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HomeMy WebLinkAboutT6-84 ORDINANCE NO. T6-84 AN ORDINANCE AUTHORIZING THE FINANCING BY THE CITY OF ELGIN, ILLINOIS, OF A PROJECT CONSISTING OF THE ACQUISITION OF LAND AND OF THE CONSTRUCTION AND INSTALLATION OF BUILDINGS AND EQUIPMENT TO BE USED AS A MANUFACTURING FACILITY TO BE LOCATED THEREON IN ORDER TO CREATE AND RETAIN EMPLOYMENT OPPORTUNITIES IN THE LOCALITY OF THE CITY OF ELGIN, ILLINOIS AND ENCOURAGE ECONOMIC DEVELOPMENT THEREIN, THEREBY REDUCING THE EVILS ATTENDANT UPON UNEMPLOYMENT AND PROVIDING FOR THE INCREASED WELFARE AND PROSPERITY OF THE RESIDENTS OF SAID LOCALITY; AUTHORIZING AND PROVIDING FOR THE ISSUANCE BY THE CITY OF ELGIN, ILLINOIS OF ITS INDUSTRIAL DEVELOPMENT REVENUE BOND (UNIVERSAL CHEMICALS AND COATINGS, INC., PROJECT) IN THE PRINCIPAL AMOUNT OF $4,000,000, AND IN CONNECTION THEREWITH AUTHORIZING THE EXECUTION AND DELIVERY OF AN AGREEMENT AMONG THE CITY, UNIVERSAL CHEMICALS AND COATINGS, INC. AND THE AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO, PROVIDING FOR THE MAKING OF A LOAN TO UNIVERSAL CHEMICALS AND COATINGS, INC. FROM THE PROCEEDS OF SAID BOND, THE SECURITY FOR SAID BOND, THE SALE OF SAID BOND TO THE AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO; AND RELATED MATTERS. WHEREAS, pursuant to its home rule powers and pursuant to City of Elgin Ordinance No. S2-80 (the "Act"), the City of Elgin, Illinois (the "Issuer"), a municipality and home rule unit of the State of Illinois, has the power to issue its revenue bonds to finance facilities for the purpose of creating or retaining employment opportunities within the locality of the Issuer and encouraging economic development therein, thereby reducing the evils attendant upon unemployment and providing for the increased welfare and prosperity of the residents of said locality; and WHEREAS, pursuant to a Memorandum of Agreement dated April 14, 1983 between the Issuer and Universal Chemicals and Coatings, Inc. (hereinafter sometimes referred to as the "Company'), a Delaware corporation, the Issuer, in order to further the public purposes set forth above, agrees to issue its industrial development revenue bond to finance a portion of the cost of acquiring land and of constructing and installing buildings rand equipment to be used as a manufacturing facility within the corporate limits of the Issuer (the "Project"); and WHEREAS, the Issuer is willing to issue its revenue bond to finance a portion of the cost of the Project and to enter into an agreement with the Company and American National Bank and Trust Company of Chicago (the "Institutional Lender"), upon terms which will produce revenues and receipts sufficient to provide for the prompt payment at maturity of the principal and interest on such revenue bond, all as set forth in the provisions of the Agreement hereinafter identified; and WHEREAS, pursuant to the requirements of the Tax Equity and Fiscal Responsibility Act of 1982, and public notice published on August 13, 1984, in the Daily Courier News , a newspaper of general circulation in the City of Elgin, a public hearing on the plan of financing for the Project was held by the City Council on August 27, 1984; and WHEREAS, the Issuer hereby finds that the issuance of the proposed revenue bond will further the public purposes set forth above, and the same is a matter pertaining to the government and affairs of the Issuer; and WHEREAS, it is necessary to authorize the execution of an agreement to be dated as of September 1, 1984 (the "Agreement") among the Issuer, the Company and the Institutional Lender, under the terms of which the Issuer agrees to sell its industrial development revenue bond to the Institutional Lender and to lend the proceeds to the Company, and the Company agrees to mortgage the Project and to assign certain contracts and to pay to the Issuer or its assignee amounts sufficient to pay at maturity the principal of and interest on the revenue bond hereinafter authorized and will evidence such obligations by executing its direct obligation note in the principal amount of $4,000,000 (the "Note"); and WHEREAS, it is necessary for the Issuer to execute and deliver an assignment and security agreement to be dated as of September 1, 1984 (the "Assignment") to the Institutional Lender; and _ 2 _ WHEREAS, it is necessary to authorize the issuance and sale of said industrial development revenue bond to the Institutional Lender; and WHEREAS, the Issuer has caused to be prepared and presented to this meeting the following documents, which the Issuer proposes to enter into: 1. The form of Agreement; 2. The form of Assignment; 3. The form of Mortgage and Security Agreement; 4. The form of Collateral Assignment; and 5. The form of the proposed $4,000,000 City of Elgin, Illinois, Industrial Development Revenue Bond (Universal Chemicals and Coatings, Inc. Project) (the "Bond"). NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF ELGIN, ILLINOIS AS FOLLOWS Section 1. That the form, terms and provisions of the proposed Agreement be, and they hereby are, in all respects approved, and that the Mayor of the Issuer is hereby authorized, empowered and directed to execute, and the City Clerk of the Issuer is hereby authorized, empowered and directed to attest and to affix the seal of the Issuer to, the Agreement in the name and on behalf of