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HomeMy WebLinkAboutResolution #1042., ,., ~ RESOLUTION NU. 1042 A RESOLUTION APPROVING AN AGREEMENT BETWEEN THE CITY OF CANTON AND THE FIRM OF PRECISION ENERGY SYSTEMS, INC. AND DIRECTING THE MAYOR AND CITY CLERK TO EXECUTE SAID LOAN AGREEMENT ON BEHALF OF THE CITY OF CANTON. WHEREAS, the City of Canton, Illinois has entered into negoti- ations with Precision Energy Systems, Inc. for a loan from the City's Enterprise Zone Fund for the amount of $150,000.00, these funds are made available through the City's loan agreement with the U.S. Depart- ment of Health and Human Services; and, WHEREAS, the City Council of the City of Canton, Illinois has reviewed the terms of the proposed agreement, a copy of which is attached hereto and made a part hereof as Exhibit A; and, WHEREAS, the City Council of the City of Canton, Illinois has determined that it is desirable and in the best interests of the City of Canton to approve said agreement. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CANTON, ILLINOIS, AS FOLLOWS: 1. That the Agreement between the City of Canton and Precision Energy Systems, Inc., which is attached hereto and made a part hereof as Exhibit A, is hereby approved, said agreement to be subject to and effective pursuant to the terms and conditions set forth therein. 2. That the Mayor and the City Clerk of the City of Canton, Illinois are hereby authorized and directed to execute said agreement on behalf of the City of Canton. 3. That this resolution shall be in full force and effect immediately upon its passage by the City Council of the City of Canton, Fulton County, Illinois and approval by the Mayor thereof. PASSED by the City Council of the City of Canton, Fulton County, Illinois this 7th day of Aup~ust , 1984 upon a roll call vote as follows: AYES: Aldermen Kovachevich, Hammond, Sarff, Workman, Carl, May. NAYS: None, ABSENT: Aldermen Savill, Horr. APPROVED: Donald E. Edwards, Mayor. ATTEST: Nan Wh' es, City Clerk. 1 LO111v AC'~.''~":' This agreement dated as of Ju lv 17 19_~i~ is between the City of Canton, an Illinois Municipal Corporation (hereinafter called "Lender"), and Precision Energy Systems, Inc., an Illinois corporation, (hereinafter called "Borrower"). In consideration of the mutual covenants and agreements contained herein, Lender and Borrower agree as follows: 1. Lender agrees to loan the principal sum of One Hundred Fifty Thousand ($ 15 0 , 0 0 0 ) (hereinafter referred t b as "Loan") , to be disbursed as hereinafter provided, bearing interest at the rate of 9.0 percent per annum from the date funds are advanced hereunder up to and including December 31, 1988, and at the rate of 13.0 percent per anni,ml thereafter for the remaining term of this loan as mare specifically set forth in paragraph 2 below. The term of the loan is for 30 years from December 30, 1983. This loan is evidenced by a promissory note of even date herewith (Exhibit 1) made payable to the City of Canton, an I1linois.Municipal Corporation. Borrower agrees to use tHa loan and its proceeds solely for activities as set forth in Lender's Rural Development Loan Fund (hereinafter called "ROLE") application st~hmitted to the Department of Health and Human Services/Office of Carminity Services (hereinafter called "OCS") (including any supplements or modifications thereof) and in accordance with Lender's Loan Terms and Conditions relating thereto, the terms and conditions of this Loan Agreement and the Rules and Regulations (as they may be amended) governing the RDLF (45 CFR 1076.50) . EXHIBIT "A", RESOLUTION N0. 2. Repayment: Repayment of this loan shall be made as follows: 2.1 Principal shall be paid in fifty-four (54) equal semi- annual installments of ($2,777.78) each commencing on the 1st day of December 1984 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 9.0 percent per annum with the first payment due on December 1st, 1984 and then on June 1st, and December lsr of each year until and including December 1st, 1988. After said period, interest shall be paid on the unpaid balance in _ said semi-annual installments at the rate of 13.0 percent per annum 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. 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 with- in 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. - 2- 3. Certification: On or before the date of the loan disbursement, the Borrower shall submit the following doclur~entations 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 condition or any condition which would adversely affect the Borrower's ability to carry out the terms and conditions of this agreer~nt. 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 docturents . 4. Disbursement Procedure: 4.1 Disbursement shall take place after this loan agreement and the promissory note (~chibit 1) are executed, and the doc~unentation called for in paragraph 3 above and any other conditions precedent to dis- bursement of funds under this award are fully satisfied. 4.2 Thereafter, Lender immediately shall cause to be issued a check upon Borrower's written request in the principal amount in paragraph 1 of this agreement. 