O-32-00 06/12/2000ORDINANCE NUMBER
Z, -32 6e
AN ORDINANCE authorizing and providing for the issue of
$3,000,000 General Obligation Bonds (Alternate Revenue
Source), Series 2000A, of the Village of Lemont, Cook,
Will and DuPage Counties, Illinois, prescribing the details
of said bonds and providing for collection, segregation and
application of certain utility tax receipts to pay said Bonds.
Adopted by the President and Board of Trustees on
the 12th of June, 2000.
TABLE OF CONTENTS
PAGE
Preambles 1
Section 1. Definitions 3
Section 2. Incorporation of Preambles 5
Section 3. Determination to Issue Bonds 5
Section 4. Bond Details 5
Section 5. Execution; Authentication 6
Section 6. Registration of Bonds; Persons Treated as Owners 7
Section 7. Form of Bonds 9
Section 8. Sale of the Bonds 15
Section 9. Treatment of Bonds As Debt 15
Section 10. Series 2000A Alternate Bond Fund 15
Section 11. Use of Bond Proceeds 16
Section 12. Pledged Taxes; Tax Levy 17
Section 13. Filing with County Clerks 17
Section 14. Abatement of Pledged Taxes 18
Section 15. Pledged Revenues; General Covenants 18
Section 16. Additional Bonds 19
Section 17. Defeasance 19
Section 18. This Ordinance a Contract 19
Section 19. Non - Arbitrage and Tax - Exemption 19
Section 20. Registered Form 37
Section 21. Bond Registrar Covenants 37
Section 22. Continuing Disclosure Undertaking 38
Section 23. Bond Insurance 38
Section 24. Severability 38
Section 25. Repealer 38
Section 26. Effective Date 39
This Table of Contents is for convenience only
and is not a part of the ordinance.
ORDINANCE NUMBER 0-3, -00
AN ORDINANCE authorizing and providing for the issue of
$3,000,000 General Obligation Bonds (Alternate Revenue
Source), Series 2000A, of the Village of Lemont, Cook,
Will and DuPage Counties, Illinois, prescribing the details
of said bonds and providing for collection, segregation and
application of certain utility tax receipts to pay said Bonds.
PREAMBLES
WHEREAS the Village of Lemont, Cook, Will and DuPage Counties, Illinois (the
"Village"), is a duly organized and existing municipality and unit of local government of the
State of Illinois, and is operating under and pursuant to the provisions of the Illinois Municipal
Code, and all laws amendatory thereof and supplementary thereto (the "Municipal Code"); and
WHEREAS the President and Board of Trustees of the Village (the "Village Board") has
determined that it is advisable, necessary and in the best interests of the Village to undertake the
construction of certain street improvements throughout the Village, including bituminous surface
removal and replacement, leveling binder (machine method), pavement removal and
replacement, combination curb and gutter removal and replacement, area reflective crack control
treatment, thermoplastic pavement marking line, landscaping, and miscellaneous items to be
performed at all locations (the "Project "); and
WHEREAS the estimated cost of constructing the Project, including engineering, legal,
financial, bond discount, printing and publication costs, and other related expenses, is not less
than $3,000,000 and interest earnings thereon (the "Project"); and
WHEREAS the Village Board has determined and does hereby determine that the Project
is a lawful corporate purpose; and
WHEREAS there are insufficient funds on hand and lawfully available to pay costs of the
Project, and there exists a source of funds, other than enterprise revenues, namely, the gross
proceeds collected from those taxes imposed by the Village pursuant to Section 8 -11 -2 of the
Municipal Code, or substitute taxes therefor as provided by the State of Illinois in the future, and
as provided in the Local Government Debt Reform Act, as amended (the "Reform Act"), the
Village is authorized to issue its General Obligation Bonds (Alternate Revenue Source) payable
from such revenue source; and
WHEREAS the costs of the Project are expected to be defrayed by up to $3,000,000 of the
proceeds of alternate bonds issued pursuant to the Reform Act; and
WHEREAS it is necessary and for the best interests of the Village that the Project be
undertaken, and in order to raise the funds required for such purpose, it will be necessary for the
Village to borrow an amount not to exceed $3,000,000 and in evidence thereof to issue alternate
bonds, being General Obligation Bonds (Alternate Revenue Source) payable from any revenue
source as provided by the Reform Act, in an aggregate principal amount not to exceed
$3,000,000, all in accordance with the Reform Act; and
WHEREAS the Village Board, on the 27th day of March, 2000, adopted Ordinance
Number 0 -16 -00 (the "Authorizing Ordinance "), authorizing the issuance of certain Alternate
Bonds, being General Obligation Bonds (Alternate Revenue Source) payable from revenue
sources as provided by the Reform Act (the "2000 Alternate Bonds"), in an amount not to
exceed $3,000,000 for the Project; and
WHEREAS the Authorizing Ordinance, which included therein a notice in the statutory
form, was published in the Lemont Metropolitan, and an affidavit evidencing the publication of
the Authorizing Ordinance and said notice has heretofore been presented to the Village Board
and made a part of the permanent records of the Village; and
WHEREAS no petition meeting the requirements of Section 3 of Article 28 of the Election
Code, as amended, of the State of Illinois has ever been filed with the Village Clerk, requesting
that the question of the issuance of the 2000 Alternate Bonds for the Project be submitted to
referendum; and
WHEREAS the Village Board has been authorized to issue the 2000 Alternate Bonds to
the amount of $3,000,000 in accordance with the provisions of the Reform Act and the
Authorizing Ordinance; $ -0- of such bonds have heretofore been issued by the Village; and the
Village Board hereby determines that it is necessary and advisable that there be issued at this
time $3,000,000 of the authorized amount; and
WHEREAS the 2000 Alternate Bonds to be issued will be payable from the Pledged
Revenues and the Pledged Taxes, both as hereinafter defined; and
WHEREAS the Village Board hereby determines that the Pledged Revenues will provide
in each year to final maturity of the proposed 2000 Alternate Bonds an amount not less than 1.25
times debt service of the proposed 2000 Alternate Bonds, said series of bonds being the only
series of alternate bonds payable from the Pledged Revenues; and.
WHEREAS such determination of the sufficiency of the Pledged Revenues is supported by
reference to the most recent audit of the Village, which audit is for a fiscal year ending not
earlier than 18 months prior to the proposed issuance of the 2000 Alternate Bonds (the "Audit "),
which Audit has been presented to and accepted by the Village Board and is now on file with the
Village Clerk; and
WHEREAS pursuant to and in accordance with the provisions of the Bond Issue
Notification Act of the State of Illinois, the Village President, on the 27th day of March, 2000,
executed an order calling a public hearing (the "Hearing") for the 8th day of May, 2000,
concerning the intent of the Village Board to sell not to exceed $3,000,000 General Obligation
Bonds (Alternate Revenue Source); and
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WHEREAS notice of the Hearing was given (i) by publication at least once not less than
seven (7) nor more than thirty (30) days before the date of the Hearing in the Lemont
Metropolitan, the same being a newspaper of general circulation in the Village, and (ii) by
posting at least 48 hours before the Hearing a copy of said notice at the principal office of the
Village Board; and
WHEREAS the Hearing was held on the 8th day of May, 2000, and at the Hearing, the
Village Board explained the reasons for the proposed bond issue and permitted persons desiring
to be heard an opportunity to present written or oral testimony within reasonable time limits; and
WHEREAS the Hearing was finally adjourned on the 8th day of May, 2000, and not less
than seven (7) days have passed since the final adjournment of the Hearing; and
WHEREAS the Property Tax Extension Limitation Law of the State of Illinois, as
amended (the "Tax Limitation Law"), imposes certain limitations on the "aggregate extension"
of certain property taxes levied by the Village, but provides that the definition of "aggregate
extension" contained in Section 18 -185 of the Tax Limitation Law does not include extensions
for payments of principal and interest on bonds issued under Section 15 of the Local
Government Debt Reform Act; and
WHEREAS the County Clerks of Cook, Will and DuPage Counties, Illinois, are therefore
authorized to extend and collect said direct annual ad valorem tax so levied for the payment of
the 2000 Alternate Bonds for the Project without limitation as to rate or amount:
NOW THEREFORE Be It Ordained by the President and Board of Trustees of the Village
of Lemont, Cook, Will and DuPage Counties, Illinois, as follows:
Section 1. Definitions. The words and terms used in this Ordinance shall have the
meanings set forth and defined for them herein unless the context or use clearly indicates another
or different meaning is intended, including the words and terms as follows:
"Additional. Bonds" means any alternate bonds issued in the future in accordance with
the provisions of the Reform Act on a parity with and sharing ratably and equally in the Pledged
Revenues with the 2000 Alternate Bonds.
"Alternate Bonds" means the Bonds and any Additional Bonds.
"Bond" or "Bonds" means one or more, as applicable, of the $3,000,000 General
Obligation Bonds (Alternate Revenue Source), Series 2000A, authorized to be issued by this
Ordinance.
"Bond Fund" means the Village of Lemont 2000 Alternate Bond Fund maintained
hereunder and further described in Section 10 of this Ordinance.
"Bond Register" means the books of the Village kept by the Bond Registrar to evidence
the registration and transfer of the Bonds, or a successor designated as bond registrar hereunder.
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"Bond Registrar" means Amalgamated Bank of Chicago, Chicago, Illinois, or a
successor designated as bond registrar hereunder.
"Bond Year" means that twelve calendar month period of any year beginning on
December 2 of any year and ending on the subsequent December 1.
"Code" means the Internal Revenue Code of 1986, as amended.
"County Clerks" means the clerks of the Counties of Cook, Will and DuPage, Illinois.
"DTC" means The Depository Trust Company, New York, New York, and its successors
and assigns.
"Fiscal Year" means that twelve - calendar month period beginning on the first day of
May of any calendar year and ending on the last day of April of the next succeeding calendar
year.
"Municipal Code" means the Illinois Municipal Code, as supplemented and amended.
"Ordinance" means this ordinance as originally adopted and as the same may from time
to time be amended or supplemented in accordance with terms hereof.
