HomeMy WebLinkAboutResolutions - RS-96-13 - 07/31/1996 - Bonds for Chroms CorpRESOLUTION NO. RS-96-13
A BOND RESOLUTION AUTHORIZING THE ISSUANCE AND
SALE OF INDUSTRIAL PROJECT REVENUE BONDS,
SERIES 1996 (CHROMA CORPORATION PROJECT) IN
THE AGGREGATE PRINCIPAL AMOUNT OF $1,300,000
TO FINANCE AN INDUSTRIAL PROJECT FOR CHROMA
CORPORATION; AUTHORIZING THE EXECUTION AND
DELIVERY BY THE CITY OF MCHENRY, ILLINOIS OF A
LOAN AGREEMENT, ASSIGNMENT AND SECURITY
AGREEMENT, BOND PURCHASE AGREEMENT, ARBITRAGE
REGULATION AGREEMENT AND CLOSING DOCUMENTS IN
CONNECTION THEREWITH; CONFIRMING THE SALE OF
SUCH BONDS TO THE PURCHASER THEREOF; AND
RELATED MATTERS.
WHEREAS, the City of McHenry, Illinois, a
municipality existing under the laws of the State of Illinois (the
"Issuer") is authorized and empowered by the provisions of the
Industrial Project Revenue Bond Act, 65 ILCS 5/11-74-1 to 5/11-74-
14, inclusive, as from time to time supplemented and amended (the
"Act") to issue its revenue bonds to finance the costs of any
industrial project to the end that the Issuer may be able to
relieve conditions of unemployment, to maintain existing levels of
employment and to encourage the increase of industry and commerce
within the City of McHenry, Illinois, thereby reducing the evils
attendant upon unemployment and provide for the public safety,
benefit and welfare of the residents of the City of McHenry; and
WHEREAS, as a result of negotiations between the Issuer
and Chroma Corporation, a Delaware corporation (the "Borrower"),
contracts have been or will be entered into by the Borrower for the
acquisition of a parcel of land located at 1260 Belden Street,
McHenry, Illinois and the construction and equipping of a
manufacturing facility thereon with related uses (the "Project") to
be used by the Borrower or its affiliates and lessees or
sublessees, and which Project will be of the character and will
accomplish the purposes provided by the Act, and the Issuer is
willing to issue its revenue bonds to finance a portion of the cost
of acquisition, construction and equipping of the Project, all as
set forth in the details and provisions of the Loan Agreement
hereinafter identified (the "Agreement"); and
WHEREAS, it is estimated that the costs of the Project,
including costs relating to the preparation and issuance of the
revenue bonds, will be not less than $1,300,000; and
WHEREAS, the Issuer proposes to sell the revenue bonds
(the "Bonds") hereinafter authorized and designated "Industrial
Project Revenue Bonds, Series 1996 (Chroma Corporation Project)"
upon a negotiated basis to American National Bank and Trust Company
of Chicago located in Chicago, Illinois; and
WHEREAS, pursuant to the provisions of Section 149(a) of
the Internal Revenue Code of 1986, as amended, a public hearing on
the proposed plan of financing of the Project was held by the
Issuer prior to the adoption of this Resolution, pursuant to notice
published by the Issuer in the Northwest Herald, a newspaper of
general circulation in the City of McHenry, Illinois, on July 15,
1996;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF MCHENRY, ILLINOIS, MCHENRY COUNTY, ILLINOIS, AS FOLLOWS:
DEFINITIONS
Section 1. The following words and terms as used in this
Bond Resolution shall have the following meanings unless the
context or use indicates another or different meaning or intent:
"Act" means 65 ILCS 5/11-74-1 et seq. (1994 State Bar
Edition), as supplemented and amended.
"Agreement" means the Loan Agreement dated as of
August 1, 1996 by and between the Issuer and the Borrower, as from
time to time amended and supplemented.
"Arbitrage Regulation Agreement" means the Arbitrage
Regulation Agreement dated as of August 1, 1996 by and among the
Issuer, the Borrower and the Bondholder, as from time to time
amended and supplemented.
"Assignment" means the Assignment and Security Agreement
dated as of August 1, 1996, from the Issuer to the Bondholder.
"Assignment of Rents" means the Assignment of Rents and
Leases dated as of August 1, 1996 from the Borrower to the Bank.
"Authorized Borrower Representative" means the person or
persons who at the time shall have been designated as such pursuant
to the provisions of the Agreement.
"Bank" means American National Bank and Trust Company of
Chicago, or the successor holder of the Bonds.
"Bonds" means the Bonds authorized to be issued here -
under.
"Bond Fund" means the Bond Fund created in Section 6
hereof.
"Bond Interest Rate" shall mean the interest borne by the
Bonds in accordance with their terms at the time of reference.
