Security Agreement or the Series 1980 Bond, may be en- forced without the production thereof at any trial or other proceeding relating thereto. Section 24. Effect of Discontinuance of Proceedings . If any proceeding taken on account of any event of default shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the owner of the Series 1980 Bond, then and in every such case, the Borrower, the Issuer and the owner shall be restored, respectively, to its former obligations and rights hereunder. Section 25 . Remedies not Exclusive; Delay or Omission. No remedy by the terms of this Bond Ordinance, the Assignment, the Loan Agreement, the Collateral Security Agreement or the Mortgage conferred upon or reserved to the owner of the Series 1980 Bond is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given under this Bond Ordinance, the Assignment, the Loan Agreement, the Collateral Security Agreement or the Mortgage, now or hereafter existing at law or in equity. No delay or omission to exercise any right or power arising upon any event of default shall impair any right or power, or shall be construed to be a waiver of any such default or an acquiescence therein; and every power and remedy given by this Bond Ordinance, the Assignment, the Loan Agreement, the Collateral Security Agreement or the Mortgage may be exercised from time to time and as often as may be deemed expedient by the owner of the Series 1980 Bond. Section 26 . Acceleration in the Event of Default. In the event that the principal of or interest on the Serie 1980 Bond is not paid according to the terms hereof and thereof either on maturity, mandatory prepayment, call for redemption or the occurrence of an event of default under this Bond Ordinance, the -22- Loan Agreement, the Mortgage, or the Assignment, the owner of the Series 1980 Bond, in accordance with the provisions of Section 10 of the Assignment, may, by written notice, effective upon deposit in the mail, and if sent by certified or registered mail, given to the Issuer, declare the principal of the Series 1980 Bond to be due and payable immediately; and upon such declaration given as aforesaid, the principal of said Bond shall be immediately due and payable, anything in the Series 1980 Bond or in this Bond Ordinance contained to the contrary notwithstanding. The owner of the Series 1980 Bond may rescind and annul such declaration and its consequences, but no such rescission or annulment shall extend to or affect any other default, or impair any rights consequent thereon. Section 27 . Defeasance. If the Issuer shall pay or cause to be paid, or there shall otherwise be paid, to the owner of the Series 1980 Bond, or its representative, the principal or redemption premium, if any, and interest due or to become due thereon, at the times and in the manner stipulated in this Bond Ordinance, and all other amounts due under this Bond Ordinance, the Mortgage, the Loan Agreement, the Collateral Security Agree- ment and the Assignment are paid in full , then the pledge of any revenues and receipts from or in connection with the Project under this Bond Ordinance, the Loan Agreement, the Collateral Security Agreement, the Mortgage and the Assignment, and the estate and rights hereby, in the Mortgage, the Loan Agreement, the Collateral Security Agreement and the Assignment granted, and all covenants, agreements and other obligations of the Issuer to the owner of the Bond, shall thereupon cease, terminate and become void, and be discharged and satisfied. In such event, the Bond owner shall cancel and discharge the lien of this Bond Ordinance, the Assignment, the Loan Agreement, the Collateral Security Agreement, and the Mortgage, and shall execute and deliver to the Issuer and the Borrower, and record in all offices appropriate therefor, all such instruments as may be appropriate to satisfy such lien and to evidence such discharge and satisfac- tion, and the Fiscal Agent and the Issuer shall pay over or deliver to the Borrower or its order all moneys or securities held by them or their representative pursuant to this Bond Ordi- nance which are not required for the payment of the principal of, redemption premium, if any, or interest on the Bond not thereto- fore paid or redeemed and all other amounts due under this Bond Ordinance. Section 28 . Provisions Relating to the Fiscal Agent. (a) The Fiscal Agent shall signify its acceptance of its duties and obligations hereunder, under the Assignment, the Loan Agreement, the Mortgage and the Collateral Security Agree- ment by its execution of the Fiscal Agent Agreement. All provi- sions of this Section shall be construed as extending to and including all of the rights, duties and obligations imposed upon the Fiscal Agent under the Assignment, the Loan Agreement, the Mortgage and the Collateral Security Agreement as fully for all