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HomeMy WebLinkAbout20-0323 Food for Greater Elgin LoanLOAN AGREEMENT THIS LOAN AGREEMENT is made and entered into as of th f March, 2020, by and between the City of Elgin, Illinois, a municipal corporation, organized and existing under the laws of the State of Illinois (hereinafter referred to as the "City") and Food for Greater Elgin, Inc., an Illinois not -for -profit corporation (hereinafter referred to as the "Borrower"). WITNESSETH: WHEREAS, on January 30, 2020, the World Health Organization declared the outbreak of COVID-19 virus to be a public health emergency of international concern and on March 11, 2020 declared a worldwide pandemic; and WHEREAS, on January 31, 2020, the U.S. Health and Human Services Secretary declared a public health emergency for the United States; and WHEREAS, on March 9, 2020, the Governor of the State of Illinois has issued a disaster proclamation due to the impact of the COVED-19 virus and has activated the State Emergency Operations Center; and WHEREAS, the State Emergency Management Agency has declared a public health emergency due to the impact of the COVID-19 virus; and WHEREAS, on March 13, 2020, the President of the United States declared a national emergency due to the impact of the COVID-19 virus; and WHEREAS, Chapter 2.76 of the Elgin Municipal Code, 1976, as amended, provides for and clarifies the authority of the City of Elgin and its officers and employees with regard to emergency and disaster situations; and WHEREAS, on March 13, 2020, the Mayor of the City of Elgin issued a Proclamation of State Emergency in the City of Elgin declaring a state of emergency in the City of Elgin related to the COVID-19 virus (the "Emergency Proclamation'); and WHEREAS, Borrower operates a regional food pantry in Elgin, which serves more than 1,600 distinct households and 6,000 individuals in Elgin making multiple visits to Borrower's facility, of which approximately thirty-seven percent (37%) are children and ten percent (10%) are elderly; and WHEREAS, since the COVID-19 virus outbreak Borrower has experienced an increased number of household visits to its facility and a twenty percent (20%) rise in demand for food, and Borrower expects such increased demand to continue or increase further due to the impact of the COVID-19 virus; and WHEREAS, since the COVED-19 virus outbreak, Borrower's ability to raise funds and other revenues from donations, business sponsorships, and fundraising events has been negatively impacted, and Borrower expects to continue to experience decreased revenues due to the impact of the COVID-19 virus; and WHEREAS, Borrower has represented to the City that the increased demand for food and the decreased revenues Borrower has experienced due to the impact of the COVID-19 virus has resulted in a significant depletion of its cash reserves, such that Borrower will be unable to purchase food, pay rent, or meet payroll other expenses that are necessary for Borrower to continue its operations without immediate assistance from the City; and WHEREAS, immediate assistance from the City in the form of a loan will allow Borrower to continue its operations while fully serving Elgin residents in need with food for the coming months; and WHEREAS, Borrower represents that it requires approximately Fifty Thousand Dollars ($50,000.00) per month for its operations and food purchasing expenses; and WHEREAS, it is expected that the impact from the COVID-19 virus and its related effects on the residents of Elgin generally, and on Borrower's operations specifically, will continue for at least the next eight to twelve weeks; and WHEREAS, Borrower has requested and the City has agreed to loan to Borrower the principal amount of One Hundred Fifty Thousand Dollars ($150,000.00), and Borrower has agreed to repay the City such amount, plus any interest and charges thereon, as provided for in this Agreement; and WHEREAS, the purpose of the loan is to enable Borrower to continue its operations while fully serving Elgin residents in need with food during the state of emergency related to the COVID- 19 virus; and WHEREAS, pursuant to the Emergency Proclamation and Sections 2.76.040 and 2.76.120 of the Elgin Municipal Code, 1976, as amended, the Mayor and the City Manager are authorized to procure by purchase or lease such goods and services as are deemed necessary for the City's emergency response effort, for immediate delivery or furnishing; and WHEREAS, Section 2.76.040 of the Elgin Municipal Code, 1976, as amended, further provides that the Mayor is authorized to regulate by allocation or other means the use, sale, or distribution of food, water, and other goods and services; and