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"Bond Purchase Agreement" means the Bond Purchase
Agreement dated as of August 1, 1996 among the Issuer, the Borrower
and the Bank.
"Bond Resolution" means this Bond Resolution.
"Bondowner", "Bondholder" or "owner of the Bond" means
any owner from time to time of the Bonds.
"Borrower" means Chroma Corporation, a Delaware
corporation, and its successors and assigns.
"Code" means the Internal Revenue Code of 1986, as
amended and supplemented.
"Cost of the Project" means those costs more specifically
described in the Agreement.
"Default" means an event or condition the occurrence of
which would, with the lapse of time or the giving of notice or
both, become an Event of Default.
"Escrow Agent" means Guaranty National Title Company.
"Escrow Agreement" means the Escrow Agreement dated as
of August 1, 1996 among the Bondholder, the Borrower, and the
Escrow Agent.
"Escrow Fund" means the Escrow Fund created pursuant to
the Escrow Agreement.
"Event of Default" means any of those events specified in
Section 10 hereof.
The words "hereof", "herein", "hereunder" and other words
of similar import refer to this Bond Resolution as a whole.
"Issuer" means the City of McHenry, Illinois, a municipal
corporation duly created and validly existing under the laws of the
State of Illinois, and any successor body to the duties or
functions of the Issuer.
"Mortgage" means the Mortgage and Security Agreement
dated as of August 1, 1996 from the Borrower to the Bondholder.
"Person" means any individual, firm, association, trust,
partnership, corporation or public body.
"Project" means the facilities described in Exhibit A
to the Agreement.
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"Reset Date" means August 1, 2006 and any date thereafter
upon which the Bonds begin to bear interest at a different rate for
the succeeding Reset Period.
"Reset Period" means the periods established pursuant to
the terms of the Bonds.
"Reset Rate" means the rate of interest borne by the
Bonds as determined in accordance with the terms thereof.
AUTHORIZATION OF THE PROJECT
Section 2. The Project, as described in the preamble
hereto shall be and is hereby approved and authorized to be
financed through the issuance of the Bonds as described herein.
The action of the Issuer in publishing notice of said public
hearing as required by Section 149(a) of the Code is in all
respects hereby ratified, confirmed and approved, and the holding
of said public hearing by the Issuer is hereby acknowledged and
approved. The estimated Cost of the Project is not less than
$1,300,000. It is hereby found and declared that the financing of
the Project and the use thereof by the Borrower as hereinafter
provided is necessary to accomplish the public purposes described
in this Section 2.
AUTHORIZATION AND ISSUE OF BONDS; PREPAYMENT OF BONDS
Section 3. (a) Authorization and Issue. For the purpose
of financing the cost of acquisition, construction and equipping
there shall be and there is hereby authorized to be issued by the
Issuer its Industrial Project Revenue Bonds, Series 1996 (Chroma
Corporation Project), in the aggregate principal sum of $1,300,000,
to be dated the date of issuance thereof, and payable to the order
of the Bank, and substantially in the form contained in Section 4
hereof.
The form, terms and provisions of the Bonds, in the form
contained in Section 4 hereof, are approved, with such changes
therein as are not inconsistent herewith. The Bonds shall be
prepared in typewritten form. The Mayor is hereby authorized and
directed to execute the Bonds, and the City Clerk is hereby
authorized to and directed to attest the Bonds, and each is
authorized to deliver the Bonds. The Bonds shall be signed by the
manual or facsimile signature of the Mayor and attested by the
manual or facsimile signature of the City Clerk of the Issuer. The
seal of the Issuer is hereby authorized and directed to be affixed
to the Bonds.
The Bonds, together with interest thereon, shall be a
special, limited obligation of the Issuer secured by the Assignment
and payable solely from the revenues and receipts derived from the
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Agreement (except to the extent paid out of moneys attributable to
the Bond proceeds or the income from the temporary investment
thereof) and shall be a valid claim of the owner thereof only
against the Escrow Fund and the Bond Fund and other moneys held by
the Bank and the revenues and receipts derived from the Note (as
defined in the Agreement), the Agreement, the Mortgage and the
Assignment of Rents, which revenues and receipts shall be used for
no other purpose than to pay the principal installments of,
premium, if any, and interest and other expenses due and owing, if
any, on the Bonds, except as may be otherwise expressly authorized
in this Bond Resolution and in such documents. The Bonds and the
obligation to pay interest thereon does not now and shall never
constitute an indebtedness, an obligation 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,
if any, within the purview of any constitutional limitation or
provision, but shall be secured by the Assignment and payable
solely from the revenues and receipts from the Agreement. No owner
of the Bond shall have the right to compel any exercise of the
taxing power, if any, of the Issuer, the State of Illinois or any
political subdivision thereof to pay the principal of, premium, if
any, or interest on the Bonds.