intents and purposes as if this Section were contained therein. -23- • (b) (i) The Fiscal Agent shall have no responsibility for the validity or sufficiency of this Bond Ordinance, the Assignment, the Loan Agreement, the Mortgage, the Collateral Security Agreement or the security provided hereunder and there- under, or for the due execution hereof and thereof by the Issuer, or in respect of the title or the value of the Project, or in respect of the validity of the Bond, or to see to the recording or filing of this Bond Ordinance, the Assignment, the Loan Agree- ment, the Mortgage, the Collateral Security Agreement, any fi- nancing statement or any other document or instrument whatsoever. The recitals, statements and representations contained in this Bond Ordinance and in the Series 1980 Bond shall be construed as having been made by and on the part of the Issuer, and not by and on the part of the Fiscal Agent, and the Fiscal Agent does not assume any responsibility for the correctness of the same. (ii ) The Fiscal Agent shall not be liable or responsi- ble for the failure of the Issuer to perform any act required of it by this Bond Ordinance, or for the loss of any moneys arising through the insolvency or the act, default or omission of any depository other than itself in which such moneys shall have been deposited under this Bond Ordinance. The Fiscal Agent shall not be responsible for the application of any of the proceeds of the Bond or any other moneys deposited with it and paid out, invested, withdrawn or transferred in accordance with this Bond Ordinance, or for any loss resulting from any such investment. The Fiscal Agent shall not be liable in connection with the performance of its duties under this Bond Ordinance, the Assignment, the Loan Agreement, the Collateral Security Agreement or the Mortgage, except for its own misconduct, negligence or bad faith. The immunities and exemptions from liability of the Fiscal Agent contained herein shall extend to its directors, officers, employ- ees and agents . (c) The Fiscal Agent shall be entitled to receive and collect from the Borrower payment or reimbursement for reasonable fees for services rendered hereunder and under the Fiscal Agent Agreement, and all advances, counsel fees and other expenses reasonably and necessarily made or incurred by the Fiscal Agent in connection therewith. Before taking any action hereunder, the Fiscal Agent may require that a satisfactory indemnity bond be furnished for the reimbursement of all expenses to which it may be put, and to protect it against all liability, except liability which has resulted from its own misconduct, negligence or bad faith by reason of any action so taken. (d) The Fiscal Agent shall be protected and shall incur no liability in acting or proceeding, or in not acting or not proceeding, in good faith, reasonably and in accordance with the terms of this Bond Ordinance and the Fiscal Agent Agreement, upon any resolution, order, notice, request, consent, waiver, certificate, statement, affidavit, requisition, bond or other paper or document which it shall in good faith believe to be genuine and to have been adopted or signed by the proper Person, -24- or to have been prepared and furnished pursuant to any provision of this Bond Ordinance, or upon the written opinion of Indepen- dent Counsel or Bond Counsel, Independent Engineer, appraiser, or accountant believed in good faith by the Fiscal Agent to be qualified in relation to the subject matter. (e) The Fiscal Agent may resign and thereby become discharged of its duties under this Bond Ordinance and the Fiscal Agent Agreement by notice in writing given to the Issuer, the Bond Purchaser, the Bond owner and the Borrower, but such resigna- tion shall only take effect immediately upon the appointment of a successor fiscal agent pursuant to subsection ( f) of this Section. The Fiscal Agent may be removed at any time by an in- strument or instruments in writing, filed with the Fiscal Agent, the Issuer and the Borrower, and signed by the owners of all of the Bonds . The Fiscal Agent shall promptly give notice of its receipt of such filing to the Issuer and the Borrower. ( f) If at any time the Fiscal Agent shall resign, be removed, be dissolved or otherwise become incapable of acting in such capacity, or shall be adjudged a bankrupt or insolvent, or if a receiver, liquidator or conservator thereof or of its pro- perty shall be appointed, or if any public officer shall take charge or control of the Fiscal Agent or of its property or affairs, or if the position of Fiscal Agent shall become vacant for any other reason, the Issuer shall appoint a successor Fiscal Agent to fill such vacancy. (g) Any business entity into which the Fiscal Agent may be merged or converted, or with which it may be consolidated, or any business entity