the Issuer, and thereupon to cause the Agreement to be delivered to the Company and the Institutional Lender; that the Agreement is to be in substantially the form presented to and before this meeting and hereby approved, and that from and after the execution and delivery of the Agreement, the officials, agents and employees 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 Agreement as executed. Section 2. That the form, terms and provisions of the proposed Assignment be, and rthey hereby are, in all respects approved, and that the Mayor of the Issuer is hereby - 3 - authorized, empowered and directed to execute, and the City Clerk of the Issuer is hereby authorized, empowered and directed to attest and to affix the seal of the Issuer to, the Assignment in the name and on behalf of the Issuer, and thereupon to cause the Assignment to be delivered to the Institutional Lender, and the Assignment shall constitute a lien for the security of the Bond issued under the Agreement upon the revenues and receipts derived from the Agreement, including, but not limited to, the Note, the Collateral Assignment (the "Collateral Assignment") and the Mortgage and Security Agreement (the "Mortgage"); that the Assignment is to be in substantially the form presented to this meeting and hereby approved, and that from and after the execution and delivery of the Assignment, the officials, agents and employees 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 r. provisions of the Assignment as executed. Section 3. (a) That the Mayor or the City Clerk of the Issuer be and each of them is hereby authorized, empowered and directed to cause the Bond to be prepared in the principal amount of $4,000,000; that the Bond will be dated the date of issuance and will be payable on March 1, June 1, September 1 and December 1 of the years (the "Payment Dates") and in the amounts as follows: Principal Payment Per Payment Date Year of Payments $20,000 December 1, 1984, March 1, 1985, June 1, 1985, September 1, 1985 $30,000 December 1, 1985, March 1, 1986, June 1, 1986, September 1, 1986 $40,000 December 1, 1986, March 1, 1987, June 1, 1987, September 1, 1987 $50,000 December 1, 1987, March 1, 1988, June 1, 1988, September 1, 1988 r - 4 - $60,000 December 1, 1988, March 1, 1989, June 1, 1989, September 1, 1989 $80,000 December 1, 1989 and each Payment Date thereafter to and including September 1, 1999 The Bond will be expressed to bear interest on the unpaid principal balance from the date of its issuance at nine and one-half percent (9 1/2%) per annum through August 31, 1989 and thereafter at a varying rate per annum which shall be seventy-five percent (75%) of the rate of interest publicly announced from time to time by the American National Bank and Trust Company of Chicago as its prime rate (the "Prime Rate") with adjustments in such varying rate to be made on the same date as any announced change in the Prime Rate, provided that any changes in the Prime Rate occurring within 15 days before any Payment Date resulting in an increase or decrease in the interest which would otherwise be payable on such Payment Date, shall not, if an increase, be payable by the Company on such Payment Date, but shall instead be payable on the next succeeding Payment Date or shall, if a decrease, reduce the amount which would otherwise be payable on the next succeeding Payment Date. Interest shall be calculated, for actual days elapsed, on a 360 day year. In the event of a declaration of default by the Institutional Lender, interest on overdue principal and, to the extent permitted by law, on overdue interest, shall be payable on demand at a rate equal to the Prime Rate then in effect plus three percent (3%) per annum until paid. The Bond shall be in the form of a single typewritten registered Bond, payable in such medium of payment and at such place, subject to such terms of prepayment and redemption and containing such other terms and provisions specified in the Agreement (as executed and delivered) and shall be executed in the name of the Issuer with the manual signatures of the Mayor and the City Clerk of the Issuer, and the seal of the Issuer shall be affixed thereto or imprinted thereon. (b) The Bond will be issued pursuant to the Act and will not constitute a general obligation of the Issuer, but will be a limited obligation of the Issuer, payable - 5 - rsolely out of the income and revenues of the Issuer to be derived from the Project pursuant to the Agreement. No holder of the Bond shall have the right to compel any exercise of the taxing power of the Issuer, or the State of Illinois or any political subdivision thereof, to pay the Bond or the interest or premium, if any, thereon, and the Bond will not constitute an indebtedness or a loan of credit of the Issuer, the State of Illinois or any political subdivision thereof, or a charge against their general credit or taxing powers, within the meaning of any constitutional or statutory provision. (c) Neither the Issuer nor the State of Illinois or any political subdivision thereof shall in any event be liable for the payment of principal of, premium, if any, or interest on the Bond, or for damages arising out of the failure to perform any pledge, mortgage, obligation or agreement of any kind whatsoever of the Issuer. (d) Neither the Bond nor any of the Issuer's agreements or obligations