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HomeMy WebLinkAboutResolutions - RS-97-7 - 02/05/1997 - Bonds for HFK IncRESOLUTION NO. Rq-97 7 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MCHENRY, MCHENRY COUNTY, ILLINOIS, AUTHORIZING THE EXECUTION OF A MEMORANDUM OF AGREEMENT BETWEEN THE CITY OF MCHENRY, MCHENRY COUNTY, ILLINOIS AND THE 910 TOWER BUILDING PARTNERSHIP AND THE OZ LEASING PARTNERSHIP PROVIDING FOR AND AUTHORIZING THE ISSUANCE AND SALE BY THE CITY OF MCHENRY, MCHENRY COUNTY, ILLINOIS OF ITS REVENUE BONDS, UPON THE TERMS AND CONDITIONS SET FORTH IN SAID MEMORANDUM OF AGREEMENT, FOR THE PURPOSE OF FINANCING A PORTION OF THE COSTS OF THE ACQUISITION, CONSTRUCTION AND EQUIPPING OF A TOOL AND D I E MANUFACTURING FACILITY, AND AUTHORIZING CERTAIN RELATED MATTERS. WHEREAS, the 910 Tower Building Partnership and the OZ Leasing Partnership (the "Company") wishes to acquire, construct and equip a tool and die manufacturing facility (the "Project") and wishes to have the City of McHenry, McHenry County, Illinois (hereinafter called the "City" and/or "Issuer") issue its revenue bonds to finance a portion of the costs of the acquisition, construction and equipping of said Project to be located within the boundaries of the City in the McHenry Corporate Center; and WHEREAS, a Memorandum of Agreement has been presented to the City under the terms of which the City agrees, subject to the provisions of such Agreement, to issue its revenue bonds to finance a portion of the costs of the acquisition, construction and equipping of such Project, a copy of said Memorandum of Agreement being embodied in this Resolution; NOW, THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF MCHENRY, MCHENRY COUNTY, ILLINOIS, that a Memorandum of Agreement in substantially the following form, be and the same is hereby authorized to be entered into between the City and the Company and the Mayor is hereby authorized and directed to execute the original of said Memorandum of Agreement for and on behalf of the City, and the City Clerk is hereby authorized and directed to attest to and affix the corporate seal of the City to the same for and on behalf of the City, said Memorandum of Agreement being in the words and figures following, to -wit: MEMORANDUM OF AGREEMENT THIS MEMORANDUM OF AGREEMENT is between the City of McHenry, McHenry County, Illinois, Party of the First Part (hereinafter referred to as the "Issuer"), and the 910 Tower Building Partnership and the OZ Leasing Partnership, Party of the Second Part (hereinafter referred to as the "Company"). Section 1. Preliminary Statement. Among the matters of mutual inducement which have resulted in the execution of this Agreement are the following: (a) The Issuer is authorized and empowered by the provisions of the Industrial Project Revenue Bond Act of the State of Illinois (65 ILCS 5/11-74-1 et seq.) (the "Act"), to issue and sell revenue bonds for the purpose of making the proceeds therefrom available to the Company in order to finance a portion of the cost of the acquisition, construction and equipping of a tool and die manufacturing facility and hereinafter referred to as the "Project" and more specifically described in (b) below. (b) The Company currently owns and operates tool and die facilities located in Mundelein, Illinois. As a result of recent growth, it is necessary for the Company to acquire, construct and equip an additional tool and die manufacturing facility (the "Project"). Completion of the Project is intended to enhance economic conditions in the City by the creation of jobs in the City. The Project will consist of the construction of a 65,000 square foot building located in the McHenry Corporate Center and the acquisition of machinery and equipment. The principal users of the -2- Project will be HFK Corporation for tool building and Precision Metal Stamping for metal stamping and assembly operations. (c) The Company has informed the City that it expects to pay a portion of the costs of the Project which are incurred before the issuance of the City's revenue bonds with a temporary advance from the general funds of the Company. The City reasonably expects that the Company will be reimbursed with the proceeds of such revenue bonds for such expenditures. The maximum principal amount of debt expected to be issued for reimbursement of such expenditures is $5,500,000. (d) Subject