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1983-060No. 83 -60 ORDINANCE OF VILLAGE OF BUFFALO GROVE: AUTHORIZING THE ISSUANCE AND SALE OF ITS $1,000,000 ECONOMIC DEVELOPMENT REVENUE BOND (FRETTED GROUP PROJECT) SERIES 1983, AND AUTHORIZING AND APPROVING THE EXECUTION AND DELIVERY• OF AN AGENCY AGREEMENT AND ASSIGNMENT, MORTGAGE AND LOAN AGREEMENT AND BOND PURCHASE AGREEMENT-, AND OTHER MATTERS IN CONNECTION THEREWITH WHEREAS, the Village of Buffalo Grove (the "Issuer ") is a political subdivision and a home rule unit of local gov- ernment of the State of Illinois; WHEREAS, pursuant to the powers of.. the Issuer as a home rule unit under the provisions of Section 6(a) of Article VII of the 1970 Illinois Constitution and in accordance with the procedures set forth in Ordinance No. 80 -19 passed and adopted by the Village on April 7, 1980 (the "Enabling Ordinance "), the Issuer is authorized and empowered to issue its revenue bonds to finance the acquisition and construction of capital projects suitable for use by any manufacturing, industrial research or commercial enterprise, including use as an assembly plant, industrial distribution facility, office building or commercial facility for the benefit of residents of the Issuer; WHEREAS, the .Village has declared in the Enabling Ordinance its purpose and intent .to encourage the increase of industry and commerce within.the Village, thereay reducing the evils attendant upon unemployment, and to provide for the in- creased welfare and prosperity of the residents of the Village, which were declared and determined to public purposes; WHEREAS, to accomplish the purposes of the Enabling Ordinance and promote a public purpose by increasing and retaining employment within the boundaries of the Issuer, the Issuer has entered into negotiations with Fretted Group (the "Borrower "), to induce it to acquire, complete construction and equip a facility to be utilized for the wholesale sale, ware- housing and distrubution of musical instruments and other related products within the boundaries of the Issuer (the "Project "); WHEREAS, the Borrower will hold legal or beneficial title to the Project and has agreed to employ 3 -5 persons in its business and has further 'guaranteed the payment of the principal, interest and premium, if any, on the Bond (as here- inafter defined); WHEREAS, by Resolution passed and duly adopted by the Village Board of the Issuer on November 21, 1983 (the "Inducement Resolution "), the Issuer undertook to issue its revenue bonds to finance the Project; WHEREAS, the Borrower, in reliance upon and pursuant to the Inducement Resolution, intends to proceed with the ac- quisition and construction of the Project; WHEREAS, the Internal Revenue Service issued on May 11, 1983 temporary regulations, effective January 1, 1983, under section 103(k) and (1) of the Internal Revenue Code which set out additional information required to be contained in a notice of public hearing on the is of industrial develop- ment bonds which are contained in the notice of public hearing published by the Issuer on December 2, 1983 in connection with the Project; WHEREAS, the Issuer, in order to provide funds for the Project, intends to issue and sell its Economic Development Revenue Bond (Fretted Group Project) Series 1983, in the prin- cipal amount not to exceed $1,000,000 (the "Bond ") pursuant to and in accordance with the Enabling Ordinance, the Inducement Resolution and this Ordinance authorizing the Bond and an Agency Agreement and Assignment, dated as of December 1 1983 (the "Agency Agreement ") between the, Issuer and The Bank and Trust Company of Arlington Heights, a national banking associa tion, as Fiscal Agent (the "Fiscal Agent "); WHEREAS, the Bond will be a limited obligation of the Issuer payable by the Issuer solely out of revenues derived from the Project, the Bond will not evidence a debt of the Issuer or a loan or credit extended to the Issuer under any constitutional or. statutory provision, and no holder of the Bond will have the right to compel any exercise of the taxing power of the Issuer to pay the principal of or interest on the Bond; NOW, THEREFORE-, BE IT ORDAINED BY THE PRESIDENT AND THE BOARD OF TRUSTEES OF THE VILLAGE OF BUFFALO GROVE, COOK AND LAKE COUNTIES, ILLINOIS as follows: Section 1. Issuance of the Bond. To accomplish the purposes of the Enabling