Loading...
S13-95 3036715 September 5, 1995 ORDINANCE NO. S 13-95 AN ORDINANCE AUTHORIZING THE ISSUANCE OF $2,300,000 AGGREGATE PRINCIPAL AMOUNT ADJUSTABLE RATE ECONOMIC DEVELOPMENT REVENUE BONDS (GIBSON GUITAR CORP. PROJECT), SERIES 1995, BY THE CITY OF ELGIN, ILLINOIS, PURSUANT TO ITS HOME RULE POWERS UNDER SECTION 6(A) OF ARTICLE VII OF THE CONSTITUTION OF THE STATE OF ILLINOIS AND IN CONFORMANCE WITH ORDINANCE NO S2-80 ADOPTED BY THE CITY COUNCIL OF THE ISSUER ON FEBRUARY 13, 1980, AS SUPPLEMENTED AND AMENDED; AUTHORIZING THE LENDING OF THE PROCEEDS OF SAID BONDS TO GIBSON GUITAR CORP. FOR THE PURPOSE OF FINANCING ALL OR A PORTION OF THE COSTS OF A PROJECT CONSISTING OF THE ACQUISITION OF LAND WITHIN THE CITY OF ELGIN, KANE COUNTY, ILLINOIS, AND THE ACQUISITION, CONSTRUCTION AND EQUIPPING OF A MANUFACTURING FACILITY THEREON; AUTHORIZING THE EXECUTION AND DELIVERY OF A TRUST INDENTURE, A LOAN AGREEMENT, A REMARKETING AGREEMENT, A LIMITED OFFERING AGREEMENT, A TAX REGULATORY AGREEMENT, A PRELIMINARY LIMITED OFFERING MEMORANDUM AND A LIMITED OFFERING MEMORANDUM; APPROVING RELATED DOCUMENTS; AUTHORIZING THE EXECUTION AND DELIVERY OF RELATED DOCUMENTS; AND PRESCRIBING OTHER MATTERS RELATED THERETO. WHEREAS, the City of Elgin, Illinois (the "Issuer") is a home rule unit of government under Section 6(a) of Article VII of the 1970 Constitution of the State of Illinois and is authorized under Ordinance No. S2-80 adopted by the City Council of the Issuer on February 13, 1980, as supplemented and amended by Ordinance No. S4-84 adopted by the City Council of the Issuer on November 26, 1984, and by Ordinance No. S1-85 adopted by the City Council of the Issuer on February 25, 1985 (said ordinances collectively being the "Enabling Ordinance") to issue revenue bonds to finance the "Project Costs" of "Economic Development Projects"; and WHEREAS, Gibson Guitar Corp., a Delaware corporation (the "Borrower"), proposes to acquire land within the boundaries of the Issuer and to acquire. construct and equip a manufacturing facility thereon (the "Project"); and WHEREAS, by a resolution passed and duly adopted by the City Council of the Issuer on May 24, 1995 (the "Inducement Resolution"), the Issuer entered into a Memorandum of Agreement with the Borrower providing for the actions of the parties necessary for the issuance of revenue bonds to finance the Project; and WHEREAS, the Borrower, in reliance upon and pursuant to the Inducement Resolution, has proceeded with the developing and planning of the Project; and WHEREAS, it is now proposed that the Issuer issue its Adjustable Rate Economic Development Revenue Bonds (Gibson Guitar Corp. Project), Series 1995, in an aggregate principal amount not to exceed $2,300,000 (the "Bonds") to provide moneys to make a loan to the Borrower for the purpose of financing all or a portion of the costs of the acquisition, construction and equipping the Project; and WHEREAS, the proceeds of the Bonds will be loaned to the Borrower pursuant to a Loan Agreement dated as of September 1, 1995 (the "Loan Agreement"), between the Issuer and the Borrower; and WHEREAS, the Issuer will execute a Trust Indenture dated as of September 1, 1995 (the "Indenture"), between the Issuer and American National Bank and Trust Company of Chicago, as trustee (said bank, in its individual capacity, being herein the "Bank", and in its capacity as trustee under the Indenture, being herein the "Trustee"); pledging, among other things, the income and revenues received under the Loan Agreement as security for the Bonds; and WHEREAS, as further security for the Bonds, the Borrower will cause to be delivered to the Trustee an irrevocable direct pay letter of credit (the "Letter of Credit") issued by the Bank; and WHEREAS, the Borrower has requested the Issuer to enter into a Limited Offering Agreement to be dated the date of issuance of the Bonds (the "Limited Offering Agreement") with the Borrower and the Bank (the Bank, in its capacity as placement agent under the Limited Offering Agreement, being herein the "Offering Agent") with respect to the initial placement of the Bonds ell* and a Remarketing Agreement dated as of September 1, 1995 (the "Remarketing Agreement") with the Borrower and the Bank as remarketing agent for the Bonds (the Bank, in such capacity, being the "Remarketing Agent"); and WHEREAS, copies of the forms of the following documents relating to the transactions described above have been filed with the Issuer: (a) the Indenture with a copy of the form of the Bonds attached as an exhibit; (b) the Loan Agreement; (c) the Limited Offering Agreement; (d) the Remarketing Agreement; (e) the Letter of Credit; (f) a Preliminary Limited Offering Memorandum with respect to the Bonds ("Preliminary Limited Offering Memorandum"); and (g) a Tax Regulatory Agreement to be dated the date of issuance of the Bonds, among the Issuer, the Borrower and the Trustee (the "Tax Agreement"); and - 2 - • WHEREAS, it appears that each of