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HomeMy WebLinkAboutS9-76 Ordinance No. S9-76 • AN ORDINANCE AUTHORIZING THE ISSUANCE OF $1,000,000 INDUSTRIAL DEVELOPMENT REVENUE BONDS (AMERICAN GAGE & MACHINE COMPANY PROJECT) ; AUTHORIZING THE EXECUTION AND DELIVERY OF A LEASE BETWEEN THE CITY, AS LESSOR, AND AMERICAN GAGE & MACHINE COMPANY, AS LESSEE; AUTHORIZING THE EXECUTION AND DELIVERY OF A MORTGAGE AND INDENTURE OF TRUST SECURING SAID BONDS; AND RELATED MATTERS WHEREAS, the City of Elgin is a home rule unit under the Constitution of the State of Illinois, authorized to exercise any power and perform any function pertaining to its government and affairs; and WHEREAS, pursuant to said power the City of Elgin has by Ordinance No. S7-75, passed on July 23, 1975, hereinafter referred to as the Enabling Ordinance, authorized the issuance and sale of revenue bonds for the purposes of financing the cost of purchasing, constructing, enlarging, improving and equipping buildings and structures for industrial and manufacturing facilities and authorized agreements for such facilities, for the public purposes described in the ordinance; and WHEREAS, it has been proposed that pursuant to said ordinance the City of Elgin shall acquire an interest in a building addition constructed and to be constructed upon property known as Elgin Diamond Products Company and leased to American Gage and Machine Company, an Illinois corporation, and certain items of equipment to be located on said real property, hereinafter referred to as "Project" and lease the same to Anerican Gage and Machine Company, for use in connection with a plant for the production of specialty alloy wire and strips, all pursuant to the Enabling Ordinance described above; and WHEREAS, forms of the following documents relating to the Project have been submitted to the City Council and placed on file in the office of the City Clerk: (a) Lease, between the City, as Lessor, and American Gage & Machine Company, as Lessee, leasing the Project and setting forth proposed recitals, covenants and agreements by the parties with respect to the Project. (b) Mortgage and Indenture of Trust, between the City and the Elgin National Bank, as Trustee, pledging the revenues and mortgaging the entire interest of the City in the Project for the security of $1,000,000 Industrial Development Revenue Bonds (American Gage E Machine Company Project) , to be issued by the City, and setting forth proposed recitals, covenants and agreements relating thereto. (c) Guaranty Agreement dated October 1, 1976, whereby American Gage E1 Machine Company unconditionally guarantees to the Trustee payment of principal, premium, if any, and interest on the Bonds. (d) Security Agreement, whereby American Gage $ Machine Company grants a security interest to the Trustee in certain equipment located at the Project Site as additional security for the Bonds. (This document will not be executed by the City) . (e) Trust Deed whereby Elgin Diamond Products Company mortgages the Project Site and existing plant and certain unimproved property thereon to the Trustee as additional security for the Bonds. (f) Lease Agreement dated as of August 26, 1976 between Elgin Diamond Products Company, and American Gage & Machine Company authorizing construction of the Project and recognizing the interests of the City therein (the "Lease Agreement") . and WHEREAS, said proposal has been examined by the City of Elgin and its consultants. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS: Section 1. That the City Council of the City of Elgin hereby finds, determines and declares as follows: (a) The Project described in the Lease and Indenture referred to above constitutes a project authorized by the Enabling Ordinance. (b) The Project, the issuance of the Bonds to finance the cost thereof and the leasing thereof to American Gage & Machine Company is necessary and for the best interests of the City to relieve conditions of unemployment, and encourage economic development within the City of Elgin, thereby reducing the evils attendant upon unemployment and to provide for the increased welfare and prosperity of the residents of the City; and that the Project, the Bonds, the Indenture and the Lease are for a public purpose and a function pertaining to the government and affairs of the City of Elgin. (c) The acquisition and construction of the Project, the issuance and sale of the Bonds, the execution and delivery of the Lease and of the Indenture and the performance of all covenants and agreements of the City contained in the Lease and Indenture and of all other acts and things required under the