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HomeMy WebLinkAbout96-58 RESOLUTION NO. 96-58 RESOLUTION PROVIDING FOR THE ISSUANCE OF $1,500,000 IN AGGREGATE PRINCIPAL AMOUNT OF INDUSTRIAL DEVELOPMENT REVENUE BONDS (EASTERN DEVELOPMENT GROUP GENERAL PARTNERSHIPO PROJECT), SERIES 1996 OF THE CITY OF ELGIN, ILLINOIS AND AUTHORIZING THE SALE THEREOF; AUTHORIZING A LOAN OF THE BOND PROCEEDS BY THE ISSUER TO EASTERN DEVELOPMENT GROUP GENERAL PARTNERSHIP; AUTHORIZING THE EXECUTION AND DELIVERY OF A LOAN AGREEMENT AND A TRUST INDENTURE IN CONNECTION THEREWITH, THE DESIGNATION OF A TRUSTEE, A TENDER AGENT AND A REMARKETING AGENT, THE EXECUTION AND DRT.TVERY OF A PLACEMENT AGREEMENT AND THE DISTRIBUTION OF A PRELIMINARY PRIVATE PLACEMENT MEMORANDUM AND A PRIVATE PLACEMENT MEMORANDUM AND RELATED DOCUMENTS; REPORTING THE RESULTS OF A PUBLIC HEARING ON THE BONDS; AND RELATED MATTERS. WHEREAS, the City of Elgin, Illinois (the "Issuer"), a home rule unit of government and a body politic and corporate duly organized and validly existing under and by virtue of the laws of the State of Illinois, including without limitation, Industrial Project Revenue Bond Act, 65 ILCS 5/11-74-1 et IN., as supplemented and amended (the "Act"), is authorized under the Act, to issue and sell revenue bonds for its corporate purposes including, but not limited to, the purpose of financing, in whole or in part, the cost of the acquisition, purchase, construction, reconstruction, improvement,betterment or extension of"industrial projects" (within the meaning of the Act); and WHEREAS, at the request of Grease Guard, Inc., an Illinois corporation (the "GGI"), the Issuer has heretofore approved by resolution dated May 24, 1995 in which the Issuer expressed its intent to issue its revenue bonds pursuant to the Act and to make a loan of the proceeds thereof to the Lessor GGI, such proceeds to be applied by the Lessee GGI to the payment, or reimbursement to the Lessee GGI, of the costs of acquiring, improving, constructing, and equipping certain manufacturing facilities located near the intersection of Route 31 and Interstate 90 in Elgin, Kane County, Illinois, to be used for the manufacture of rooftop grease containment systems (the "Project"); and WHEREAS, the shareholders of the GGI have organized Eastern Development Group General Partnership, an Illinois general partnership (the "Obligor") to undertake the acquisition, improvement, construction and equipping of the Project for lease to GGI and GGI's affiliate, Spotless Touch, Inc., an Illinois corporation ("STI" and, together with GGI, the "Lessee") and the Issuer has agreed to the assignment of the rights of GGI under the Memorandum of Agreement dated as of May 24, 1995 (the "MOA") by and between the Issuer and GGI to the Obligor; and WHEREAS, in furtherance of the purposes set forth in the Act, the Issuer desires to issue and sell $1,500,000 in aggregate principal amount of its Industrial Development Revenue Bonds • (Eastern Development Group General Partnership Project), Series 1996 (the "Bonds"), to pay, or reimburse the Obligor for, the costs of the Project and to pay the costs of issuance of the Bonds, including the cost of providing the Letter of Credit (as hereinafter defined); and WHEREAS, the Bonds will be issued under and secured by the Trust Indenture dated as of March 1, 1996 (the "Indenture"), from the Issuer to American National Bank and Trust Company of Chicago, Chicago, Illinois, as trustee (the "Trustee); and WHEREAS, except to the extent payable from Bond proceeds or income from the temporary investment thereof or from money derived by the Trustee from draws upon the Letter of Credit, the Bonds shall be payable solely from the payments and other amounts received by the Issuer pursuant to the Loan Agreement dated as of March 1, 1996 (the "Loan Agreement") between the Issuer and the Obligor, and pursuant to the Obligor's promissory note dated as of March _, 1996 (the "Promissory Note"), in the principal amount of the Bonds; and WHEREAS, the Loan Agreement and the Promissory Note provide for the Obligor to make payments to the Trustee, as assignee of the Issuer, at the times and in the amounts required for the timely payment, when due, of the principal of, premium, if any, and interest on, and the Purchase Price (as defined in the Indenture) of, the Bonds; and WHEREAS, the Obligor will enter into a Reimbursement Agreement with NBD Bank, Detroit, Michigan (the "Bank"), pursuant to which the Bank will issue its transferable irrevocable direct pay letter of credit (the "Letter of Credit") to secure the prompt payment of principal of and interest on the Bonds, whether due upon maturity, acceleration or mandatory redemption and the Purchase Price of Bonds tendered for purchase; and WHEREAS, Bonds tendered for purchase will