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Resolution 2015-11 Resolution No.2015- A RESOLUTION OF THE UNITED CITY OF YORKVILLE, KENDALL COUNTY,ILLINOIS, APPROVING A PLACEMENT AGENT AGREEMENT WHEREAS, the United City of Yorkville, Kendall County, Illinois (the "City") is a duly organized and validly existing non home-rule municipality created in accordance with the Constitution of the State of Illinois of 1970 and the laws of this State; and, WHEREAS, the City, Gates Capital Corporation ("Gates"), and Kayne Saybrook Municipal Opportunity Funds ("Kayne Saybrook") desire to enter into a Placement Agent Agreement wherein Gates agrees to use its best efforts to arrange for the re-finance of the City's Sales Tax Revenue Bonds, Series 2007 and to assist the City in raising the necessary funds through an issue of the City's Sales Tax Revenue Bonds, Senior Series 2015A and delivery by the City to or as directed by Kayne Saybrook of a Series 2015B Cash Flow Note. NOW, THEREFORE, BE IT RESOLVED, by the Mayor and City Council of the United City of Yorkville, Kendall County, Illinois, as follows: Section 1. That the Placement Agent Agreement, attached hereto and made a part hereof, is hereby approved and the City Administrator is hereby authorized to execute and deliver said Agreement on behalf of the United City of Yorkville. Section 2. This Resolution shall be in full force and effect from and after its passage and approval as provided by law. Passed by the City Council of the United City of Yorkville, Kendall County, Illinois this day of�f V7 e , 2015. CITY CLERK CARLO COLOSIMO KEN KOCH _ JACKIE MILSCHEWSKI LARRY KOT CHRIS FUNKHOUSER JOEL FRIEDERS DIANE TEELING SEAVER TARULIS Resolution No. 2015- 1_ Page 1 Approved by me, as Mayor of the United City of Yorkville, Kendall County, Illinois, this d(o day of J U 4 E , 2015. -",& MAYOR Attest: s City Clerk Resolution No. 2015--d— Page 2 PLACEMENT AGENT AGREEMENT June 1,2015 United City of Yorkville 800 Game Farm Road Yorkville,IL, 60560 Saybrook Municipal Opportunity Fund IV,L.P. 303 Twin Dolphin Drive Suite 600 Redwwod Shores,CA 94065 Re: Sales Tax Revenue Refunding Bonds, Series 2015 Kendall Marketplace Project $3,515,000 Total Par Amount(estimated) Senior Series 2015A Bonds and Subordinate Series 2015B Cash Flow Note Ladies and Gentlemen: Gates Capital Corporation (the "Placement Agent" or"Gates") is pleased to present this Placement Agent engagement letter (this"Agreement") to the United City of Yorkville, Kendall County, Illinois ("Issuer") and Saybrook Municipal Opportunity Fund IV; L.P. ("Saybrook"). Upon acceptance hereof by the addressees,this Agreement will be binding on us all. By entering into this Agreement,the Issuer and Saybrook agree that the Placement Agent will use its best efforts to arrange for the re-finance of the Issuer's Sales Tax Revenue Bonds, Series 2007 (the "Prior Bonds"), such refinancing of the Prior,Bonds being referred to herein as the"Project." Gates will facilitate conversations in which the Issuer and Saybrook agree to select a plan of finance, based in part on each option's cost, ongoing risk, likelihood of execution and ability to maintain future Project financial flexibility. Gates' role as Placement Agent will be to exert its best efforts to assist the Issuer in raising the funds through an issue of the Issuer's Sales Tax Revenue Bonds, Senior Series 2015A and delivery by the Issuer to or as directed by Saybrook of a Series 2015B Cash Flow Note, secured on a basis subordinate to the Senior Series 2015A Bonds. It is expressly understood that in accepting the responsibilities of placement agent as set forth herein Gates will use its best efforts to complete the desired financing for the Project. Such efforts do not constitute a commitment by Gates to underwrite or purchase the Bonds. Section 1: Background From the Placement Agent's review of Prior Bond material, the Placement Agent has gained a broad understanding of the Project and the Issuer's financing objectives. The initial plan of finance contemplates a restructuring with existing bondholders that allows the Project to cover debt service for the new Senior Series 2015A Bonds from existing sales tax cash flows.Any final financing option or plan of finance will be subject to further due diligence. 1 Section 2: Scope of Services and Compensation Gates' initial services will include: 1. Prepare a comprehensive credit information package for investors including an information summary of Issuer,Gates prepared sample term sheet and bond cash flows. 2. Conduct a due diligence effort including coordination with third parties like appraisers, engineers, and feasibility consultants in order to satisfy investor requirements. 3. Oversee the work of a third party consultant who will prepare a Project market study and Sales Tax Revenue analysis. 4. Contact the investors, answering questions, coordinating site visits and addressing follow up questions and analysis. 5. Summarize and analyze the proposed terms and conditions from restructure proposals. 6. Assist with the negotiation of the commitment from investors. 6. Prepare necessary materials for Issuer meetings. 7. Provide recommendations for completing the financing team, if applicable and needed (attorneys, consultants,trustee,bond purchaser counsel, etc.), including obtaining"not to exceed"fee quotes where applicable. 8. Develop and maintain a working group distribution list and detailed financing schedule. 