"Outstanding" when used with reference to the Bonds and Additional Bonds means such
of those bonds which are outstanding and unpaid; provided, however, such term shall not include
any of the Bonds or Additional Bonds (i) which have matured and for which moneys are on
deposit with proper paying agents or are otherwise sufficiently available to pay all principal
thereof and interest thereon or (ii) the provision for payment of which has been made by the
Village by the deposit in an irrevocable trust or escrow of funds or direct, full faith and credit
obligations of the United States of America, the principal of and interest on which will be
sufficient to pay at maturity or as called for redemption all the principal of and interest on such
Bonds or Additional Bonds.
"Paying Agent" means Amalgamated Bank of Chicago, Chicago, Illinois, or a successor
designated as paying agent hereunder.
"Pledged Moneys" means the Pledged Revenues and the Pledged Taxes, as all of such
terms are defined herein.
"Pledged Revenues" means the gross proceeds collected from those taxes imposed by the
Village pursuant to Section 8 -11 -2 of the Municipal Code, or substitute taxes therefor as
provided by the State of Illinois in the future.
"Pledged Taxes" means the ad valorem taxes levied against all of the taxable property in
the Village without limitation as to rate or amount, pledged hereunder by the Village as security
for the Bonds.
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"Project" means such projects as described and defined as such in the preambles to this
Ordinance.
"Project Fund" means the fund established hereunder and further described by
Section 11 of this Ordinance.
"Purchase Contract" means the contract for the sale of the Bonds by and between the
Villager and the Purchaser.
"Purchase Price" means $3,001,880.60.
"Purchaser" means U.S. Bancorp Piper Jaffray.
"Reform Act" means the Local Government Debt Reform Act of the State of Illinois, as
amended.
"Representation Letter" means such letters to or agreements between the Village and
DTC as shall be necessary to effectuate the book -entry system described in Section 6(b) herein.
"Tax- exempt" means, with respect to the Bonds, the status of interest paid and received
thereon as not includible in the gross income of the owners thereof under the Code for federal
income tax purposes except to the extent that such interest will be taken into account in
computing an adjustment used in determining the alternative minimum tax for certain
corporations and in computing the "branch profits tax" imposed on certain foreign corporations.
"Village" means the Village of Lemont, Cook, Will and DuPage Counties, Illinois.
"Village Board" means the President and Board of Trustees of the Village.
Section 2. Incorporation of Preambles. The Village Board hereby finds that the
recitals contained in the preambles to this Ordinance are true and correct and does hereby
incorporate them into this Ordinance by this reference.
Section 3. Determination to Issue Bonds. It is necessary and in the best interests of the
Village for the Village to construct the Project for the public health, safety and welfare, in
accordance with the plans and estimates therefor as described, and to issue the Bonds to enable
the Village to pay the costs thereof.
Section 4. Bond Details. For the purpose of providing for the payment of costs of the
Project, there shall be issued and sold the Bonds in the aggregate principal amount of
$3,000,000. The Bonds shall each be designated "General Obligation Bond (Alternate Revenue
Source). Series 2000A "; and shall be dated June 15, 2000, and shall also bear the date of
authentication thereof. The Bonds shall be in fully registered form, shall be in denominations of
$5.000 or authorized integral multiples thereof (but no single Bond shall represent principal
maturing on more than one date), shall be numbered in such reasonable fashion as may be
selected by the Bond Registrar, and shall become due and payable on December 1 of the years,
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in the amounts and bearing interest at the rates percent per annum as follows (subject to the right
of redemption hereinafter stated):
YEAR AMOUNT ($) RATE ( %)
2002 265,000 5.375
2003 280,000 5.375
2004 295,000 5.375
2005 315,000 5.125
2006 330,000 5.125
2007 350,000 5.125
2008 370,000 5.125
2009 385,000 5,125
2010 410,000 5.125
Each Bond shall bear interest from the later of its Dated Date or from the most recent
interest payment date to which interest has been paid or duly provided for, until the principal
amount of such Bond is paid or duly provided for, such interest (computed upon the basis of a
360 -day year of twelve 30-day months) being payable on December 1, 2000, and semiannually
thereafter on June 1 and December 1 of each year. Interest on each Bond shall be paid by check
or draft of the Paying Agent, payable upon presentation in lawful money of the United States of
America, to the person in whose name such Bond is registered at the close of business on the
applicable record date. The applicable record date (the "Record Date ") is the 15th day of the
month next preceding any regular interest payment date and the 15th day preceding any other
interest payment date which may be occasioned by a redemption of Bonds. The principal of the
Bonds shall be payable upon presentation in lawful money of the United States of America at the
principal corporate trust office of the Paying Agent.
Section 5. Execution; Authentication. The Bonds shall be executed on behalf of the
Village with the manual or duly authorized facsimile signature of the President and attested with
the manual or duly authorized facsimile signature of the Village Clerk, as they may determine,
and shall have impressed or imprinted thereon the corporate seal or facsimile thereof of the
Village. In case any officer whose signature shall appear on any Bond shall cease to be such
officer before the delivery of such Bond, such signature shall nevertheless be valid and sufficient
for all purposes, the same as if such officer had remained in office until delivery.
All Bonds shall have thereon a certificate of authentication substantially in the form
hereinafter set forth duly executed by the Bond Registrar as authenticating agent of the Village
and showing the date of authentication. No Bond shall be valid or obligatory for any purpose or
be entitled to any security or benefit under this Ordinance unless and until such certificate of
authentication shall have been duly executed by the Bond Registrar by manual signature, and
such certificate of authentication upon any such Bond shall be conclusive evidence that such
Bond has been authenticated and delivered under this Ordinance. The certificate of
authentication on any Bond shall be deemed to have been executed by it if signed by an
authorized officer of the Bond Registrar, but it shall not be necessary that the same officer sign
the certificate of authentication on all of the Bonds issued hereunder.
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Section 6. Registration of Bonds; Persons Treated as Owners. (a) General. The
Village shall cause the Bond Register for the registration and for the transfer of the Bonds as
provided in this Ordinance to be kept at the principal corporate trust office of the Bond Registrar,
which is hereby constituted and appointed the registrar of the Village. The Village is authorized
to prepare, and the Bond Registrar shall keep custody of, multiple Bond blanks executed by the
Village for use in the transfer and exchange of Bonds.
Upon surrender for transfer of any Bond at the principal corporate trust office of the
Bond Registrar, duly endorsed by, or accompanied by a written instrument or instruments of
transfer in form satisfactory to the Bond Registrar and duly executed by, the registered owner or
his or her attorney duly authorized in writing, the Village shall execute and the Bond Registrar
shall authenticate, date and deliver in the name of the transferee or transferees a new fully
registered Bond or Bonds of the same maturity of authorized denominations, for a like aggregate
principal amount. Any fully registered Bond or Bonds may be exchanged at said principal
corporate trust office of the Bond Registrar for a like aggregate principal amount of Bond or
Bonds of the same maturity of other authorized denominations. The execution by the Village of
any fully registered Bond shall constitute full and due authorization of such Bond and the Bond
Registrar shall thereby be authorized to authenticate, date and deliver such Bond, provided,
however, the principal amount of outstanding Bonds of each maturity authenticated by the Bond
Registrar shall not exceed the authorized principal amount of Bonds for such maturity less
previous retirements.
The Bond Registrar shall not be required to transfer or exchange any Bond during the
period beginning at the close of business on the 15th day of the month next preceding the interest
payment date on such Bond and ending at the opening of business on such interest payment date.
The person in whose name any Bond shall be registered shall be deemed and regarded as
the absolute owner thereof for all purposes, and payment of the principal of or interest on any
Bond shall be made only to or upon the order of the registered owner thereof or his or her legal
representative. All such payments shall be valid and effectual to satisfy and discharge the
liability upon such Bond to the extent of the sum or sums so paid.
No service charge shall be made for any transfer or exchange of Bonds, but the Village or
the Bond Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any transfer or exchange of Bonds
except in the case of the issuance of a Bond or Bonds for the unredeemed portion of a Bond
surrendered for redemption.
(b) Global Book -Entry System. The Bonds shall be initially issued in the form of a
separate single fully registered Bond for each of the maturities of the Bonds determined as
described in Section 3 hereof. Upon initial issuance, the ownership of each such Bond shall be
registered in the Bond Register in the name of Cede & Co., or any successor thereto ("Cede"), as
nominee of DTC. All of the outstanding Bonds shall be registered in the Bond Register in the
name of Cede, as nominee of DTC, except as hereinafter provided. The President of the Village
Board and the Village Clerk and the Bond Registrar are each authorized to execute and deliver,
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on behalf of the Village, the Representation Letter, which Representation Letter may provide for
the payment of principal of or interest on the Bonds by wire transfer.
With respect to Bonds registered in the Bond Register in the name of Cede, as nominee
of DTC, the Village and the Bond Registrar shall have no responsibility or obligation to any
broker - dealer, bank or other financial institution for which DTC holds Bonds from time to time
as securities depository (each such broker - dealer, bank or other financial institution being
referred to herein as a "DTC Participant ") or to any person on behalf of whom such a DTC
Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence,
the Village and the Bond Registrar shall have no responsibility or obligation with respect to (i)
the accuracy of the records of DTC, Cede or any DTC Participant with respect to any ownership
interest in the Bonds, (ii) the delivery to any DTC Participant or any other person, other than a
registered owner of a Bond as shown in the Bond Register, of any notice with respect to the
Bonds, including any notice of redemption, or (iii) the payment to any DTC Participant or any
other person, other than a registered owner of a Bond as shown in the Bond Register, of any
amount with respect to the principal of or interest on the Bonds. The Village and the Bond
Registrar may treat and consider the person in whose name each Bond is registered in the Bond
Register as the holder and absolute owner of such Bond for the purpose of payment of principal
and interest with respect to such Bond, for the purpose of giving notices of redemption and other
matters with respect to such Bond, for the purpose of registering transfers with respect to such
Bond, and for all other purposes whatsoever. The Bond Registrar shall pay all principal of and
interest on the Bonds only to or upon the order of the respective registered owners of the Bonds,
as shown in the Bond Register, or their respective attorneys duly authorized in writing, and all
such payments shall be valid and effective to fully satisfy and discharge the Village's obligations
with respect to payment of the principal of and interest on the Bonds to the extent of the sum or
sums so paid. No person other than a registered owner of a Bond as shown in the Bond Register,
shall receive a Bond evidencing the obligation of the Village to make payments of principal and
interest with respect to any Bond. Upon delivery by DTC to the Bond Registrar of written notice
to the effect that DTC has determined to substitute a new nominee in place of Cede, and subject
to the provisions in Section 3 hereof with respect to the payment of interest to the registered
owners of Bonds at the close of business on the 15th day of the month next preceding the
applicable interest payment date, the name "Cede" in this resolution shall refer to such new
nominee of DTC.