Constitution and laws of the State of Illinois to make the Lease, Indenture and Bonds valid and binding obligations of the City in accordance with their terms, are authorized by the Enabling Ordinance. (d) It is desirable that the City of Elgin Industrial Development Revenue Bonds (American Gage E Machine Company Project) in the amount of $1,000,000 be issued by the City upon the terms set forth in the Indenture, under the provi- sions of which the City of Elgin's interest in the Lease and the rentals will be pledged and the Project will be mortgaged to the Trustee as security for the payment of principal and interest on the Bonds. (e) Under the provisions of the Enabling Ordinance, and as provided in the Lease and Indenture, the Bonds are not to be payable from nor charged upon any funds other than the Lease rentals pledged to the payment thereof; the City of Elgin is not subject to any liability thereon; no holders of the Bonds shall ever have the right to compel any exercise of the taxing powers of the City of Elgin to pay any of the Bonds or the interest thereon, nor to enforce payment thereof against any property of the City of Elgin except the Project mortgaged by the Indenture; the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City of Elgin except the Project; each Bond issued under the Indenture shall recite that it is issued pursuant to the Enabling Ordinance and that the Bond including interest thereon, is payable solely from the revenue pledged to the payment thereof; and no Bond shall constitute a debt of the City of Elgin within the meaning of any constitutional or statutory limitation. Section 2. That the forms of Lease, Mortgage and Indenture of Trust, Guaranty, Security Agreement, Mortgage and Lease Agreement referred to in Paragraph 2 are approved. The Lease shall be executed, sealed and acknowledged in the name and on behalf of the City by the Mayor and City Clerk, upon execution thereof by the officers of American Gage & Machine Company, in substantially the form on file, but with all such changes therein, not incon- sistent with the Enabling Ordinance or other law, as may be approved by the officers executing the same, which approval shall be conclusively evidenced by the execution thereof. The Mortgage and Indenture of Trust shall be executed, sealed and acknowledged in the name and on behalf of the City of Elgin by the Mayor and City Clerk in substantially the form on file, but with all such changes therein, not inconsistent with the Enabling Ordinance or other laws, as may be approved by the officers executing the same, which approval shall be conclusively evidenced by the execution thereof, and then shall be delivered to the Trustee. Copies of all the documents shall be delivered, filed and recorded as provided therein. Section 3. That the proposal of Northwestern National Life Insurance Company to purchase the Bonds at a price of par and accrued interest upon the terms and conditions set forth in the Indenture is deemed to be a reasonable offer and is hereby accepted. As requested by Northwestern National Life Insurance Company, the Bonds shall be issued as a single fully registered Bond in the aggregate principal amount of $1,000,000, payable to Northwestern National Life Insurance Company, or its registered assigns. Such Bond shall mature, bear interest, be subject to prior redemption, and contain such other terms and conditions as are set forth in the Indenture. The Mayor and City Clerk are hereby authorized to execute the Bond as prescribed by the Indenture and to deliver it to the Trustee, V • together with a certified copy of this Ordinance and the other documents required by the Indenture, for authentication and delivery to the purchaser. Section 4. The Mayor and City Clerk and other officers of the City are authorized and directed to prepare and furnish to the purchasers of the Bonds, when issued, certified copies of all proceedings and records of the City relating to the Bonds, and such other affidavits and certificates as may be required to show the facts appearing from the books and records in the officers' custody and control or as otherwise known to them; and all such certified copies, certificates and affidavits, including any hereto- fore furnished, shall constitute representations of the City as to the truth of all statements contained therein. Section 5. That this ordinance shall be in full force and effect upon its passage in the manner provided by law. s/ Richard L . Verbic Richard L. Verbic, Mayor Presented: October 27 1976 Passed: October 27 , 1976 Vote: Yeas 7 Nays 0 Recorded: Published: Attest: s/ Marie Yearman Marie Yearman, City Clerk