resulting from any merger, conversion or consolidation to which the Fiscal Agent shall be a party, or any business entity to which the Fiscal Agent may sell or transfer all or substantially all of its assets, provided such business entity shall be a national banking association or a bank or trust company duly organized under the laws of any state of the United States of America, and authorized to conduct a banking or trust business in the State, and shall be authorized by law to perform all the duties imposed upon it by this Bond Ordinance and the Fiscal Agent Agreement, shall be the successor to such Fiscal Agent without the execution or filing of any paper or the perfor- mance of any further act. Section 29 . Issuance of Additional Bonds . As long as no event of default hereunder is occurring, the Issuer at its sole discretion and, at the request of the Borrower, subject to the prior written approval of the owners of the Bonds then out- standing, and to the extent permitted by law in effect at the time thereof, shall use its best efforts to issue Additional Bonds on a parity with the Series 1980 Bond and any Additional Bonds theretofore or thereafter issued for the purposes specified in Section 3 .2 of the Loan Agreement. Before any Additional -25- Bonds are issued, there shall be delivered to the Fiscal Agent the items required therefor by Section 34 hereof. Additional Bonds shall be issued in such series and principal amounts, shall be dated, shall bear interest at such rate or rates , shall be subject to redemption at such times and prices, and shall mature in such years as the ordinance supple- mental hereto authorizing the issuance thereof shall fix and determine. Section 30 . Delivery of Additional Bonds . Upon the execution and delivery in each instance of an appropriate ordi- nance supplemental hereto, the Issuer shall issue, execute and deliver to the purchasers thereof such Additional Bonds , all as hereafter in this Section 30 provided. Prior to the delivery of any such Additional Bonds there shall be filed with the Fiscal Agent: (a) A valid and effective amendment to the Loan Agree- ment, pursuant to Section 3 .2 thereof, providing for the inclusion within the Project of any real estate and inter- ests therein, and any buildings , structures, facilities , machinery, equipment and related property to be acquired by purchase or construction from the proceeds of the Additional Bonds , and providing for an increase in the obligations of the Borrower in accordance with Section 4.2 of the Loan Agreement. (b ) A valid and effective supplemental ordinance providing for the issuance of such Additional Bonds, and subjecting to the lien of this Bond Ordinance, the Mortgage, the Collateral Security Agreement, the Loan Agreement and the Assignment, as appropriate, any and all real estate and interests therein, and any buildings , structures, facili- ties, machinery, equipment, fixtures and related property (whether real, personal or mixed) acquired by purchase or construction from the proceeds of such Additional Bonds, and pledging and assigning the additional amounts payable under the Loan Agreement to the payment of the Bonds . (c) A duly certified copy of an ordinance of the Issuer theretofore duly adopted and approved authorizing the execution and delivery of such such amendment to the Loan Agreement and the Assignment, and the issuance of such Additional Bonds . (d) The proceeds of such Additional Bonds shall be paid over to the Fiscal Agent and deposited to the credit of the Construction Fund as provided in Section 11 hereof (or to such other funds as are provided and created by the supplemental ordinance) . -26- (e) A certificate signed by the Authorized Borrower Representative to the effect that no event of default under this Bond Ordinance, the Assignment, the Mortgage, the Col- lateral Security Agreement or the Loan Agreement is occur- ring or will result from the issuance of such Additional Bonds . ( f) An opinion of Bond Counsel to the effect that the issuance of such Additional Bonds will not affect the tax- exempt status of all Bonds Outstanding. Section 31 . Sale of Bond. The Series 1980 Bond is hereby sold to The Elgin National Bank at a price of par and accrued interest. Section 32 . Form, Execution and Authorization of Fi- nancing Documents . The Issuer, by its Mayor and its City Clerk, is authorized to enter into the Loan Agreement, the Assignment and the Fiscal Agent Agreement, which instruments are to be substantially in the form now before this meeting and hereby approved and which instruments the Mayor and the City Clerk of the Issuer are hereby authorized and directed to execute for and on behalf of, and as the act and deed of, the Issuer. The Loan Agreement, the Assignment and the Fiscal Agent Agreement as executed and delivered by the Mayor