In the event that (i) the Village determines that DTC is incapable of discharging its
responsibilities described herein and in the Representation Letter, (ii) the agreement among the
Village, the Bond Registrar and DTC evidenced by the Representation Letter shall be terminated
for any reason or (iii) the Village determines that it is in the best interests of the beneficial
owners of the Bonds that they be able to obtain certificated Bonds, the Village shall notify DTC
and DTC Participants of the availability through DTC of certificated Bonds and the Bonds shall
no longer be restricted to being registered in the Bond Register in the name of Cede, as nominee
of DTC. At that time, the Village may determine that the Bonds shall be registered in the name
of and deposited with such other depository operating a universal book -entry system, as may be
acceptable to the Village, or such depository's agent or designee, and if the Village does not
select such alternate universal book -entry system, then the Bonds may be registered in whatever
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name or names registered owners of Bonds transferring or exchanging Bonds shall designate, in
accordance with the provisions of Section 4(a) hereof.
Notwithstanding any other provisions of this ordinance to the contrary, so long as any
Bond is registered in the name of Cede, as nominee of DTC, all payments with respect to
principal of and interest on such Bond and all notices with respect to such Bond shall be made
and given, respectively, in the name provided in the Representation Letter.
Section 7. Form of Bonds. The Bonds shall be in substantially the form hereinafter set
forth; provided, however, that if the text of the Bonds is to be printed in its entirety on the front
side of the Bonds, then the second paragraph on the front side and the legend "See Reverse Side
for Additional Provisions" shall be omitted and the text of paragraphs set forth for the reverse
side shall be inserted immediately after the first paragraph.
[Form of Bond - Front Side]
REGISTERED REGISTERED
NO. $
UNITED STATES OF AMERICA
STATE OF ILLINOIS
COUNTY OF COOK
VILLAGE OF LEMONT
GENERAL OBLIGATION BOND (ALTERNATE REVENUE SOURCE)
SERIES 2000A
See Reverse Side for
Additional Provisions
Interest Maturity Dated CUSIP
Rate: °lo Date: December 1, Date: June 15, 2000 Number:
Registered Owner:
Principal Amount: DOLLARS
KNOW ALL PERSONS BY THESE PRESENTS that the Village of Lemont, Cook, Will and
DuPage Counties, Illinois, a municipality and political subdivision of the State of Illinois (the
"Village"), hereby acknowledges itself to owe and for value received promises to pay to the
Registered Owner identified above, or registered assigns as hereinafter provided, on the Maturity
Date identified above, the Principal Amount identified above, and to pay interest (computed on
the basis of a 360 -day year of twelve 30 -day months) on such Principal Amount from the later of
the Dated Date of this Bond identified above or from the most recent interest payment date to
which interest has been paid or duly provided for, at the Interest Rate per annum identified
above, such interest to be payable on December 1, 2000, and semiannually thereafter on June 1
and December 1 of each year until the Principal Amount is paid or duly provided for, except as
the provisions hereinafter set forth with respect to redemption prior to maturity may be and
become applicable hereto. The Principal Amount of this Bond is payable in lawful money of the
United States of America upon presentation and surrender hereof at the principal corporate trust .
office of Amalgamated Bank of Chicago, Chicago, Illinois, as bond registrar and paying agent
(the "Bond Registrar "). Payment of the installments of interest shall be made to the Registered
Owner hereof as shown on the registration books of the Village maintained by the Bond
Registrar at the close of business on the 15th day of the month next preceding each interest
payment date and shall be paid by check or draft of the Bond Registrar, payable upon
presentation in lawful money of the United States of America, mailed to the address of such
Registered Owner as it appears on such registration books or at such other address furnished in
writing by such Registered Owner to the Bond Registrar, or as otherwise agreed to by the Village
and The Depository Trust Company, New York, New York, for so long as this Bond is held in
Book -Entry only form.
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Reference is hereby made to the further provisions of this Bond set forth on the reverse
hereof, and such further provisions shall for all purposes have the same effect as if set forth at
this place.
It is hereby certified and recited that all acts, conditions and things required to be done
precedent to and in the issuance of this Bond have been done and have happened and have been
performed in regular and due form of law; that the indebtedness of the Village, including the
issue of Bonds of which this is one, does not exceed any limitation imposed by law; that
provision has been made for the collection of the Pledged Revenues, the levy and collection of
the Pledged Taxes, and the segregation of all Pledged Moneys to pay the interest hereon as it
falls due and also to pay and discharge the principal hereof at maturity; and that the Village
hereby covenants and agrees that it will properly account for said Pledged Moneys and will
comply with all the covenants of and maintain the funds and accounts as provided by the
Ordinance.
FOR THE PROMPT PAYMENT OF THIS BOND, BOTH PRINCIPAL AND INTEREST AT
MATURITY AND UPON MANDATORY REDEMPTION, THE FULL FAITH, CREDIT AND RESOURCES
OF THE VILLAGE ARE HEREBY IRREVOCABLY PLEDGED.
THE VILLAGE HAS DESIGNATED THIS BOND AS A "QUALIFIED TAX - EXEMPT OBLIGA-
TION" PURSUANT TO SECTION 265(b)(3) OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED.
This Bond shall not be valid or become obligatory for any purpose until the certificate of
authentication hereon shall have been signed by the Bond Registrar.
IN WITNESS WHEREOF the Village of Lemont, Cook, Will and DuPage Counties, Illinois,
by its President and Board of Trustees, has caused this Bond to be executed with the manual or
duly authorized facsimile signature of its President and attested by the manual or duly authorized
facsimile signature of its Village Clerk and its corporate seal or a facsimile thereof to be
impressed or reproduced hereon, all as appearing hereon and as of the Dated Date identified
above.
ATTEST:
Village Clerk
Village of Lemont
Cook, Will and DuPage Counties, Illinois
[SEAL]
Date of Authentication:
side
Village of Lemont
Cook, Will and DuPage Counties, Illinois
CERTIFICATE Bond Registrar and Paying Agent:
OF Amalgamated Bank of Chicago
AUTHENTICATION Chicago, Illinois
This Bond is one of the Bonds described
in the within mentioned ordinance and is
one of the General Obligation Bonds
(Alternate Revenue Source), Series 2000A,
of the Village of Lemont, Cook, Will and
DuPage Counties, Illinois.
AMALGAMATED BANK OF CHICAGO,
Chicago, Illinois, as Bond Registrar
By
Authorized Signatory
[Form of Bond - Reverse Side]
VILLAGE OF LEMONT, COOK, WILL AND DUPAGE COUNTIES, ILLINOIS
GENERAL OBLIGATION BOND (ALTERNATE REVENUE SOURCE)
SERIES 2000A
This bond and the bonds of the series of which it forms a part ( "Bond" and "Bonds"
respectively) are of an authorized issue of Three Million Dollars ($3,000,000), of like dated date
and tenor except as to maturity, rate of interest, and privilege of redemption and are issued
pursuant to applicable provisions of the Illinois Municipal Code, as amended (the "Code"), and
the Local Government Debt Reform Act of the State of Illinois, as amended (the "Reform Act").
The Bonds are issued for the purpose of paying the costs of constructing certain street
improvements throughout the Village.
The Bonds are payable from (i) the gross proceeds collected from those taxes imposed by
the Village pursuant to Section 8 -11 -2 of the Municipal Code, or substitute taxes therefor as
provided by the State of Illinois in the future (the "Pledged Revenues ") and (ii) ad valorem taxes
levied against all of the taxable property in the Village without limitation as to rate or amount
(the "Pledged Taxes").
The Bonds are issued pursuant to an authorizing ordinance passed by the President and
Board of Trustees of the Village (the "Village Board") on 27th of March, 2000, and by a more
complete bond ordinance passed by the Village Board on the 12th of June, 2000 (the
"Ordinance"), to which reference is hereby expressly made for further definitions and terms and
to all the provisions of which the Registered Owner by the acceptance of this Bond assents. This
Bond does not and will not constitute an indebtedness of the Village within the meaning of any
constitutional or statutory provision or limitation, unless the Pledged Taxes shall be extended
pursuant to the general obligation, full faith and credit promise supporting the Bonds, in which
case the amount of the Bonds then Outstanding shall be included in the computation of
indebtedness of the Village for purposes of all statutory provisions or limitations until such time
as an audit of the Village shall show that the Bonds shall have been paid from the Pledged
Revenues for a complete Fiscal Year.
The Village reserves the right to issue Additional Bonds without limit from time to time
payable from the Pledged Revenues, and any such Additional Bonds shall share ratably and
equally in the Pledged Revenues with the Bonds; provided, however, that no Additional Bonds
shall be issued except in accordance with the provisions of the Reform Act, and further provided
that no Additional Bonds will be secured by the Pledged Taxes which are levied for and secure
only the Bonds.
This Bond may be transferred or exchanged, but only in the manner, subject to the
limitations, and upon payment of the charges as set forth in the Ordinance.
The Village, the Paying Agent and the Bond Registrar may deem and treat the Registered
Owner hereof as the absolute owner hereof for the purpose of receiving payment of or on
account of principal hereof, premium, if any, hereon and interest due hereon and for all other
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purposes; and none of the Village, the Paying Agent and the Bond Registrar shall be affected by
any notice to the contrary.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned sells, assigns and transfers unto
(Name and Address of Assignee)
the within Bond and does hereby irrevocably constitute and appoint
as attorney to transfer the said Bond on the books kept for registration thereof with full power of
substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: The signature to this assignment must correspond with the name of the registered
owner as it appears upon the face of the within Bond in every particular, without
alteration or enlargement or any change whatever.
Section 8. Sale of the Bonds. The Bonds hereby authorized shall be executed as in this
Ordinance provided as soon after the passage hereof as may be, and thereupon be deposited with
the Treasurer of the Village, and be by said Treasurer delivered to the Purchaser, upon receipt of
the Purchase Price, plus accrued interest to date of delivery; the Purchase Contract, the Bonds
heretofore entered into is in all respects ratified, approved and confirmed, it being hereby found
and determined that the Bonds have been sold at such price and bear interest at such rates that
neither the true interest cost (yield) nor the net interest rate received upon such sale exceed the
maximum rate otherwise authorized by Illinois law and that the Purchase Contract is in the best
interests of the Village and that no person holding any office of the Village, either by election or
appointment, is in any manner financially interested directly in his or her own name or indirectly
in the name of any other person, association, trust or corporation, in the Purchase Contract.