Pursuant to the Bond Purchase Agreement, the Bonds shall
be sold to the Bank at a private sale at a purchase price equal to
1000 of the principal amount of the Bonds.
The Bonds shall be transferable only as a whole as
provided herein. Upon surrender for transfer of the Bonds at the
principal office of the Bank, duly endorsed for transfer or
accompanied by an assignment duly executed by the registered owner
or his attorney duly authorized in writing, the Issuer shall
execute and deliver in the name of the transferee substitute fully
registered Bonds of the same series, in the denomination of the
unpaid principal amount thereof, with the same maturity and
interest rate, dated the first day of the calendar month (to which
interest has been paid) next preceding the date of its issuance, or
if issued on the first day of a calendar month (to which interest
has been paid), as of such date.
The owner of the Bonds may give written notice to the
Borrower of any proposed mandatory purchase pursuant to Section
3(b)(5) hereof at least thirty (30) days prior to any Reset Date in
which event the Borrower shall have the option to find an alternate
purchaser of the Bonds at the same price, on the same date and upon
substantially the same terms and conditions of purchase as the
transfer proposed by the owner of the Bonds. If the Borrower has
found such an alternate purchaser, the Bonds shall be transferred
to the alternate purchaser on the date designated by the Bondholder
pursuant to Section 3 (b) (5) hereof at the price of par plus accrued
interest to the date of transfer.
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The Issuer shall cause books for the registration and for
the transfer of the Bonds as provided in this Resolution to be kept
by the Bank which is hereby constituted and appointed the Bond
Registrar of the Issuer. The Bank, as Bond Registrar, shall keep
and maintain, on behalf of the Issuer, registration books
indicating the name and address of the owner from time to time of
the Bonds. The Bonds shall never be registered in the name of
bearer. The Bank shall not be required to transfer the Bonds
during the period of ten (10) days next preceding any interest
payment date of the Bonds nor to transfer the Bonds after the
mailing of notice calling the Bonds (or a portion thereof) for
prior redemption has been given as herein provided. The person in
whose name the Bonds shall be registered shall be deemed and
regarded as the absolute owner thereof for all purposes, and
payment of or on account of the principal installments of, premium,
if any, or interest on the Bonds shall be made only to or upon the
written order of the registered owner thereof or his legal
representative, but such registration may be changed as hereinabove
provided. All such payments shall be valid and effectual to
satisfy and discharge the liability upon the Bonds to the extent of
the sum or sums so paid. In each case the Issuer shall require the
payment by the owner of the Bonds requesting transfer of any tax or
other government charge required to be paid with respect to such
transfer.
In the event any Bond is mutilated, lost, stolen or
destroyed, the Issuer may execute a substitute Bond of like date,
tenor and maturity as the Bond mutilated, lost, stolen or
destroyed; provided, that, in the case the Bond is mutilated, the
mutilated Bond shall first be surrendered to the Issuer, and in the
case the Bond is lost, stolen or destroyed, there shall be first
furnished to the Issuer evidence of such loss, theft or destruction
satisfactory to the Issuer, together with indemnity from the
Bondholder satisfactory to the Issuer. In the event all of the
principal installments of any Bond shall have matured, instead of
issuing a duplicate Bond the Issuer may pay the same without
surrender thereof. The Issuer may charge the owner of the Bond
with reasonable fees and expenses in this connection.
(b) Prepayment of Bond. (1) The Bonds are subject to
prepayment in part in the event any moneys shall be deposited in
the Bond Fund (relating to moneys remaining after construction of
the Project). If called for prepayment as a result of such events,
the Bonds shall be subject to prepayment by the Issuer in part at
a prepayment price of 100% of the principal amount thereof being
prepaid plus accrued interest to the prepayment date.
( 2 ) The Bonds are subject to prepayment at the option of
the Borrower at any time, in whole or in part, at any time provided
(A) at least thirty (30) days, notice is given to the Bondholder of
such prepayment, and (B) if such repayment is made at any time
prior to August 1, 1999, a prepayment premium shall be paid to the
Bondholder as follows:
DATE OF PREPAYMENT
Prior to August 1,
On or after August
prior to August
On or after August
prior to August
PREPAYMENT PREMIUM
1997
30
of principal
amount prepaid
1,
1997 and
2%
of principal
amount prepaid
1,
1998
1,
1998 and
1%
of principal
amount prepaid
1,
1999
(3) The Bonds are also subject to prepayment, in whole
or in part, at a prepayment price of 100% of the principal amount
thereof being prepaid, plus accrued interest to the prepayment
date, from the proceeds of insurance or condemnation with respect
to the Project, but only upon the conditions and pursuant to
Sections 5.20 and 5.21 of the Agreement.
(4) The Bonds are subject to mandatory prepayment upon
an Event of Default (as such term is defined in the Agreement)
pursuant to Section 7.2 of the Agreement.