Ordinance and pursuant to and in ac- cordance with the Inducement Resolution, and to provide for the financing of the cost of the acquisition, addition and improvements to the Project, the issuance of the Bond by the Issuer in the principal amount not to exceed $1,000,000 is hereby authorized, subject to the provisions of this Ordinance and the Agency Agreement hereinafter authorized. -2- • .0 The bond shall contain a provision that it is issued under authority of the Enabling Ordinance. The Bond shall bear in- terest at a rate per annum of 750 of the Prime Rate, as such term is defined in the form of the Bond attached as Exhibit A to the Agency Agreement, shall be dated, shall mature, shall be subject to redemption prior to maturity, shall be payable in such places and in such manner and shall have such other details and provisions as prescribed by the Agency Agreement and form of the Bond attached as Exhibit A thereto. The provisions for execution, signatures, authentication, payment and prepayment shall be as -set forth in the Agency Agreement and the form of the Bond attached as Exhibit A there- to. Section 2. Security for the Bond. The Bond shall be secured by the pledge made by the Agency Agreement and shall be payable by the Issuer solely from. and secured by a pledge of the loan payments, revenues and receipts derived from or in connection with the Project as set forth in the Agency Agreement. The Bond shall also be secured by a mortgage on the Project and the guarantee of the Tenant. The Bond is a limited obligation of the Issuer, payable solely as provided -in the Agency Agreement. The Bond and the interest thereon shall never constitute a debt- or general obligation or a pledge of the faith, the credit or the taxing power of the Issuer within the meaning of any constitutional or statutory provision of the State of Illinois. The Issuer shall not be liable on the Bond, nor shall the Bond be payable out of any funds of the Issuer other than those pledged therefor. Section 3. The Agency Agreement. The execution and delivery of the Agency Agreement, substantially in the form attached hereto and made a part of this Ordinance as though set forth in full herein, is hereby authorized. The President of the Board of Trustees of the Issuer (the "President ") is hereby authorized to execute, acknowledge and' deliver the Agency Agreement with such changes, insertions and omissions as may be approved by the President,- and the Clerk of the Issuer (the "Clerk ") is hereby authorized to affix the seal of the Issuer on the Agency Agreement and attest the same. The execution of the Agency Agreement by the President shall be conclusive evidence of such approval Section 4. The Mortgage and Loan Agreement. The execution and delivery of a Mortgage and Loan Agreement, dated as of.December 1, 1983 (the "Loan. Agreement "), between the Issuer, as lender and mortgagee, and the Borrower, as borrower and mortgagor, substantially in the form attached hereto and made a part of this Ordinance as though set forth in full here _3_ in, is hereby authorized. The President is hereby authorized to execute, acknowledge and deliver the Loan Agreement with such changes, insertions and omissions as may be approved by the President and the Clerk is hereby authorized to affix the seal of the Issuer of the Loan Agreement and attest the same. The execution of the Loan Agreement by the President shall be conclusive evidence of such approval. Section 5 Bond Purchase Agreement. The execution and delivery of a.Bond Purchase Agreement, to be dated the date of closing (the "Bond Purchase Agreement "), among the Issuer, the Borrower, the Tenant, and The Bank and Trust Company, of Arlington Heights, a national banking association, as purchaser of the Bond (the "Purchaser "), substantially in the form at- tached hereto and made a part of this Ordinance as though set forth in full herein, is hereby authorized. The President and the Clerk are hereby authorized to execute, acknowledge and deliver the Bond Purchase Agreement with such changes, insertions and omissions as may be approved by the President and the Clerk is hereby authorized to affix the seal of the Issuer on the Bond Purchase Agreement and attest the same. The execution of the Bond. Purchase Agreement by the President and the Clerk shall be conclusive evidence of such approval. Section .6. Sale of the Bond. The