the instruments above referred to, which are now before rthis meeting, is in appropriate form and each instrument referred to in (a), (b), (c), (d), (f) and (g) above is an appropriate instrument to be executed and delivered by the Issuer for the purpose intended; and WHEREAS, pursuant to the requirements of Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code"), a public hearing for which there was reasonable public notice has been held by the Issuer concerning the issuance of the Bonds; NOW, THEREFORE, Be and It is Hereby Ordained by the City Council of the City of Elgin, Illinois, as follows: Section 1. Findings. It is hereby found, determined and declared by the City Council of the Issuer that: (a) the Project will (i) provide increased employment opportunities and relieve conditions of unemployment and underemployment within the Issuer, (ii) encourage the increase of industry and commerce within the Issuer, and (iii) increase the tax base within the Issuer, thereby furthering valid public purposes; (b) the Project, the financing of the Project and the issuance of the Bonds are determined to serve a valid public purpose in accordance with the Constitution and laws of the State of Illinois and are approved; rik (c) the Project is an "Economic Development Project" within the meaning of the Enabling Ordinance and the financing thereof through the issuance of the Bonds and the loan of the proceeds thereof pursuant to the Loan Agreement is consistent with the purposes of the Enabling Ordinance; (d) the Project, the issuance and sale of the Bonds to finance the same, the execution and delivery of the Bonds, the Indenture, the Loan Agreement, the Limited Offering Agreement, Remarketing Agreement and the Tax Agreement, and the performance of all covenants and agreements of the Issuer contained therein and of all other acts and things required under the Constitution and laws of the State of Illinois to make the Bonds, the Indenture, the Loan Agreement, the Limited Offering Agreement, the Remarketing Agreement and the Tax Agreement valid and binding obligations of the Issuer in accordance with their terms, are authorized by the Constitution and laws of the State of Illinois and by the Enabling Ordinance; (e) it is desirable that the Bonds in an aggregate principal amount not to exceed $2,300,000, initially dated the date of the original issuance thereof, be issued by the Issuer upon the terms set forth in the Indenture, under the provisions of which the Issuer's interest in the Loan Agreement and the payments due the Issuer thereunder will be pledged and assigned to the Bondholder as security for the payment of principal of, premium, if any, and interest on the Bonds; - 3 - (f) no member of the City Council of the Issuer or officer, agent or employee of the Issuer has an interest, financial, employment or other, in the Borrower or in the transactions contemplated hereby or by the Indenture, the Loan Agreement, the Limited Offering Agreement or the Remarketing Agreement, or the issuance and sale of the Bonds; and (g) it is the intention of the Issuer that the Bonds be reimbursement bonds for the purpose of Section 1.150-2 of the Income Tax Regulations issued pursuant to the Code and that the proceeds of the Bonds be used, in whole or in part, to reimburse expenditures made prior to the issuance of the Bonds. Section 2. For the purpose of financing a portion of the cost of the Project, the issuance of revenue bonds of the Issuer to be known as the "City of Elgin, Illinois, Adjustable Rate Economic Development Revenue Bonds (Gibson Guitar Corp. Project) Series 1995" in an aggregate principal amount not to exceed $2,300,000 is hereby authorized. The Borrower has agreed that to the extent bond proceeds are not sufficient to pay all of the costs of financing the Project, the Borrower will pay all such excess costs in order to complete the financing of the Project. Any such payments made by the Borrower shall in no manner affect or reduce the payments required by the Loan Agreement hereinafter authorized and approved. Section 3. The Bonds shall be issued in such form and denominations as are set forth in the Indenture and the interest on the Bonds will be payable on the dates and at such places as are specified in or determined pursuant to the Indenture but not later than January 1, 2016. The Bonds shall have an original issue date, shall mature, shall be subject to redemption and shall bear interest °'" as provided in the Indenture. The Bonds shall initially bear interest at the Weekly Rate (as defined in the Indenture) as determined by the Remarketing Agent pursuant to and in accordance with the Indenture; provided that the initial Weekly Rate shall not exceed 7% per annum. The Bonds shall be dated and numbered as provided in the Indenture. The form of the Bonds and the provisions for execution, authentication, payment and registration shall be substantially as set forth in the Indenture. Subject to the limitations