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HomeMy WebLinkAboutResolutions - R-89-25 - 10/11/1989 - RAE Corp BondsR-89-25 A PRELIMINARY RESOLUTION OF THE CITY OF MCHENRY, ILLINOIS APPROVING THE APPLICATION OF RAE CORPORATION AND AUTHORIZING THE CITY TO EXECUTE A MEMORANDUM OF AGREEMENT WITH RAE CORPORATION CONCERNING THE ISSUANCE BY THE CITY OF ITS INDUSTRIAL DEVELOPMENT REVENUE BONDS WHEREAS, the City of McHenry, Illinois (the "City") is a municipality and political subdivision and a non -home rule unit of local government of the State of Illinois; and WHEREAS, the City is authorized and empowered by the Industrial Project Revenue Bond Act, Sections 11-74-1 through 11-74-14, inclusive, of Chapter 24, Illinois Revised Statutes, as amended (the "Act"), to issue its industrial development revenue bonds to finance the cost of the acquisition, construction, reconstruction, improvement, betterment or extension of any "industrial project", as defined in the Act, and to enter into a loan agreement pursuant to which the proceeds of such industrial development revenue bonds may be loaned to industrial or commercial enterprises to finance the cost of the acquisition, construction and equipping of any such project; and WHEREAS, RAE CORPORATION, a Delaware for profit corporation (the "Company") has applied to the City for economic assistance through the issuance by the City of its industrial development revenue bonds to finance the acquisition, development, construction and equipping of a new manufacturing facility to be located in McHenry Corporate Center Subdivision in the City for use by the Company in the manufacture of fractional horsepower direct current electric motors, gear motors and electronic speed controls (the "Project"); and, WHEREAS, pursuant to the powers of the City as a non -home rule unit under the provisions of the Act, the City proposes to execute a Memorandum of Agreement relating to the Project and the financing thereof; and WHEREAS, the Illinois General Assembly has declared in the Act the purpose and intent to relieve conditions of unemployment, to maintain existing levels of employment and to encourage the increase of industry and commerce within the State of Illinois, thereby reducing the evils attendant upon unemployment and to increase the tax base of the various municipalities of the State of Illinois, which were all declared and determined to be public purposes and for the public safety, benefit and welfare of the residents of the State of Illinois; 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 limited obligation industrial development revenue bonds to finance the Project; NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF MCHENRY, ILLINOIS, as follows: SECTION l: The City hereby finds and determines, based on the representations of the Company, that the Project proposed by the Company and hereinafter described will increase employment opportunities and increase the real estate tax base of the City, and that aiding the financing of the Project through the issuance of the City's industrial development revenue bonds (the "Bonds") is hereby declared and determined to be for an industrial project within the meaning of the Act. SECTION 2: Subject to due compliance with all requirements of law and of the Ordinances of the City, the Mayor of the City is hereby authorized to execute, and the Clerk of the City is hereby authorized to attest a Memorandum of Agreement (the "Memorandum of Agreement") with the Company in substantially the form of the agreement appended to this Resolution as Exhibit A. The Memorandum of Agreement is hereby approved and authorized. SECTION 3: The officers and employees of the City are hereby authorized and directed to take such further action as is necessary to carry out the intent and purposes of the Memorandum of Agreement as executed and to issue not more than $1,400,000 principal amount of its industrial development revenue bonds upon the terms and conditions stated in such Memorandum of Agreement to defray and reimburse the Company, or its designee, for the cost of acquiring, developing, constructing and equipping the Project (as further defined in the Memorandum of Agreement) and the same is declared and determined to be consistent with the policy of the City to encourage economic development within the City as set forth in the Act, and this Resolution shall constitute affirmative official action toward the issuance of the Bonds within the meaning of applicable United States Treasury Regulations. SECTION 4: All Bonds to be issued by the City for the Project shall be limited obligations of the City. Such Bonds shall not constitute an indebtedness of the City or a loan of credit thereof, or a pledge of any exercise of the City's taxing powers. The assignment of the rights to the revenues and receipts derived by the City with respect to the Project to the purchaser(s) of the Bonds, along with such additional security as provided under a bond purchase 2 agreement, shall serve as full and complete satisfaction of the City's obligations under the provisions of the Act and such agreements as shall be entered into in the course