The use by the Purchaser of any Preliminary Official Statement and any final Official
Statement relating to the Bonds and before the Village Board at the time of the adoption hereof is
hereby ratified, approved and authorized; the execution and delivery of said final Official
Statement is hereby authorized; and the officers of the Village Board are hereby authorized to
take any action, including, specifically, the execution of closing documents, a tax exemption
certificate, and the hereinafter authorized Undertaking, as may be required on the part of the
Village to consummate the transactions contemplated by the Purchase Contract, this Ordinance,
said Preliminary Official Statement, said final Official Statement and the Bonds.
Section 9. Treatment of Bonds As Debt. The Bonds shall be payable from the Pledged
Moneys and do not and shall not constitute an indebtedness of the Village within the meaning of
any constitutional or statutory limitation, unless the Pledged Taxes shall be extended pursuant to
the general obligation, full faith and credit promise supporting the Bonds, as set forth in
Section 12 hereof, in which case the amount of the Bonds then Outstanding shall be included in
the computation of indebtedness of the Village for purposes of all statutory provisions or
limitations until such time as an audit of the Village shall show that the Bonds have been paid
from the Pledged Revenues for a complete Fiscal Year, in accordance with the Reform Act.
Section 10. Series 2000A Alternate Bond Fund There is hereby created a special fund
of the Village, which fund shall be held separate and apart from all other funds and accounts of
the Village and shall be known as the "Village of Lemont 2000A Alternate Bond Fund" (the
"Bond Fund "). The purpose of the Bond Fund is to provide a fund to receive and disburse the
Pledged Moneys for any of the Bonds. All payments with respect to the Bonds shall be made
directly from the Bond Fund. There are hereby created two accounts of the Bond Fund,
designated the Pledged Revenues Account and the Pledged Taxes Account. All Pledged
Revenues to be applied to the payment of the Bonds shall be deposited to the credit of the
Pledged Revenues Account and all Pledged Taxes shall be deposited to the credit of the Pledged
Taxes Account. The Bond Fund and its respective accounts constitute a trust fund established
for the purpose of carrying out the covenants, terms and conditions imposed upon the Village by
this Ordinance.
Any Pledged Taxes received by the Village shall promptly be deposited into the Pledged
Taxes Account of the Bond Fund. Pledged Taxes on deposit to the credit of the Pledged Taxes
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Account shall be fully spent to pay the principal of and interest on the Bonds for which such
taxes were levied and collected prior to use of any moneys on deposit in the Pledged Revenues
Account of the Bond Fund.
The pledge of the Pledged Revenues is on a subordinate lien basis and the Village retains
the right to issue one or more series of obligations on a senior lien basis, secured by and payable
from the Pledged Revenues, so long as the provisions and requirements of the Reform Act can be
met with respect to the Bonds.
Section 11. Use of Bond Proceeds. The proceeds derived from the sale of the Bonds
shall be used as follows:
A. Accrued interest received by the Village upon the sale of the Bonds shall be
remitted by the Village Treasurer for deposit into the Bond Fund, and be used to pay first
interest coming due on the Bonds.
B. The remaining funds shall be set aside in a separate fund hereby created and
designated as the "Project Fund (2000A)" (the "Project Fund "), which the Village shall
maintain as a separate and segregated account. Monies in said fund shall be withdrawn
from time to time as needed for the payment of costs of the Project, and paying the fees
and expenses incidental thereto; and said monies shall be disbursed by the Village from
time to time only upon submission to the Village Treasurer of the following:
(1) If such disbursement is for payment to a supplier, materialman, or
contractor for work done in connection with the Project, a certificate executed by
the engineer or architect or Village officer in charge of the construction or
acquisition of the pertinent project stating the amount of materials supplied or the
nature of the work completed, that such materials have been properly accepted or
such work approved by him, the amount due and payable thereon, and the amount
remaining to be paid in connection with the project as applicable; and
(2) A duplicate copy of the order signed by an officer of the Village,
stating specifically the purpose for which the order is issued and indicating that
the payment for which the order is issued has been approved by the Village.
Funds on deposit in the Project Fund may be invested by the Village Treasurer of the
Village in any lawful manner. All investment earnings in the Project Fund shall first be reserved
and transferred to such other account as and to the extent necessary to pay any "excess arbitrage
profits" or "penalty in lieu of rebate" under Section 148 of the Code to maintain the Tax - Exempt
status of the Bonds, and the remainder shall be retained in the Projeci. Fund and appropriate
account for costs of the Project.
Within sixty (60) days after full depletion of any account of the Project Fund, or if the
Project has been completed and accepted, the Village Treasurer of the Village shall certify to the
Village Board the fact of such depletion or the engineer or architect or Village officer in
responsible charge of the pertinent project shall certify to the Village Board the fact that the work
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has been completed and accepted, and upon approval of such certification by the Village Board,
funds (if any) remaining in the Project Fund shall be credited by the Village Treasurer of the
Village to the appropriate account for payment of the Bonds; and the Project Fund shall be
closed.
Section 12. Pledged Taxes; Tax Levy. For the purpose of providing necessary funds to
pay the principal of and interest on the Bonds at maturity, and as provided in Section 15 of the
Reform Act, there is hereby levied upon all of the taxable property within the Village, in the
years for which any of the Bonds are Outstanding, a direct annual tax in amounts sufficient for
that purpose, and there be and there hereby is levied upon all of the taxable property in the
Village the following direct annual taxes (the "Pledged Taxes "):
FOR THE YEAR A TAX SUFFICIENT TO PRODUCE THE SUM OF:
2000 $ 155,850.00 for interest up to December 1, 2001 (net of funds on hand)
2001 420,850.00 for principal and interest
2002 421,606.25 for principal and interest
2003 421,556.25 for principal and interest
2004 425,700.00 for principal and interest
2005 424,556.25 for principal and interest
2006 427,643.75 for principal and interest
2007 429,706.25 for principal and interest
2008 425,743.75 for principal and interest
2009 431,012.50 for principal and interest
Principal or interest maturing at any time when there are insufficient funds on hand from
the Pledged Moneys to pay the same shall be paid promptly when due from current funds on
hand in advance of the collection of the Pledged Moneys herein pledged and levied; and when
the Pledged Moneys shall have been collected, reimbursement shall be made to said funds in the
amount so advanced.
Section 13. Filing with County Clerks. After this Ordinance becomes effective, a copy
hereof, certified by the Village Clerk, shall be filed with the County Clerks. The County Clerks
shall in and for each of the years required ascertain the rate percent required to produce the
aggregate Pledged Taxes hereinbefore provided to be levied in each of said years; and the
County Clerks shall extend the same for collection on the tax books in connection with other
taxes levied in said years in and by the Village for general corporate purposes of the Village; and
the County Clerks, or other appropriate officers or designees, shall remit the Pledged Taxes for
deposit to the credit of the Bond Fund, and in said years the Pledged Taxes shall be levied and
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collected by and for and on behalf of the Village in like manner as taxes for general municipal
purposes of the Village for said years are levied and collected, and in addition to and in excess of
all other taxes. The Pledged Taxes are hereby irrevocably pledged to and shall be used only for
the purpose of paying principal of and interest on the Bonds.
Section 14. Abatement of Pledged Taxes. As provided in the Reform Act, whenever the
Pledged Revenues have been deposited in the Bond Fund in an amount sufficient to pay debt
service on all outstanding Bonds in the next succeeding Bond Year, the Village Treasurer shall,
prior to the time the Pledged Taxes levied in such calendar year are extended, direct the
abatement of the Pledged Taxes, and proper notification of such abatement shall be filed with the
County Clerks in a timely manner to effect such abatement.
At the time of delivery of the Bonds, there shall be credited to the Bond Fund the sum
derived from funds of the Village on hand and lawfully available therefor which, together with
accrued interest, will be sufficient to pay interest on the Bonds up to and including December 1,
2000, and such funds are hereby appropriated and shall be used for such purpose.
Section 15. Pledged Revenues; General Covenants. The Village covenants and agrees
with the holders of the Bonds that, so long as any Bonds remain Outstanding:
A. The Pledged Revenues are hereby pledged to the payment of the Bonds; and
the Village Board covenants and agrees to provide for, collect and apply the Pledged
Revenues to the payment of all of such bonds as are from time to time Outstanding Bonds
and the provision of not less than an additional 0.25 times debt service thereon, all in
accordance with Section 15 of the Reform Act.
B. The Village will punctually pay or cause to be paid from the Bond Fund the
principal of, interest on and premium, if any, to become due in respect to the Bonds in
strict conformity with the terms of the Bonds and this Ordinance, and it will faithfully
observe and perform all of the conditions, covenants and requirements thereof.
C. The Village will pay and discharge, or cause to be paid and discharged, from
the Bond Fund any and all lawful claims which, if unpaid, might become a lien or charge
upon the Pledged Revenues, or any part thereof, or upon any such funds in the hands of
the Paying Agent, or which might impair the security of the Bonds. Nothing herein
contained shall require the Village to make any such payment so long as the Village in
good faith shall contest the validity of said claims.
D. The Village will keep, or cause to be kept, proper books of record and
accounts, separate from all other records and accounts of the Village, in which complete
and correct entries shall be made of all transactions relating to the Project, to the Pledged
Revenues and to the Bond Fund. Such books of record and accounts shall at all times
during business hours be subject to the inspection of the holders of not less than ten per
cent (10 %) of the principal amount of the Outstanding Bonds or their representatives
authorized in writing.
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E. The Village will preserve and protect the security of the Bonds and the
rights of the registered owners of the Bonds, and will warrant and defend their rights
against all claims and demands of all persons. From and after the sale and delivery of
any of the Bonds by the Village, the Bonds shall be incontestable by the Village.
F. The Village will adopt, make, execute and deliver any and all such further
ordinances, resolutions, instruments and assurances as may be reasonably necessary or
proper to carry out the intention of, or to facilitate the performance of, this Ordinance,
and for the better assuring and confirming unto the holders of the Bonds of the rights and
benefits provided in this Ordinance.
