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HomeMy WebLinkAbout02-374 Resolution No. 02-374 RESOLUTION AUTHORIZING EXECUTION OF AN ASSIGNMENT OF PARTICIPATION AGREEMENT WITH ROBERT LOQUERCIO ENTERPRISES, INC . AND TOYOTA MOTOR CREDIT CORPORATION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Olufemi Folarin, Interim City Manager, be and is hereby authorized and directed to execute an Assignment of Participation Agreement on behalf of the City of Elgin with Robert Loquercio Enterprises, Inc . and Toyota Motor Credit Corporation for the assignment of the interest of Robert Loquercio Enterprises, Inc . (Elgin Toyota) in the Cook County Automobile Dealership Incentive Program to the Toyota Motor Credit Corporation, a copy of which is attached hereto and made a part hereof by reference . s/ Ed Schock Ed Schock, Mayor Presented: December 4 , 2002 Adopted: December 4 , 2002 Omnibus Vote : Yeas : 7 Nays : 0 Attest : s/ Dolonna Mecum Dolonna Mecum, City Clerk ASSIGNMENT OF PARTICIPATION AGREEMENT THIS ASSIGNMENT OF PARTICIPATION AGREEMENT (this "Assignment") is dated as of November 1, 2002, and is by and between ROBERT LOQUERCIO ENTERPRISES, INC., a Delaware corporation ("Assignor") and TOYOTA MOTOR CREDIT CORPORATION, a California corporation("Assignee"). RECITALS A. Assignorin Elgin,is the operator of Elgin Toyota gI , Illinois and has entered into a Participation Agreement, City of Elgin Cook County Automobile Dealership Incentive Programs dated as of March 10, 1999, between the City of Elgin ("City") and Assignor, as amended by a First Amendment to City of Elgin Cook County Automobile Dealership Incentive Program Participation Agreement, dated May 4, 2001, between the City and Assignor ("Participation Agreement"). Pursuant to the Participation Agreement, Assignor is a participant in the sales tax rebate component of the City of Elgin Cook County Automobile Dealership Incentive Program and, accordingly, is entitled to obtain certain rebates of local retail sales tax paid to the City. B. Assignee has loaned to RLE Property Corporation, an Illinois corporation ("Borrower"), which owns the land underlying Assignor's business property, the sum of ONE MILLION THREE HUNDRED THOUSAND DOLLARS ($1,300,000) pursuant to a Note Secured by Mortgage dated as of April 30, 1999 ("Note") and a Loan and Security Agreement of even date therewith ("Loan Agreement"). The Note is secured by a Mortgage dated April 30, 1999 ("Mortgage"). Payment of the Note is also secured by a Continuing and Irrevocable Guaranty of even date with the Note made by Assignor in favor of Assignee ("Guaranty"), and a continuing and irrevocable guaranty made by Robert Loquercio in favor of Assignee. C. Borrower and Assignee are entering into a Modification of the Note and other Loan Documents concurrently herewith to increase the amount of the loan made by Assignee to Borrower pursuant to a Modification Agreement ("Modification Agreement") of even date herewith. Assignor is its capacity as Guarantor of the Note has consented to the modification as additional security for the Note as amended by the Modification Agreement. Guarantor has agreed to assign to Assignee its rights pursuant to the Participation Agreement as further security for its Guaranty. NOW, THEREFORE, in consideration of the above-stated premises and of Ten and No/100 Dollars ($10.00) and other good and valuable consideration, the sufficiency of which is hereby acknowledged by Assignor, Assignor hereby covenants and agrees with Assignee as follows: 1. Assignment Assignor hereby absolutely, presently and unconditionally assigns, transfers, conveys and sets over and grants a security interest unto Assignee, as additional security for the Note and Guaranty, subject to all of the terms, covenants and conditions set forth herein, all of Assignor's right,title and interest in and to the Participation Agreement. Assignor hereby irrevocably directs City that all payments under the Participation Agreement be made directly to Assignee to be paid and applied by it to payments due or to I:\Katherine\Real Estate\Elgin Toyota\ Assignment of Participation 1 become due under the Note or other amounts due under the Loan Agreement, Mortgage or Guaranty. City agrees to make the payments directly to Assignee as set forth in the Notice Section of this Assignment. This Assignment shall for all purposes constitute a Security Agreement pursuant to the Uniform Commercial Code of Illinois. Any requirement of the Code for reasonable notice shall be met if such notice is given to Assignor in the manner set forth herein at least ten (10) days prior to the time of a sale, disposition or other event giving rise to the requirement of notice. 