contained in this Ordinance, the Issuer hereby delegates to the Mayor of the Issuer, whose determination shall be conclusively evidenced by his execution of the Indenture, the power and duty to determine (i) the original issue date of the Bonds, (ii) the principal amount of the Bonds, (iii) the initial interest rate for the Bonds, and (iv) the final maturity for the Bonds. Section 4. The Bonds shall be special, limited obligations of the Issuer and, except to the extent payable from Bond proceeds or moneys from the investment thereof, shall be payable solely from the revenues and receipts and other amounts received by or on behalf of the Issuer pursuant to the Loan Agreement, from certain funds pledged under the Indenture, and from funds received by the Trustee under the Letter of Credit or such other Credit Facility (as defined in the Indenture), if any, as may then be held by the Trustee for the benefit of owners of the Bonds. The Bonds and interest and premium, if any, thereon shall not be deemed to constitute an indebtedness or an obligation of the Issuer, the State of Illinois or any political subdivision therefor within the purview of any constitutional limitation or statutory provision or a charge against the general credit or taxing powers of any of them. No taxing powers of the Issuer, the State of Illinois or any political subdivision thereof are available to pay the Bonds or interest or premium, if any, thereon. The - 4 - special, limited nature of the obligation represented by the Bonds is more fully set forth in the rik Indenture. Section 5. The payments under the Loan Agreement to be received by the Issuer under the terms of the Loan Agreement hereinafter authorized, as represented by the Borrower, are calculated to be sufficient to pay the principal of and premium, if any, and interest on the Bonds as the same become due and payable, and all of such payments shall be pledged for that purpose pursuant to, and in addition to such other purposes as are more fully set forth and provided for in, the Indenture. Section 6. The execution, delivery and performance of the Indenture, the Loan Agreement and the Remarketing Agreement by the Issuer are hereby authorized. The Indenture, the Loan Agreement and the Remarketing Agreement shall be in substantially the forms submitted to this meeting as hereinabove recited, with such changes, insertions or omissions as may be approved by the Mayor or City Clerk of the Issuer, whose approval thereof shall be conclusively evidenced by his execution of each such instrument. Section 7. The offering of the Bonds for sale by the Offering Agent and the execution, delivery and performance of the Limited Offering Agreement by the Issuer are hereby authorized. The Limited Offering Agreement shall be in substantially the form submitted to this meeting as hereinabove recited, with such changes, insertions or omissions as may be approved by the Mayor or City Clerk of the Issuer, whose approval thereof shall be conclusively evidenced by his execution of the Limited Offering Agreement. Section 8. The Issuer does hereby authorize and approve the distribution of the Preliminary Limited Offering Memorandum by the Offering Agent substantially in the form submitted herewith, with such modifications, revisions, insertions, deletions, amendments and supplements to the Preliminary Limited Offering Memorandum as shall be approved by the officer executing the Limited Offering Agreement, with such execution to constitute conclusive evidence of such person's approval and the Issuer's approval of any such modifications, revisions, insertions, deletions, amendments or supplements to the form of the Preliminary Limited Offering Memorandum. The Issuer does hereby authorize and approve the distribution of an Limited Offering Memorandum (the "Limited Offering Memorandum") substantially in the form of the Preliminary Limited Offering Memorandum with such modifications, amendments and supplements to the fmal Limited Offering Memorandum as shall be approved by the officer executing the Limited Offering Agreement, with such execution to constitute conclusive evidence of such person's approval and the Issuer's approval of any such modifications, amendments or supplements, but subject to the limitations and representations with respect thereto made by the Issuer as set forth in the Limited Offering Agreement and in the Limited Offering Memorandum. Section 9. The Issuer does hereby authorize and approve the execution by its Mayor or City Clerk and the delivery of the Tax Agreement which imposes certain requirements relating to the Project and the investment and use of funds held by the Trustee under the Indenture to ensure compliance with the provisions of the Code. The Tax Agreement shall be in substantially the form r - 5 - as shall be approved by the Mayor or City Clerk of the Issuer executing the same, with such execution to constitute conclusive evidence of such person's approval. Section 10. The Letter