to due compliance with all requirements of law and to the provisions of paragraph 4 hereof, the Issuer by virtue of such statutory authority as may now or hereafter be conferred by the Act and/or any amendment or amendments thereof, will issue and sell its revenue bonds in an amount now estimated to be $5,500,000, which is the estimated cost of the Project. Such amount may be amended, altered and changed by mutual agreement of the Issuer and the Company as the Project proceeds. (e) The Issuer finds that the Project will constitute an "industrial project" within the meaning of the Act and the acquisition, construction and equipping of the Project will promote and further the purposes of the Act. (f) It is intended that this Agreement and the related resolution are to constitute official action with respect to the entire Project and all of its costs which may now or hereafter qualify for financing by means of the issuance of bonds, the interest on which is exempt from federal income taxes. The Issuer hereby declares its intent to assist the Company pursuant to Treasury Regulations Section 1.150-2 to -3- reimburse any expenditures made prior to the issuance of the bonds with the proceeds of the bonds. (g) The obligation of the City shall be limited solely to the good faith effort to consummate the proceedings necessary to issue the bonds and to issue the bonds, and neither the Issuer, the City Council nor its officers or agents shall incur any liability whatsoever if for any reason the proposed issuance of the bonds is not consummated. Section 2. Undertakings on the Part of the Issuer. Subject to the conditions above stated, the Issuer agrees as follows: (a) That it will use its best efforts to authorize the issuance and sale of such revenue bonds, pursuant to the terms of the Act as then in force for the purpose of acquiring, constructing and equipping the Project. (b) That it will cooperate with the Company's endeavors to find a purchaser or purchasers for said revenue bonds, but that the City has no obligation hereunder to find said purchaser, and if purchase arrangements satisfactory to the Company can be made, it will adopt, or cause to be adopted, such proceedings and authorize the execution of such documents as may be necessary or advisable for the authorization, issuance and sale of said revenue bonds and the acquisition, construction and installation of the Project, as aforesaid, all as shall be authorized by law and mutually satisfactory to the Issuer and the Company. (c) That it will use its best efforts to finance a portion of the costs of the acquisition, construction and equipping of the Project, by the issuance and sale of economic development revenue bonds and making the proceeds therefrom available to the Company, such loan to be secured by a pledge and assignment of a financing -4- agreement, between the Company and Issuer, or such other obligations as may be agreed upon between the Issuer and the Company. Said economic development revenue bonds shall be payable by the Issuer solely from amounts received from the Company pursuant to said financing agreement. The economic development revenue bonds shall not in any respect be a general obligation of the Issuer nor shall they be payable in any manner from funds raised by taxation. The revenue bonds of the Issuer shall be limited obligations, payable solely out of the revenues and receipts derived from the Company. No holder of any such bonds shall have the right to compel any exercise of the taxing power of the Issuer or any political subdivision of the State of Illinois and such bonds shall not constitute an indebtedness or a loan of credit of the Issuer. (d) That it will take or cause to be taken such other acts and adopt such further proceedings as may be required to implement the aforesaid undertakings or as it may deem appropriate in pursuance thereof. (e) The closing of the bonds in regard to the project is subject to the receipt of the Issuer of sufficient volume cap allocation from the State of Illinois or otherwise. The Issuer agrees to apply for such volume cap allocation or to receive the same from other appropriate municipalities. Section 3. Undertakings on the Part of the Company. Subject to the conditions above stated, the Company agrees as follows: (a) That it will use all reasonable efforts to find one or more purchasers for the economic development