Bond is hereby autho rized to be sold to the Purchaser at the purchase price and on the terms and conditions .set forth in the. Agency Agreement and the Bond Purchase Agreement. Section 7. Execution of. the Bond. The Bond shall be executed in the manner provided in the Agency Agreement and the same shall be delivered to the Fiscal Agent for proper authentication and delivery to the Purchaser upon instructions to that effect Section 8. Fiscal Agent; The Purchaser of the Bond is hereby designated Fiscal Agent and depository for the Bond proceeds under the Agency Agreement. The Issuer shall have no _obligation, or liability as principal of the. Fiscal Agent. for acts of the Fiscal Agent. Section 9. Obligations of the Issuer. All covenants, stipulations, limited obligations and agreements of the Issuer in this Ordinance, the. Agency Agreement, the "Loan Agreement and the Bond Purchase Agreement shall be binding upon the Issuer and its successors from time to time and upon any board or body to which any powers or duties affecting such covenants, stipulations, obligations and agreements shall be transferred by or in accordance with law. Except as otherwise provided in _ this Ordinance, all rights, powers and privileges conferred and duties and liabilities imposed upon the Issuer or the members -4- thereof by the provisions of this Ordinance, the Agency Agreement, the Loan Agreement or the Bond Purchase Agreement shall be exercised or performed by the Issuer or by: such mem- bers, officers, board or body as may be required by law to ex- ercise such powers and to perform such duties. No covenant, stipulation, obligation or agreement herein contained or contained in the Agency Agreement, the Loan Agreement or the Bond Purchase Agreement shall be deemed to be a covenant, stipulation, obligation or agreement of any member, officer, agent or employee of the Issuer in his individual ca- pacity. Neither the members of the .Board of Trustees of the Issuer nor any officer executing the Bond shall be liable per- sonally on the Bond or be subject to any personal liability or accountability by reason of the issuance thereof. Section 10. Loan of Proceeds of the Bond. The Issuer is hereby authorized to finance the costs of the Project by loaning the proceeds of the Bond to the Borrower pursuant to the Loan Agreement and the Agency Agreement. The Borrower is authorized to proceed with the acquisition and construction. of the Project as set forth in the Loan Agreement. Section 11. Authorized Representatives. The President, Clerk and the members of the Board of Trustees of the Issuer are hereby designated the authorized representatives of the Issuer, and each of them, is hereby authorized and directed to execute and deliver any and all papers, instruments, opinions, certificates, affidavits and other documents and to do and cause to be done any and all acts and things necessary or prop- er for carrying out this Ordinance, the Agency Agreement, the .Loan, Agreement and the Bond Purchase Agreement, and the issuance and sale of the Bond. Section 12. Separable Provisions. The. provisions of this Ordinance. are hereby declared to be separable and if any section,. phrase or provision shall for any reason be declared to be invalid, such declaration shall not affect the validity of the remainder of the sections, phrases and provisions hereof. Section 13. Ordinances and Resolutions in Conflict Repealed. All ordinances and resolutions and parts thereof in conflict herewith are hereby repealed to the extent of such conflict. Section 14. Section 103(b)(6)(D) Election. The Issuer hereby is authorized to and does elect to have the provisions of Section 103(b)(d)(D) of the Internal Revenue Code of 1954, as amended, apply to the issue of the Bond, and the President or the Clerk is hereby authorized and directed to file a state- -5- ment of such election with the Internal Revenue Service for and on behalf of the Issuer, Section 15. Ordinance Effective Immediately. This Ordinance shall take effect immediately upon its passage and approval Board of Trustees. PASSED THIS 19th DAY OF DECEMBER, 1983 BY ROLL CALL VOTE (AND BY THE AFFIRMATIVE VOTE OF THE BOARD OF TRUSTEES) AS FOLLOWS: AYES: 4 - Stone, O'Reilly, Glover, Reid NAYS: 0 --None ABSENT: 2 - Marienthal, Hartstein ' ABSTAIN: 0 - None Approved this 19th day of December 1983. 7 President ATTESTED C 1 e 0126C —6—