(5) The Bonds are subject to mandatory prepayment in
whole at the option of the Bondholder within thirty (30) days of
August 1, 2006 and each Reset Date thereafter. In lieu of
mandatory prepayment, the Borrower may provide an alternate
purchaser as provided in Section 3(a) hereof.
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Section 4.
following form:
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BOND FORM
The Bonds shall be in substantially the
THIS BOND MAY BE TRANSFERRED
ONLY AS A WHOLE
UNITED STATES OF AMERICA
STATE OF ILLINOIS
COUNTY OF MCHENRY
CITY OF MCHENRY
INDUSTRIAL PROJECT REVENUE BONDS, SERIES 1996
(CHROMA CORPORATION PROJECT)
$1,300,000
The City of McHenry, Illinois, a municipal corporation of
the State of Illinois (the "Issuer"), for value received, promises
to pay, solely and only from the source and as hereinafter
provided, to the order of American National Bank and Trust Company
of Chicago (the "Bank"), the principal sum of:
One Million Three Hundred Thousand and no/100 Dollars
($1,300,000)
in equal semi-annual installments of principal and interst on
August 1, 1997 and on each February 1 and August 1 thereafter to
and including August 1, 2021 (each a "Payment Date") with interest
calculated at the rate of the Bond Interest Rate (as such term is
hereinafter defined) and the principal amortized over a period of
twenty-five (25) years, all as provided on Schedule I attached
hereto and made a part of this Bond (the "Bond Payment Schedule");
provided each such day is a Business Day (as defined, in the
hereinafter defined Agreement) or on the immediately succeeding
Business Day and further provided that there shall be one payment
of interest only on Febrary 1, 1997 in the amount of interest at
the Bond Interest Rate accrued from the date of this Bond through
the last day of January, 1997. At least fifteen (15) days prior to
the commencement of each Reset Period (as such term is hereinafter
defined), the Bondholder shall provide the Borrower and the Issuer
with a revised Bond Payment Schedule amortizing the unpaid
principal balance of this Bond over the period from the date such
Reset Period commences to August 1, 2021 at the then applicable
Bond Interest Rate.
M-4a
"Bond Interest Rate" shall mean the rate of 6.6870-o per annum
for the period commencing on the date of this Bond to and including
July 31, 2006 and for each Reset Period the rate per annum of 77.201
of the sum of (i) the then applicable rate, determined on the date
twenty (20) days prior to the commencement date of the applicable
Reset Period, for United States Treasury Securities of a maturity
comparable to the length of the applicable Reset Period and (ii)
2%; provided that from and after a Determination of Taxability (as
defined in the Agreement) , the Bond Interest Rate shall be computed
by dividing the Bond Interest Rate which would otherwise then be
applicable by .772 retroactive to the date interest on the Bonds
ceased to be exempt from federal income taxation by reason of such
Determination of Taxability (the "Taxable Rate").
"Reset Period" shall mean one-year incremental periods of time
which are equal to or greater than one year but not greater than
five years as determined by the Borrower for the periods commencing
August 1, 2006 (the "Initial Reset Date") and at the end of each
Reset Period thereafter and with written notice in the form as
provided in Schedule II attached to the Note dated the date hereof
of the Borrower given by the Borrower to the Issuer and the
Bondholder at least forty-five days but not more than sixty days
prior to (i) the Initial Reset Date and (ii) after the Initial
Reset Date the end of the Reset Period then in effect.
This Bond shall bear interest on any overdue installment
of principal and (to the extent that the payment of such interest
shall be legally enforceable) on any overdue installment of
interest at a rate equal to the Base Rate (as defined in the
Agreement), plus 3% per annum. Both principal hereof and interest
hereon are payable in immediately available funds at or before
1 P.M. Chicago time at the principal office of the Bank, in
Chicago, Illinois.
This Bond is issued in the principal sum of $1,300,000
pursuant to the hereinafter described Act and to a Bond Resolution
duly adopted by the governing body of the Issuer (the "Bond
Resolution") for the purpose of providing funds to finance the cost
of acquiring a parcel of land located at 1260 Belden Street in
McHenry, Illinois and the constructing and the equipping of an
manufacturing facility thereon (the "Project") and paying expenses
incidental thereto. The proceeds of the Bond will be loaned by the
Issuer to Chroma Corporation, a Delaware corporation (the
"Borrower"), for payment of a portion of the costs of acquisition,
construction and equipping of the Project, under the terms of a
Loan Agreement dated as of August 1, 1996 (the "Agreement").
This Bond is secured by a pledge and assignment of
revenues and receipts derived by the Issuer pursuant to the
Agreement, a mortgage on the Project and an assignment of rents and
leases on the Project, as more fully described in the Bond
Resolution. Reference is made to the Bond Resolution for a
description of the provisions, among others, with respect to the
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nature and extent of the security, the rights, duties and
obligations of the Issuer, the rights of the owner of the Bond, and
the terms on which the Bond is or may be issued and to all the
provisions of which the owner hereof by the acceptance of this Bond
assents.
