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HomeMy WebLinkAbout97-73 Resolution No. 97-73 RESOLUTION AUTHORIZING EXECUTION OF A CONSENT TO ASSIGNMENT WITH PRAIRIE MATERIAL SALES, INC. WHEREAS, the City of Elgin and Road Materials Corporation have entered into a mining contract on October 28, 1985, relating to gravel extraction on the city owned sports complex property; and WHEREAS, Road Materials Corporation has sold its mining and aggregate business to Prairie Material Sales, Inc. , an Illinois corporation, and has assigned all of its interest and obligations in the mining contracts to Prairie Material Sales, Inc . ; and WHEREAS, the city has the right to consent or approve of any further assignments, which consent shall not be unreasonably withheld; and WHEREAS, the city has determined that it is in the best interests of the City of Elgin to agree to the collateral assignment of Prairie Material Sales, Inc . ' s interests in said agreement . BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Robert 0. Malm, Interim City Manager, and Dolonna Mecum, City Clerk, be and are hereby authorized and directed to execute a Consent to Assignment on behalf of the City of Elgin with Prairie Material Sales, Inc . in connection with a mining agreement dated October 28, 1995 in a form substantially similar to the copy of which is attached hereto and made a part hereof by reference. s/ Kevin Kelly Kevin Kelly, Mayor Presented: February 26 , 1997 Adopted: February 26, 1997 Vote: Yeas 6 Nays 0 Attest: s/ Dolonna Mecum Dolonna Mecum, City Clerk • c .DOCUMENT CH0001A(2098400040-8)251805.3;DATE:10/14/96/TIME:10.05. DOCUMENT PREPARED BY, RECORDING REQUESTED BY AND AFTER RECORDING RETURN TO: KATTEN MUCHIN & ZAVIS 525 West Monroe Street, Suite 1600 Chicago, Illinois 60661-3693 Attention: Jonathan M. Reinsdorf, Esq. SPACE ABOVE THIS LINE FOR RECORDER'S USE CONSENT TO ASSIGNMENT TO: THE CIT GROUP/BUSINESS CREDIT, INC., as Collateral Agent 10 South LaSalle Street, 22nd Floor Chicago, Illinois 60603 Attention: Regional Vice President PRAIRIE MATERIAL SALES, INC. ("Prairie"), as successor-in-interest to Road Materials Corporation ("RMC") pursuant to that certain Assignment and Assumption of Mining Agreement between Prairie and RMC dated July 15, 1941 (the "Assignment"), and the undersigned ("Grantor")are parties to that certain Agreement(Gravel Extraction/Rehabilitation) (together with all supplements and assignments and as amended, extended, modified or renewed from time to time, the "Mining Agreement"), granting RMC the right to mine, process and sell minerals extracted from the property that is legally described on Exhibit A attached hereto and made a part hereof (the "Property") on the terms and conditions contained in the Mining Agreement. A copy of the Mining Agreement is attached hereto as Exhibit B. Prairie has entered into certain financing arrangements with THE CIT GROUP/BUSINESS CREDIT, INC., a New York corporation (the "Collateral Agent"), and certain other financial institutions (the "Secured Lenders") that are extending credit and making other financial accommodations available to Prairie and its affiliates pursuant to the terms of certain financing agreements and other loan documents. As a condition precedent to the Secured Lenders' obligations to extend such financial accommodations to Prairie and its affiliates, the Secured Lenders required Prairie to collaterally assign Prairie's interest in the Mining Agreement to the Collateral Agent pursuant to a Collateral Assignment of Mining Agreement (the "Collateral Assignment") in the form attached hereto as Exhibit C. The Assignment will secure the payment and performance of the indebtedness and obligations of Prairie to the Secured Lenders. To induce the Secured Lenders to enter into said financing arrangements, and for other good and valuable consideration, Grantor hereby agrees as follows: 1. Grantor hereby consents to the assignment of the Mining Agreement to Prairie and the execution by Prairie of the Collateral Assignment and the granting by Prairie to the Collateral Agent of a security interest in Prairie's rights and interest under the Mining Agreement. 2. A foreclosure or other exercise of remedies by the Collateral Agent under the Collateral Assignment or otherwise or transfer in lieu of foreclosure or exercise of other remedies shall not require the consent of Grantor and shall not constitute a default under the Mining Agreement. 3. The Mining Agreement is valid and is in full force and effect and has not been assigned, modified, supplemented or amended in any way, except as is reflected in the copy attached as Exhibit B, and represents the entire agreement between the parties thereto. 4. Grantor is not in default under the terms of the Mining Agreement and no event has occurred which with the giving of notice or the passage of time would constitute a default under the Mining Agreement. 