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HomeMy WebLinkAboutResolution #3030i • ~, RESOLUTION N0. 303Q A RESOLUTION APPROV I N3 AN AGREEMENT BETWEEN Tf-E C I TY OF CANTON AND CAf~fTON INDUSTRIAL OORPORATION AND DIRECTI~ THE MAYOR AND CITY CLERK TO EXECUTE AND DELIVER SAID ,oGREEMENT ON BEHALF OF THE CITY OF CANTON. (HHS) VV}-EREAS, the City of Canton has entered into negotiations with Canton Industrial Corporation; and, WI-EREAS, the City Council of the City of Canton has reviewed the terms of the proposed agreement, a copy of which is hereto attached and made a part hereof as Exhibit A; and, VV~A--EREAS, the Canton City Council has determined that it is desirable and in the best interest of the City of Canton to approve said agreement. NUJV, THEREFORE, BE IT RESOLVED BY THE CITY OOUNCIL OF THE CITY OF CANTON, Fulton County, Illinois as follows: 1. That the Agreement between the City of Canton and Canton Industrial Corporation, which is attached hereto and made a part hereof as Exhibit A, is hereby approved, said Agreement to be subject to and effective pursuant to the terms and conditions therein set forth. 2. That the Mayor and City Clerk are hereby authorized and directed to execute and deliver said Agreement on behalf of the City of Canton. 1 3. That this Resolution shall be in full force and effect itmiediately upon its passage by the City Council of the City of Canton, Fulton County, Illinois and approval by the Mayor thereof . PASSED by the City Council of the City of Canton, Fulton County, Illinois at a regular meeting this ~ day of December ~g ~0 upon a roll call vote as follows: AYES: Alderr~.en 1~a~, Bohler, Meade, duller, Koyacliev~h. N4YS: Alderman Steck. ABSENT: Aldermen Chapman, Sar~~. APPRQVED: ATTEST: onald E. Edwards, Mayor ~~. JY Nancy Whites, City Clerk 2 AGREFF1~II~iT This Agreement made and entered into as of this 1st day of November, 1990, by and between the City of Canton, Illinois (hereafter designated "City") and Canton Industrial Corporation (hereaf ter designated "CIC") to adjust and resolve the HHS/OCS debt obligations which heretofore obligated CIC to City. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and for good consideration the parties agree as follows: 1. City agrees to release CIC from any and all obligations otherwise due and owing City by reason of loan(s) provided to CIC through the Farmers Home Administration (HHS/OCS) in consideration for which CIC agrees to pay the following sum to City. This release shall not operate to forgive, release or discharge Harriett L. Schleich or any other previous officer or director of CIC from any obligation she or they may have to City and/or CIC. Notwithstanding, this agreement shall operate to release the 160,416.7 shares of CIC stock pledged by Schleich to CIC and City shall physically return such shares to CIC. By this agreement, the City assigns unto CIC any and all rights which it has against Harriett L. Schleich, by reason of its pledge agreement, and CIC in turn, agrees to hold the City whole and harmless from any claim which Harriett L. Schleich may choose to assert against the City with regard to said stock and agrees to undertake, at its sole expense, any and all defense of the City with respect to any and all claims asserted against the City by reason of this agreement. 2. CIC agrees to pay City the sum of $400,000.00 in the following manner: a. By semi-annual payments of $20,000.00 commencing November 1, 1990 and May 1, 1991 and thereafter until May 1, 1995 at which time the final payment will be made in the amount of $20,000.00 together with a balloon payment of $200,000.00. b. Payment shall be, at CIC's sole election, in cash or in CIC's common stock. The amount of common stock which will be paid on the indicated dates will be based upon the prior week's average market price. Thus, assuming that the market price of CIC's stock the week prior to November 1, 1990 is $1.00 per share, CIC would pay to City, at CIC's sole election, either 20,000 shares of CIC's common stock or the sum of $20,000.00. If the price of common stock on November 1, 1990 is $5.00 per share, then CIC will, at its sole election, pay City either 4,000 shares of its common stock or the sum of $20,000.00. If CIC is able to secure other financing, CIC shall have the right to make prepayment in either stock or cash at any time without any penalty attached thereto. 3. The parties agree that this agreement shall be submitted to the Bankruptcy Court for its approval. The City agrees to reasonably cooperate to obtain approval of the Bankruptcy Court. This Agreement shall not be binding upon the parties unless or until it be approved by the Federal Bankruptcy Court sitting in Peoria, Illinois. 4. Should CIC, prior to full performance of this agreement, cease operation in Canton, Illinois; or, go out of business by bankruptcy or otherwise; or, be sold or merged into any company, AND, should Abbott Structural Steel Products Division (ASSPD) then -2- be in operation at the (former) CIC facility in Canton, Illinois, or, subsequently be in operation at that facility, then CIC's obligation under this agreement shall be assumed by ASSPD and ASSPD shall fully perform hereunder in place of CIC. 5. Should the appropriate federal agency ever, during the life of this agreement, forgive, or, agree to forgive, any portion of the $1,000,000.00 principal amount debt owed to the federal government by the City, then the City shall forgive, or, agree to forgive, a prorata amount of the $l~00,000.00 principal amount loan which is the subject of this agreement. 6. It is understood and agreed that time is of the essence of this agreement and each and every term and provision thereof, and that failure to make payment when the same is due or to keep any other term or provision of this agreement shall constitute a default of this agreement, provided, that the waiver of any default shall not constitute the waiver of any subsequent default of any of the terms or provisions of this agreement; and the parties may, at their option, declare a cancellation of this agreement by giving the other 30 days notice in writing that it is in default under the terms and conditions of this agreement. Any notice to be given hereunder may be served upon either party personally, or by certified mail addressed as follows: Office of the Mayor Canton Industrial Corporation City of Canton 260 East Elm Street 210 East Chestnut Canton, IL 61520 Canton, IL 61520 7. The parties agree to execute and deliver in timely fashion all other documents reasonably necessary to give full - 3- force and effect to this agreement. 8. This agreement shall be binding upon the successors and assigns of each of the City and CIC. CITY OF CANTON, ILLINOIS BY: , Donald E. Edwards, Mayor ATTEST: Nancy Whites, City Clerk. CANTON INDUSTRIAL CORPORATION BY: , Its: ATTEST: ABBOTT PRODUCTS, INC., BY: , Its: ATTEST: -4-