2. Purpose of Assignment Assignor hereby agrees that this Assignment is given by Assignor to Assignee to secure the obligations of Assignor under the Guaranty. 3. Representations and Warranties Assignor hereby represents and warrants that Assignor has, subject to consent and approval of the City, the right, power and capacity to make this Assignment and that no person, firm or corporation or other entity other than Assignor has or will have any right, title or interest in or to the Participation Agreement. 4. Covenants (a) Assignor shall not, without the prior written consent of Assignee, (i) amend or terminate the Participation Agreement; (ii) create or permit any lien or encumbrance which would impair Assignee's rights and interest with respect to the Participation Agreement; or (iii)pledge, transfer, mortgage or otherwise encumber or assign the Participation Agreement. (b) Assignor shall, at its sole cost and expense, perform and discharge all of the obligations and undertakings under the Participation Agreement. Assignor shall enforce or secure the performance of each and every obligation and undertaking of the City under the Participation Agreement. Assignor shall give prompt written notice to Assignee of any and all material defaults under the Participation Agreement. (c) Assignor agrees, from time to time, to execute and deliver, upon demand, all assignments and any and all other writings as Assignee may reasonably deem necessary or desirable to carry out the purpose and intent hereof, or to enable Assignee to enforce any right or rights hereunder. 5. Indemnity Assignor shall and does hereby agree to indemnify Assignee and defend and hold Assignee harmless from any and all liability, loss or damage which Assignee may or might incur under the Participation Agreement or under or by reason of this Assignment, and from any and all claims and demands whatsoever which may be asserted against Assignee by reason of any alleged obligations or undertakings on Assignee's part to perform or discharge any of the terms, covenants or agreements contained in the Participation Agreement. Should Assignee incur any liability, loss or damage under the Participation Agreement or under or by reason of this Assignment, or in the defense of any of such claims or demands, the amount thereof, including costs, expenses and attorney's fees, shall be secured hereby. Assignor shall reimburse Assignee therefor immediately upon demand, and upon failure of Assignor to do so, Assignee may declare all sums so secured to be immediately due and payable. I:\Katherine\Real Estate\Elgin Toyota\ Assignment of Participation 2 6. Waiver and Discretion The failure of Assignee to enforce any of the terms, covenants or conditions hereof shall not be construed or deemed to be a waiver of any rights or remedies hereunder. Assignee shall have the full right, power and authority to enforce this Assignment, or any of the terms, covenants or conditions hereof, at any time or times that Assignee shall deem fit. 7. Notices All notices expressly provided hereunder to be given by Assignee to Assignor and all notices and demands of any kind or nature whatever which Assignor may be required or may desire to give to or serve on Assignee shall be in writing and shall be (a) hand- delivered, effective upon receipt, (b) sent by United States Express Mail or by private overnight courier, effective upon receipt or (c) served by certified mail, return receipt requested, and addressed to the appropriate address set forth below. Any such notice or demand served by certified mail shall be deposited in the United States mail, with postage thereon fully prepaid and addressed to the party so to be served at its address below stated or at such other address of which said party shall have theretofore notified in writing, as provided below, the party giving such notice. Service of any such notice or demand so made shall be deemed effective on the day of actual delivery as shown by the addressee's return receipt or the expiration of three (3) business days after the date of mailing, whichever is the earlier in time. All notices shall be addressed as follows: If to Assignor: Robert Loquercio Enterprises, Inc. 1200 East Chicago Street Elgin, Illinois 60120 If to Assignee:Toyota Motor Credit Corporation 19001 South Western Avenue P.O. Box 2958 Torrance, California 90509-2958 Attention: Operations Department or such other place or places as the parties hereto may by ten (10) days prior written notice thereof from time to time designate for the purpose of receiving notices hereunder. 