HomeMy WebLinkAboutResolution #2070RESOLUTION NO. 2070
A RESOLUTION APPROVING AN AGREEMENT BETWEIId THE CITY OF CANTON
AND RADON HOME PRODUCTS, INC. AND DIRECTING THE MAYOR AND CITY
CLERK TO EXOQTrE AND DELiVEIt SAID LOAN AGREEMF~I'P ON BEHALF OF THE
CITY OF CANTON.
WHEREAS, the City of Canton has entered into negotiations
with Radon Home Products, Inc. for a loan from the City's
Enterprise Zone Fund for the amount of $50,000.00, such funds to
be made available through the City's loan agreement with the U.S.
Department of Health and Human Services; and,
WfiEREAS, the City Council of the City of Canton has reviewed
the terms of the proposed loan agreement, a copy of which is
hereto attached and made a part hereof as Exhibit A; and,
WHEREAS, the Canton City Council has detennined that it is
desirable and in the best interest of the City of Canton to
approve said agreement.
NOW, TfH~ORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF CANTON, Fulton County, Illinois as follows:
1. That the Loan Agreement between the City of Canton and
Radon Home Products, Inc., which is attached hereto and made a
part hereof as Exhibit A, is hereby approved, said Loan Agreement
to be subject to and effective pursuant to the terms and
conditions therein set forth.
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2. That the b~Iayor and City Clerk are hereby authorized and
directed to execute and deliver said Loan Agreement on behalf of
the City of Canton.
3. That this Resolution shall be in full force and effect
immediately 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 18th day of July ,
1989, upon a roll call vote as follows:
AYES; Aldermen Kovachevich, Zilly, Sarff, Meade, May,
Kovachevich,
NAyS; None.
~,~; Aldermen Steck, Bohler.
APPROVED:
'~~
~f~
Donald E. Edwards, Mayor
ATTEST:
1 ~ ~ •,
an y Whit City Clerk
Publication Instructions
Do not publish
Publish in pamphlet form only
^ Publish in a general circulation newspaper
19 `(
City Att. Date
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Loan Agreement
(HHS/OCS)
This agreement dated this
between the City of Canton, an
(hereinaf ter called "Lender"), and
Illinois corporation (hereinaf to
consideration of the mutual covenants
Lender and Borrower agree as follows:
1. Loan Terms:
_ day of , 1989 is
Illinois municipal corporation
Radon Home Products, Inc., an
r called "Borrower"). In
and agreements contained herein,
Lender agrees to loan the principal sum of Fif ty Thousand and
00/100 ($50,000.00), (hereinaf ter referred to as "Loan"), to be
disbursed as hereinafter provided, bearing interest at the rate of 13
percent per annum from the date funds are advanced hereunder up to and
including the remaining term of this loan as more specifically set
forth in paragraph 2 below. The term of the loan is for five (5)
years from the date hereof.
This loan is evidenced by a promissory note of even date
herewith (Exhibit 1) made payable to the City of Canton, an Illinois
Municipal Corporation. Borrower agrees to use the loan and its
proceeds solely for activities as set forth in Borrower's approved
Rural Development Loan Fund (hereinaf ter called "RDLE'") application
(including any supplements or modifications thereto), approved
Business Plan (including any supplements or modifications thereto),
each submitted to the Lender, the terms and conditions of this Loan
Agreement and the rules and regulations governing the RDLF (45 CFR
1076.50) in effect on the date hereof, and all applicable Federal and
State of Illinois laws, rules and regulations.
2. Repayment:
Repayment of this loan shall be made as follows:
2.1 Principal shall be paid in ten (10) equal semi-annual
installments of $5,000.00 each commencing on the 1st day of December
1989 and continuing every six months thereafter until said principal
is fully paid.
2.2 Interest shall be paid on the unpaid principal balance at
the rate of 13 percent per annum with the first payment due on
December 1st, 1989 and then on June 1st, and December 1st of each year
until said interest and principal is fully paid.
2.3 Unpaid interest shall be added to principal and bear
interest at the same rate as noted above for said principal. Interest
shall be considered unpaid if not received by Lender within 7 calendar
days following the due date.
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2.4 Borrower shall pay a late charge of 6~ of the payment due
of principal or interest if payment for any of these is not received
within 7 calendar days following the due date. The late charge shall
be considered unpaid if not received within 15 calendar days of the
missed due date for which it was imposed. Any unpaid late charge
shall be added to principal and bear interest at the same rate as
noted above for said principal. Acceptance of a late charge by Lender
does not constitute a waiver of default.
2.5 Borrower shall have the right to prepay any and all
interest and principal at any time without penalty or additional
interest and any such prepayments shall be applied to the next
maturing installments of principal and interest.
3. Certification:
Immediately before the date of the loan disbursement, the
borrower shall submit the following documentations to Lender;
3.1 A current copy of the Borrower's articles of incorporation
or charter.