and the City Clerk of the Issuer, shall each be in substantially the respective forms now before this meeting and hereby approved, or with such changes therein as shall be approved by the officers of the Issuer exe- cuting the same, their execution thereof to constitute conclusive evidence of their approval and the approval of the City Council of the Issuer of any and all changes or revisions therein from the forms of said instruments now before this meeting, and from and after the execution and delivery of the above-mentioned documents, the officers, 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 and instruments, as may be necessary to carry out and comply with the provisions of said documents as executed. Section 33 . Execution of Other Instruments and Certi- ficates . The Mayor and the City Clerk for and on behalf of the Issuer, are hereby authorized and directed to do any and all things necessary to effect the execution and delivery of the Loan Agreement, the Mortgage and the Collateral Security Agreement by the Borrower, the Assignment, the Mortgage, the Collateral Secur- ity Agreement by the Bond Purchaser, the Fiscal Agent Agreement by the Fiscal Agent, the performance of all obligations of the Issuer under and pursuant to this Bond Ordinance, the Loan Agree- ment, the Assignment, the Mortgage, the Collateral Security Agreement and the Fiscal Agent Agreement, the execution and delivery of the Series 1980 Bond, and the performance of all other acts of whatever nature necessary to effect and carry out the authority conferred by this Bond Ordinance and the other above-mentioned documents . The Mayor and the City Clerk of the -27- Issuer are hereby further authorized and directed for and on behalf of the Issuer to execute all papers , documents, certifi- cates and other instruments that may be required for the carrying out of the authority conferred by this Bond Ordinance and the other above-mentioned documents, or to evidence the said author- ity and its exercise. Section 34. Priority of Bond Ordinance, Assignment, Loan Agreement, Collateral Secur ty Agreement and Mortgage. This Bond Ordinance, the Loan Agreement, the Collateral Security Agreement, the Assignment and the Mortgage are given in order to secure funds to finance the acquisition, construction and equip- ping of the Project and, by reason thereof, it is intended that this Bond Ordinance, the Assignment, the Loan Agreement, the Collateral Security Agreement and the Mortgage shall be superior to any laborers ' , mechanics ' , materialmen' s or other liens which . may be placed upon the Project. Section 35 . Creation of Lien; Indebtedness . The Issuer shall not create or suffer to be created any lien or charge upon or pledge of the revenues and receipts derived from or in connection with the Project, except the lien, charge and pledge created by this Bond Ordinance, the Loan Agreement, the Assignment and the Series 1980 Bond. The Issuer agrees that the owner of the Series 1980 Bond, in its own name or in the name of the Issuer, may and is hereby granted the right to enforce all rights of the Issuer and all obligations of the Borrower under and pursuant to the Loan Agreement whether or not the Issuer is in default in its covenant to enforce such rights and obliga- tions . The Issuer shall not incur any indebtedness or issue any evidences of indebtedness other than the Series 1980 Bond or the Additional Bonds herein authorized secured by a lien on or pledge of such revenues and receipts which is prior to or equal with the lien and pledge securing the Bonds hereunder, said lien continuing as long as any of the Bonds are Outstanding. The Issuer further covenants and agrees not to sell, convey, trans- fer, mortgage or encumber its interest in the Loan Agreement, except as specifically permitted under this Bond Ordinance, the Mortgage, the Collateral Security Agreement, the Loan Agreement and the Assignment. Section 36 . Instruments of Further Assurance. The Issuer covenants that it will do, execute, acknowledge and deli- ver, or cause to be done, executed, acknowledged and delivered, such supplemental ordinances and further acts, instruments and transfers as the owner of the Series 1980 Bond may reasonably require for the better assuring, transferring, conveying, pledg- ing, assigning and confirming unto the owner, all and singular, the property herein described and the revenues and receipts pledged hereby to the payment of the principal of, premium, if any, and interest on the Series 1980 Bond. Any and all property hereafter acquired which is of the kind or nature herein provided -28- to be and become subject to the lien of the Assignment shall, ipso facto, and without any further conveyance, assignment or act on the part of the Issuer or the owner of the Series 1980 Bond, become and be subject to the lien