This Bond may be declared due prior to its express
maturity date, voluntary prepayments may be made thereon by the
Borrower on behalf of the Issuer, and the owner hereof may cause
the early prepayment hereof, all in the events, on the terms and in
the manner and amounts as provided in the Bond Resolution.
This Bond is issued pursuant to and in full compliance
with the laws of the State of Illinois, particularly 65 ILCS 5/11-
74-1 et seq. (1994 State Bar Edition), as supplemented and amended
(the "Act"). This Bond and the obligation to pay interest hereon
are special, limited obligations of the Issuer, secured by an
assignment to the Bank of the Agreement (except for certain rights
retained by the Issuer), a note of the Borrower delivered pursuant
to the Agreement, a mortgage, an assignment of rents and leases,
and payable solely out of the revenues and receipts derived by the
Issuer from the Agreement and otherwise as provided in the Bond
Resolution and the Agreement. This Bond and the obligation to pay
interest hereon shall not be deemed to constitute an indebtedness
or an obligation of the Issuer, the State of Illinois or any
political subdivision thereof, within the purview of any
constitutional limitation or provision. No owner of this Bond
shall have the right to compel the taxing powers, if any, of the
Issuer, the State of Illinois or any political subdivision thereof
to pay any principal installments of, premium, if any, or interest
on this Bond. Pursuant to the provisions of the Agreement,
payments sufficient for the prompt payment when due of the
principal installments of and interest on this Bond are to be paid
by the Borrower to the Bank for the account of the Issuer and
deposited in a special account created by the Issuer and designated
"City of McHenry, Illinois Industrial Project Revenue Bond Fund
(Chroma Corporation Project), Series 199611, and all revenues and
receipts under the Agreement have been duly pledged and assigned to
the Bank to secure payment of such principal installments and
interest.
This Bond is non -transferable by the Bank, except as a
whole and as provided in the Bond Resolution.
Modifications, alterations or amendments of the
provisions of the Bond Resolution may be made only to the extent
and in the circumstances permitted by the Bond Resolution.
This Bond is issued with the intent that the laws of the
State of Illinois will govern its construction.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all
acts, conditions and things required by the Constitution and laws
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of Illinois happen, exist and be performed precedent to and in the
issuance of this Bond have happened, exist and have been performed
in due time, form and manner as required by law.
IN WITNESS WHEREOF, the City of McHenry, Illinois has
caused this Bond to be signed on its behalf by its Mayor and
attested by its City Clerk and the official seal of said Issuer to
be affixed hereto, all as of August 7, 1996.
CITY OF MCHENRY, ILLINOIS
By
ATTEST; Mayor
City Clerk
(SEAL)
APPROVAL OF AGREEMENT, NOTE, ASSIGNMENT,
BOND PURCHASE AGREEMENT, MORTGAGE AND ESCROW AGREEMENT;
AUTHORIZATION OF AGREEMENT, ASSIGNMENT, ARBITRAGE
REGULATION AGREEMENT AND BOND PURCHASE AGREEMENT
Section 5. The forms, terms, and provisions of the
Agreement, the Note, the Assignment, the Bond Purchase Agreement,
the Escrow Agreement, the Arbitrage Regulation Agreement, the
Mortgage and the Assignment of Rents are approved and the Issuer
shall enter into the Agreement, the Assignment, the Arbitrage
Regulation Agreement and the Bond Purchase Agreement in the forms
of each of such documents presented at this meeting, with such
changes therein as shall be approved by the Mayor, as evidenced by
his execution thereof. The Mayor is hereby authorized and directed
to execute and deliver the Agreement, the Assignment, the Arbitrage
Regulation Agreement and the Bond Purchase Agreement, and the City
Clerk is hereby authorized and directed to affix the seal to and to
attest the Agreement, the Assignment, the Arbitrage Regulation
Agreement and the Bond Purchase Agreement.
REVENUES; BOND FUND
Section 6. There is hereby created by the Issuer and
ordered established with the Bank, as depositary, a special fund to
be designated "City of McHenry, Illinois Industrial Project Revenue
Bond Fund, Series 1996 (Chroma Corporation Project)" (the "Bond
Fund"), which shall be used to pay the principal installments of,
premium, if any, and the interest on the Bonds.
There shall be deposited into the Bond Fund, as and when
received: (a) all prepayments specified in Articles IV, VII and
VIII of the Agreement; and (b) all other moneys received by the
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Bank under and pursuant to any of the provisions of the Agreement.
The Bank is authorized and directed to apply amounts available
therefor in the Bond Fund to the payment when due of the principal
of and interest on the Bonds.
