HomeMy WebLinkAboutResolution #1041+"
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A RESOLUTION APPRG7VING AN AGREEMEATr BEIWEIIV THE CITY OF CAN'IC7N AND THE FIRM
OF THE CANZCAV CORPORATION AND DIRDCrING THE MAYOR AND CITY CLERFC TO ~X'UTE
SAID IRAN AGREEMEr1T ON BEHAI~' OF THE CITY OF CAi~'I'ON .
Tnh~ERF.AS, the City of Canton, Illinois has entered into negotiations with
The Canton Corporation for a loan from the City's Enterprise Zone Loan Fund
for the amount of $400,000.00, these funds are made available throug~i the City's
loan agreement with the U.S. Departrrent of Health and Htm~an Services; and,
Wf~.S, the City Council of the City of Canton, Illinois has reviewed
the terms of the proposed agreet*ient, 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 deternuned
that it is desirable and in the best interests of the City of~Canton to approve
said agreement.
NOW, THEREE'ORE, BE IT RESOLVED BY THE CITY COUNCIL OF Ti-~ CITY OF CAN'ICJN,
nT•Il~OIS, AS FOLIAWS:
1. That the Agreement between the City of Canton and The Canton 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
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.
PASSID by the City Council of the City of Canton, Fulton County, Illinois
this 7th day of August , 1984 upon a roll call vote as follows:
AYES: Aldermen May, Carl, Workman, Sarff, Hammond, Kovachevich,
Mayor Edwards.
NAYS: None .
~~; Aldermen Horr, Savill.
APPFK73VID:
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Donald E. Edwards, Mayor.
N White City Clerk. ~
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This agrearnnt dated as of August 24 , 19 84 is between the
City of Canton, an Illinois I~uiicipal Corporation (hereinafter called "Lender") ,
and The Canton Corporation, an Ohio corporation, ,
(hereinafter called "Borrower"). In consideration of the mutual cmvenants
and agreements contained herein, bender and Borrower agree as follows:
1. Loan Terms:
Lender agrees to loan the principal sum of Four Hundred Thousand Dollars
($ 400, 000.00) (her_.irlaftar referred to 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 Deer 31,
1988, and at the rate of 13.0 percent per annum thereafter for the remaining -
term of this loan as more 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 pranissory 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 Lender's Rural Development Loan Fund (hereinafter called "ROLE")
application submitted to the Departirnnt of Health and Human Services/Office
of Coinninity 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" TO
RESOLUTION N0. .1t;~~!
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2. kepayment:
Repayment of this loan shall be made as follows:
2.1 Principal shall be paid in fifty-four (54) ~1
seRti-annual instal ln~ents of (S 7 4 0 7.41 ) each oannencing oar
the 1st day of December 1986 and continuing every six months there-
after 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 anmun with the first payment due on December 1st, 1984
and then on June 1st, 1985, and on Deoa~x 1st and June 1st of each
year until and including December 1st, 1988. After said period, interest
shall be paid on the unpaid balance in said sari-annual installments at
the rate of 13.0 percent per annum until said interest and prinicipal
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 princi-
pal or interest if payment for any of these is not received within
7 calendar days following the due date. The late charge shall be
cazsidered unpaid if not received within 15 calendar days of the
missed due date far which it was imposed. Any unpaid late charge
sha].1 be added to principal and bear interest at the same rate as
noted above far said principal. Acceptance of a late charge by Lender
does not constitute.. a waiver of default.
2.5 Bor=owps shall have the right to prepay any and all interest and princi-
pal at any time without penalty or additional interest.
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On or before the date of the loan disbursement, the Borrower shall
submit the following doc~m~entaticns to Lender:
3.1 A current Dopy of the Hozzvwer's articles of incorporation or charter.
3.2 Certifications that there has been no material adverse ch~~Sge 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 agreanent.
3.3 If a corporation, a oertif ied copy of Borrower' s corporate resolution
authorizing and directing the execution and delivery bry Borrower to
Lender of this agreen~nt and all related doc~mients .
4. Disbursement Procedure:
4.1 Disbursement shall take place after this loan agreetn?nt and the
pranissory note (E~hibit 1) are executed, and the doc~urentation 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
Borrowps'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 accauit for
ELF funds obtained hereunder.
4.5 Loan amounts shall retain their character as Lender assets while
in Lender's possession.