revenue bonds. (b) That it will, to the extent deemed by it to be necessary or desirable, enter into a contract or contracts for the construction, acquisition and equipping of the W72 Project, and that at the time, if any, of the delivery of the said bonds by the Issuer, execute and assign such debt instruments all as shall be authorized by law and mutually satisfactory to the Issuer and the Company, or enter into such arrangements and/or undertakings with the Issuer as may be authorized or permitted by law and mutually agreeable to the Issuer and the Company. (c) That contemporaneously with the delivery of the said bonds by the Issuer, it will enter into appropriate instruments with the Issuer under the terms of which the Company will obligate itself to pay to the Issuer sums sufficient in the aggregate to pay the principal of and interest and redemption premium, if any, on the said bonds as and when the same shall become due and payable, such instruments to contain provisions required by law and such other provisions as shall be mutually acceptable to the Issuer and the Company. (d) That it will take such further action and adopt such further proceedings as may be required to implement the aforesaid undertakings or as it may deem appropriate in pursuance thereof. (e) That the Company will pay or cause to be paid from bond proceeds any fees due and payable to bond counsel and the Issuer and its attorneys incurred by any of them in connection with the proposed issuance of revenue bonds to finance the Project. Section 4. General Provisions. (a) All commitments of the Issuer under paragraph 2 hereof and of the Company under paragraph 3 hereof, are subject to the conditions that on or before December 31, 1997 (or such other date as shall be mutually satisfactory to the Issuer and the Company), the Issuer and the Company shall have agreed to mutually acceptable terms for the bonds and of the sale and delivery thereof, and mutually In acceptable terms and conditions of the contracts and instruments referred to in paragraph 3 and the proceedings referred to in paragraphs 2 and 3 hereof. (b) If the events set forth in (a) of this paragraph do not take place within the time set forth or any extension thereof and the said bonds are not sold within such time, the Company agrees that it will reimburse the Issuer for all reasonable and necessary direct out- of-pocket expenses which the Issuer may incur at its request, arising from the execution of this Agreement and the performance by the Issuer of its obligations hereunder, including bond counsel's fees and expenses and the Issuer's attorneys fees and expenses and this Agreement shall thereupon terminate. (c) If, for any reason, the bonds are not issued, the Issuer shall not in any way be liable for damages or otherwise to any party for such failure of consummation of the financing. -7- IN WITNESS WHEREOF, the parties hereto have entered into this Agreement by their officers thereunto duly authorized as of the 54\ day of �zU - �1 , 1997. ATTEST: C' y Clerk ATTEST: LM ATTEST: LIM CITY OF MCHENRY, MCHENRY COUNTY, ILLINOIS� , or 910 TOWER BUILDING PARTNERSHIP Its OZ LEASING PARTNERSHIP I:A Its In BE IT FURTHER RESOLVED BY THE CITY COUNCIL OF THE CITY OF MCHENRY, MCHENRY COUNTY, ILLINOIS that the Mayor and the City Clerk be and they are hereby authorized to take such further action as may be necessary to carry out the purposes and intent of said Memorandum of Agreement and to issue the City's revenue bonds upon the terms and conditions stated in said Memorandum of Agreement. BE IT FURTHER RESOLVED BY THE CITY COUNCIL OF THE CITY OF MCHENRY, MCHENRY COUNTY, ILLINOIS that the obligation of the City shall be limited solely to the good faith effort to consummate the proceedings necessary to issue the bonds, and neither the City Council nor its officers or agents shall incur any liability whatsoever if for any reason the proposed issuance of the bonds is not consummated. WE THIS RESOLUTION shall take effect and be in full force from and after its passage by the City Council and approval by the Mayor and all actions of the officers, agents and employees of the City that are in conformity with the purposes and intent of this Resolution, whether taken before or after the adoption hereof, are hereby ratified, confirmed and adopted. ATTEST: ity Clei , CITY OF MCHENRY, MCHENRY COUNTY, ILLINOIS Mayor -10-