The Issuer covenants and agrees that should there be a
default under the Agreement, the Issuer shall fully cooperate with
the Bank and with any other owner of the Bonds to the end of fully
protecting the rights and security of such owner; provided that the
Issuer shall be reimbursed by such owner for all its reasonable
expenses, including attorneys' fees, in so cooperating with the
owner. Nothing herein shall be construed as requiring the Issuer
to operate the Project or to use any funds or revenues from any
source other than funds and revenues derived from the Agreement.
Any amounts remaining in the Bond Fund, after payment in
full of the principal installments of, premium, if any, and
interest on the Bonds and all other amounts required to be paid
under the Agreement, the Note, the Mortgage, the Assignment of
Rents, the Arbitrage Regulation Agreement, this Bond Resolution and
any other agreement executed by the Borrower or the Issuer in
connection therewith, shall be paid to the Borrower as provided in
Section 14 hereof.
CUSTODY AND APPLICATION OF PROCEEDS
OF BONDS: ESCROW FUND
Section 7. In accordance with Section 3.1 of the
Agreement principal proceeds received by the Issuer from the sale
of the Bonds shall be deposited in the Escrow Fund. Moneys in the
Escrow Fund shall be expended in accordance with the provisions of
the Escrow Agreement and the Agreement, and particularly Section
3.2 of the Agreement.
The Escrow Agent shall keep and maintain adequate records
pertaining to the Escrow Fund and all disbursements therefrom, and
after the Project has been completed and a certificate of payment
of all costs filed as provided in this Section, the Escrow Agent
shall deliver copies of such records to the Issuer, the Bank and
the Borrower.
The completion of the Project and payment of all costs
and expenses incident thereto shall be evidenced by the filing with
the Issuer and the Bank of a certificate of the Authorized Borrower
Representative required by Section 3.4 of the Agreement. Any
moneys thereafter remaining in the Escrow Fund shall be applied in
accordance with Section 8.1 of the Agreement.
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INVESTMENTS; ARBITRAGE
Section 8. Any moneys held as part of the Bond Fund and
the Escrow Fund created pursuant to Section 7 hereof may be
invested or reinvested on the direction of the Authorized Borrower
Representative, in accordance with the provisions of Section 3.3 of
the Agreement and the Arbitrage Regulation Agreement. Any such
investment shall be held by or under control of the Bank or the
Escrow Agent, as the case may be, as depositary, and shall be
deemed at all times a part of such Fund and the interest accruing
thereon and any profit realized from such investments shall be
credited to such fund, and any loss resulting from such investments
shall be charged to such fund, which loss shall be an obligation of
the Borrower as provided in the Agreement.
As and when any amount invested pursuant to this Section
may be needed for disbursement, the Borrower may direct the Bank or
the Escrow Agent, as the case may be, to cause a sufficient amount
of the investments to be sold and reduced to cash to the credit of
such funds regardless of the loss on such liquidation.
With respect to Section 148(a) of the Code, the Issuer
hereby, acting in reliance on certain certifications and
representations made by the Borrower to the Issuer in the Arbitrage
Regulation Agreement, which certifications and representations by
this reference are incorporated herein and made a part hereof,
adopts and ratifies such certifications and representations and
hereby covenants with the purchaser and any owner of the Bonds that
so long as any principal installment of the Bonds remains unpaid,
the Issuer will not take or authorize the taking of any action
which will cause the Bonds to be classified as an "arbitrage bond"
within the meaning of Section 148(a) of the Code and any lawful
regulations promulgated or proposed thereunder and covenants to
comply with the Arbitrage Regulation Agreement.
GENERAL COVENANTS
Section 9. The Issuer covenants that, acting through the
Bank as its assignee pursuant to the Assignment, it will promptly
cause to be paid solely and only from the source mentioned in the
Bonds, the principal installments of and interest on the Bonds
hereby authorized at the place, on the dates and in the manner
provided herein and in the Bonds according to the true intent and
meaning thereof. The Bonds and the obligation to pay interest
thereon are special, limited obligations of the Issuer, secured by
the Note, the Agreement, the Mortgage and the Assignment of Rents
and payable solely out of the revenues and receipts derived by the
Issuer therefrom and otherwise as provided herein and in the
Agreement.
The Issuer covenants that it will faithfully perform at
all times any and all covenants, undertakings, stipulations and
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provisions contained in this Bond Resolution, in the Bond and in
all proceedings of its governing body pertaining thereto. The
Issuer represents that it is duly authorized under the Constitution
and laws of the State of Illinois to issue the Bonds authorized
hereby; that all actions on its part for the issuance of the Bonds
have been duly and effectively taken and that the Bonds are and
will be a valid and enforceable special, limited obligation of the
Issuer according to the true intent and meaning thereof.