of the Assignment as fully and completely as though specifically described therein. Section 37 . Recording and Filing. The Loan Agreement, the Assignment, the Collateral Security Agreement and the Mort- gage, or appropriate summaries thereof, shall be recorded in the office of the Recorder of Deeds of Kane County, Illinois and/or in such other office or offices as may be at the time provided by law as the proper place or places for the recordation thereof. Security interests in the personal property (and rights therein) constituting a part of the Project shall be perfected in the manner required by the Illinois Uniform Commercial Code, and any security agreement or interest which might in any way conflict with or supercede the priority of such security interests created in the Project security interests required to be created hereby. The Loan Agreement, the Assignment, the Collateral Security Agreement and the Mortgage shall be re-recorded and re-indexed by the Borrower whenever, in the opinion of the Independent Counsel, such action is necessary to preserve the lien thereof; and, in addition, such financing or continuation statements as in the opinion of such Independent Counsel become necessary to preserve said lien shall be filed in such offices by the Borrower as shall be required by the Illinois Uniform Commercial Code to maintain the prior perfected status required hereby. The Borrower will within twenty (20 ) days after any such filing, recording or other act, furnish the Bondowner with an opinion of Independent Counsel as to the adequacy, and reciting the details of such filing, re- cording or other act, and specifying any re-recording or re-filing to be effected in the future with respect to the security inter- ests required to be created hereby. Section 38 . Rights Under Loan Agreement. The Issuer agrees that the Bond owners as pledgees and assignees of the revenues and receipts derived from the Loan Agreement under the Assignment, shall, subject to the provisions thereof, have the legal power to exercise all of the rights, powers and privileges of the Issuer under the Loan Agreement, including the right to enforce all of the obligations of the Borrower thereunder. Section 39 . Provisions of this Bond Ordinance . The provisions of this Bond 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 and provisions . Section 40 . Covenants , Stipulations , Obligations and Agreements of the Issuer. All covenants, stipulations , obliga- tions and agreements of the Issuer contained in this Bond Ordi- nance, in the Loan Agreement, the Fiscal Agent Agreement and the Assignment shall be deemed to be the covenants, stipulations, -29- obligations and agreements of the Issuer to the full extent authorized or permitted by law, and all such covenants, stipula- tions, obligations and agreements shall be binding upon the Issuer and its successors from time to time, and upon any board or body to which any powers or duties affecting such covenants , stipulations , obligations and agreements shall be transferred by or in accordance with law; and, except as otherwise provided in this Bond Ordinance or in the other instruments contemplated hereby to which the Issuer is or is to be a party, all rights , powers and privileges conferred, and duties and liabilities imposed, upon the Issuer by the provisions of this Bond Ordi- nance, the Fiscal Agent Agreement, the Assignment or the Loan Agreement shall be executed or performed by the Issuer or by such officers, board or body as may be required by law to exercise such powers and to perform such duties . No covenant, stipulation, obligation or agreement here- in contained, or contained in the Fiscal Agent Agreement, the Assignment or the Loan Agreement, shall be deemed to be a cove- nant, stipulation, obligation or agreement of any officer, agent or employee of the Issuer, nor shall any officer executing the Series 1980 Bond be liable personally thereon or be subject to any personal liability or accountability by reason of the is- suance thereof, nor shall the Issuer be liable to perform any act beyond the issuance of the Bond, the delivery thereof and the deposit of the proceeds of sale thereof with the Fiscal Agent. Section 41 . Small Issue Election. The Issuer hereby elects to have the provisions of Section 103 (b ) (6 ) (D) of the Internal Revenue Code of 1954, as amended (the "Code" ) , applied to the Series 1980 Bond approved and authorized pursuant to this Bond Ordinance, and the Mayor and the City Clerk of the Issuer be and they hereby are authorized, empowered and directed to take any and all further action which may be required to implement and effectuate such election, including, without limitation, the preparation and filing of such statements or other documents as may be deemed by them to be necessary or advisable in order to comply with the procedures set forth in Section 1 . 