8. Binding Effect This Assignment applies to and binds the parties hereto and their respective successors and assigns, and any agreement creating rights in Assignee other than those created herein shall be deemed incorporated herein by reference and made a part hereof for all purposes. 9. Actions by Assignee Assignee may take or release other security, may release any party primarily or secondarily liable for any indebtedness secured hereby, may grant extensions, renewals or indulgences with respect to such indebtedness, and may apply any other security therefor held by it to the satisfaction of such indebtedness, without prejudice to any of its rights hereunder. 10. No Election of Remedies Nothing herein contained and no act done or omitted by Assignee pursuant to the powers and rights granted it herein shall be deemed to be a waiver I:\Katherine\Real Estate\Elgin Toyota\ Assignment of Participation 3 by Assignee of its rights and remedies under the Guaranty, Note and Mortgage, and this Assignment is made and accepted without prejudice to any of the rights and remedies possessed by Assignee under the terms thereof. The right of Assignee to collect said indebtedness and to enforce any other security therefor held by it may be exercised by Assignee either prior to, simultaneously with, or subsequent to any action taken by it hereunder. 11. Construction of Terms In this Assignment, whenever the context so requires, the masculine gender includes the feminine or neuter, and the singular number includes the plural. 12. Governing Law This Assignment shall be governed by and construed under the laws of the state of Illinois. The United States District Court for the State of Illinois and any court of competent jurisdiction of the State of Illinois shall have jurisdiction in any action, suit or other proceeding instituted to enforce the Guaranty, Note, the Mortgage, and this Assignment. Assignor hereby waives (a) any objections to the jurisdiction of such courts, (b) any objections to venue and (c) its right to a trial by jury in any action, proceeding or counterclaim brought by Assignee. 13. Severability In the event any one or more of the provisions contained in this Assignment shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity or unenforceability shall not affect any other provision hereof, and this Assignment shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein, but only to the extent that it is invalid, illegal or unenforceable. 14. Modification This Assignment may not be amended or modified orally, but only by an agreement in writing signed by the party against whom enforcement of any amendment or modification is sought. I:\Katherine\Real Estate\Elgin Toyota\ Assignment of Participation 4 IN WITNESS WHEREOF, Assignor has caused this instrument to be executed as of the date first above written. ASSIGNOR: ROBERT LOQUERCIO ENTERPRISE , ratio AN INC.,,iffi ve is By: Its: I:\Katherine\Real Estate\Elgin Toyota\ Assignment of Participation 5 w CONSENT The City of Elgin, an Illinois municipal corporation, hereby consents to the foregoing Assignment and, pursuant to the direction of Assignor, and subject to compliance with the terms of the Participation Agreement, agrees to make payments under the Participation Agreement directly to Assignee. CITY OF ELGIN, an Illinois municipal corporation By: .�.'...