thereunder will constitute an indebtedness or a loan of credit of the Issuer or of the State of Illinois or any political subdivision thereof within the meaning of any constitutional or statutory provision whatsoever, nor shall the Bond be construed to create any moral obligation of the Issuer, the State of Illinois or any political subdivision thereof. Neither the faith and credit nor the taxing power of the Issuer or the State of Illinois or any political subdivision thereof is pledged to the payment of the principal of the Bond, the interest or any premium thereon, or other costs incident thereto. (e) No recourse shall be had for the payment of the principal of, premium, if any, or interest on the Bond or for any claim based thereon or upon any obligation, covenant or agreement contained in this Ordinance, the Agreement, the Assignment, or in any other instrument contemplated therein, against any past, present or future official, officer, agent or employee of the Issuer, or any successor corporation, as such, either directly or through the Issuer or any successor corporation, under any rule rek of law or equity, statute or constitution or by the enforcement of any assessment or - 6 - penalty or otherwise. Section 4. That the form of the Bond submitted to this meeting, subject to appropriate insertion and revision in order to comply with the provisions of the Agreement be, and the same hereby is, approved and when the same shall be executed on behalf of the Issuer in the manner contemplated by the Agreement and this Ordinance in the principal amount of $4,000,000, it shall represent the approved form of the Bond of the Issuer. Section 5. That the Mayor of the Issuer be and is hereby authorized, empowered and directed, for and on behalf of the Issuer, to issue and sell to the Institutional Lender the Bond in the principal face amount of $4,000,000 at a price and on terms and conditions as provided in the Agreement. Section 6. That from and after the execution and delivery of said documents, the proper officials, agents and employees 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 Assignment, the Agreement and the Bond as executed and to further the purposes and intent of this Ordinance, including the preamble hereto. Section 7. That adoption of the Ordinance by the corporate authorities of the Issuer and the approval hereof by the Mayor of the Issuer shall constitute the approval by the "applicable elected representative" required by Section 103(k)(2)(B)(i) of the Internal Revenue Code of 1954, as amended by the Tax Equity and Fiscal Responsibility Act of 1982 (the "Code"). Section 8. That the Issuer elects to have the provisions of Section 103(b)(6)(D) of the Code apply to the Bond, and the Mayor or City Clerk is hereby authorized and directed to file or cause to be filed an appropriate statement relating to such election with the Internal Revenue Service (relating to the temporary period) pertaining to Section 103(c) of the Code. - 7 - Section 9. That the provisions of the Agreement require the Company to bear the risks of any loss that may result from investments of monies as held as part of the proceeds of the Bond, and the City Council hereby finds and determines that the authorization to the Institutional Lender to invest monies held as part of such proceeds as provided in the Agreement will not involve any undue risk of loss of funds derived from the general revenue of the Issuer. Section 10. That no covenant, stipulation, obligation or agreement herein contained, or contained in any instrument or document executed in connection with the Project shall be deemed to be a covenant, stipulation, obligation or agreement of any of the corporate authorities of the Issuer or any officer, agent or employee of the Issuer in their individual capacities, and neither the corporate authorities of the Issuer nor any • officer of the Issuer executing the Bond shall be liable personally on the Bond or subject to any personal liability or accountability by reason of the issuance thereof. Section 11. That all acts and doings of the officials of the Issuer which are in conformity with the purposes and intent of this Ordinance and in furtherance of the issuance and sale of the Bond and the financing of the Project be, and the same hereby are, in all respects, approved and confirmed. Section 12. That the provisions of this Ordinance are hereby declared to be separable, and if any section, phrase or provision shall, for any reason, be declared to be invalid, such declaration shall not affect the validity of the remainder of the sections, phrases or provisions hereof. - Section 13. That notwithstanding any other provisions of law to the contrary, the Bond, the Agreement, and any transaction provided for therein shall not be void by reason of the pecuniary interest therein of any of the corporate authorities of the Issuer. Section 14. That all ordinances or parts of ordinances in conflict with the provisions of this Ordinance are hereby repealed to the extent of such conflict. - 8 - Section 15. That this Ordinance shall be in full force and effect upon its passage and approval and its filing in the records of the Issuer by the Cfty Clerk. s/ Richard L. Verbic Mayor Passed: September 10, 1984 Approved: September 10, 1984 Vote: Yeas : 6 Nays : 0 Published: Attest: s/ Marie Yea rma n City Clerk r r - 9 -