3.2. Certifications that there has been no material adverse
change in Borrower's financial conditions or any conditions which
would adversely affect the Borrower's ability to carry out the terms
and conditions of this agreement.
3.3 If a corporation, a certified copy of Borrower's corporate
resolution authorizing and directing the execution and delivery by
Borrower to Lender of this agreement and all related documents.
4. Disbursement Procedure:
4.1 Disbursement shall take place of ter this loan agreement and
the promissory note (Exhibit 1) are executed, the documentation called
for in paragraph 3 above and any other conditions precedent to
disbursement of funds under this award are fully satisfied, and
Borrower has delivered to Lender all requisite security instruments in
form and substance acceptable to Lender.
4.2 In addition to any of the foregoing, loan funds will only
be disbursed upon completion of all of the following in form and
substance satisfactory to the Lender:
(a) Collateral security agreement(s) specified in
paragraph 8;
(b) Lender's receipt of any necessary final written
approval from OCS; and
(c) Evidence of compliance with other terms and conditions
specified in paragraph 18.
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4.3 Borrower shall rlaintain a separate ledger for RDLF funds
obtained hereunder.
5. Reporting and Access Requirements.
(a) Within five (5) working days of Lender's written
request, Borrower agrees to make all of its books, accounts and other
financial data relating to this loan available to Lender, or, Lender's
authorized agents (to include Lender's auditors) within the City of
Canton, Illinois.
(b) Borrower, its consultants and contractors, shall
permit on site inspections of records and assets (wherever located) by
Lender or by Lender's authorized representatives and shall effectively
require their agents, employees and board members to furnish such
information as, in the judgment of Lender or Lender's authorized
representatives, may be relevant to the question of Borraver's
compliance with the terms of Borrower's approved Rural Development
Loan Funds application (including any supplements or any modifications
thereto), to Borrower's approved business plan (including any
supplements or any modifications thereto), to Borrower's compliance
with this loan agreement, or to Borrower's compliance with the rules
and regulations governing the RDLF (45 CFR 1076.50) in effect on the
date hereof and to all applicable Federal and State of Illinois laws,
rules and regulations.
6. Assignment:
Except as expressly provided in the
shall not assign any right, title or
agreement, or, to any security pledged
without first obtaining Lender's written
applicable, prior OCS written approval.
7. Default:
loan agreement, Borrower
interest in and to this
in repayment of this loan
consent thereto and, as
On the occurrence of any event of default as described below,
Lender may declare all or any portion of the debt and interest created
hereby to be immediately due and payable and may proceed to enforce
its rights under this loan agreement or any other instruments securing
or relating to this loan and in accordance with the law and
regulations applicable hereto. Any of the following may, without
limitation, be regarded as an "event of default" in the sole
discretion of the Lender:
(A) Failure, inability or unwillingness of
Borrower to carry out or comply with the specific
terms or conditions of this loan agreement, or any
federal or state laws, rules, or regulations,
applicable to this loan agreement, or with such OCS
regulations as may become applicable at any time.
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(B) Failure of Borrower to pay any installment of
principal or interest on its promissory note to
Lender when due as specified in paragraph 2 above.
(C) The occurrence of: (1) Borrower's becoming
insolvent or bankrupt, or ceasing, being unable, or
admitting in writing its inability, to pay its
debts as they mature, or making a general
assignment with creditors; (2) proceedings for the
appointment of a receiver, trustee or liquidator of
Borrower, or of a substantial part of its assets,
being authorized or instituted by or against it; or
(3) proceedings under any bankruptcy,
reorganization, readjustment of debt, insolvency,
dissolution, liquidation, or other similar law of
any jurisdiction being authorized or instituted by
or against this Borrower.
(D) Submission or making of any report, statement,
warranty, or representation by Borrower or agent on
its behalf to Lender or OCS in connection with the
financial assistance awarded hereunder which is
false, incomplete, or incorrect in any material
respect.
(E) Failure of Borrower to remedy any material
adverse change in its financial or other condition
arising since the date hereof which condition was
an inducement to this loan.
(F) Except as expressly provided in this loan
agreement, any attempt by Borrower to assign any
right, title or interest in and to this agreement,
or, to any security pledged in repayment of this
loan without first obtaining Lender's written
consent thereto.
8. Collateral:
(A) The personal guarantee to the repayment of this loan in the
form of Exhibit 1 hereto attached of Dennis Dawson and Jerry Jarnigan.
(B) 17,000 shares of Radon Home Products, Inc. stock owned by
Dennis Dawson to partially secure the payment of all principal and
interest heretofore or hereaf ter owing or outstanding under this loan
agreement.
(C) 17,000 shares of Radon home Products, Inc. stock owned by
Jerry Jarnagin to partially secure the payment of all principal and
interest heretofore or hereaf ter owing or outstanding under this loan
agreement.
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(D) Executed pledge agreements for the above listed shares of
Radon Home Products, Inc. stock as set forth in Exhibit 3 hereto
attached.