be remarketed by NBD Bank, N.A., Indianapolis,Indiana,as remarketing agent(the"Remarketing Agent"),pursuant to a Remarketing Agreement between the Obligor and the Remarketing Agent; and WHEREAS, Kane County, Illinois, has been designated by the Illinois Department of Commerce and Community Affairs as an "area of critical labor surplus" (within the meaning of the Act); and WHEREAS, a determination has been made by the Issuer that the making of the Loan by the Issuer to the Obligor will increase and retain employment in Kane County, Illinois, and alleviate the area's critical labor surplus; and WHEREAS, on March 13, 1996, the Issuer conducted a public hearing (the "Public Hearing") in accordance with Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code"), at which hearing interested individuals had the opportunity to express their views, both orally and in writing, on the issuance of the Bonds and the location and nature of the Project; and -2- WHEREAS, in order to promote the purposes of the Act through the issuance of the Bonds for the aforesaid purposes, it is now necessary, desirable and in the best interest of the Issuer to authorize the execution, delivery and/or use and distribution, as appropriate, of: (1) the Indenture; (2) the Loan Agreement; (3) the assignment of the Promissory Note to the Trustee; (4) the Placement Agreement with respect to the Bonds(the "Placement Agreement"), among the Issuer, the Obligor and NBD Bank, N.A, as placement agent (the "Placement Agent"); and (5) the Preliminary Private Placement Memorandum (the "Preliminary Private Placement Memorandum") and the final Private Placement Memorandum (the"Private Placement Memorandum")prepared in connection with the placement of the Bonds; and WHEREAS, forms of the Indenture, the Loan Agreement, the Promissory Note, the Placement Agreement and the Preliminary Private Placement Memorandum have been prepared and presented and are now before this meeting. NOW THEREFORE, Be It Resolved by the City Council of the City of Elgin, Illinois, as follows: Section 1. Findings. That the issuance of the Bonds under the Act and the loan of the proceeds thereof to the Obligor for application to the payment, or reimbursement to the Obligor, of the costs of the Project and the costs of issuance of the Bonds, including the cost of providing the Letter of Credit, will promote one or more of the purposes enumerated in the Act. Section 2. Assignment. That the assignment of the rights of GGI under the MOA to the Obligor be, and hereby is, approved. Section 3. The Bonds. That the issuance of the Bonds in an aggregate principal amount of $1,500,000, bearing interest for the initial Rate Period (as defined in the Indenture) at the Weekly Rate set forth in the Placement Agreement and thereafter at a rate per annum determined in accordance with the Indenture, be, and it hereby is, authorized and approved; that the Mayor of the Issuer be, and each of them hereby is, authorized, empowered and directed to execute the Bonds and deliver the Bonds to the Trustee for authentication in accordance with the Indenture,and the Secretary or any Assistant Secretary of the Issuer be, and hereby is, authorized, empowered and directed to attest to and affix the official seal of the Issuer to the Bonds (or cause said seal to be imprinted thereon in facsimile), each of them by such manual or facsimile signature, in the name, for and on behalf of the Issuer. -3- Section 4. The Loan. That the loan of the proceeds from the sale of the Bonds to the Obligor (the "Loan") pursuant to the Loan Agreement, in an amount of $1,500,000, such Loan to have such terms and conditions (including the terms and conditions set forth in the Promissory Note)as shall provide for the repayment of principal and interest in amounts sufficient to fully amortize the Loan over its term, all in accordance with the Loan Agreement and the Indenture presented to this meeting, be, and it hereby is, authorized and approved; provided, however, that the making of the Loan shall be subject to the issuance and delivery of the Bonds and the delivery of the Letter of Credit by the Bank in favor of the Trustee. Section 5. The Indenture. That the Issuer is hereby authorized to enter into the Indenture with the Trustee; that the form, terms and provisions of the Indenture be, and they hereby are, in all respects approved; that the Mayor of the Issuer be, and each of them hereby is, authorized, empowered and directed to execute and deliver the Indenture, and the City Clerk of the Issuer be, and hereby is, authorized, empowered and directed to attest to and affix the official seal of the Issuer to the Indenture, in the name, for and on behalf of the Issuer, and thereupon to cause the Indenture to be delivered to the Trustee; that the Indenture shall be in substantially