Loading...
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. 1 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 APPROVED: '~~ ~f~ Donald E. Edwards, Mayor ATTEST: 1 ~ ~ •, an y Whit City Clerk Publication Instructions Do not publish Publish in pamphlet form only ^ Publish in a general circulation newspaper 19 `( City Att.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 2 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. 1 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. 2 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. 3 (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. 4 (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: 5 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. 6 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. 7