4.3 Borrower shall notify the Lender of such date of disbursement in writing not less than five (5) days prior to such date. 4.4 Bon-ower shall maintain a separate ledger and segregated account for RDLF funds obtained hereunder. 4.5 Doan arrounts shall retain their character as Lender assets while in Lender's possession. -3- ~. ke~rting kequir~it~.: Borrower understands that Lender is required to make annual, semi-annual, and other periodic reports and audits to OCS pursuant to Lender's loan agreement with OCS. Borrower agrees to make all of its books, accounts and other financial data available to Lender, or, Lender's authorized agents (to include Lender's auditors) in support of Lender's requirement to make such reports and audits. Borrower agrees at Borrower's expense, to provide Lender with certified abstracts of any such books, accounts, or other financial data within five (5) working days of Lender's written request ~- ,#~herefor . 6. Relending and Assigrunent: 6:1 Borrower shall not relend any portion of the loan funds received or to be received from Lender. 6.2 Borrower shall not assign any right, title or interest in and to this Agreement, or, to any security pledged in repayment of this laon without first obtaining Lender's written consent thereto. 7. Default: 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 instn~nents 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 Borrowps to carry out or comply with the specific activities in its loan application as -4- approved by Lender, or Lender's Loan Terms and Conditions, or any terms or conditions of this Loan Agreement, or any applicable federal or state laws, or with such OCS regulations as may beco[ne applicable at any time. (B) Failure of Borrower to pay any install.mPnt 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 bariltrupt, or ceasing, being unable, or adm~tting in writing its inability, to pay its debts as they mature, or making a general assigrunent with creditors; (2) proceedings for the appointment of a receiver, trustee or liquidator of Borro~wpx, 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, liquida- tion or other similar law of any jurisdiction being authorized or insti- tuted by or against this Borrower. (D) Sutsnission 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 Borrowps to remedy any material adverse change in its financial or other coazdition arising since the date of this agreement, which condition was an inducement to this loan. (F) Any attempt by Borrvwex 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. -5- 8. Collateral: The Borrawer pledges as collateral to secure its indebtedness under this Loan Agre~nent, its portfolio of investments derived from the proceeds of this loan award, together with such other security as Lender may require, not to exceed in value the total of principal and interest due under this agreement. 9. Other Parties: This Loan Agrea~nt is not far thetbenefit of third parties. Lender shall not be under any obligation to any such parties, whether directly or indirectly interested in the Loan Agreezrient, to pay any charges or expenses incident to ca~liance by Borrower with any of the duties or obligations " imposed hereby. •- 10. Costs and Expenses: .' - Borrowns agrees to reimtxirse 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 oocassioned by Borrcxaer' s failure to canply with such terms and conditions . Borrr~aer 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. 11. Retention and Creation of Jobs: Lender and Borrower recognize and agree that the loan provided by Lender to Borrow~es is in direct support of Borrower's expressed intention of purchasing real property and improvements thereto, industrial machinery and equipment, and other diverse property to be located within Lender's -6- corporate limits. Both Lender and Borrower recognize and agree that presently existing jobs are expected to be retained hereby and new jobs created. Borrower convenants and agrees to not remove jobs retained or created by use of this loan from Lender's corporate limits during the term of the loan as expressed in Paragraph 1 even though Borrower may sooner pay all interest and principal hereunder without first obtaining Lender's written consent. 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: 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: Precision Energy Systems, Inc. 519 Lunt Schaumburg, IL. 60193 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. -7- 14 . Continctenc ies In addition to any foregoing contingency, loan funds will only be disbursed upon completion of all of the following in form and substance satisfactory to the Lender: (a) Jobs must be created and kept in the Canton Enterprise Zone for the period and otherwise in conformity with other requirements expressed in Paragraph 11 of this Loan Agreement. (b) Binding collateral and security satisfactory~to the Lender must be provided by Borrower. (c) Borrower must provide Lender with the personal guarantee of all Precision Energy Systems, Inc., Principals, in the amount of $ all in form satisfactory to the Lender. (d) Final written appraisals in form satisfactory to Lender must be completed on all collateral property, real or personal. (e) This Loan Agreement and each and every term and condi- tion hereof is specifically subject to the approval of OCS;_this Agreement shall not be binding upon Lender unless such OCS written approval is received by Lender. 