the form now before the Issuer or with such changes therein as the individual executing the Indenture on behalf of the Issuer shall approve, such execution thereof to constitute conclusive evidence of such approval of any and all changes or revisions therein from the form of Indenture now before the Issuer; that the Indenture shall constitute an assignment and pledge for the security of the Bonds issued thereunder of the payments and other amounts to be received by the Issuer pursuant to the Loan Agreement and the Promissory Note and an assignment and pledge of the Issuer's other rights under the Loan Agreement, as described in the Indenture (with the exception of the unassigned rights as set forth in the Indenture); that when the Indenture is executed, attested, sealed and delivered on behalf of the Issuer as hereinabove provided, the Indenture will, assuming the due and valid authorization, execution and delivery thereof by the Trustee, be the legal, valid and binding obligation and agreement of the Issuer; that from and after the execution and delivery of the Indenture by the Issuer, the officers, employees and agents of the Issuer are hereby 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 Indenture as executed; that the Indenture shall constitute, and hereby is made, a part of this Resolution; and that a copy of the Indenture shall be placed in the official records of the Issuer and shall be available for public inspection at the office of the Issuer. Section 6. The Loan Agreement: the Promissory Note. That the Issuer is hereby authorized to enter into the Loan Agreement with the Obligor and to assign the Promissory Note to the Trustee; that the form, terms and provisions of the Loan Agreement and the Promissory Note be, and they hereby are, in all respects approved; that the Mayor of the Issuer be, and each of them hereby is, authorized, empowered and directed to execute the Loan Agreement and assign the Promissory Note, and the City Clerk of the Issuer be, and hereby is, authorized, empowered and directed to attest to and affix the official seal of the Issuer to the Loan Agreement, in the name, for and on behalf of the Issuer, and thereupon to cause the Loan Agreement to be delivered to the Obligor and the Promissory Note to be delivered to the Trustee; that the Loan Agreement and the Promissory Note shall be in substantially the form now before the Issuer or with such -4- changes therein as the individual executing the Loan Agreement and the assignment of the Promissory Note on behalf of the Issuer shall approve, such execution thereof to constitute conclusive evidence of such approval of any and all changes or revisions therein from the forms thereof now before the Issuer; that the Loan Agreement (as executed) shall provide for the loan of the proceeds of the Bonds to the Obligor and the use of such proceeds for the payment, or reimbursement to the Obligor of, the costs of the Project and the costs of issuance of the Bonds, including the cost of providing the Letter of Credit, in the manner therein provided; that when the Loan Agreement is executed, attested, sealed and delivered on behalf of the Issuer as hereinabove provided, the Loan Agreement will, assuming the due and valid authorization, execution and delivery thereof by the Obligor, be the legal, valid and binding agreement of the Issuer; that from and after the execution and delivery of the Loan Agreement, the officers, employees and agents of the Issuer are hereby 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 Loan Agreement as executed; that the Loan Agreement and the Promissory Note shall constitute, and hereby are made, a part of this Resolution; and that a copy of the Loan Agreement and the Promissory Note shall be placed in the official records of the Issuer and shall be available for public inspection at the offices of the Issuer. Section 7. Limited Obligations. That when the Bonds are executed, authenticated and delivered in accordance with this Resolution and the Indenture, the Bonds shall be the legal, valid and binding limited obligations of the Issuer, payable solely from the revenues received by the Issuer pursuant to the Loan Agreement, the Promissory Note, the proceeds of draws upon the Letter of Credit and other amounts on deposit with the Trustee pursuant to the Indenture. The Bonds shall never constitute a general obligation of the Issuer or a debt or liability of the State of Illinois or any political subdivision or agency thereof other than the Issuer. Section 8. The Trustee;the Tender Agent;the Remarketing Agent. That American National Bank and Trust Company of Chicago, Chicago, Illinois, is hereby designated as Trustee, Paying Agent and Registrar for the Bonds and as Tender Agent for the Bonds; and that NBD Bank, N.A., Indianapolis,Indiana, is hereby