G. As long as any Bonds are Outstanding, the Village will continue to deposit
the Pledged Revenues and, if necessary, the Pledged Taxes to the appropriate accounts of
the Bond Fund. The Village covenants and agrees with the purchasers of the Bonds and
with the registered owners thereof that so long as any Bonds remain Outstanding, the
Village will take no action or fail to take any action which in any way would adversely
affect the ability of the Village to collect the Pledged Moneys. The Village and its
officers will comply with all present and future applicable laws in order to assure that the
Pledged Moneys may be collected as provided herein and deposited into the Bond Fund.
H. Once issued, the Bonds shall be and forever remain until paid or defeased
the general obligation of the Village, for the payment of which its full faith and credit are
pledged, and shall be payable, in addition to the Pledged Revenues, from the levy of the
Pledged Taxes as provided in the Reform Act.
Section 16. Additional Bonds. The Village reserves the right to issue Additional Bonds
without limit from time to time payable from the Pledged Revenues, and any such Additional
Bonds shall share ratably and equally in the Pledged Revenues with the Bonds; provided,
however, that not Additional Bonds shall be issued except in accordance with the provisions of
the Reform Act.
Section 17. Defeasance. Bonds which are no longer Outstanding Bonds as defined in
this Ordinance shall cease to have any lien on or right to receive or be paid from Pledged
Revenues, or the Pledged Taxes, and shall no longer have the benefits of any covenant for the
registered owners of Outstanding Bonds as set forth herein as such relates to lien and security for
the Bonds in the Pledged Moneys.
Section 18. This Ordinance a Contract. The provisions of this Ordinance shall
constitute a contract between the Village and the registered owners of the Bonds, and no
changes, additions or alterations of any kind shall be made hereto, except as herein provided.
Section 19. Non- Arbitrage and Tax - Exemption. One purpose of this Section is to set
forth various facts regarding the Bonds and to establish the expectations of the Village Board and
the Village as to future events regarding the Bonds and the use of Bond proceeds. The
certifications, covenants and representations contained herein and at the time of the Closing are
made on behalf of the Village for the benefit of the owners from time to time of the Bonds. In
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addition to providing the certifications, covenants and representations contained herein, the
Village hereby covenants that it will not take any action, omit to take any action or permit the
taking or omission of any action within its control (including, without limitation, making or
permitting any use of the proceeds of the Bonds) if taking, permitting or omitting to take such
action would cause any of the Bonds to be an arbitrage bond or a private activity bond within the
meaning of the Code or would otherwise cause the interest on the Bonds to be included in the
gross income of the recipients thereof for federal income tax purposes. The Village
acknowledges that, in the event of an examination by the Internal Revenue Service of the
exemption from Federal income taxation for interest paid on the Bonds, the Village may take
such actions as it deems appropriate, consistent with the obligations of the Village under the
Village's covenants hereunder. The Village Board and the Village certify, covenant and
represent as follows:
1.1. Definitions. In addition to such other words and terms used and defined in
this Ordinance, the following words and terms used in this Section shall have the
following meanings unless, in either case, the context or use clearly indicates another or
different meaning is intended:
"Bond Counsel" means Chapman and Cutler or any other nationally recognized
firm of attorneys experienced in the field of municipal bonds whose opinions are
generally accepted by purchasers of municipal bonds.
"Capital Expenditures" means costs of a type that would be properly chargeable
to a capital account under the Code (or would be so chargeable with a proper election)
under federal income tax principles if the Village were treated as a corporation subject to
federal income taxation, taking into account the definition of Placed -in- Service set forth
herein.
"Closing" means the first date on which the Village is receiving the purchase
price for the Bonds.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commingled Fund" means any fund or account containing both Gross Proceeds
and an amount in excess of $25,000 that are not Gross Proceeds if the amounts in the
fund or account are invested and accounted for, collectively, without regard to the source
of funds deposited in the fund or account. An open -ended regulated investment company
under Section 851 of the Code is not a commingled fund.
"Control" means the possession, directly or indirectly through others, of either of
the following discretionary and non - ministerial rights or powers over another entity:
(a) to approve and to remove without cause a controlling portion of the
governing body of a Controlled Entity; or
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(b) to require the use of funds or assets of a Controlled Entity for any
purpose.
"Controlled Entity" means any entity or one of a group of entities that is subject
to Control by a Controlling Entity or group of Controlling Entities.
"Controlled Group" means a group of entities directly or indirectly subject to
Control by the same entity or group of entities, including the entity that has the Control of
the other entities.
"Controlling Entity" means any entity or one of a group of entities directly or
indirectly having Control of any entities or group of entities.
"Costs of Issuance" means the costs of issuing the Bonds, including underwriters'
discount and legal fees, but not including the fees for the Credit Facility described in
paragraph 5.5 hereof.
"Credit Facility" means the municipal bond insurance policy issued by the Credit
Facility Provider.
"Credit Facility Provider" means MBIA Insurance Corporation, Armonk, New
York.
"De minimis Amount of Original Issue Discount or Premium" means (a) any
original issue discount or premium that does not exceed two percent of the stated
redemption price at maturity of the Bonds plus (b) any original issue premium that is
attributable exclusively to reasonable underwriter's compensation.
"External Commingled Fund" means a Commingled Fund in which the Village
and all members of the same Controlled Group as the Village own, in the aggregate, not
more than ten percent of the beneficial interests.
"GIC" means (a) any investment that has specifically negotiated withdrawal or
reinvestment provisions and a specifically negotiated interest rate and (b) any agreement
to supply investments on two or more future dates (e.g., a forward supply contract).
"Gross Proceeds" means amounts in the Bond Fund and the Project Fund.
"Placed -in- Service" means the date on which, based on all facts and
circumstances (a) a facility has reached a degree of completion that would permit its
operation at substantially its design level and (b) the facility is, in fact, in operation at
such level.
"Preliminary Expenditures" is defined in Section 2.3(a) hereof.
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"Qualified Administrative Costs of Investments" means (a) reasonable, direct
administrative costs (other than carrying costs) such as separately stated brokerage or
selling commissions (other than a broker's commission paid on behalf of either the
Village or the provider of a GIC to the extent such commission exceeds the present value
of annual payments equal to 0.05 percent of the weighted average amount reasonably
expected to be invested each year of the term of the GIC; for this purpose, present value
is computed using the taxable discount rate used to compute the commission or, if not
readily ascertainable, a reasonable taxable discount rate), but not legal and accounting
fees, recordkeeping, custody and similar costs; (b) all administrative costs, direct or
indirect, incurred by a publicly offered regulated investment company or an External
Commingled Fund; or (c) in the case of purpose investments, costs or expenses paid
directly to purchase, carry, sell or retire the investment and costs of issuing, carrying, or
repaying the Bonds, and any placement agent fee or underwriter's discount.
"Qualified Tax Exempt Obligations" means (a) any obligation described in
Section 103(a) of the Code, the interest on which is excludable from gross income of the
owner thereof for federal income tax purposes and is not an item of tax preference for
purposes of the alternative minimum tax imposed by Section 55 of the Code; (b) an
interest in a regulated investment company to the extent that at least ninety -five percent
of the income to the holder of the interest is interest which is excludable from gross
income under Section 103 of the Code of any owner thereof for federal income tax
purposes and is not an item of tax preference for purposes of the alternative minimum tax
imposed by Section 55 of the Code; and (c) certificates of indebtedness issued by the
United States Treasury pursuant to the Demand Deposit State and Local Government
Series program described in 31 C.F.R. part 344.
"Rebate Fund" means the fund, if any, identified and defined in paragraph 4.1
herein.
"Rebate Provisions" means the rebate requirements contained in Section 148(f)
of the Code and in the Regulations.
"Reimbursement Allocation" means the act of allocating the Reimbursed
Expenditures as defined in Section 2.3(d) hereof.
"Regulations" means United States Treasury Regulations dealing with the tax -
exempt bond provisions of the Code.
"Sale Proceeds" means amounts actually or constructively received from the sale
of the Bonds, including (a) amounts used to pay underwriters' discount or compensation
and accrued interest, other than accrued interest for a period not greater than one year
before Closing but only if it is to be paid within one year after Closing and (b) amounts
derived from the sale of any right that is part of the terms of a Bond or is otherwise
associated with a Bond (e.g., a redemption right).
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"Sale Proceeds Funds" means the funds containing amounts derived by the sale
of the Bonds or investment earnings thereon.
"Yield" means that discount rate which when used in computing the present value
of all payments of principal and interest paid and to be paid on an obligation (using
semiannual compounding on the basis of a 360 -day year) produces an amount equal to
the obligation's purchase price (or in the case of the Bonds, the issue price as established
in paragraph 5.1 hereof), including accrued interest.
"Yield Reduction Payment" means a rebate payment or any other amount paid to
the United States in the same manner as rebate amounts are required to be paid or at such
other time or in such manner as the Internal Revenue Service may prescribe that will be
treated as a reduction in Yield of an investment under the Regulations.
2.1. Purpose of the Bonds. The Bonds are being issued to finance the Project in
a prudent manner consistent with the revenue needs of the Village. A breakdown of the
sources and uses of funds is set forth in the preceding Section of this Ordinance. At least
75% of the sum of (i) Sale Proceeds plus (ii) investment earnings thereon, less (iii) Costs
of Issuance paid from Sale Proceeds or investment earnings thereon, less (iv) Sale
Proceeds or investment earnings thereon deposited in a reasonably required reserve or
replacement fund, are expected to be used for construction purposes with respect to
property owned by a governmental unit or a Section 501(c)(3) organization.
2.2. The Project — Binding Commitment and Timing. The Village has incurred
or will, within six months of the Closing, incur a substantial binding obligation (not
subject to contingencies within the control of the Village or any member of the same
Controlled Group as the Village) to a third party to expend at least five percent of the
Sale Proceeds on the Project. It is expected that the work of acquiring and constructing
the Project and the expenditure of amounts deposited into the Project Fund will continue
to proceed with due diligence through June 15, 2003, at which time it is anticipated that
all Sale Proceeds and investment earnings thereon will have been spent.