The Issuer covenants that it will execute, acknowledge
and deliver such instruments, financing statements and other
documents as the owner of the Bonds or the Bank may reasonably
require for the better assuring, granting, pledging and assigning
the rights of the Issuer in and to the revenues and receipts hereby
assigned and pledged to the payment of the principal installment of
and interest on the Bonds as provided in the Assignment. The
Issuer covenants and agrees that, except as herein and in the
Agreement provided, it will not sell, convey, mortgage, encumber or
otherwise dispose of any part of the revenues and receipts derived
from the Agreement, or of its rights under the Agreement.
The Issuer covenants and agrees that all books and
documents in its possession relating to the Project and the
revenues and receipts derived from the Agreement shall at all
reasonable times be open to inspection by the owner of the Bonds or
such accountants or other agencies as such owner may from time to
time designate.
EVENTS OF DEFAULT AND REMEDIES
Section 10. If any of the following events occur it is
hereby defined as and declared to be and to constitute an "Event of
Default":
(a) Default in the due and punctual payment of any
interest on the Bonds or of any principal installments of the
Bonds, whether at the stated or any accelerated maturity
thereof and continuation of such default for 5 days
thereafter; or
(b) The occurrence and continuation of an Event of
Default under Section 7.1 of the Agreement; or
(c) The occurrence and continuation of an Event of
Default under Section 3.1 of the Mortgage.
Upon the occurrence of an Event of Default, the Bank by
notice in writing delivered to the Issuer and the Borrower, may
declare the principal installments of the Bonds and the interest
accrued thereon immediately due and payable, and such principal
installments and interest shall thereupon become and be immediately
due and payable. Upon any such declaration all payments under the
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Agreement from the Borrower immediately shall become due and
payable as provided in Section 7.2 of the Agreement.
While any principal installments of the Bonds or interest
are unpaid, the Issuer shall not exercise any of the remedies on
default specified in Section 7.2 of the Agreement without prior
written consent of the Bank.
Upon the occurrence of an Event of Default, the Bank may
pursue any available remedy at law or in equity by suit, action,
mandamus or other proceeding to enforce the payment of the
principal installments and interest on the Bonds and to enforce and
compel the performance of the duties and obligations of the Issuer
as herein set forth.
No remedy by the terms of this Bond Resolution conferred
upon or reserved to the Bank is intended to be exclusive of any
other remedy, but each and every such remedy shall be cumulative
and shall be in addition to any other remedy given to the Bank or
to the owner hereunder or now or hereafter existing at law or in
equity or by statute.
No delay or omission to exercise any right, power or
remedy accruing upon any Event of Default shall impair any such
right, power or remedy or shall be construed to be a waiver of any
such Event of Default or acquiescence therein; and every such
right, power or remedy may be exercised from time to time as often
as may be deemed expedient.
All moneys received pursuant to any right given or action
taken under the provisions of this Section or under the provisions
of Article VII of the Agreement (after payment of the costs and
expenses of the proceedings resulting in the collection of such
moneys and of the expenses, liabilities and advances incurred or
made by the Issuer, the Bank or the owner of the Bonds) at the time
of the occurrence of an Event of Default shall be deposited in the
Bond Fund and all such moneys in the Bond Fund shall be applied to
the payment of the principal installments and interest then due and
unpaid upon the Bonds to the person entitled thereto.
Whenever moneys are to be applied pursuant to the
provisions of this Section, such moneys shall be applied at such
times, and from time to time, as the Bank shall determine.
Whenever all principal installments and interest on the
Bonds have been paid under the provisions of this Section and all
exoenses the Bank and the Issuer have been paid, any balance
remaining in the Bond Fund shall be paid to the Borrower.
With regard to any default concerning which notice is
given to the Borrower under the provisions of this Section, the
Issuer hereby grants the Borrower full authority for account of the
Issuer to perform or observe any covenant or obligation alleged in
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said notice not to have been performed or observed, in the name and
stead of the Issuer with full power to do any and all things and
acts to the same extent that the Issuer could do in order to remedy
such default.
PERFORMANCE PROVISIONS
Section 11. The Mayor and City Clerk, for and on behalf
of the Issuer be, and each of them hereby is, authorized and
directed to do any and all things necessary to effect the
performance of all obligations of the Issuer under and pursuant to
this Bond Resolution, the execution and delivery of the Bonds and
the performance of all other acts of whatever nature necessary to
effect and carry out the authority conferred by this Bond
Resolution. The Mayor and City Clerk be, and they are hereby,
further authorized and directed for and on behalf of the Issuer, to
execute all papers, documents, certificates and other instruments
that may be required for the carrying out of the authority
conferred by this Bond Resolution or to evidence said authority and
to exercise and otherwise take all necessary action to the full
discharge of the obligations of the Issuer under the Agreement, the
Assignment, the Arbitrage Regulation Agreement and the Bond
Purchase Agreement.