designated as the Remarketing Agent for the Bonds. Section 9. The Placement Agreement. That the Issuer is hereby authorized to enter into the Placement Agreement with the Obligor and the Placement Agent; that the form, terms and provisions of the Placement Agreement be, and they hereby are, in all respects approved; that the Mayor of the Issuer be, and each of them hereby is, authorized, empowered and directed to execute and deliver the Placement Agreement, and the City Clerk be, and hereby is, authorized, empowered and directed to attest to and affix the official seal of the Issuer to the Placement Agreement, in the name and on behalf of the Issuer; that the Placement Agreement shall be in substantially the same form now before the Issuer or with such changes therein as the individual executing the Placement Agreement on behalf of the Issuer shall approve, such execution thereof to constitute conclusive evidence of such approval of any and all changes and revisions therein from the form of Placement Agreement now before the Issuer; that the Placement Agreement shall provide for the issuance and sale of Bonds by the Issuer in an aggregate principal amount of$1,500,000, bearing interest for the initial Rate Period at a Weekly Rate not in excess of 6% -5- per annum, and at a purchase price of not less than 99.0% of the aggregate principal amount of the Bonds; that when the Placement Agreement is executed and delivered on behalf of the Issuer as hereinabove provided, the Placement Agreement will be, assuming the due and valid authorization, execution and delivery thereof by the other parties thereto, the legal, valid and binding agreement of the Issuer; that from and after the execution and delivery of the Placement Agreement, the officers, employees and agents of the Issuer are hereby 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 Placement Agreement as executed; that the Placement Agreement shall constitute, and hereby is made, a part of this Resolution; and that a copy of the Placement Agreement shall be placed in the official records of the Issuer and shall be available for public inspection at the offices of the Issuer. Section 10. The Preliminary Private Placement Memorandum;the Private Placement Memorandum. That the draft of the Preliminary Private Placement Memorandum which is now before this meeting is hereby approved; that the use and distribution of the Preliminary Private Placement Memorandum and the Private Placement Memorandum by the Placement Agent in connection with the marketing and sale of the Bonds is hereby approved; that the Preliminary Private Placement Memorandum and the Private Placement Memorandum shall be in substantially the form of the draft of the Preliminary Private Placement Memorandum now before the Issuer or with such changes as the Mayor shall approve. Section 11. Additional Actions. That the Mayor of the Issuer and the City Clerk of the Issuer be, and each of them hereby is, authorized to execute and deliver such documents, certificates and undertakings of the Issuer, including, but not limited to, the documents described herein, and to take such other actions as may be required in connection with the execution, delivery, performance, assignment, distribution and/or use, as appropriate, of the Indenture, the Loan Agreement, the Promissory Note, the Placement Agreement and the Private Placement Memorandum, as authorized by this Resolution. Section 12. Actions Ratified. That all acts of the officers, employees and agents of the Issuer which are in conformity with the purposes and intent of this Resolution be, and the same hereby are, in all respects, ratified, approved and confirmed. Section 13. $10 Million Election. That the Issuer hereby elects to apply the provisions of Section 144(a)(4) of the Code to the Bonds; that the Mayor of the Issuer be, and each of them hereby is, authorized to execute and file, in the name, for and on behalf of the Issuer, such documents as may be necessary or appropriate to effect said election. -6- • Section 14. Provisions of Resolution Separable. That the provisions of this Resolution are hereby declared to be separable and if any section, phrase or provision hereof 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 of this Resolution. Section 15. Conflicting Resolutions Superseded. That all resolutions and orders, or parts thereof, in conflict herewith are hereby superseded to the extent of such conflict. Section 16. Effectiveness of Resolution. That this Resolution shall be in full force and effect immediately upon its passage, as by law provided. Adopted and approved by the City of Elgin, Illinois, this day of March, 1996. s/ Kevin Kelly Kevin Kelly, Mayor Presented: March 13, 1996 Adopted: March 13, 1996 Vote: Yeas 7 Nays 0 Attest: s/ Dolonna Mecum Dolonna Mecum, City Clerk