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S4-95 r 302549f.1 April b.1995 ORDINANCE NO. S4-95 AN ORDINANCE authorizing the issuance of $3,800,000 principal amount Economic Development Revenue Bond (Elgin Corrugated Box Company 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 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; authorizing the lending of the proceeds of said Bond to Elgin Corrugated Box Company 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 construction, improvement and equipping of a manufacturing facility thereon; authorizing the execution and delivery of a Bond Issuance and Security Agreement securing said Bond; authorizing the execution and delivery of a Loan Agreement with Elgin Corrugated Box Company; confirming the sale of said Bond to the purchaser thereof pursuant to a Bond Purchase Agreement; 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, Elgin Corrugated Box Company, an Illinois corporation, proposes to acquire land within the boundaries of the Issuer and to construct, improve and equip a manufacturing facility thereon; and WHEREAS, it is now proposed that the Issuer issue its Economic Development Revenue Bond (Elgin Corrugated Box Company Project), Series 1995, as authorized by the Constitution and laws of the State of Illinois, and in compliance with the Enabling Ordinance in the principal amount of $3,800,000 (the "Bond") 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, improvement and equipping the Project; 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 Bond; and rWHEREAS, the Bond will be issued under and pursuant to a Bond Issuance and Security Agreement dated as of April 1, 1995 (the "Bond Agreement"), by and between the Issuer and American National Bank and Trust Company of Chicago, a national banking association, as owner and holder of the Bond (the "Bondholder") and as Fiscal Agent (the "Fiscal Agent"); and WHEREAS, it is proposed that the Issuer will make a loan of the proceeds of the Bond to the Borrower pursuant to a Loan Agreement dated as of April 1, 1995 (the "Loan Agreement"), by and between the Issuer and the Borrower; and WHEREAS, there have been prepared and presented to this meeting the following documents: 1. The form of the Bond Agreement, including the form of the Bond; 2. The form of the Loan Agreement, including the form of the promissory note of the Borrower (the "Promissory Note"), and the form of the Issuer's endorsement of said promissory note (the "Endorsement of the Promissory Note"), which are attached to the Loan Agreement as exhibits; 3. The form of the Mortgage and Security Agreement dated as of April 1, 1995 (the "Mortgage"), to be executed by the Borrower, granting to the Bondholder a mortgage on and security interest in the Project; • 4. The form of the Assignment of Rents and Leases dated as of April 1, 1995 (the "Assignment"), from the Borrower to the Bondholder; 5. The form of Security Agreement dated as of April 1, 1995 (the "Security Agreement"), from the Borrower to the Bondholder; 6. The form of Environmental Indemnity Agreement dated as of April 1, 1995 (the "Environmental Indemnity Agreement"), from the Borrower in favor of the Bondholder and the Fiscal Agent; 7. The form of the Bond Purchase Agreement dated as of April 1, 1995 (the "Bond Purchase Agreement"), to be entered into by and among the Issuer, the Borrower and American National Bank and Trust Company of Chicago (the "Purchaser"), pursuant to which the Issuer agrees to sell the Bond to the Purchaser and the Purchaser agrees to purchase the same from the Issuer; and 8. The form of the Tax Regulatory Agreement dated as of April 1, 1995 (the "Tax Agreement"), to be entered into by and among the Borrower, the Issuer and the Fiscal Agent; NOW, THEREFORE, Be and It is Hereby Ordained by the City Council of the City of Elgin, Illinois, as follows: r - 2 - Section 1,. Findings. It is hereby found, determined and declared by the City Council of the Issuer that: (a) the Project will (a) provide increased employment opportunities and relieve conditions of unemployment and underemployment within the Issuer, (b) encourage the increase of industry and commerce within the Issuer, and (c) 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 Bond are determined to serve a valid public purpose in accordance with the.Constitution and laws of the State of Illinois and are approved; - (c) the Project is an "Economic Development Project" within the meaning of the Enabling Ordinance and the financing thereof through the issuance of the Bond 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 Bond to finance the same, the execution and delivery of the Bond, the Bond Agreement, the Loan Agreement, the Endorsement of the Promissory Note, the Bond Purchase 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 Bond, the Bond Agreement, the Loan Agreement, the Endorsement of the Promissory Note, the Bond Purchase 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 Bond in the principal amount of $3,800,000, initially dated the date of the original issuance thereof, be issued by the Issuer upon the terms set forth in the Bond Agreement, under the provisions of which the Issuer's interest in the Loan Agreement, the Promissory Note, 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 Bond; (f) the principal amount of the Bond plus interest which will be earned on the undisbursed proceeds thereof during the construction period as estimated by the Issuer do not exceed the estimated cost of the acquisition, construction, improvement and equipping of the Project, interest which it is estimated will accrue on the Bond during the construction period and that portion of the costs of the issuance of the Bond which may be paid with proceeds of the Bond; (g) the payments required to be made by the Borrower under the Promissory Note and the Loan Agreement are in such amounts as will be sufficient to provide for prompt payment of all of the principal of and premium, if any, and interest on the Bond when due; - 3 - (h) as provided in the Bond Agreement, the Bond shall