9. Other Parties:
This loan agreement is not for the benefit of third parties.
Lender shall not by under any obligation to any such parties, whether
directly or indirectly interested in the loan agreement, to pay any
charges or expenses incident to compliance by Borrower with any of the
duties or obligations imposed hereby.
10. Costs and Expenses:
Borrower agrees to reimburse Lender for costs and expenses,
court costs, reasonable attorney fees, and all other out-of-pocket
expenses paid by Lender in enforcing the terms and conditions of this
agreement occassioned by Borrower's failure to comply with such terms
and conditions. Borrower hereby irrevocably consents that all such
attorney fees, costs, and expenses, and out-of-pocket expenses may be
included in any judgment awarded to Lender in any proceeding at law or
in equity to enforce this agreement.
Borrower hereby irrevocably empowers any attorney at any time
hereaf ter to appear for Borrower in any court in term time or
vacation, and confess judgment against Borrower, each or any of us,
(as applicable), including any guarantor(s) hereof, without process of
this Loan Agreement in favor of any legal holder, for all sums owing
hereon, interest, costs, and reasonable attorney's fees, and to waive
all right of appeal, release all errors and consent to immediate
execution.
11. Retention and Creation of Jobs:
Lender and Borrower recognize and agree that the loan provided
by Lender to Borrower is in direct support of Borrower's activities
specified in the approved application and business plan. Both Lender
and Borrower recognize and agree that new jobs will be created and/or
existing jobs retained; a majority of new jobs created shall be filled
by persons whose family incomes are at or below the Poverty Guidelines
as established by the Secretary, Health and F3uman Service, at the time
the jobs are filled. Borrower covenants and agrees to not relocate
jobs created by use of this loan from Lender's corporate limits as
long as any indebtedness exists hereunder.
12. Notice:
Notice shall be given to any party hereto by United States mail,
certified mail, return receipt requested, and directed to the
following addresses:
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To Lender: City Clerk
City Building
210 East Chestnut Street
Canton, Illinois 61520
Any notice given to the Lender shall include an informational copy,
mailed as aforesaid, and addressed to the attention of the city
Attorney at the above stated address.
To the Borrower: Radon Home Products, Inc.
162 East Chestnut Street
Canton, Illinois 61520
13. Successors and Assigns:
The loan agreement shall be binding upon Borrower and its
successors and assigns and upon Lender and its successors and assigns,
and shall survive the closing of the loan and disbursement of
proceeds.
14. Applicable Laws:
Interpretation of the terms and provisions of this loan
agreement shall be in accordance with applicable federal laws and with
the laws of the State of Illinois.
15. Management of Borrower:
Except as provided to the contrary in this loan agreement, the
Borrower shall have the right: (i) to merge with or into any other
corporation with Lender's prior written consent, (ii) to make a public
offering of its stock, or, (iii) to take any other corporate action
that the Borrower deems to be in the best interest.
16. Insurance:
Borrower agrees to keep the improvements now and hereaf ter upon
the premises set forth in Exhibit 2 insured against damage by fire,
windstorm, and such other hazards as the Lender may require to be
insured against until the loan is paid in full, or, in the case of
foreclosure until expiration of the period of redemption. The
aggregate amount of such insurance shall not be less than the
aggregate sum of the unpaid principal or this loan and accrued
interest and penalties thereto appertaining. Borrower shall provide
Lender with a copy of such insurance policy or policies and shall show
the Lender as mortgagee and loss payee thereon.
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17. Retention of Records:
Borrower hereby agrees to retain intact all of its books,
accounts, and other financial data relating to this loan for a period
of four (4) years following the end of Borrower's fiscal year of the
last entry therein and, further, agrees to make the same available for
Lender's inspection upon the same terms and conditions as set forth in
numerical paragraph 5 of this loan agreement.
18. Other Terrns and Conditions:
(A) No person in the United States shall on the grounds
of race, color, religion, sex, age, handicap, marital status, or
national origin, be denied the proceeds of, or be subject to
discrimination under the activities approved as a result of this loan.
Borrower agrees to comply with the applicable regulations promulgated
by the Civil Rights Act of 1964 and Section 623 of the Economic
Opportunity Act of 1964, as amended, 42 U.S.C., S 2971 c.
Iid 6^dITNESS Wf~EI2EOF, Lender and Borrower have executed duplicate
originals of this loan agreement as of the date first above-mentioned.
BORROF~ER
Radon Home Products, Inc.,
an Illinois corporation
LENDII2
City of Canton, an Illinois
municipal corporation
BY:
Its President
Date:
Address: 162 East Chestnut Street
Canton, Illinois 61520
Phone: (309) 64?-0331
ATTEST:
Corporate Secretary.
BY:
Date:
Its Mayor.
Address: 210 E. Chestnut Street
Canton, Illinois
61520
Phone: (309) 647-0065/0020
ATTEST:
City Clerk.
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