9. Initiate and coordinate the Issuer process as needed. 10. Coordinate the public review process,if any. 11. Coordinate a series of conference calls for the processing of the transactions. Oversee and review multiple drafts of financing documents. 12. Draft a"Flow of Funds Memo"and coordinate the allocation of bond proceeds at closing. 13. Development of final debt service schedules for the Issuer based on the final deal structure. 14. Place securities (as applicable) and assist in the preparation of a Preliminary and Final Private Placement Memorandum with respect to the Senior Series 2015A Bonds. 2 To assist in provision of services,the Issuer agrees to make available,without limitation,but only to the extent permitted by law, all documents, appraisals, financial information, sales tax data, lease agreements, management agreements, equity and partnership agreements, market and pricing information and such other information which Gates may request from time to time relating to it, its operations or to the Project. Additionally, the Issuer agrees to make available, upon reasonable notice, its principals, officers, employees and affiliated professionals including engineers, attorneys and accountants to assist in the provision of services. Saybrook agrees to pay any and all expenses to be incurred by the Issuer pursuant to this Agreement, subject to the limitations set forth in the following sentence, including payment to the Issuer for any and all time required of Issuer personnel (whether or not listed in this Section 2) other than such costs and expenses to be paid from the proceeds of the Senior Series 2015A Bonds. The Issuer agrees that the costs and expense related to the Issuer personnel providing services listed in this Section 2 shall not exceed$6,000. The proposed fee structure is listed below. Diligence / Marketing Fee: a marketing and diligence fee of $15,000 to be paid upon execution of this document. The marketing and diligence fee is a non-refundable fee but the fee will be credited toward the financing fee which is paid at closing (see below). The marketing and diligence fee will cover costs of.diligence, analysis and structuring, travel, compilation of a marketing package and participation in calls and meetings as necessary. Payment of the marketing and diligence fee will be the responsibility of Saybrook, and by execution hereof Saybrook agrees to pay such amount. Series 2015 Financing Fee: A Financing Fee equal to 4.00% of the final principal amount of the Senior Series 2015A Bonds, to be paid at financing closing from proceeds of the Senior Series 2015A Bonds. If the Series 2015B Cash Flow Note requires structuring / placement services, it will be subject to separate fee to be determined by mutual agreement of the Issuer, the Placement Agent and Saybrook. In addition to above fees, the Issuer agrees to pay (but solely from proceeds of the Senior Series 2015A Bonds) all reasonable costs, including those incurred by Gates, relating to the Project including, but not limited to: legal fees, (including Gates' legal fees), lender or investor commitment fees, market study fees, credit enhancement fees, trustee and related fees and underwriting or placement fees relating to the placement of securities or mortgages. The foregoing notwithstanding, the Issuer has the right to pre-approve any individual expense item incurred by Gates in excess of$1,000 either individually or in the aggregate. Section 3: Exclusivity During the term of the engagement, neither the Issuer nor Saybrook nor any of its respective affiliates or advisors will initiate any discussions with respect to this financing, except through Gates, and the Issuer and Saybrook will refer all inquiries from prospective credit enhancement and investor participants in the financing to Gates. The final terms and conditions of any financing will be subject to acceptance by the Issuer, Saybrook and Gates, and Gates acknowledges it has no.authoirty to commit the Issuer to any financing. 3 Section 4: Staffing Directing our engagement team with the Issuer will be Thomas C. Sulger, Managing Partner, and Nguyen(Win)A.Huynh,Executive Vice President. Section 5: Termination This Agreement will extend for a period of six months after execution by all parties. The Issuer may terminate this engagement with cause with 45 days' notice, in writing, to Gates. On such termination and payment,the Issuer shall have no further obligations hereunder. Section 6: Enforceability This Agreement shall be governed by, enforced and construed in accordance with laws of the State of Illinois. The Issuer and Saybrook hereby recognize and confirm that in providing the services hereunder Gates will be using and relying upon information furnished by or approved by the Issuer or by others that Gates reasonably assumes are authorized to provide such information, and that Gates does not assume any responsibility for the accuracy or completeness of that information. The Issuer agrees that any information provided by the Issuer shall be complete and accurate and shall not be false and misleading in any material respect. The Issuer shall and hereby does agree to indemnify Gates, its principals, officers, agents and employees to the full extent of the law, from and against all liabilities related to or arising from any information provided or approved by the Issuer, or from the Issuer's failure to provide such information regarding the Issuer or the Project or