NOTICES
Section 12. It shall be sufficient service of any
notice, request, complaint, demand or other paper on the Issuer if
the same shall, except as otherwise be provided herein, be duly
mailed to the Issuer by first class mail, postage prepaid, or given
by telephone or telecopier and confirmed by such mail, and to the
other parties addressed to the Issuer at 333 South Green Street,
McHenry, Illinois 60050, Attention: Mayor, telephone (815)363-2100,
fax (815)363-2119, or to such other address as the Issuer may from
time to time file with the Bank and the Borrower. It shall be
sufficient service of any notice, request, complaint, demand or
other paper on the Borrower if the same shall be duly mailed to the
Borrower by first class mail, postage prepaid, or given by
telephone or telecopier and confirmed by such mail, and to the
other parties addressed to the Borrower at 3900 Dayton Street,
McHenry, Illinois 60050, Attention: President, telephone (815)385-
8100, fax (815)385-1518, or to such other address as the Borrower
may from time to time file with the Issuer and the Bank. It shall
be sufficient service of any notice, request, complaint, demand or
other paper on the Bank if the same shall be duly mailed to the
Bank by first class mail addressed to the Bank at 33 North LaSalle
Street, Chicago, Illinois 60690, Attention: Commercial Loan
Department, telephone (312)661-5678, fax (312)664-6675 or to such
other address as the Bank may from time to time file with the
Issuer and the Borrower.
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BOND RESOLUTION A CONTRACT; PROVISIONS FOR
MODIFICATIONS, ALTERATIONS AND AMENDMENTS
Section 13. The provisions of this Bond Resolution 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 Bond Resolution shall be made in any manner except with the
written consent of the Bondholder until such time as all principal
installments of and interest on the Bonds shall have been paid in
full.
SATISFACTION AND DISCHARGE
Section 14. All rights and obligations of the Issuer and
the Borrower under the Agreement, the Bonds, the Bond Purchase
Agreement and this Bond Resolution shall terminate and such
instruments shall cease to be of further effect, and the Bank shall
cancel the Bonds deliver it to the Issuer, and deliver copies of
the cancelled Bonds to the Borrower and shall assign and deliver to
the Borrower any moneys in the Bond Fund required to be paid to the
Borrower (except moneys held by the Bank for the payment of
principal of, premium, if any, or interest on the Bonds) when:
(a) all reasonable expenses of the Issuer and the Bank
shall have been paid;
(b) the Issuer and the Borrower shall have performed
all of their covenants and promises in the Agreement, the
Bonds, the Mortgage, the Escrow Agreement, the Bond Purchase
Agreement, the Assignment, the Arbitrage Regulation Agreement
and in this Bond Resolution; and
(c) all principal installments and interest on the Bonds
have been paid.
SEVERABILITY
Section 15. If any section, paragraph, clause or
provision of his Bond Resolution 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 provisions hereof.
APPROVAL
Section 16. The Issuer hereby acknowledges that a Public
Hearing was held on July 31, 1996 and hereby approves the Project
and the issuance of the Bonds.
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INTENT
Section 17. That all acts and doings of the officials of
the Issuer which are in conformity with the purposes and intent of
this Resolution and in furtherance of the issuance and sale of the
Bonds in the aggregate principal amount of $1,300,000 and the
financing of the Project be, and the same hereby are, in all
respects, approved and confirmed.
ELECTION
Section 18. That the Issuer hereby elects to have the
provisions of Section 144(a)(4)(A) of the Internal Revenue Code of
1986, as amended, apply to the hereinabove described bond issue and
hereby affirmatively notes said election in this Resolution.
VOLUME CAP
Section 19. The obligation of the Issuer to issue and
deliver the Bonds is subject to the availability for such purpose
of a necessary and sufficient cap allocation under Section 146 of
the Internal Revenue Code of 1986, as amended. The Issuer has
received a reallocation of 1996 volume cap allocation from the City
of Crystal Lake, Illinois in the amount of $1,300,000.
ACT
Section 20. The Bonds shall be issued in compliance with
and under the authority of the provisions of the Act and this
Resolution.
CAPTIONS
Section 21. The captions or headings of this Bond
Resolution are for convenience only and in no way define, limit or
describe the scope or intent of any provision of this Bond
Resolution.
PROVISIONS IN CONFLICT REPEALED
Section 22. All by-laws, ordinances, resolutions, and
orders, or parts thereof, in conflict with the provisions of this
Bond Resolution are, to the extent of such conflict, hereby
repealed.
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This Bond Resolution shall be in full force and effect
immediately upon its adoption.
AYES: Rnlgpr_ Locke,Bates, Lawson, Baird
NAYS: None
ABSENT: None
PASSED this 31st day of July, 1996.
APPROVED this 31st day of July, 1996.
ATTEST: ar
City Clerk
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