� Its: I:\Katherine\Real Estate\Elgin Toyota\ Assignment of Participation 6 • ``COF FC, y City of Elgin Agenda Item No. \ 7' E v' L November 15, 2002I . N ► TO: Mayor and Members of the City Councils 3. ECONOMIC GROWTH FROM: Olufemi Folarin, Interim City Manager SUBJECT: Elgin Toyota' s Request to Assign Its Interest in Cook County Automobile Dealership Incentive Program to Toyota Motor Credit Corporation PURPOSE The purpose of this memorandum is to provide the Mayor and members of the City Council with information relating to Elgin Toyota' s request to assign its interest in the City' s Cook County Automobile Dealership Incentive Program to Toyota Motor Credit Corporation. BACKGROUND The City approved Elgin Toyota' s application to participate in the sales tax rebate component of the City' s Cook County Automobile Dealership Incentive Program in March, 1999 . (Elgin Toyota is the assumed business name of Robert Loquercio Enterprises, Inc . , a Delaware Corporation. ) Under the terms of that program, Elgin Toyota was required to make capital improvements in excess of $248, 590 at the dealership it is operating at 1200 East Chicago Street before April, 2001 and remain at that location for not less than ten years . The City, in turn, would provide Elgin Toyota with a retail sales tax rebate for seven consecutive years in the amount of fifty percent of any annual increase from the base sales tax rate of $124 , 295 . When construction on Illinois Highway 19 prevented Elgin Toyota from completing the required capital improvements by the program deadline, the City amended the program terms in April , 2001 at Elgin Toyota' s request, extending the capital improvement deadline one year until April, 2002 . Elgin Toyota completed the required capital improvements within the revised timeframe . Elgin Toyota is now seeking the City' s consent to assign the Elgin Toyota Request to Assign Interest November 15, 2002 Page 2 sales tax rebates it will be receiving from the City under the program to the Toyota Motor Credit Corporation. Elgin Toyota is modifying a loan it has received from Toyota Motor Credit Corporation and is seeking to provide the sales tax rebate as additional security under that loan. Under the terms of the assignment, the City would make payment of the sales tax rebates directly to Toyota Motor Credit Corporation rather than Elgin Toyota. Elgin Toyota remains obligated to satisfy all other conditions of the City' s program under the terms of the assignment . If Elgin Toyota fails to satisfy all the conditions of the program, the City is not obligated to make payment to Toyota Motor Credit Corporation. The proposed assignment is attached to this memorandum for review. The City has not made payment on the first two sales tax rebates that have become due under the program because Elgin Toyota has not posted the required letter of credit or other acceptable surety to guarantee its continued compliance with the conditions of the program.. Toyota Motor Credit Corporation has been advised that this condition has not been satisfied and still wishes to complete the assignment . If the City Council approves the assignment, the City will not make payment on the sales tax rebates to Toyota Motor Credit Corporation until Elgin Toyota has posted the requisite letter of credit or other acceptable surety. COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED None . Y/11A-' FINANCIAL IMPACT The economic development incentive due Elgin Toyota under the Cook County Auto Dealership Incentive Program agreement would total $600, 000 over a seven year period. Elgin Toyota has earned $211, 612 . 66 for the 2000 and 2001 rebate periods . No payment has been made pending receipt of required letter of credit or other surety. Economic Development Incentives are funded with Riverboat Lease Funds, account number 276-0000- 791 . 80-27 . The entire 2002 budget allocation of $623 , 400 for economic development incentives has been utilized. Sufficient monies are included within the five-year financial plan to fund • Elgin Toyota Request to Assign Interest November 15, 2002 Page 3 the remainder of the Elgin Toyota incentive as well as future incentives . GAL IMPACT None . ALTERNATIVES Consent to the assignment of Elgin Toyota' s interest in the sales tax rebates of the Cook County Automobile Dealership Incentive Program to the Toyota Motor Credit Corporation. Do not consent to the assignment of Elgin Toyota' s interest in the sales tax rebates of the Cook County Automobile Dealership Incentive Program to the Toyota Motor Credit Corporation. RECOMMENDATION It is recommended that the City Council consent to the assignment of Elgin Toyota' s interest in the sales tax rebates of the Cook County Automobile Dealership Incentive Program to the Toyota Motor Credit Corporation. Respectfully submitted, Olufemi F rin Inter ' ' y anager RGK/rgk Attachments