not be or become an indebtedness or loan of credit of the Issuer or the State of Illinois within the purview of any constitutional or statutory provision; the Bond and the interest and premium, if any, payable thereon shall be limited obligations of the Issuer, payable solely and only from Revenues (as defined in the Bond Agreement), including revenues and receipts derived from and pursuant to the Loan Agreement, the Promissory Note. the Mortgage, the Assignment, the Security Agreement and the Environmental Indemnity Agreement; and it shall be stated on the face of the Bond that it does not constitute such an indebtedness or loan of credit of the Issuer but is payable solely from such Revenues; (i) 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 Bond Agreement, the Loan Agreement or the Bond Purchase Agreement, or the issuance and sale of the Bond; and (j) 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. Terms of Bond. For the purpose of financing the acquisition, rconstruction, improvement and equipping of the Project, there is hereby authorized to be issued the Bond in the principal amount of $3,800,000, which bond shall be designated "Economic Development Revenue Bond (Elgin Corrugated Box Company Project), Series 1995"; shall bear interest from its date; shall be issuable only as a single registered bond without coupons in the denomination of $3,800,000, or such lesser amount determined in accordance with Section 14 hereof; and shall be initially dated the date of delivery thereof when originally issued. Except to the extent that the provisions of the Bond Agreement with respect to redemption prior to maturity may become applicable thereto, and except as may otherwise by approved by the Mayor of the Issuer whose approval shall be conclusively evidenced by his or her execution of the Bond Agreement, the Bond shall mature as to principal in 239 consecutive principal installments, each in the amount not exceeding $15,834 and payable commencing May 31, 1995, and on the last day of each month thereafter to and including the last day of March, 2015, and a final installment due April 30, 2015, in an amount equal to the entire principal thereof then unpaid. Except as otherwise provided in this Ordinance or in the Band Agreement, the Bond shall bear interest as provided in this paragraph. The Bond shall bear interest at a variable rate, which rate shall be equal to seventy-seven and two-tenths percent (77.2%) of the Base Rate (as hereinafter defined) from time to time in effect. Interest on the Bond shall be computed as if a calendar year consisted of three hundred sixty (360) days and charged on a daily basis, and shall be payable on the last day of the month in which the Bond is dated, and on the last day of each calendar month thereafter until the principal sum of such Bond is paid. The Bond shall bear rinterest at three percent (3%) in excess of the rate from time to time payable on principal on any - 4 - overdue principal and premium and (to the extent that such interest shall be legally enforceable) on any overdue installment of interest until paid. During any period that American National Bank and Trust Company of Chicago or any other "bank" as defined in Section 581 of the Code is the registered owner of the Bond (as hereafter defined), if the Tax Rate (as hereafter defined) is greater or less than thirty-five percent (35%), the rate of interest on the Bond shall be the rate of interest equal to the Base Rate multiplied by (a) the difference between one hundred percent (100%) and the then applicable Tax Rate and (b) • 1.188, such interest rate to fluctuate accordingly with any changes from time to time in the Tax Rate. The term "Tax Rate" as used herein is the tax rate at which a bank would be taxed for federal income tax purposes pursuant to applicable provisions of the Code or any future United States internal revenue or similar law if its taxable income were in the highest tax bracket specified by the Code or such law. The Bond shall bear interest from and after the date of a Determination of Taxability (as defined in the Bond Agreement) at a variable rate, which rate shall be equal to the Base Rate from time to time in effect. The "Base Rate" shall be the interest rate from time to time announced by American National Bank and Trust Company of Chicago, Chicago, Illinois, as its base rate or equivalent rate of interest, which rate of interest at any time may not be the lowest rate charged by said bank. A change in the Base Rate shall be effective on the date of the announcement thereof. The Bond shall be subject to redemption prior to maturity as provided in Article III of the Bond Agreement. The Bond shall be a limited obligation of the Issuer as more fully provided in Section 1(h) of this Ordinance. As provided in Section 1(h) of this Ordinance, it shall be plainly stated on the face of the Bond that it is a limited obligation of the Issuer as more fully provided in said Section 1(h) hereof. Section 3. Execution of Bond. The Bond shall be executed on behalf of the Issuer by the manual or facsimile signature of its Mayor and attested by the manual or facsimile signature of its City Clerk provided that one of such signatures on the Bond shall be manual, shall have the seal of the Issuer affixed thereto, and shall be authenticated by the certificate of the Fiscal Agent. Section 4. Form of Bond. The Bond and the Fiscal Agent's certificate of authentication to appear on the Bond shall be in substantially the forms set forth in the Bond Agreement, with necessary or appropriate variations, omissions and insertions, as permitted or required by the Bond Agreement. Section 5. Compliance with Laws and Ordinances. The Bond shall be issued in compliance with and under authority of the Constitution and laws of the State of Illinois and the provisions of the Enabling Ordinance, this Ordinance and the Bond Agreement. • - 5 - Section 6. Approval of Bond Agreement, Loan Agreement, Promissory Note and Tax Agreement. The form, terms and provisions of the proposed Bond Agreement, Loan Agreement, Promissory