of the issuance of the Bonds. SECTION 5: This Resolution shall be published in pamphlet form by and under the authority of the Corporate Authorities of the City of McHenry, Illinois. SECTION 6: That all resolutions and parts thereof in conflict herewith are hereby repealed to the extent of such conflict. PASSED THIS 11 th DAY OF October , 1989. AYES:Bolger, Donahue, Lieder, McClatchey, Patterson, Serritella, Smith, Teta NAYS: None ABSENT: None ABSTAINED: None NOT VOTING: None APPROVED THIS 11th DAY OF October 1 89. R ATTEST: Published in pamphlet form by order of the Corporate Authorities of the City of McHenry, McHenry County, Illinois. The foregoing Resolution No. R-89-25 was voted and passed by the City Council of the City of McHenry, Illinois at a regular meeting of the City Council duly called and held on the llth day of October, 1989. CITY CLERK 3 a EXHIBIT A MEMORANDUM OF AGREEMENT THIS MEMORANDUM OF AGREEMENT is made by and among the City of McHenry, Illinois, an Illinois municipality and political subdivision (the "City") and the RAE CORPORATION, a Delaware for profit corporation (the "Company"). I. Preliminary Statement. Among the matters of mutual inducement which have resulted in this Agreement are the following: (a) The City is authorized and empowered by the provisions of the Industrial Project Revenue Bond Act, Sections 11-74-1 through 11-74-14, inclusive of Chapter 24, Illinois Revised Statutes, as amended (the "Act"), to issue its industrial development revenue bonds to finance the cost of the acquisition, construction, reconstruction, improvement, betterment or extension of any "industrial project", as defined in the Act. (b) The Company wishes to obtain satisfactory assurance from the City that the proceeds of the sale of the industrial development revenue bonds of the City will be made available to the Company or its designee, to finance the acquisition, development, construction and the equipping of a new manufacturing facility in the McHenry Corporate Center for use by the Company in the manufacture of fractional horsepower direct current electronic motors, gear motors and electronic speed controls (the "Project") to be located in the McHenry Corporate Center Subdivision in the City. (c) Subject to the conditions contained herein and to the compliance with all requirements of law and of all City ordinances, the City, by virtue of such authority as may now or hereafter be conferred by the Act, has indicated a willingness to issue and sell its industrial development revenue bonds in an amount not to exceed $1,400,000 (the "Bonds") to finance the cost of the Project, or, with the mutual consent of the City and the Company, such portion of the cost of the Project as shall then be permissible to qualify the Bonds under the exemptions contained in the Internal Revenue Code, as amended (the "Code"), or any successor provision of similar import. (d) The City proposes to enter into a loan agreement or mortgage and loan agreement with the Company or its designee, with respect to the Project pursuant to the provisions of the Act as then in effect. The Bonds shall not be general obligations of the Cit,, or of the State of Illinois, but will be payable solely out of revenues and receipts derived by the City with respect to the Project, and no holder of any such Bonds shall have the right to compel any exercise of the credit or taxing power of the City or any other political subdivision of the State of Illinois. Such Bonds shall not constitute an indebtedness or a loan of credit of the City. Under the loan agreement, 2 the Company or its designee, shall be obligated to pay (directly or through notes, debentures, bonds, or other debt obligations of the Company or its designee, executed and delivered to evidence or secure its obligations thereunder or otherwise) sums sufficient in the aggregate to pay the principal of and interest and redemption premium, if any, on the Bonds as and when the same shall become due and payable. The purchaser(s) of the Bonds and subsequent holders thereof, if any, must and shall agree to accept assignment of the loan agreement and rights to the revenues and receipts derived by the City with respect to the Project, along with such additional security as provided under a bond purchase agreement, as full and complete satisfaction of the City's obligations under the provisions of the Act and such agreements and documents as shall be entered into in the course of the issuance of the Bonds. Such a provision will be included on the face of the Bonds. 