WHEREAS, the City of Elgin is a home rule unit pursuant to Article VII, Section 6 of the Illinois Constitution and may exercise any power and perform any function pertaining to its government and affairs, including, but not limited to, the power to regulate for the protection of the public health, safety, morals, and welfare, including taking immediate emergency measures to protect the public health and welfare in response to the COVID-19 virus outbreak; and -2- WHEREAS, the provision of a loan to Borrower to enable Borrower to continue its operations and serve Elgin residents with food during the state of emergency related to the COVID- 19 virus fills a vital community need, pertains to the government and affairs of the City, is in furtherance of the public, health, safety, morals, and welfare of the City and its residents, and is necessary for the City's emergency response. NOW, THEREFORE, for and in consideration of the mutual undertakings contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. Incorporation of Recitals. The foregoing recitals are incorporated into this Agreement. 2. Borrower's Promise to Pay. In return for the loan the Borrower has received from the City, Borrower promises to repay to the City in full the amount of One Hundred Fifty Thousand Dollars ($150,000) (this amount is called the "Principal"), plus any interest and charges thereon, in installments as provided for in this Agreement. Borrower will make payments under this Agreement in the form of United States dollars by check. 3. interest. Interest will be charged on unpaid Principal until the full amount of Principal has been paid. Borrower will pay interest at a yearly rate of zero percent (0%) until the Maturity Date, as defined in Section 4 of this Agreement. The interest rate required by this Section 3 is the interest rate Borrower will pay before any default. The interest rate Borrower will pay after default is described in Section 9 of this Agreement. 4. Payments. A. Time and Place of Payments. Borrower will pay the Principal and any interest to the City by making payments to the City in twenty-four (24) consecutive monthly installments. Borrower will make monthly installments to the City on the first day of each month beginning April 1, 2021. Borrower will make these payments every month until Borrower has paid all of the Principal and interest and any other charges described below that it may owe to the City. Each monthly payment will be applied as of its scheduled due date and will be applied to interest before Principal. If on April 1, 2023, Borrower still owes amounts under this loan agreement, Borrower will pay those amounts to the City in full on that date, which is called the "Maturity Date". Borrower will make monthly payments to the City of Elgin at 150 Dexter Court, Elgin, Illinois 60120, or at a different place if required by the City. B. Amount of Month Pa-yments. The amount of Borrower's twenty-four (24) monthly payments to the City for Principal shall each be in the amount of Six Thousand Two Hundred Fifty Dollars ($6,250.00). 5. Borrower's Right to Prepay. Borrower has the right to make payments of Principal at any time before they are due. A payment of Principal only is known as a "Prepayment". When Borrower makes a Prepayment, it will tell the City in writing that it is doing so. Borrower may not designate a payment as a Prepayment if it has not made all monthly -3- payments due under this Agreement. Borrower may make a full Prepayment or partial Prepayment without paying a Prepayment charge. The City will use Borrower's Prepayment to reduce the amount of Principal that it owes under this Agreement. However, the City may apply Borrower's Prepayment to the accrued and unpaid interest, if any, on the Prepayment amount, before applying Borrower's Prepayment to reduce the outstanding Principal amount. If Borrower makes a partial Prepayment, there will be no changes in the due dates of Borrower monthly payment unless the City agrees in writing to those changes. 6. Loan Charges. If a law, which applies to this Agreement and which sets maximum loan charges, is finally interpreted so that the interest or other loan charges collected or to be collected in connection with this loan agreement exceed the permitted limits, then: (a) any such loan charge shall be reduced by the amount necessary to reduce the charge to the permitted limit; and (b) any sums already collected from Borrower which exceed permitted limits will be refunded to Borrower. The City may choose to make this refund by reducing the Principal Borrower owes under this Agreement or by making a direct payment to Borrower. If a refund reduces Principal, the reduction will be treated as a partial Prepayment. 