The investment earnings on the Project Fund will be spent to pay costs of the
Project and interest on the Bonds not later than the date set forth in the preceding
paragraph, the investment earnings on the Bond Fund will be spent to pay interest on the
Bonds, or to the extent permitted by law, investment earnings on amounts in the Project
Fund and the Bond Fund will be commingled with substantial revenues from the
governmental operations of the Village, and the earnings are reasonably expected to be
spent for governmental purposes within six months of the date earned. No proceeds of
the Bonds will be used more than 30 days after the date of issue of the Bonds for the
purpose of paying any principal or interest on any issue of bonds, notes, certificates or
warrants or on any installment contract or other obligation of the Village or for the
purpose of replacing any funds of the Village used for such purpose.
2.3. Reimbursement. Except for Reimbursed Expenditures, as identified in
Resolution R -35 -00 of the Village, none of the Sale Proceeds or investment earnings
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thereon will be used to reimburse the Village for an expenditure paid prior to the date of
Closing.
The Village is making the Reimbursement Allocation to allocate a portion of the
Sale Proceeds to the Reimbursed Expenditures incurred in connection with the acquiring,
constructing, renovating, improving and equipping the Project and will, after such
Reimbursement Allocation, treat such proceeds as being spent. In support of the
Reimbursement Allocation, the Village represents as follows:
(a) Certain Reimbursed Expenditures (the "Preliminary Expenditures")
relate to architectural, engineering, surveying, soil testing, Costs of Issuance and
similar costs that were incurred prior to commencement of the acquisition,
construction, or rehabilitation of the Project and do not include any costs related
to land acquisition, site preparation and similar costs incident to commencement
of construction.
(b) The amount of Preliminary Expenditures does not exceed 20% of the
Sale Proceeds being used to finance the portion of the Project with respect to
which the Preliminary Expenditures were incurred.
(c) Except as described in (h) below, in the case of non - Preliminary
Expenditures, the Village declared an official intent to reimburse such
expenditures not later than 60 days after the date such expenditures were paid. At
the time the official intent described above was declared, the Village reasonably
expected to reimburse the non - Preliminary Expenditures related thereto with the
proceeds of a future borrowing. The Village hereby allocates Sale Proceeds in the
amount of $345,673.94 to reimburse the Reimbursed Expenditures (the
"Reimbursement Allocation").
(d) Except as described in (h) below, and except in the case of
Preliminary Expenditures, the Closing is within three years after the later of (i) the
first date on which a Reimbursed Expenditure was paid or (ii) the first date on
which the property relating to a Reimbursed Expenditure was Placed -in- Service.
(e) All Reimbursed Expenditures represent Capital Expenditures or Costs
of Issuance.
(f) The Village acknowledges that if within one year after Closing the
Village deposits any money or other property into any fund or account (other than
amounts deposited into a bona fide debt service fund) to pay principal of or
interest on the Bonds or any other tax- exempt obligations of the Village or of a
member of the same Controlled Group as the Village in an amount corresponding
to Gross Proceeds used to reimburse a Reimbursed Expenditure (unless such
money or other property constitutes proceeds of a borrowing by the Village), it
may adversely affect the tax - exempt status of the Bonds. The Village further
acknowledges that in this Ordinance it has covenanted not to take any action that
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would cause interest on the Bonds to become includable in the gross income of
the holders thereof for federal income tax purposes.
(g) No Reimbursement Allocation will employ any action that results in
the Village issuing more Bonds, issuing Bonds earlier, or allowing Bonds to
remain outstanding longer than is reasonably necessary to accomplish the
governmental purposes of the Bonds, based upon all of the facts and
circumstances.
(h) The restrictions in (c) and (d) above do not apply to (i) Costs of
Issuance or (ii) an amount not in excess of $100,000.
2.4. Working Capital. All amounts in the Sale Proceeds Funds will be used,
directly or indirectly, to finance Capital Expenditures other than the following:
(a) an amount not to exceed five percent of the Sale Proceeds for working
capital expenditures directly related to Capital Expenditures financed by the
Bonds;
(b) payments of interest on the Bonds for a period commencing at
Closing and ending on the later of the date three years after Closing or one year
after the date on which the Project is Placed -in- Service;
(c) Costs of Issuance and Qualified Administrative Costs of Investments;
(d) payments of rebate or Yield Reduction Payments made to the United
States under the Regulations; and
(e) principal of or interest on the Bonds paid from unexpected excess
Sale Proceeds and investment earnings thereon.
2.5. Consequences of Contrary Expenditure. The Village acknowledges that if
amounts in the Sale Proceeds Funds and investment earnings thereon are spent for
non - Capital Expenditures other than as permitted by paragraph 2.4 hereof, a like amount
of then available funds of the Village will be treated as unspent Sale Proceeds.
2.6. Investment of Bond Proceeds. Not more than 50% of the Sale Proceeds and
investment earnings thereon are or will be invested in investments (other than Qualified
Tax Exempt Obligations) having a Yield that is substantially guaranteed for four years or
more. No portion of the Bonds is being issued solely for the purpose of investing a
portion of Sale Proceeds or investment earnings thereon at a Yield higher than the Yield
on the Bonds.
2.7. No Grants. None of the Sale Proceeds or investment earnings thereon will
be used to make grants to any person.
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2.8. Hedges. Neither the Village nor any member of the same Controlled Group
as the Village has entered into or expects to enter into any hedge (e.g., an interest rate
swap, interest rate cap, futures contract, forward contract or an option) with respect to the
Bonds. The Village acknowledges that any such hedge could affect the calculation of
Bond Yield under the Regulations, and that the Internal Revenue Service could
recalculate Bond Yield if the failure to account for the hedge fails to clearly reflect the
economic substance of the transaction.
3.1. Use of Proceeds. (a) The use of the Sale Proceeds and investment earnings
thereon and the funds held under the Ordinance at the time of Closing are described in
Section 11 of this Ordinance.
(b) Only the funds and accounts described in said Section will be funded at
Closing. There are no other funds or accounts created under this Ordinance.
(c) Principal of and interest on the Bonds will be paid from the Bond Fund.
(d) Any Costs of Issuance incurred in connection with the Bonds to be paid by
the Village will be paid either with funds on hand of the Village at Closing or from the
Project Fund.
(e) The costs of the Project will be paid from the Project Fund and no other
moneys (except for investment earnings on amounts in the Project Fund) are expected to
be deposited therein.
3.2. Purpose of Bond Fund. The Bond Fund will be used primarily to achieve a
proper matching of revenues and earnings with principal and interest payments on the
Bonds in each bond year. It is expected that the Bond Fund will be depleted at least once
a year, except for a reasonable carry over amount not to exceed the greater of (a) the
earnings on the investment of moneys in the Bond Fund for the immediately preceding
bond year or (b) 1 /12th of the principal and interest payments on the Bonds for the
immediately preceding bond year.
3.3. No Other Gross Proceeds. (a) Except for the Bond Fund and the Project
Fund, and except for investment earnings that have been commingled as described in
paragraph 2.2 and any credit enhancement or liquidity device related to the Bonds, after
the issuance of the Bonds, neither the Village nor any member of the same Controlled
Group as the Village has or will have any property, including cash or securities that
constitutes:
(i) Sale Proceeds;
(ii) amounts in any fund and account with respect to the Bonds (other
than the Rebate Fund);
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(iii) amounts that have a sufficiently direct nexus to the Bonds or to the
governmental purpose of the Bonds to conclude that the amounts would have
been used for that governmental purpose if the Bonds were not used or to be used
for that governmental purpose (the mere availability or preliminary earmarking of
such amounts for a governmental purpose, however, does not itself establish such
a sufficient nexus);
(iv) amounts in a debt service fund, redemption fund, reserve fund,
replacement fund or any similar fund to the extent reasonably expected to be used
directly or indirectly to pay principal of or interest on the Bonds or any amounts
for which there is provided, directly or indirectly, a reasonable assurance that the
amount will be available to pay principal of or interest on the Bonds or any
obligations under any credit enhancement or liquidity device with respect to the
Bonds, even if the Village encounters financial difficulties;
(v) any amounts held pursuant to any agreement (such as an agreement to
maintain certain levels of types of assets) made for the benefit of the Bondholders
or any credit enhancement provider, including any liquidity device or negative
pledge (any amount pledged to pay principal of or interest on an issue held under
an agreement to maintain the amount at a particular level for the direct or indirect
benefit of Bondholders or a guarantor of the bonds); or
(vi) amounts actually or constructively received from the investment and
reinvestment of the amounts described in (i) or (ii) above.
(b) No compensating balance, liquidity account, negative pledge of property
held for investment purposes or similar arrangement exists with respect to, in any way,
the Bonds or any credit enhancement or liquidity device related to the Bonds.
(c) The term of the Bonds is not longer than is reasonably necessary for the
governmental purposes of the Bonds. The average reasonably expected economic life of
the Project is at least 20 years. The weighted average maturity of the Bonds does not
exceed 10 years and does not exceed 120 percent of the average reasonably expected
economic life of the Project. The maturity schedule of the Bonds (the "Principal
Payment Schedule") is based on an analysis of revenues expected to be available to pay
debt service on the Bonds. The Principal Payment Schedule is not more rapid (i.e.,
having a lower average maturity) because a more rapid schedule would place an undue
burden on tax rates and cause such rates to be increased beyond prudent levels, and
would be inconsistent with the governmental purpose of the Bonds as set forth in
paragraph 2.1 hereof.
4.1. Rebate Fund. The Village is hereby authorized to create and establish a
special fund to be known as the Rebate Fund (the "Rebate Fund"), which, if created,
shall be continuously held, invested, expended and accounted for in accordance with this
Ordinance. Moneys in the Rebate Fund shall not be considered moneys held for the
benefit of the Bondholders. Except as provided in the Regulations, moneys in the Rebate
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Fund (including earnings and deposits therein) shall be held in trust for payment to the
United States as required by the Rebate Provisions and by the Regulations and as
contemplated under the provisions of this Ordinance.
4.2. Compliance with Rebate Provisions. The Village covenants to take such
actions and make, or cause to be made, all calculations, transfers and payments that may
be necessary to comply with the Rebate Provisions applicable to the Bonds. The Village
will make, or cause to be made, rebate payments with respect to the Bonds in accordance
with law.