Note and Tax Agreement are in all respects approved, and the Mayor and the City Clerk of the Issuer are hereby authorized, empowered and directed to execute, acknowledge and deliver the Bond Agreement, the Loan Agreement, the Endorsement of the Promissory Note and the Tax Agreement in the name and on behalf of the Issuer, and thereupon to cause the Bond Agreement to be executed, acknowledged and delivered by the Bondholder, and the Bond Agreement shall constitute an assignment by the Issuer of the Security for the Bond, as defined therein. The Bond Agreement, the Loan Agreement, the Endorsement of the Promissory Note and the Tax Agreement as executed and delivered, shall be in substantially the form now before this meeting and hereby approved, or with such changes therein as shall be approved by the officers of the Issuer executing the same, their execution thereof to constitute conclusive evidence of the Issuer's approval of any and all changes or revisions therein from the form of such documents now before this meeting. From and after the execution and delivery of the Bond Agreement, the Loan Agreement, the Endorsement of the Promissory Note and the Tax Agreement, the officers, agents and employees of the Issuer are 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 such documents as executed. Section 7. Approval of Mortgage, Assignment, Security Agreement and Environmental Indemnity Agreement. The form, terms and provisions of the proposed Mortgage, Assignment, Security Agreement and Environmental Indemnity Agreement are in all respects hereby approved, with such changes therein as shall be approved by the parties executing such documents. Section 8. Approval of Bond Purchase Agreement. The sale of the Bond to the Purchaser pursuant to the Bond Purchase Agreement is hereby approved and confirmed, and the Mayor and City Clerk of the Issuer are hereby authorized, empowered and directed to execute, acknowledge and deliver the Bond Purchase Agreement in the name and on behalf of the Issuer. The Bond Purchase Agreement, as executed and delivered, shall be in substantially the form now before this meeting and hereby approved, or with such changes therein as shall be approved by the officers of the Issuer executing the same, their execution thereof to constitute conclusive evidence of the Issuer's approval of any and all changes or revisions therein from the form of Bond Purchase Agreement now before this meeting. From and after the execution and delivery of the Bond Purchase Agreement, the officers, agents and employees of the Issuer are 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 Bond Purchase Agreement as executed. Section 9. Delegation. The Mayor and City Clerk of the Issuer, for and on behalf of the Issuer, are hereby authorized, empowered and directed to do any and all things necessary to effect the execution and delivery of the Bond Agreement, the Loan Agreement, the Endorsement of the Promissory Note, the Tax Agreement and the Bond Purchase Agreement, the performance of all obligations of the Issuer under and pursuant to the Bond Agreement, the Loan Agreement, the Endorsement of the Promissory Note, the Tax Agreement and the Bond Purchase Agreement, the rill execution and delivery of the Bond, and the performance of all other acts of whatever nature necessary to effect and carry out the authority conferred by this Ordinance and by the Bond - 6 - rAgreement, the Loan Agreement, the Endorsement of the Promissory Note, the Tax Agreement and the Bond Purchase Agreement. The Mayor and City Clerk of the Issuer are further authorized, empowered and directed, for and on behalf of the Issuer, to execute all papers, documents, certificates and other instruments that may be required in order to carry out the authority conferred by this Ordinance and by the Bond Agreement, the Loan Agreement, the Endorsement of the Promissory Note, the Tax Agreement and the Bond Purchase Agreement, or to evidence the said authority and its exercise. Section 10. Proceedings of the Issuer. The Mayor, City Clerk and other officers of the Issuer are hereby authorized, empowered and directed to prepare and furnish to the Purchaser certified copies of all proceedings and records of the Issuer relating to the Bond, and such other affidavits and certificates as may be required to show the facts relating to the legality of the Bond as such facts appear from the books and records in the officers' custody and control or as otherwise known to them. Section 11. Section 144(a)(4) Election. The Issuer hereby elects to have the provisions as to the $10,000,000 limit in Section 144(a)(4) of the Code applied to the Bond, and the Mayor and City Clerk of the Issuer are hereby authorized, empowered and directed to take any and all further action which may be required to implement and effectuate such election. Adoption of this Ordinance shall constitute the notation in the books or records of the Issuer required by Section 1.103-10(b)(2)(vi) of the Income Tax Regulations under the Code. Section 12. Filing Form 8038. The Mayor and City Clerk of the Issuer are hereby authorized, empowered and directed to take any and all action which may be required to comply with the information reporting requirements of Section 149(e) of the Code, including, without limitation, the execution and filing of IRS Form 8038. Section 13. Expiration. This Ordinance and each of the provisions hereof and the approvals made and the powers and authorities granted hereunder shall expire and become null and void in the event that the Bond is not originally issued on or prior to March 1, 1996. Section 14. Severability. The provisions of this Ordinance are hereby declared to be severable 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 and provisions hereof. Section 15. Repealer. 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 16. This Ordinance shall be in full force and effect from and after its passage and approval. - 7 - PASSED this 12th day of April, 1995. APPROVED this day of April, 1995. VOTE: AYES 7 NAYS 0 ABSENT 0 Mayor Attest: G Gc h — City Clerk - 8 -