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HomeMy WebLinkAbout01-300 Resolution No. 01-300 RESOLUTION AUTHORIZING EXECUTION OF TERMINATION AGREEMENT WITH CELL PARTS, INC. PROVIDING FOR THE TERMINATION OF A MEMORANDUM OF AGREEMENT DATED APRIL 25, 2001 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Ed Schock, Mayor, and Dolonna Mecum, City Clerk, be and are hereby authorized and directed to execute a termination agreement on behalf of the City of Elgin with Cell Parts, Inc . providing for the termination of a Memorandum of Agreement dated April 25, 2001, a copy of which is attached hereto and made a part hereof by reference . BE IT FURTHER RESOLVED that Resolution No. 01-115 adopted on April 25, 2001, providing for the approval of the Memorandum of Agreement with Cell Parts, Inc . , dated April 25, 2001, be and is hereby repealed. s/ Ed Schock Ed Schock, Mayor Presented: November 14 , 2001 Adopted: November 14, 2001 Omnibus Vote : Yeas : 7 Nays : 0 Attest : s/ Dolonna Mecum Dolonna Mecum, City Clerk • • RAGREE/BONDTA. CP Draft 10-9-01 TERMINATION AGREEMENT THIS AGREEMENT made and entered into this ,26Mday of ctobcr?Vim /�"2001,2001, by and between the CITY OF ELGIN, an Illinois municipal corporation (hereinafter referred to as the "City" ) and CELL PARTS, INC. , an Illinois corporation (hereinafter referred to as "Cell Parts" ) . WITNESSETH WHEREAS, the City and Cell Parts previously entered into a Memorandum of Agreement dated April 25 , 2001 , regarding the proposed issuance of the City' s 2001 industrial development revenue bonds in an amount not to exceed $3 , 000 , 000 for a project to be located at Lot 1, Tollgate Industrial Park, Tollgate Road, in the City of Elgin, Illinois, a copy of such Memorandum of Agreement being attached hereto as Exhibit A (hereinafter referred to as the "Memorandum of Agreement" ) ; and WHEREAS, Cell Parts has advised the City that it no longer wishes to proceed with the subject Project and the issuance and sale of bonds as provided for in the Memorandum of Agreement ; and WHEREAS, the parties wish to terminate the Memorandum of Agreement . NOW, THEREFORE, for and in consideration of the payment of Ten Dollars and No/100 ($10 . 00) to Cell Parts in hand paid, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows : 1 . That the foregoing recitals are hereby incorporated into this agreement in their entirety. 2 . That the Memorandum of Agreement between the City and Cell Parts dated April 25 , 2001 , a copy of which is attached hereto as Exhibit A is hereby terminated. The parties hereto agree that each party is released from any and all further obligations from and under the Memorandum of Agreement . 3 . That it is further expressly agreed and understood that the City may rely upon this Termination Agreement to proceed to reallocate the subject $3 , 000 , 000 of 2001 cap volume and to proceed with the issuance of industrial development revenue bonds to another entity of the City' s choosing . IN WITNESS WHEREOF, the parties have entered into and executed this Termination Agreement on the date and year first written above . CITY OF ELCIN CELL P RTS, INC. ti By By s :or is resi Attest : City Clerk MEMORANDUM OF AGREEMENT THIS MEMORANDUM OF AGREEMENT (the "Agreement") is by and among the CITY OF ELGIN, KANE AND COOK COUNTIES, ILLINOIS, a municipality duly organized and validly existing under the Constitution and the laws of the State of Illinois (the "Issuer") and CELL PARTS,INC., an Illinois corporation (the "Company"). 1. Preliminary Statement. Among the matters of mutual inducement which have resulted in this Agreement are the following: (a) The Issuer is a home rule unit of government pursuant to Section 6(a) of Article VII of the 1970 Constitution of the State of Illinois. (b) The Company wishes to finance a portion of the cost of the acquisition, construction and equipping of a manufacturing facility for the manufacture of plastic and metal ferrules for golf clubs or other products (the "Project"), all to be owned and operated by the Company, or its affiliate or designee, and to be located at Lot 1, Tollgate Industrial Park, Tollgate Road in the City of Elgin,Illinois. The Company wishes to have the Issuer issue one or more issues of its industrial development revenue bonds in one or more series in an aggregate principal amount not to exceed $3,000,000 (the "Bonds"), to finance all or a portion of the costs of the Project pursuant to the provisions of the Act and the Internal Revenue Code of 1986, as amended (the "Code"). (c) The Bonds shall be special, limited obligations of the Issuer payable solely and only out of the revenues and receipts and other amounts received by or on behalf of the Issuer, pursuant to a loan agreement, lease agreement or other financing agreement between the Issuer and the Company or its designee. The Bonds and the interest thereon shall not constitute an indebtedness or a loan of credit of the Issuer, the State of Illinois or any political subdivision thereof, within the meaning of any constitutional or statutory provisions, and no owner or holder of any such revenue bonds shall have the right to compel any exercise of the taxing power of the Issuer, the State of Illinois or any political subdivision thereof to pay the principal of,premium,if any, or interest on the Bonds. (d) The Issuer finds that the financing of the Project from the proceeds of the Bonds will be for the public purposes set forth in the Act by increasing and maintaining employment and for the increased welfare and prosperity of the residents of the City of