5. If Prairie defaults on its obligations to the Secured Lenders and, as a result, the Collateral Agent, at the direction of the Secured Parties, exercises its rights under the Collateral Assignment or otherwise undertakes to enforce its security interest in Prairie's assets, Grantor will permit the Collateral Agent to take possession of the Property and exercise all rights of Prairie under the Mining Agreement without terminating the Mining Agreement and Grantor will recognize the Collateral Agent (or the nominee of the Collateral Agent) as the successor-in- interest to Prairie under the Mining Agreement, entitled to all of the benefits thereof. If the Collateral Agent takes possession of the Property in accordance with the immediately preceding sentence, the Collateral Agent may cause the rights it obtains under the Mining Agreement to use the Property to be assigned to an entity designated by the Collateral Agent whose financial condition is reasonably acceptable to Grantor. 6. Grantor will give copies of all notices of default sent to Prairie under the Mining Agreement to the Collateral Agent at: The CIT Group/Business Credit, Inc. 10 South LaSalle Street 22nd Floor Chicago, Illinois 60603 Attention: Regional Vice President or to such other address as the Collateral Agent may designate from time to time by notice given to Grantor at the address set forth on the signature page hereto. -2- 7. The statements and agreements contained herein shall be binding upon, and shall inure to the benefit of, the Collateral Agent, Grantor and their respective successors, heirs and assigns. This Consent to Assignment is executed as of the2 7 thiay of February , 1997 CTTItOfr't.LG By: .EZet 9A,---N Rob-rt 0. Malm, Interim City Manager Address: City of Elgin 150 Dexter Court Elgin, IL 60120 -3- STATE OF ILLINOIS ) ) SS. COUNTY OF COOK ) I, Dolonna Mecum ,a Notary Public ind for said county and state, do hereby certify that Robert 0. Maim , the/Clyanager of the City of Elgin, personally known to me to be the same person whose name is subscribed to the foregoing instrument, appeared before me this day in person and acknowledged that he/she signed and delivered the said instrument as his/her free and voluntary act and as the free and voluntary act, for the uses and purposes therein set forth. Given under my hand and official seal, this 27 thday of February , 199 Z b91.4914,..4C Notary Public My commission expires: March 19, 1997 4 OFFICIAL SEAL 0 DOLONNA ibiECUM t NOTARY PUBLIC, STATE OF ILLINOIS M�yy Commissi;n E<pi;e, Mar. 19,440 -4- EXIT A LEGAL DESCRIPTION Common Address: P.I.N.: OF Et V ir V.,/ 1 14 City of Elgin yo x Mayor Kevin Kelly ij4r in I `\\"J Council Members Terry Gavin Robert Gilliam John T. McKevitt Ed Schock John Walters February 27 , 1997 Marie Yearman Mr. Leonard Stoecker 75 E. Wacker Drive, Suite 200 Chicago, IL 60601 Re: Consent to Assignment with Prairie Material Sales, Inc . Dear Mr. Stoecker: Pursuant to our conversation after the City Council meeting last night, I am enclosing two copies of the Consent to Assignment which has been executed by Robert Malm, Interim City Manager. Sincerely, Dolonna "Loni" Mecum, CMC City Clerk 847/931-5660 dkm By Federal Express cc: Monica Bates 150 Dexter Court • Elgin, IL 60120-5555 • Phone 847/931-6100 • Fax 847/931-5610 • TDD 847/931-5616 ® Pnnted on recycled paper `<4OFE�Ci (0 -7) ° City of Elgin Agenda Item No. ' iii Caph„ 9gTCD[��'' February 19, 1997 TO: Mayor and Members of the City Council FROM: Robert 0. Malm, Interim City Manager SUBJECT: Request to Allow Prairie Materials Service to Enter Assignment of Mining Rights at Collateral PURPOSE The purpose of this memorandum is to provide the Mayor and members of the City Council information to consider a consent for collateral assignment of the mining rights of Prairie Materials pursuant to its agreement with the City. BACKGROUND Prairie Materials has an agreement with the City which pro- vides certain mining rights to Prairie in exchange for 10% royalties and land reclamation of the Sports Complex. The agreement requires city consent to any assignment of Prairie Material rights . Prairie Materials has requested the City' s consent to a collateral assignment of its interests (their 90% share) in the aforementioned agreement with the City in order to obtain a loan. Staff reviewed the contract and requested adherence by Prairie Materials to several items in the contract before consent would be provided. On February 10, 1997 such compli- ance was obtained from Prairie Materials. COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED None. FINANCIAL IMPACT The City' s 10% royalties will not be affected by the collater- al assignment. LEGAL IMPACT None. • ruk ALTERNATIVES Refusal to consent to the assignment. Prairie Materials Service February 19, 1997 Page 2 RECOMMENDATION 411) It is recommended that the Mayor and members of the City Council authorize execution to the assignment of the mining agreement interest of Prairie Materials . Respectfully submitted, 1 Monica Bates , Director Parks and Recreation Ma1m Int rim City Manager mb