15. Applicable Laws: Interpretation of the terms and provisions of this Loan Agreement shall be in accordance with the laws of the State of Illinois. IN WITNESS WHEREOF, Lender and Borrower have executed duplicate originals of this Loan Agreement as of the date first above-mentioned. BORROWER: LENDER: Precision Energy_Systems, Inc., City of Canton, an Illinois an Illinois corporation, municipal corporation, BY: Its President. BY: Date: July , 1984 Address: 519 Lunt Schaumburg, IL. 60193 Phone: (312) 980-6979 ATTEST: Corporate Secretary. (Corporate Seal) Its Mayor. Date: July 1984 Address: 210 East Chestnut Street Canton, IL. 61520 Phone: (309) 647-0065/0020 ATTEST: City Clerk. (Corporate Seal) -8- LOAN AQZF~T~'!~ `"' This agree-mnt dated as of July 17 , 19_~ is between the City of Canton, an Illinois Municipal Corporation (hereinafter called "Lender"), and Precision Energ_y Systems, Inc., an Illinois cornoration, (hereinafter called "Borrower"). In consideration of the mutual covenants and agreements contained herein, Fender and Borrower agree as follows: 1. Loan Terms: Lender agrees to loan the principal sum of One Hundred Fifty Thousand ($ 15 0 , 0 0 0 ) (hereinafter referred t D as "Loan") , to be disbursed as hereinafter provided, bearing interest at the rate of 9.0 percent per annum from the date funds are advanced hereunder up to and including December 31, 1988, and at the rate of 13.0 percent per annum thereafter for the remaining term of this loan as mare specifically set forth in paragraph 2 below. The term of the loan is for 30 years from December 30, 1983. This loan is evidenced by a promissory note of even date herewith (Exhibit 1) made payable to the City of Canton, an I1linois.Municipal Corporation. Borrower agrees to use tha loan and its proceeds solely for activities as set forth in Lender's Rural Development Loan Fund (hereinafter called "ROLE") application su2~nitted to the Department of Health and Human Services/Office of Community Services (hereinafter called "OCS") (including any supplements or modifications thereof) and in accordance with Lender's Loan Terms and Conditions relating thereto, the terms and conditions of this Loan Agreerr~nt and the Rules and Regulations (as they may be amended) governing the RDLF (45 CFR 1076.50) . EXHIBIT "A" TO RESOLUTION N0. 2. Repayment: Repayment of this loan shall be made as follows: 2.1 Principal shall be paid in fifty-four (54) equal semi- annual installments of ($2,777.78) each commencing on the 1st day of December 1984 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 9.0 percent per annum with the first payment due on December 1st, 1984 and then on June 1st, and December 1st of each year until and including December 1st, 1988. After said period, interest shall be paid on the unpaid balance in said semi-annual installments at the rate of 13.0 percent per annum 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. 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 with- in 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. -2- 3. Certification: On or before the date of the loan disbursamnt, the Borrower shall submit the following docim~tations 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 condition or any condition which would adversely affect the Borrower's ability to carry out the tPxms 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 doc,-uments. 4. Disbursement Procedure: 4.1 Disbursement shall take place after this loan agreement and the prcdnissory note (Exhibit 1) are executed, and the documentation called for in paragraph 3 above and any other conditions precedent to dis- bursemsnt of funds under this award are fully satisfied. 4.2 Thereafter, Lender immediately shall cause to be issued a check upon Borrower's written request in the principal amount in paragraph 1 of this agreement. 4.3 Borrower shall notify the Lender of such date of disbursement in writing not less than five (5) days prior to such date. 4.4 Borrower shall maintain a separate ledger and segregated account for RDLF funds obtained hereunder. 4.5 Loan arrounts shall retain their character as Lender assets while in Lender's possession. -3- 5. Reporting kequirements: Borrower understands that Lender is required to make annual, semi-annual, and other periodic reports and audits to OCS pursuant to Lender's loan agreecrnnt with OCS. Borrower agrees to make all of its books, aec.~ounts and other financial data available to Lender, or, Lender's authorized agents (to include Lender's auditors) in support of Lender's requirement to make such reports and audits. Borrower agrees at Borrower's expense, to provide Lender with certified abstracts of any such books, accounts, or other financial data within five (5) working days of Lender's written request ..therefor . 6. Relending and Assignment: 6:1 Borrower shall not relend any portion of the loan funds received or to be received from Lender. 6.2 Borrower shall not assign any right, title or interest in and to this Agreement, or, to any security pledged in repayment of this laon without first obtaining Lender's written consent thereto. 