4.3. Records. The Village agrees to keep and retain or cause to be kept and
retained until six years after the Bonds are paid in full adequate records with respect to
the investment of all Gross Proceeds and amounts in the Rebate Fund. Such records shall
include: (a) purchase price; (b) purchase date; (c) type of investment; (d) accrued interest
paid; (e) interest rate; (f) principal amount; (g) maturity date; (h) interest payment date;
(i) date of liquidation; and (j) receipt upon liquidation.
If any investment becomes Gross Proceeds on a date other than the date such
investment is purchased, the records required to be kept shall include the fair market
value of such investment on the date it becomes Gross Proceeds. If any investment is
retained after the date the last Bond is retired, the records required to be kept shall
include the fair market value of such investment on the date the last Bond is retired.
Amounts or investments will be segregated whenever necessary to maintain these
records.
4.4. Prohibited Payments; Certificates of Deposit and Investment Agreements.
In making investments of Gross Proceeds, the Village shall take into account prudent
investment standards including the date on which moneys to be invested may be needed.
The Village shall provide that all amounts which constitute Gross Proceeds and any
amounts in the Rebate Fund shall be invested at all times to the greatest extent practicable
in investments permitted under this Ordinance, and no amounts may be held as cash or be
invested in zero Yield investments other than obligations of the United States purchased
directly from the United States; provided, however, that in the event moneys cannot be
invested, other than as provided in this sentence, due to the denomination, price or
availability of investments, such amounts shall be invested in an interest bearing deposit
account of a bank with a Yield not less than that paid to the general public or held
uninvested (but uninvested amounts shall be held to the minimum amount necessary).
For purposes of determining the purchase price of investments (for either yield
restriction or rebate purposes), Gross Proceeds and any amounts in the Rebate Fund that
are invested in certificates of deposit or in GICs shall be invested only in accordance with
the following provisions:
(a) Investments in certificates of deposit of banks or savings and loan
associations that have a fixed interest rate, fixed payment schedules and
substantial penalties for early withdrawal shall be made only if either (i) the Yield
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on the certificate of deposit (A) is not less than the Yield on reasonably
comparable direct obligations of the United States and (B) is not less than the
highest Yield that is published or posted by the provider to be currently available
from the provider on reasonably comparable certificates of deposit offered to the
public or (ii) the investment is an investment in a GIC and qualifies under
paragraph (b) below.
(b) Investments in GICs shall be made only if
(i) the bid specifications are in writing, include all material terms
of the bid and are timely forwarded to potential providers (a term is
material if it may directly or indirectly affect the yield on the GIC);
(ii) the terms of the bid specifications are commercially reasonable
(a term is commercially reasonable if there is a legitimate business
purpose for the term other than to reduce the yield on the GIC);
(iii) all bidders for the GIC have equal opportunity to bid so that,
for example, no bidder is given the opportunity to review others bids (a
last look) before bidding;
(iv) any agent used to conduct the bidding for the GIC does not bid
to provide the GIC;
(v) at least three of the providers solicited for bids for the GIC are
reasonably competitive providers of investments of the type purchased
(i.e., providers that have established industry reputations as competitive
providers of the type of investments being purchased);
(vi) at least three of the entities that submit a bid do not have a
financial interest in the Bonds;
(vii) at least one of the entities that provided a bid is a reasonably
competitive provider that does not have a financial interest in the Bonds;
(viii) the bid specifications include a statement notifying potential
providers that submission of a bid is a representation that the potential
provider did not consult with any other provider about its bid, that the bid
was determined without regard to any other formal or informal agreement
that the potential provider has with the Village or any other person
(whether or not in connection with the Bonds) and that the bid is not being
submitted solely as a courtesy to the Village or any other person for
purposes of satisfying the federal income tax requirements relating to the
bidding for the GIC;
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(ix) the determination of the terms of the GIC takes into account the
reasonably expected deposit and drawdown schedule for the amounts to be
invested;
(x) the highest- yielding GIC for which a qualifying bid is made
(determined net of broker's fees) is in fact purchased; and
(xi) the obligor on the GIC certifies the administrative costs that it
is paying or expects to pay to third parties in connection with the GIC.
(c) If a GIC is purchased, the Village will retain the following records
with its bond documents until three years after the Bonds are redeemed in their
entirety:
(i) a copy of the GIC;
(ii) the receipt or other record of the amount actually paid for the
GIC, including a record of any administrative costs paid, and the
certification under paragraph (b)(xi) of this section;
(iii) for each bid that is submitted, the name of the person and entity
submitting the bid, the time and date of the bid, and the bid results; and
(iv) the bid solicitation form and, if the terms of the GIC deviated
from the bid solicitation form or a submitted bid is modified, a brief
statement explaining the deviation and stating the purpose for the
deviation.
Moneys to be rebated to the United States shall be invested to mature on or prior
to the anticipated rebate payment date. All investments made with Gross Proceeds or
amounts in the Rebate Fund shall be bought and sold at fair market value. The fair
market value of an investment is the price at which a willing buyer would purchase the
investment from a willing seller in a bona fide, arm's - length transaction. Except for
investments specifically described in this section and United States Treasury obligations
that are purchased directly from the United States Treasury, only investments that are
traded on an established securities market, within the meaning of regulations promulgated
under Section 1273 of the Code, will be purchased with Gross Proceeds. In general, an
"established securities market" includes: (i) property that is listed on a national securities
exchange, an interdealer quotation system or certain foreign exchanges; (ii) property that
is traded on a Commodities Futures Trading Commission designated board of trade or an
interbank market; (iii) property that appears on a quotation medium; and (iv) property for
which price quotations are readily available from dealers and brokers. A debt instrument
is not treated as traded on an established market solely because it is convertible into
property which is so traded.
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An investment of Gross Proceeds in an External Commingled Fund shall be made
only to the extent that such investment is made without an intent to reduce the amount to
be rebated to the United States Government or to create a smaller profit or a larger loss
than would have resulted if the transaction had been at arm's - length and had the rebate or
Yield restriction requirements not been relevant to the Village. An investment of Gross
Proceeds shall be made in a Commingled Fund other than an External Commingled Fund
only if the investments made by such Commingled Fund satisfy the provisions of this
paragraph.
The foregoing provisions of this paragraph 4.4 satisfy various safe harbors set
forth in the Regulations relating to the valuation of certain types of investments. The safe
harbor provisions of this paragraph 4.4 are contained herein for the protection of the
Village, who has covenanted not to take any action to adversely affect the tax - exempt
status of the interest on the Bonds. The Village will contact Bond Counsel if it does not
wish to comply with the provisions of this paragraph 4.4 and forego the protection
provided by the safe harbors provided herein.
4.5. Arbitrage Elections. The President, Clerk and Treasurer of the Village
Board are hereby authorized to execute one or more elections regarding certain matters
with respect to arbitrage.
4.6. Small Issuer Exception. The Village is a governmental unit that has the
power to impose a tax or to cause another entity to impose a tax of general applicability
that, when collected, may be used for the governmental purposes of the Village. The
power to impose such tax is not contingent on approval by another governmental unit; a
tax of general applicability is one that is not limited to a small number of persons. The
Village is not subject to Control by any other governmental unit or political subdivision.
None of the Bonds is or will be a "private activity bond" (as defined in Section 141 of the
Code). Ninety -five percent or more of the Sale Proceeds will be used for local
governmental activities of the Village. Neither the Village, any entity that issues tax -
exempt bonds on behalf of the Village nor any entity subject to Control by the Village
will issue, during the calendar year 2000, any tax - exempt bonds in an aggregate face
amount in excess of $5,000,000. As used herein, (a) "tax- exempt bonds" means
obligations of any kind, the interest on which is excludable from gross income of the
holders or owners thereof for federal income tax purposes pursuant to Section 103 of the
Code but not including "private activity bonds" (as defined in Section 141 of the Code)
and (b) "aggregate face amount" means, if an issue has more than a De minimis Amount
of Original Issue Discount or Premium, the issue price of the issue and otherwise means
the face amount of the issue. As of the date hereof, no tax - exempt bonds or other
obligations (other than the Bonds and the Senior Lien Tax Increment Revenue Bonds
(Lemont Senior Housing L.P.I. Project), Series 2000 (the "Senior Lien TIF Bonds ") have
been issued by the Village, any entity that issues tax - exempt bonds on behalf of the
Village or any entity subject to Control by the Village during the calendar year 2000.
The Village does not reasonably expect that it, any entity that issues tax - exempt bonds on
behalf of the Village or any entity subject to Control by the Village (including but not
limited to the Village) will issue any such tax - exempt bonds or other obligations within
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calendar year 2000, other than the Bonds, the Proposed General Obligation Bonds
(Alternate Revenue Source), Series 2000B (the "2000B Bonds ") and the Senior Lien TIF
Bonds. Therefore, subject to compliance with all the terms and provisions hereof, the
Village is excepted from the required rebate of arbitrage profits on the Bonds under
Section 148(f)(4)(D) of the Code and from the terms and provisions of this Ordinance
that need only be complied with if the Village is subject to the arbitrage rebate
requirement.
5.1. Issue Price. For purposes of determining the Yield on the Bonds, the
purchase price of the Bonds is equal to the first offering price at which the Purchaser sold
at least ten percent of each maturity of the Bonds or is equal to par, plus accrued interest,
if the Purchaser does not intend to resell the Bonds.
5.2. Yield Limits. (a) Except as provided in paragraph (b) or (c), all Gross
Proceeds shall be invested at market prices and at a Yield (after taking into account any
Yield Reduction Payments) not in excess of the Yield on the Bonds plus, for amounts in
the Project Fund only, 1 /8th of one percent.
(b) The following may be invested without Yield restriction:
(i) amounts invested in Qualified Tax Exempt Obligations (to the extent
permitted by the Municipal Code and this Ordinance);
(ii) amounts in the Rebate Fund;
(iii) amounts on deposit in the Bond Fund (except for capitalized interest)
that have not been on deposit under the Ordinance for more than 13 months, so
long as the Bond Fund continues to qualify as a bona fide debt service fund as
described in paragraph 3.2 hereof;
(iv) amounts on deposit in the Project Fund prior to the earlier of three
years after Closing or the completion (or abandonment) of the Project;
(v) amounts in the Bond Fund to be used to pay capitalized interest on the
Bonds prior to the earlier of three years after Closing or the payment of all
capitalized interest;
(vi) all amounts other than Sale Proceeds for the first 30 days after they
become Gross Proceeds; and
(vii) all amounts derived from the investment of Sale Proceeds or
investment earnings thereon for a period of one year from the date received.