7. Borrower's Failure to Pav as Rouiired. A. Late Charge for Overdue Payments. If the City does not receive the full amount of any monthly payment by the end of five calendar days after the date it is due, Borrower will pay a late charge to the City. The amount of the late charge will be 5% of the overdue payment of Principal and interest. The Borrower will pay this late charge promptly but only once on each late payment. B. Default. If the Borrower does not pay the full amount of each monthly payment on the date it is due, the Borrower will be in default. C. Notice of Default. If the Borrower is in default, the City may send the Borrower a written notice telling the Borrower that if it does not pay the overdue amount by a certain date, the City may require the Borrower to pay immediately the full amount of Principal which has not been paid and all the interest that Borrower owes on that amount. That date must be at least 34 days after the date on which the notices are mailed to Borrower or delivered by other means. D. No Waiver Rv Ci . Even if, at a time when the Borrower is in default, the City does not require the Borrower to pay immediately in full as described above, the City will still have the right to do so if the Borrower is in default at a later time. E. Payment of the Ci 's Cost and Expenses If the City has required the Borrower to pay immediately in full as described above, the City will have the right to be paid back by the Borrower for all its costs and expenses in enforcing this Agreement to the extent not prohibited by applicable law. Those expenses include, for example, reasonable attorney's fees. -4- 8. Use of Loan Funds. Borrower shall use the loan funds provided by the City solely and only for the purpose of serving Elgin residents in need with food during the state of emergency related to the COVID-19 virus. 9. Default Interest Rate. If the City has required the Borrower to pay immediately in full as described in this Agreement, then thereafter interest will be charged on the unpaid balance due to the City at the annual rate of nine percent (9%) until the full amount of the Principal, interest and any other monies due to the City have been repaid to the City in full. 10. Books and Records. Borrower will keep and maintain or will cause to be kept and maintained on a fiscal year basis in accordance with generally accepted accounting practices using full accrual accounting proper and accurate books, records and accounts reflecting all of the financial affairs of Borrower and all items of income and expense in connection with the operation of Borrower. The City shall have the right, at no cost to the City, from time -to -time upon reasonable notice to examine such books, records and accounts at the office of Borrower or other person maintaining such books, records and accounts and to make copies and extracts thereof as the City shall desire. At the conclusion of each fiscal year of the Borrower the Borrower shall provide to the City at no cost to the City a copy of an audited financial statement on all of the financial affairs of the Borrower. Borrower shall also provide the City prompt written notice when it begins receiving payments from the State of Illinois. 11. Giving of Notices. Unless applicable law requires a different method, any notices that must be given to the City under this Agreement shall be given by delivering it or by mailing it by first class mail to the City of Elgin at City of Elgin, 150 Dexter Court, Elgin, Illinois 60120, Attention: Chief Financial Officer, with a copy to the Corporation Counsel, City of Elgin, 150 Dexter Court, Elgin, Illinois 60120, or at a different address if Borrower is given a notice of that different address by the City. Any notices that must be given to the Borrower under this Agreement will be given by delivering it or by mailing it by first class mail to Food For Greater Elgin, Inc., 1533 Commerce Drive, Elgin, Illinois 60123, Attention: Executive Director Michael Montgomery, with a copy to Scott G. Richmond, 2000 McDonald Road, Suite 200, South Elgin, IL 60177, or at a different address if the City is given a notice of that different address by the Borrower. 12. Waivers. Borrower and any other entity which has obligations under this Agreement waive the right of Presentment and Notice of Dishonor ("Presentment" means the right to require the City to demand payment of amounts due. `Notice of Dishonor" means the right to require the City to give notice to other persons that amounts due have not been paid). 13. Relationship of the Parties. This Agreement shall not be construed so as to create a partnership, joint venture, employment or other agency relationship between the parties hereto. 