103-10(b) (2 ) (vi ) of the Income Tax Regulations (26 CFR Part 1 ) promulgated under Section 103 of the Code, and all acts heretofore taken by them in this connection are hereby ratified and confirmed. Section 42 . Conflicting Ordinances . All ordinances in conflict herewith are hereby repealed to the extent of such conflict. Notwithstanding the foregoing sentence the initial resolution of the Issuer with respect to the Project, passed and approved on December 12, 1979, shall not be repealed either in whole or in part. Section 43 . Effective Date. This Bond Ordinance shall take effect and be-in force from and after its passage. -30- PASSED AND APPROVED by the Council of the City of Elgin, this llth day of June, 1980 . By Harry W. Barnes Mayor Pro Tem Attest: By s/ Marie Yearman City Clerk Councilwoman Nelson moved and Councilman Waters seconded the motion that said Ordinance No. S7-80 as presented and read be adopted. After full discussion thereof, the Mayor Pro Tem directed that the motion to adopt said Ordinance No. S7-80 as presented be put to a vote on roll call, which resulted as fol- lows: VOTING AYE: Councilmen Barnes , Gilliam, Hill , Nelson and Waters . VOTING NAY: None The Council thereupon declared Ordinance No. S7-80 duly adopted and approved. -31- STATE OF ILLINOIS ) ss : COUNTY OF KANE ) I , MARIE YEARMAN, hereby certify that I am the duly qualified and acting City Clerk of the City of Elgin (the " Issuer" ) , and as such official I further certify that attached hereto is a copy of excerpts from the minutes of the meeting of the City Council of said Issuer held on June 11, 1980; that I have com- pared said copy with the original minute record of said meeting in my official custody; and that said copy is a true, correct and complete transcript from said original minute record insofar as said original minute record relates to the issuance of a $1,400, 000 Economic Development Revenue Bond, Series 1980 (Component Plastics, Inc. Project) of said Issuer. WITNESS my official signature and seal of said Issuer this llth day of June , 1980 . By s/ Marie Yearman City Clerk (SEAL) -32- • ELGIN ECONOMIC DEVELOPMENT COMMISSION /. -_ 28 North Grove Avenue, P. O. Box 648 i _ . ,7,._\,,I_ d L Elgin, Illinois 60120 -Area Code (312) 741-5660 _ . a am— r A DIVISION OF THE ELGIN AREA CHAMBER OF COMMERCE n 1‹ . :# 4er ;,.. 04. ,kg rED f Stir of C August 5, 1985 TO: City Council, City of Elgin FROM: M. Edward Kelly RE: IDB Application from Component Plastics The Elgin Economic Development Commission has approved the Industrial Development Bond application for $1,700,000 by Component Plastics. The application meets the criteria as established by the City of Elgin. Sincerely, CENTER ‘. OF QUALITY C R A F T S M A N S H I P LAW OFFICES HOFFMAN & DAVIS THIRTY WEST MONROE STREET CHICAGO, ILLINOIS 60803 (312) 621-0300 July 25, 1985 Mr . Edward Kelly Executive Vice President Elgin Area Chamber of Commerce 28 North Grove Elgin, Illinois 60120 Re : Proposed Bond Issue for Component Plastics Dear Mr. Kelly: As I indicated to you in our recent telephone conversation, Section 103(n) ( 7) (D) of the Internal Revenue Code and the temporary regulations under that Section provide in substance that industrial development bonds issued for refunding purposes do not count against the issuer 's annual volume limit , provided the refunded bonds are retired within 180 days after the date of issue of the refunded bonds . The amount excludable from the volume limit is the outstanding face amount of the refunded bonds (not including any redemption premium or interest paid in connection with the refunding ) . We understand that approximately $900,000 of the proposed Component Plastics bond issue is to be used to pay (at closing ) the principal of outstanding industrial development bonds previously issued for that company. Under these circumstances , that $900 ,000 refunding portion of the new bond issue would not count against the City of Elgin 's volume limit. The remainder of the bond issue would, of course, count against the volume limit . If you need any additional information or have further questions , please do not hesitate to contact us . Very truly yours, HOFFMAN & DAVIS, A rofess onal Corporation, Alvin L. Kruse ALK:be cc: Harry P. Stinespring, III, Esq. David A. Saunders, Esq . ' LAW OFFICES Siinedpring, a amher!, Schroeder & ,diociale! 