the financing thereof. Such indemnification shall not apply to liabilities based solely upon Gates' willful misconduct, negligence or bad faith in performing its services hereunder. This section and sections 2 and 3 above shall survive the expiration or termination of this agreement. Section 7: Kaynes Saybrook Indemnification Saybrook agrees (i) to indemnify and hold harmless the Issuer and each present or future member, director, officer, agent or employee of the Issuer, and each person, if any, who controls the Issuer, and each and all and any of them (collectively, within the meaning of this Section 7, the "Indemnified Parties"), from and against any and all losses, claims, damages, liabilities or actions to the extent that such losses,claims, damages, liabilities or actions arise as a result of any action taken by the Issuer hereinder, except for any liability arising as a result of the willful misconduct, negligence or bad faith of the Issuer, and (ii) to reimburse the Issuer, any past, present or future member, director, officer, agent, official, or employee of or counsel to the Issuer, and each such controlling person, if any, for any legal or other expenses reasonably incurred by them in defending any such action, including but not limited to any reasonable attorneys' fees and expenses(except for expenses for any liability arising as a result of the willful misconduct,negligence or bad faith of such individual).. (iii) In case any action shall be brought against any of the Indemnified Parties in respect of which the Saybrook is required to indemnify the Indemnified Parties pursuant to the provisions of this Section 7, the Indemnified Parties shall promptly notify Saybrook in writing and Saybrook shall assume the defense thereof, including the employment of counsel and the payment of all expenses. The Indemnified Parties shall have the right to employ separate counsel in any such action and participate in the defense thereof if such Indemnified Party reasonably concludes that a 4 potential conflict of interest exists between such Indemnified Party and Saybrook or in the event Saybrook does not promptly assume the defense of any such action,as the case may be. Saybrook shall not be liable for any settlement of any such action effected without the consent of Saybrook, but if settled with the consent of Saybrook, or if there be a final judgment for the plaintiff in any such action, Saybrook agrees to indemnify and hold harmless the Indemnified Parties from and against any loss or liability by reason of such settlement or judgment, including but not limited to reasonable attorneys' fees and expenses. Section 8.Notices Any notice or other communication required or permitted to be given hereunder shall be in writing and, except as otherwise provided, shall be deemed to have been given on the date the same is personally delivered or refused, or deposited in the United States mail, registered or certified, return receipt requested, postage prepaid, or deposited with an air courier service with proof of delivery, addressed to the party to which the notice or other communication is to be given as follows: if to the Issuer: United City of Yorkville 800 Game Farm Road Yorkville,IL, 60560 if to Saybrook: Saybrook Municipal Opportunity Fund IV,L.P. 303 Twin Dolphin Drive Suite 600 Redwwod Shores, CA 94065 if to Gates: Gates Capital Corporation 100 Park Avenue 22nd Floor New York,NY 10017 The Issuer, Saybrook and Gates may, by notice hereunder, designate any further or different addresses to which subsequent notices,certificates or other communications shall be sent. Section 9. Severability. If one or more provisions of this Agreement shall be held to be illegal or invalid,such illegality or invalidity shall not affect the other provisions of this Agreement, and this Agreement shall be construed and enforced as if such illegal or invalid provisions had not been contained herein. Section 10.Parties in Interest. This Agreement shall be binding upon and shall inure to the benefit of the Issuer, Saybrook and Gates, and, to the extent expressed, any person controlling the Issuer, Saybrook or Gates. The term"successors and assigns" shall not include any purchaser of a Senior Series 2015 A Bond. Section 11.Time of the Essence. Time shall be of the essence of this Agreement. 5 Section 12.Headings. Headings in this Agreement have been provided for convenience of reference only and shall not affect the interpretation of this Agreement. Section 13.Amendments. This Agreement may be amended only by a written instrument signed by all parties hereto. Section 14. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original but all of which together shall constitute a single agreement. [Remainder of page intentionally left blank] 6 If the foregoing is in accordance with your understanding of the Agreement, kindly sign and return to us the enclosed duplicate copies hereof, whereupon it will become a binding agreement between the Issuer, Saybrook and Gates in accordance with its terms. Very truly yours, GATES CAPITAL CORPORATION By: Thomas C. Sulger Managing Partner This letter is accepted on (Date) UNITED CITY OF YORKVILLE,KENDALL COUNTY,ILLINOIS By: Mr. Bart Olson City Administrator United City of Yorkville,Kendall County, Illinois This letter is accepted on 7-6—�5 (Date) YORKVILLE ACQUISITION,LLC By: Saybrook Fund Investors,LLC, its managing member By: Jeffrey M.Wilson Co-Portfolio Manager/Co-Managing Partner 7