Elgin, Illinois. Subject to due compliance with all requirements of law, the Issuer, by virtue of such authority as may now or hereafter be conferred, subject to the holding of a public hearing on the financing of the Project through the issuance of the Bonds and matters disclosed at said public hearing, and subject to receipt of adequate assurance from the Company or its affiliate or designee that there are one or more purchasers for the Bonds, will issue and sell one or more issues of the Bonds in one or more series in an aggregate principal amount not to exceed a combined total of$3,000,000, to pay all or a portion of the costs of the Project. EXHIBIT A 2. Undertakings on the Part of the Issuer. Subject to the conditions above stated, the Issuer hereby agrees as follows: (a) That, it will allocate to the Bonds $1,700,000 of its "volume cap" for purposes of Section 146 of the Internal Revenue Code of 1986, as amended, for the calendar year 2001 and, at the request of the Company, will apply to the office of the Governor of the State of Illinois for additional volume cap if the Bonds are to be issued in an amount greater than $1,700,000. The Company will pay all fees, costs and expenses relating to the acquisition of volume cap in excess of the Issuer's existing $1,700,000 volume cap for the calendar year 2001. The Issuer's obligation to issue the Bonds in excess of$1,700,000 is subject to the receipt by the Issuer of sufficient additional volume cap allocation from the State of Illinois. (b) That it will authorize the issuance and sale of one or more issues of the Bonds in one or more series in an amount not to exceed a combined aggregate principal amount of$3,000,000, pursuant to its lawful and constitutional authority, and particularly the Act as then in effect. (c) That it will enter into a loan agreement, lease agreement or other financing agreement with the Company or its affiliate or designee, whereby the Company or its designee will pay to, or on behalf of, the Issuer such sums as shall be sufficient to pay when due the principal of and interest and redemption premium, if any, on the Bonds as and when the same shall become due and payable. (d) That it will take such further action and adopt such further proceedings as may be required to implement the aforesaid undertakings or as it may deem appropriate in pursuance thereof. 3. Undertakings on the Part of the Company. Subject to the conditions above stated, the Company hereby agrees as follows: (a) That it will use all reasonable efforts to find one or more purchasers for the total amount of Bonds of each issue prior to requesting any further approval by the Issuer for such issue. (b) That contemporaneously with the delivery of the Bonds it, or its affiliate or designee, will enter into a loan agreement, lease agreement or other financing agreement or such other instrument, with the Issuer, under the terms of which the Company or its designee will obligate itself to pay to or on behalf of the Issuer sums sufficient in the aggregate to pay the principal of and interest and redemption premium, if any, on the Bonds as and when the same shall become due and payable. (c) That it, or its designee, will pay all fees, costs and expenses related to the issuance of the Bonds and will pay directly to the Issuer the Issuer's reasonable fees and expenses (including, without limitation reasonable fees and expenses of its counsel and Bond Counsel) in connection with the issuance of the Bonds. -2- (d) That it will take such further action and adopt such further proceedings as may be required to implement the aforesaid undertakings or as it may deem appropriate in pursuance thereof. 4. General Provisions. (a) All commitments of the Issuer under paragraph 2 hereof and of the Company under paragraph 3 hereof are subject to the conditions that on or before December 31, 2001 (or such other date as shall be mutually satisfactory to the Issuer and the Company), the Issuer and the Company shall have agreed to mutually acceptable terms and conditions of the loan agreement, lease agreement or other financing agreement or other instrument referred to in paragraphs 2 and 3 above and of the Bonds and other instruments or proceedings relating to the Bonds. (b) If the events set forth in (a) of this paragraph do not take place within the time set forth or any extension thereof and the Bonds in an amount of approximately the amount stated above are not sold within such time, the Company agrees that it will reimburse the Issuer for all reasonable and necessary direct out-of-pocket expenses which the Issuer may incur at the request of the Company arising from the execution of this Agreement and the performance by the Issuer of its obligations hereunder, and this Agreement shall thereupon terminate. (c) If, by reason of any limitation under the Code or for other cause, the Issuer is prevented from fulfilling its undertakings hereunder in accordance with the intent of the parties hereto, then, at the request of the Company, this Agreement shall be assigned with full substitution by the Issuer to the Illinois Development Finance Authority or other municipality or political subdivision having power to finance the Project and willing to accept such assignment, and upon such assignment all obligations of the Issuer hereunder shall terminate. -3- . / IN WITNESS WHEREOF, the parties hereto have entered into this agreement by their officers thereunto duly authorized as of the 25th day of April, 2001. CITY OF ELGIN, KANE AND COOK COUNTIES, ILLINOIS By Mayor [SEAL] ATTEST: City Clerk CELL PARTS,INC. By Its -4-