77 WEST WASHINGTON STREET SUITE 1801 CHICAGO, IL 60602 REPLY (312)641-5760 TO HARRY P.STINESPRING&ASSOC.,P.C. McHENRY OFFICE JERRY L LAMBERT 1303 N.RICHMOND ROAD ✓ HARRY A.SCHROEDER McHENRY,ILLINOIS 80050 4 (815)385-1333 OF COUNSEL — MIC L E. LaVEL FLOSSMOOR OFFICE 3608 VOLLMER ROAD ii 2 July 29, 1985 P.O. BOX zs FLOSSMOOR,ILLINOIS Is60tzz O \j/4X/\ \ Mr . Edward Kelly Executive Vice President Elgin Area Chamber of Commerce 28 North Grove Street Elgin, IL 60120 Re : Industrial Development Bond Component Plastics, Inc. , et. al . Dear Mr . Kelly, As you requested I enclose with this letter a photostatic copy of the proposed committment by American National Bank. If you should have any questions regarding this matter please call . Thank you. Sincerely, Har)1i P. nespring , III BPS:slc enclosure American National Bank and Trust Company of Chicago 33 North LaSalle Srren/Giicu ,,Illinaij 6069GT3121661•5C*)J GUY W.EISENHUTH VICE PRESIDENT • W.6242 June 3, 1985 Mr. Joseph Valente Component Plastics, Inc. 700 W. Tollgate Road Elgin, IL 60120 Dear Joe: American National Bank and Trust Company of Chicago (herein- after "Bank") is pleased to make available to Component Manage- ment Group (hereinafter "Borrower") a commitment to purchase up to $1 ,700, 000 in City of Elgin Industrial Revenue Bonds (herein- after "Bonds") according to the following terms and conditions : Amount: Up to $1, 700, 000. Purpose : a) Approximately $900, 000 : refinance existing Industrial Revenue Bonds. b) Approximately $800, 000 : construct a 30 ,000 square foot addition to existing building located at 700 W. Tollgate Road in Elgin. Repayment Program: a) Quarterly installments of $50, 000 including interest until June 1 , 1988 , then full payout quarterly installments of principal plus interest until June 30, 2000 . b) Quarterly installments of $13 , 333 plus interest until June 30 , 2000 . Collateral : First mortgage and assignment of lease on real estate located at 700 W. Tollgate Road in Elgin. Second mortgage and/or collateral Assignment of Beneficial Interest on real estate located at 909 Davis Road in Elgin. American National Bank Mr. Joseph Valente June 3, 1985 Page 2 Call Provisions: Unconditional call provisions at the end of the fifth and tenth years. Rate : a) Fixed at 8% until June 1 , 1988 , then floating at 75% of the Bank ' s prime rate as announced by the Bank from time to time. b) Floating at 75% of the Bank's prime rate as announced by the Bank from time to time. Fees : 1% of the amount of the Bond, due at closing. In addition, all out-of-pocket costs incurred by the Bank, including, but not limited to, attorney and bond counsel fees and Trust Department fees, will be paid by the Borrower. Balances : The greater of $150, 000 or an amount adequate to cover Bank services. Guarantees : Joint and several guarantees of Frank Killough, Joseph Valente, Austin Hester (hereinafter "Guarantors") and Component Plastics, Inc. (hereinafter "Corporate Guarantor") . Cross Default Provisions : There will be a cross default provision with respect to the Bond and all other obligations of the Borrower, the Guarantors, the Corporate Guarantor and Elgin Leasing. Construction Escrow: The proceeds of the Bond (s) , other than refinancing proceeds, will be disbursed into an escrow from which all disbursements will be made upon review and ap_troval by the Bank. American National Bank Mr. Joseph Valente June 3 , 1985 Page 3 Financial Covenants for Component Plastics, Inc. : Maintain minimum working capital of $800,000 and a working capital ratio of at least 2 to 1 . Maintain minimum tangible net worth of $1 , 250 , 000 and a debt to tangible net worth ratio of at most 1 to 1. Capital expenditures not to exceed $400, 000 per year for the Corporate Guarantor and/or any entity owned or controlled by the Corporate Guarantor, the Borrower or the Guarantors. Negative pledge on all assets of the Corporate Guarantor and any entity owned or controlled by the Corporate Guarantor, the Borrower or the Guarantors. Financial Statements Component Plastics , Inc. : Annual financial statements, reviewed by an accountant acceptable to the Bank, within 90 days after fiscal year end. Quarterly statements within 45 days after each quarter. Component Management Group: Annual financial statements , reviewed by an accountant acceptable to the Bank, within 90 days after fiscal year end. Documentation: Opinion by a qualified bond counsel regarding the tax-free status of the Bonds. All other documentation as required by the e Bank' s Real Estate Department and legal counsel. All borrowings under this commitment are subject to the satisfactory financial condition of the Borrower, the Guarantors , the Corporate Guarantor and Elgin Leasing. American National Bank Mr. Joseph Valente June 3, 1985 Page 4 This commitment, unless accepted by you, will expire 60 days from the date hereof. Please return a signed copy of this letter to me at your earliest convenience. Within 90 days from the date of your acceptance, the Bond must close or this commitment will expire. Sincerely, GWE/rj cc: Harry P. Stinespring III The foregoing has been accepted and agreed to this day of , 1985. Component Plastics, Inc. FRANK KILLOUGH By: Title: JOSEPH VALENTE AUSTIN HESTER r