14. Non -Waiver. The failure of the City to insist upon strict performance of any term of this Agreement shall not be deemed to be a waiver of any term of this Agreement. 15. Entire A.►areement. This Agreement constitutes the entire agreement of the parties and the subject matter hereof and may not be changed, modified, discharged or extended except -5- by written amendment duly executed by the parties. Each party agrees that no representations or warranties shall be binding on the other party unless expressed in writing herein or in a duly executed amendment hereof. 16. Applicable Law. This Agreement shall be deemed to have been made in and shall be construed in accordance with the laws of the State of Illinois. Venue for the resolution of any disputes or the enforcement of any rights pursuant to this Agreement shall be in the Circuit Court of Kane County. 17. Waiver of Trial by Jury. Borrower hereby irrevocably and unconditionally waives any and all rights to trial by jury in any action, suit or counter -claim arising in connection with, out of or otherwise relating to this Agreement. 18. Joint Work Product. This Agreement is and shall be deemed and construed to be a joint and collective work product of the City and Borrower, and, as such, this Agreement shall not be construed against the other party, as the otherwise purported drafter of same, by any court of competent jurisdiction in order to resolve any inconsistency, ambiguity, vagueness or conflict, if any, of the terms and provisions contained herein. 19. Enforceability. Whenever possible, each provision of this Agreement shall be interpreted in such matter as to be effective and valid under applicable law, but if any provision of this Agreement shall be unenforceable or prohibited by or invalid under applicable law, such provision shall only be ineffective to the extent of such unenforceability, prohibition or invalidity, without invalidating the remaining provisions of this Agreement. 20. Absolute and Unconditional Obli ation. The Borrower acknowledges that the Borrower's obligation to pay the Principal, interest and any other monies which become due to the City pursuant to this Agreement is and shall at all times constitute to be absolute and unconditional in all respects, and shall at all times be valid and enforceable irrespective of any other agreements or circumstances of any nature whatsoever which might otherwise constitute a defense to this Agreement or the obligation of the Borrower thereunder to pay the monies due pursuant to this Agreement. The Borrower to the fullest extent permitted by law absolutely, unconditionally and irrevocably waives any and all rights to assert any defense, set-off, counterclaim or cross -claim of any nature whatsoever with respect to the obligation of the Borrower to pay the Principal, interest and other monies which may become due in accordance with the provisions of this Agreement. 21. Indemnity. Notwithstanding anything to the contrary in this Agreement, the Borrower shall indemnify and hold the City harmless and defend the City at Borrower's sole cost and expense against any loss or liability, cost or expense (including, without limitation, reasonable attorney's fees and disbursements of the City's counsel, whether in-house staff, retained firms or otherwise), and all claims, actions, procedures and suits arising out of or in connection with this Agreement and any and all lawful actions that may be taken by the City in connection with the enforcement of the provisions of this Agreement, or in connection with the Borrower becoming a party to a voluntary or involuntary bankruptcy, insolvency or similar proceeding. �-2 22. De_ If the Borrower violates or breaches any term of this Agreement, such violation or breach shall be deemed to constitute a default, and the City shalt have the right to seek the administrative, contractual, legal or equitable remedies as specified in this Agreement and or as otherwise may be available in law or equity. The rights and remedies of the City pursuant to this Agreement whether provided by law or by this Agreement shall be cumulative and the exercise by the City of any one or more of such remedies shall not preclude the exercise by it, at the time or different times, of any other remedies for the same default. No waiver made with respect to the performance, nor the manner or time thereof, of any obligation of the Borrower of any provision of this Agreement shall be considered a waiver of any rights of the City with respect to the particular obligation of the Borrower. In the event of any legal proceedings relating to this Agreement the Borrower shall pay and reimburse to the City all of the City's