of Credit in substantially the form submitted to this meeting as hereinabove recited is hereby approved. Section 11. The execution and delivery of the Bonds to the Trustee for authentication, acceptance and redelivery of the authenticated Bonds, and the delivery of the Bonds to the purchasers thereof or their duly authorized attorneys-in-fact, against receipt by the Trustee of the amount of the purchase price for the Bonds in payment therefor, together with the payment of certain expenses in connection with the issuance of the Bonds, are hereby authorized. Section 12. The Mayor of the Issuer, or any person authorized to carry out the duties of said office, is hereby authorized to execute on behalf of the Issuer the Indenture, the Loan Agreement, the Limited Offering Agreement, the Remarketing Agreement, the Tax Agreement, the Preliminary Limited Offering Memorandum, the Limited Offering Memorandum and the Bonds, and the City Clerk of the Issuer, or any person authorized to carry out the duties of said office, is hereby authorized to attest such documents, and the Mayor and City Clerk are hereby authorized to deliver such instruments and documents on behalf of the Issuer and to execute and deliver all such instruments, documents or certificates, and to do and perform all such things and acts, as each shall deem necessary or appropriate in furtherance of the issuance of the Bonds and the carrying out of the transactions authorized by this Ordinance or contemplated by the instruments referred to in this Ordinance. The Bonds shall be executed on behalf of the Issuer by its Mayor with his manual or ('' facsimile signature and attested by the manual or facsimile signature of the City Clerk of the Issuer. Section 13. The Indenture, the Loan Agreement, the Limited Offering Agreement, the Remarketing Agreement, the Preliminary Limited Offering Memorandum, the Limited Offering Memorandum, the Tax Agreement and the Letter of Credit, as approved or acknowledged by this Ordinance, all of which are hereby incorporated in this Ordinance by reference thereto, shall be placed on file at the office of the Issuer and made available for public inspection by any interested party immediately following the passage and approval of this Ordinance. Section 14. The Mayor and the City Clerk are hereby authorized to take all actions and execute all additional documents, including, without limitation, an IRS Form 8038 and a Letter of Representations with The Depositary Trust Company, as are reasonably necessary and appropriate to the issuance of the Bonds. Section 15. American National Bank and Trust Company of Chicago, at the direction of the Borrower, is hereby designated as the Trustee under the Indenture. Section 16. The Issuer hereby makes the election described in Section 144(a)(4)(A) of the Internal Revenue Code of 1986, as amended, to issue the Bonds in the aggregate principal amount as set forth in the Indenture as executed pursuant to this Ordinance (subject to the limitations set forth herein). r - 6 - Section 17. The provisions of this Ordinance shall constitute a contract between the Issuer and the owners of the Bonds hereby authorized, and after the issuance of the Bonds, no modification, alteration, amendment or supplement to the provisions of this Ordinance shall be made except as otherwise provided in the Indenture. Section 18. If any section, paragraph, clause or provision of this Ordinance shall be ruled by any court of competent jurisdiction to be invalid, the invalidity of such section, paragraph, clause or provision shall not affect any of the remaining sections, paragraphs, clauses or provisions hereof. Section 19. The Issuer hereby determines that all meetings of the Issuer at which action was taken in connection with the authorization and approval of the Indenture, the Loan Agreement, the Limited Offering Agreement, the Remarketing Agreement, the Preliminary Limited Offering Memorandum, the Limited Offering Memorandum, the Letter of Credit and the Tax Agreement, and the authorization of the issuance of the Bonds, were duly and legally called and held proper public meetings, open to the public at all times in compliance with all requirements of law and rules of procedure of the Issuer and the State, and notice of the time and place of each meeting was given and minutes of such meetings have been kept and are or will be made available as required by procedures adopted by the Issuer and by "An Act in relation to meetings", and all laws amendatory thereof and supplementary thereto. Section 20. All ordinances and resolutions and parts thereof in conflict with the provisions of this Ordinance are, to the extent of such conflict, hereby repealed. Section 21. This Ordinance shall be in full force and effect from and after its passage and approval. PASSED this /3714 day of September, 1995 VOTE: AYES 7 NAYS Q ABSENT Q APPROVED this /em day of Septembey, 1995. Mayor ATTEST: Do FY(A6214-'1A< n\.fL-(,�jf nna Mecum, City Clerk - 7 -