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5. Reporting Requirements:
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
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 loan 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 instruments
securing or relating to this Loan and in accordance with the Law
and regulations applicable hereto. Any of the following may, with-
out limitation, be regarded an 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
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approved by Lender, or Lender's Loan Terms and Conditions, or any
teens or conditions of this Loan Agreement, or any applicable federal
or state laws, or with such OCS regulations as may become applicable
at any time. ,
(B) Failure of Borrower to pay any installment of principal o» interest
on its promissory note to Lender when due as specified in paragraph
2 above.
(C) The of : ~ (1) Borrower's becxmiryg insolvent or barilcnipt, or
ceasing, being unable, or admitting in writing its inability, to pay
its debts as they mature, or making a general assigranP~t with creditors;
(2) proceedings for the appointment of a receiver, txustee or liquidator
of Borrcxa+~s, or of a substantial part of its assets, being authorized os _
instituted by or against it; or (3) proceedings under any bankniptcy,
reorganization, readjustsrnnt of debt, insolvency, dissolution, liquida-
tion ar other similar law of any jurisdiction being authorized or insti-
tuted by or against this Borrower.
(D) Submissirn or making of any report, statement, warranty, or representation
by Borrower or agent an its behalf t4 Lender or OC.S in connection with
the financial assistance awarded hereunder which is false, inocmplete
or incorrect in any material respect.
(E) Failure of Borg to relredy any material adverse change in its
financial or other condition arising since the date of this agreez~nt,
which condition was an inducement to this loan.
(F) Any attsnpt by Borrowps to assign any right, title or interest in and tD
this Agreement, or, to any security pledged in repayment of this loan
without first obtaining lender's written consent thereto.
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8. Oollateral:
Zhe Borg pledges as collateral to secure its indebtedness under this
Doan Agreement, its portfolio of investments derived from the proceeds of
this loan award, together with such other security as Lender may rer~uire,
not to exceed in value the total of principal and interest due under this
agreement,. Specific collateral outlined on Attachment A to follow.
9. Other Parties:
this Loan Agreement is not far the benefit of third ~Y-+-; es. Lender shall
rat be under a~ obligation to any such parties, whether directly or
indirectly interested in the Doan Agrea~slt, to PaY anY charges or expenses
incident to compliance by Borrower with any of the duties or obligations
imposed hereby.
10. Oosts and F~cpenses: '
Borrn~aer agrees to reimburse bender for costs and expenses, court costs,
reasonable attorney fees, and all. other out-of-pocket expenses paid by
Lender in enforcing the teens and conditions of this agrearnnt occassianed
by Borrower's failure to cat~ly 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 judc~nt awarded to
LendP~ 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 Borrower 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 bender's
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corporate limits. Bo~tl~i I~nder and Borrower recognize and agree that
presently existing jobs are expected to be retained hereby and new jobs
created. Borrower vonvenants and agrees to not retm~ve jabs retained or
created by use of this loan from Lerder's corporate limits during the
tezm of the loan as expressed in Paragraph 1 even though Borrower may
soarer 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:
4b Lender: City Clerk
City Building
210 East Chestnut Street
Canton, Illinois 61520
Any notice given to the Lender shall include an informational Dopy, mailed
as aforesaid, and addressed to the attention of the City Attorney at the
above stated address.
Zb the Borrvwn~:
13. Successors and Assigns:
The Canton Corporation
3140 East 65th Street
Cleveland, Ohio 44127
The Loan Agreetrent shall be bin3uig upon Borrower and its successors and
assigns and upon Lender and its successors and assigns, and shall syrvive
the closing of the Loan and disbursement of proceeds.
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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 the personal guarantee
of Joseph L. Driscoll, President of The Canton Corporation, in
the amount of $200,000.00, 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:
The Canton Corporation, an
Ohio corporation,
LENDER:
City of Canton., an Illinois
municipal corporation,
BY: BY:
Its President. Its Mayor.
Date: Date:
Address: 3140 East 65th Street Address: 210 East Chestnut Street
Cleveland, Ohio 44127 Canton, Illinois 61520
Phone: (216) 932-2226 Phone: (309) 647-0065/0020
ATTEST:
Corporate Secretary.
ATTEST:
City Clerk.
(Corporate Seal)
(Corporate Seal)
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