reasonable attorney's fees. In event and to the extent that any legal work is performed by the City's in-house legal counsel the City shall be reimbursed by Borrower for such legal work at the rate of $200.00 per hour, which rate the Borrower hereby agrees and acknowledges to be a reasonable rate for such in-house attorney's fees. 23. Binding of Effect. This Agreement shall be binding on the parties hereto and their respective successors and permitted assigns. This Agreement and the obligations herein may not be assigned by the Borrower without the express written consent of the City which consent may be withheld at the sole discretion of the City. 24. Representation on Authority of Parties/Signatories. Mayor David J. Kaptain is signing this this Agreement on behalf of the City of Elgin pursuant to his emergency powers set forth in Chapter 2.76 of the Elgin Municipal Code, 1976, as amended, and his Proclamation of State Emergency in the City of Elgin, dated March 13, 2020. Each person signing this Agreement on behalf of Borrower represents and warrants that he or she is duly authorized and has legal capacity to execute and deliver this Agreement for Borrower. Borrower represents and warrants to the City that the execution and delivery of this Agreement and the performance of Borrower's obligations hereunder have been duly authorized and that the Agreement is a valid and legal agreement binding on Borrower and enforceable in accordance with its terms. 25. Execution. This Agreement may be executed in counterparts, each of which shall be an original and all of which shall constitute one and the same agreement. For the purposes of executing this Agreement, including any attachments hereto, any signed copy of this Agreement transmitted by fax machine or e-mail, or by electronic signature under the Electronic Commerce Security Act (5 ILCS 175/1-101 et seq.), shall be treated in all manners and respects as an original document. The signature of any party on a copy of this Agreement transmitted by fax machine, e- mail or electronic signature shall be considered for these purposes as an original signature and shall have the same legal effect as an original signature. Any such faxed or e-mailed copy of this Agreement or electronic record of the same shall be considered to have the same binding legal effect as an original document. At the request of either party, any fax or e-mail copy of this Agreement or a copy executed by electronic signature shall be re -executed by the parties in an original form. No party to this Agreement shall raise the use of fax machine or e-mail, or the execution by electronic signature, as a defense to this Agreement and shall forever waive such defense. -7- IN WITNESS WHEREOF, the undersigned have entered into and executed this Agreement on the date and year first written above. Attest: & g Kimberly A. Dewifkity Clerk FOOD FOR GREATER ELGIN, INC. =100 10-5 Its CKAi 2M A Jj Attest: c w Its CERTIFICATIONS PAGE FOLLOWS -8- STATE OF ILLINOIS ) ) SS COUNTY OF K A N E ) I, the undersigned, a Notary Public, in and for the County and State aforesaid, DO HEREBY CERTIFY that David J. Kaptain, Mayor of the City of Elgin, an Illinois municipal corporation, and Kimberly A. Dewis, City Clerk of said municipal corporation, and personally known to me to be the same persons whose names are subscribed to the foregoing instrument, appeared before me this day in person and severally acknowledged that as such Mayor and City Clerk, they signed and delivered the said instrument as Mayor and City Clerk as their free and voluntary act, and free and voluntary act and deed of said corporation, for the uses and purposes therein set forth. Given under my hand and official sea] this Oay of $kA , 2020 UINTON RE OFFICIAL SEAL Notery Public, State of Illinois My Commission Expires January 10, 2024 STATE OF ILLINOIS ) ) SS COUNTY OF K A N E ) I, the undersigned, a Notary Public, in and for the County and State aforesaid, DO HETEr_ /2ti0 BY CERTIFY that /'IAf,44iAgRz- Seri l 1CHMa,c A ATlwkE: I of Food for Greater Elgin, Inc., an Illinois not -for -profit corporation, of said not -for -profit corporation, and personally known to me to be the same persons whose names are subscribed to the foregoing instrument, appeared before me this day in person and severally acknowledged that as such C-k41dZM AI-1 and q iT-c — u j , they signed and delivered the said instrument as Ift Cl p, Iem4ti1 and K]-rc u r, as their free and voluntary act, and free and voluntary -act and deed of said corporation, for the uses and purposes therein set forth. Given under my hand and official seal this 23 day of /,�H 2O20. IMPRESS NOTARIAL SEAL HERE tary Public aN L ETTEL OF ILLINOISOCT. 20, 2022 9-