7. Default: On the occurrence of any event of default as described below, bender 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 Agreesrient or any other instnacients 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 activities in its loan application as -4- approved by Lender, or Lender's Loan Terms and Conditions, or any terms or conditions of this Loan Agreement, or any applicable federal or state laws, or with such OCS regulations as may becotr~e applicable at any time. (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 adm~tting in writing its inability, to pay its debts as they mature, or making a general assigrunent with creditors; (2) proceedings for the appointment of a receiver, trustee or liquidator of Borxvwer, 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, liquida- tion or other similar law of--any jurisdiction being authorized or insti- tuted by or against this Harrower. (D) Sulsnissicri or making of any report, statei~nt, warranty, or representation by Borrower or agent on its behalf to Lender or OCS in coruiectioa~ with the financ-ial 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 of this agreement, which condition was an inducer~nt to this loan. (F) Any attes-ipt by Borrownx 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. -5- 8. Collateral: Zhe Borrower pledges as collateral too secure its indebtedness under this Loan Agrearesit, its portfolio of investments derived from the proceeds of this loan award, together with such other security as bender may require, not to exceed in value the total of principal and interest due under this agr~t. Specific collateral outlined on Attachment A to follow. 9. Other Parties: Zhi.s Loan Agrees~nt is not for the benefit of third na*±; es . Lender shall not be under arty obligation to any such parties, whether directly or ~*~~r~+-~y interested in the Loan Agreerent, to pay any charges or expenses incident to compliance by Borrower with arty of the duties or obligations imposed hereby. 10. Costs and E~ ' Borraaer agrees to reimburse Lender for costs and expenses, ecurt costs, reasonable attorney fees, and all. other out-of-pocket expenses paid by TPrv~Pr 1S1 enforcing the terms and conditions of this agreetrnnt ocCassioned by Borrower's failure to coi~ly with such ternis and conditions. Borrower hereby irrevocably consents that all such attorney fees, costs and expenses, and out-of-pocket expenses may be included in any judc~~nt awarded to Lender in any proceeding at law or in equity to enforce this agreen~nt. 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 expressed intention of purchasing real Property and improverents thereto, industrial machinery arxi equipment, and other diverse property to be located within Lender's -b- corporate limits. Both Lender and Borrower recognize and agree that presently existing jobs are expected to be retained hereby and new jobs created. Borrower convenants and agrees to not remove jobs retained or created by use of this loan from Lender's corporate limits during the term of the loan as expressed in Paragraph 1 even though Borrower may sooner pay all interest and principal hereunder without first obtaining Lender's written consent. 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: 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: 13. Successors and Assigns: Precision Energy Systems, Inc. 519 Lunt Schaumburg, IL. 60193 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. -7- 14. Contingencies: In addition to any foregoing contingency, loan funds will only be disbursed upon completion of all of the following in form and substance satisfactory to the Lender: (a) Jobs must be created and kept in the Canton Enterprise Zone for the period and otherwise in conformity with other requirements expressed in Paragraph 11 of this Loan agreement. (b) Binding collateral and security satisfactory to the Lender must be provided by Borrower. (c) Borrower must provide Lender with its corporate guar- antee and the personal guarantee of all Precision Energy Systems, Inc., Principals, to the extent of such principals' interest in Precision Energy Systems, Inc., all in form satisfactory to the Lender. (d) Final written appraisals in form satisfactory to Lender must be completed on all collateral property, real or personal. (e) This Loan Agreement and each and every term and condi- tion hereof is specifically subject to the approval of OCS; this Agreement shall not be binding upon Lender unless such OCS written approval is received by Lender. (f) Borrower must obtain legally binding financing commit- ments from other sources in the minimum aggregate amount of 15. Applicable Laws: Interpretation of the terms and provisions of this Loan Agreement shall be in accordance with the laws of the State of Illinois. IN WITNESS WHEREOF, Lender and Borrower have executed duplicate originals of this Loan Agreement as of the date first above-mentioned. BORROWER: LENDER: Precision Energy Systems, Inc. City of Canton, an Illinois an Illinois corporation, municipal corporation, BY: BY: Its President. Its Mayor. -8- Date _ 1984 Date Address: 519 Lunt Address: Schaumburg, IL 60193 Phone: (312) 980-6967 Phone: ATTEST: ATTEST: Corporate Secretary. (Corporate Seal) 1984 210 East Chestnut Canton, IL 61520 (309) 647-0065/0020 City Clerk. (Corporate Seal) -9-