2. Undertaking on the Part of the City. Subject to the conditions herein stated, the City agrees as follows: (a) That it will. begin the proceedings necessary on its part to cause the issuance and sale of the Bonds, pursuant to terms mutually acceptable to the City, the Company or its designee, and potential purchaser(s) of the Bonds. (b) That it will cooperate with the Company or its designee, and if satisfactory purchase agreements can be made, the City will adopt such proceedings authorizing the 3 execution of such documents as may be necessary or advisable for the authorization, issuance and sale of the Bonds and the financing of the Project, all as shall be authorized in an ordinance or resolution of the City Council and mutually satisfactory to the City, the Company or its designee, and potential purchaser(s) of the Bonds. (c) That, if the City issues and sells the Bonds, the financing instruments will provide (.i) that the City will lend the proceeds of the Bonds to the Company or its designee, to finance the Project, and (ii) that the aggregate amounts (i.e., the repayments to be made by the Company or its designee, upon such loan and used by the City to pay the principal of, interest and redemption premium if any, on the Bonds), payable under the instruments whereby the Project shall be financed, shall be such sums as shall be sufficient to pay the principal of and interest and redemption premium, if any, on the Bonds as and when the same shall become due and payable. 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. 3. Undertakings on the Part of the Company. Subject to the conditions above stated, the Company agrees as follows: (a) That the Company will use all reasonable efforts to find one or more purchasers satisfactory to the .19 City for the Bonds. The purchaser(s) of the Bonds must and shall agree to accept assignment of the loan agreement and rights to the revenues and receipts derived by the City with respect to the Project as full and complete satisfaction of the City's obligations under the provisions of the Act and such agreements as shall be entered into in the course of the issuance of the Bonds and the purchaser(s) shall receive the Bonds so endorsed. (b) Tha'- contemporaneously wlth the delivery of the Bonds, the Company or its designee, will enter into the loan agreement with the City (in a form and substance satisfactory to the City), under the terms of which the Company or its designee, will be obligated to pay the City sums sufficient in the aggregate to pay the principal of and interest and redemption premium, if any, on the Bonds as and when the same shall become due and payable. Such loan agreement shall be assignable by the City as contemplated in paragraph 3(a) above. The Company agrees that the City may require that performance of the obligations of the Company or its designee, under the loan agreement be secured by a lien, mortgage, collateral assignment of lease and all rentals, or other security as determined appropriate by the City upon the property comprising the Project. (c) The Company will pay or cause to be paid to the City for any and all administrative costs, legal and professional fees, including the fees and expenses of its counsel and bond counsel, City Council salaries resulting 5 from special meetings of the City Council, and all other City expenses directly or indirectly incurred by, or charged to the City in connection with the subject matter of the proposed Bonds, whether or not such Bonds are issued, as provided for in the City's retained personnel ordinance. (d) That the Company or its designee, will comply with all of the conditions and requirements of the law and of all of the City Ordinances. 4. General Provisions. (a) All committments of the City under Paragraph 2 hereof and of the Company or its designee, under Paragraph 3 hereof are subject to the condition that on or before one year from the date hereof (or such other date as shall be mutually satisfactory to the City and the Company), the City and the Company or its designee, shall have agreed to mutually acceptable terms and conditions of the loan agreement and of the Bonds and other instruments or proceedings relating to the Bonds. The decision not to approve or agree to any term or condition of any document or not to take any action prior to issuance of the Bonds shall rest solely within the complete discretion of the parties to the loan agreement. All regulatory or other governmental approvals requisite to the execution of such documents and the issuance and sale of the Bonds shall first have been obtained. If for any reason the Bonds are not issued, the City shall not be liable in any way for damages or otherwise to any party for such failure of consummation of this financing. R (b) If the events set forth in (a) of this Paragraph 4 do not take place within the time set forth or any extension thereof and the Bonds are not sold within such time, the Company agrees that it will reimburse the City for all direct out-of-pocket expenses which the City may incur or as a result or arising out of the passage of this Resolution (including but not limited to the payments of its attorney and other consulting fees arising from the execution of this Agreement an(; the performance by the City of its obligations hereunder). (c) The Company acknowledges that the intended qualification of the Bonds under the provisions of the Code will require an adequate allocation to the Bonds, under the Code, of the private activity bond limit of the State of Illinois, which allocation is not within the control of the City. RAE Corporation, a Delaware Corporation IN Its President City of McHenry, an Illinois Municipal Corporation By: 4*6�� ATTEST: ATTEST: 0001, Secretary I City Clerk . Az 7