(c) An amount not to exceed the lesser of $100,000 or five percent of the Sale
Proceeds may be invested without regard to Yield restriction.
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5.3. Continuing Nature of Yield Limits. Except as provided in paragraph 7.6,
once moneys are subject to the Yield limits of paragraph 5.2 hereof, such moneys remain
Yield restricted until they cease to be Gross Proceeds.
5.4. Federal Guarantees. Except for investments meeting the requirements of
paragraph 5.2(b) hereof, investments of Gross Proceeds shall not be made in
(a) investments constituting obligations of or guaranteed, directly or indirectly, by the
United States (except obligations of the United States Treasury, obligations guaranteed
by the Federal Housing Administration, the Federal National Mortgage Association, the
Federal Home Loan Mortgage Corporation, the Government National Mortgage
Association, the Student Loan Marketing Association, any guarantee by the Bonneville
Power Authority pursuant to the Northwest Power Act (16 U.S.C. 839d) as in effect on
the date of enactment of the Tax Reform Act of 1984, or investments in obligations
issued pursuant to Section 21B(d)(3) of the Federal Home Loan Bank, as amended (e.g.,
Refcorp Strips)); or (b) federally insured deposits or accounts (as defined in
Section 149(b)(4)(B) of the Code). Except as permitted in the immediately prior sentence
and in the Regulations, no portion of the payment of principal or interest on the Bonds or
any credit enhancement or liquidity device relating to the foregoing is or will be
guaranteed, directly or indirectly (in whole or in part), by the United States (or any
agency or instrumentality thereof). No portion of the Gross Proceeds has been or will be
used to make loans the payment of principal or interest with respect to which is or will be
guaranteed (in whole or in part) by the United States (or any agency or instrumentality
thereof).
5.5. Treatment of Certain Credit Facility Fees. The fee paid to the Credit
Facility Provider with respect to the Credit Facility may be treated as interest in
computing Bond Yield.
Neither the Village nor any member of the same Controlled Group as the Village
is a Related Person as defined in Section 144(a)(3) of the Code to the Credit Facility
Provider. The fee paid to the Credit Facility Provider does not exceed ten percent of the
Sale Proceeds. Other than the fee paid to the Credit Facility Provider, neither the Credit
Facility Provider nor any person who is a Related Person to the Credit Facility Provider
within the meaning of Section 144(a)(3) of the Code will use any Sale Proceeds or
investment earnings thereon.
6.1. Payment and Use Tests. (a) No more than five percent of the Sale Proceeds
plus investment earnings thereon will be used, directly or indirectly, in whole or in part,
in any activity carried on by any person other than a state or local governmental unit.
(b) The payment of more than five percent of the principal of or the interest on
the Bonds will not be, directly or indirectly (i) secured by any interest in (A) property
used or to be used in any activity carried on by any person other than a state or local
governmental unit or (B) payments in respect of such property or (ii) on a present value
basis, derived from payments (whether or not to the Village or a member of the same
Controlled Group as the Village) in respect of property, or borrowed money, used or to
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be used in any activity carried on by any person other than a state or local governmental
unit.
(c) No more than the lesser of five percent of the Sale Proceeds and investment
earnings thereon or $5,000,000 will be used, directly or indirectly, to make or finance
loans to any persons.
(d) No user of the Project other than a state or local governmental unit will use
more than five percent of the Project, in the aggregate, on any basis other than the same
basis as the general public; and no person other than a state or local governmental unit
will be a user of more than five percent of the Project, in the aggregate, as a result of
(i) ownership, (ii) actual or beneficial use pursuant to a lease or a management, service,
incentive payment, research or output contract, or (iii) any other similar arrangement,
agreement or understanding, whether written or oral.
(e) The Village has not and will not enter into any arrangement that conveys to
any person, other than a state or local government unit, special legal entitlements to any
portion of the Project that is available for use by the general public. No person, other
than a state or local governmental unit, is receiving or will receive any special economic
benefit from use of any portion of the Project that is not available for use by the general
public.
(f) No more than the lesser of five percent of the proceeds of the Bonds or
$5,000,000 have been or will be used to provide professional sports facilities. For
purposes of this paragraph, the term "professional sports facilities" (i) means real
property or related improvements used for professional sports exhibitions, games or
training, regardless of whether the admission of the public or press is allowed or paid and
(ii) includes any use of a facility that generates a direct or indirect monetary benefit
(other than reimbursement for out -of- pocket expenses) for a person who uses such
facilities for professional sport exhibitions, games or training.
6.2. I.R.S. Form 8038 -G. The information contained in the Information Return
for Tax - Exempt Governmental Obligations, Form 8038 -G, is true and complete. The
Village will file Form 8038 -G (and all other required information reporting forms) in a
timely manner.
6.3. Bank Qualification. (a) The Village hereby designates each of the Bonds as
a "qualified tax - exempt obligation" for the purposes and within the meaning of
Section 265(b)(3) of the Code. In support of such designation, the Village hereby
certifies that (i) none of the Bonds will be at anytime a "private activity bond" (as defined
in Section 141 of the Code) other than a "qualified 501(c)(3) bond" (as defined in
Section 145 of the Code), (ii) as of the date hereof, the Village has not issued any tax -
exempt obligations of any kind in calendar year 2000 other than the Bonds, the 2000B
Bonds and the Senior Lien TIF Bonds nor have any tax - exempt obligations of any kind
been issued on behalf of the Village and (iii) not more than $10,000,000 of obligations of
any kind (including the Bonds, the 2000B Bonds and the Senior Lien TIF Bonds) issued
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by or on behalf of the Village during calendar year 2000 will be designated for purposes
of Section 265(b)(3) of the Code.
(b) The Village is not subject to Control by any entity, and there are no entities
subject to Control by the Village.
(c) On the date hereof, the Village does not reasonably anticipate that for
calendar year 2000 it will issue any Section 265 Tax - Exempt Obligations (other than the
Bonds, the 2000B Bonds and the Senior Lien TIF Bonds), or that any Section 265 Tax -
Exempt Obligations will be issued on behalf of it. "Section 265 Tax - Exempt
Obligations" are obligations the interest on which is excludable from gross income of the
owners thereof under Section 103 of the Code, except for private activity bonds other
than qualified 501(c)(3) bonds, both as defined in Section 141 of the Code. The Village
will not issue or permit the issuance on behalf of it or by any entity subject to Control by
the Village (which may hereafter come into existence) of Section 265 Tax - Exempt
Obligations (including the Bonds, the 2000B Bonds and the Senior Lien TIF Bonds) that
exceed the aggregate amount of $10,000,000 during calendar year 2000 unless it first
obtains an opinion of Bond Counsel to the effect that such issuance will not adversely
affect the treatment of the Bonds as "qualified tax - exempt obligations" for the purposes
and within the meaning of Section 265(b)(3) of the Code.
7.1. Termination; Interest of Village in Rebate Fund. The terms and provisions
set forth in this Section shall terminate at the later of (a) 75 days after the Bonds have
been fully paid and retired or (b) the date on which all amounts remaining on deposit in
the Rebate Fund, if any, shall have been paid to or upon the order of the United States
and any other payments required to satisfy the Rebate Provisions of the Code have been
made to the United States. Notwithstanding the foregoing, the provisions of
paragraph 4.3 hereof shall not terminate until the sixth anniversary of the date the Bonds
are fully paid and retired.
7.2. No Common Plan of Financing. Since a date that is 15 days prior to the date
of sale of the Bonds by the Village to the Purchaser, neither the Village nor any member
of the same Controlled Group as the Village has sold or delivered any obligations other
than the Bonds that are reasonably expected to be paid out of substantially the same
source of funds as the Bonds. Neither the Village nor any member of the same
Controlled Group as the Village will sell or deliver within 15 days after the date hereof
any obligations other than the Bonds that are reasonably expected to be paid out of
substantially the same source of funds as the Bonds. No obligation other than the Bonds
were sold on the same date as the Bonds, are being issued on the date of the Closing and
were or are being offered pursuant to a single offering document.
7.3. No Sale of the Project. (a) Other than as provided in the next sentence,
neither the Project nor any portion thereof has been, is expected to be, or will be sold or
otherwise disposed of, in whole or in part, prior to the earlier of (i) the last date of the
reasonably expected economic life to the Village of the property (determined on the date
of issuance of the Bonds) or (ii) the last maturity date of the Bonds. The Village may
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dispose of personal property in the ordinary course of an established government program
prior to the earlier of (i) the last date of the reasonably expected economic life to the
Village of the property (determined on the date of issuance of the Bonds) or (ii) the last
maturity of the Bonds, provided: (A) the weighted average maturity of the Bonds
financing the personal property is not greater than 120 percent of the reasonably expected
actual use of that property for governmental purposes; (B) the Village reasonably expects
on the issue date that the fair market value of that property on the date of disposition will
be not greater than 25 percent of its cost; (C) the property is no longer suitable for its
governmental purposes on the date of disposition; and (D) the Village deposits amounts
received from the disposition in a commingled fund with substantial tax or other
governmental revenues and the Village reasonably expects to spend the amounts on
governmental programs within six months from the date of the commingling.
(b) The Village acknowledges that if Bond - financed property is sold or
otherwise disposed of in a manner contrary to (a) above, such sale or disposition may
constitute a "deliberate action" within the meaning of the Regulations that may require
remedial actions to prevent the Bonds from becoming private activity bonds. The Village
shall promptly contact Bond Counsel if a sale or other disposition of bond - financed
property is considered by the Village.
7.4. Use of Project. The Village acknowledges and agrees that it will not use, or
allow the Project to be used, in a manner which is prohibited by the Establishment of
Religion Clause of the First Amendment to the Constitution of the United States of
America or by any comparable provisions of the Constitution of the State of Illinois.
7.5. Future Events. The Village acknowledges and agrees that any changes in
facts or expectations from those set forth herein may result in different Yield restrictions
or rebate requirements from those set forth herein. Such changes in facts or expectations
might include, but are not in any respect whatsoever limited to, moneys or investments
being pledged or otherwise set aside for payment of principal of or interest on the Bonds,
amounts being derived from the sale of any right that is part of the terms of a Bond or is
otherwise associated with a Bond (e.g., a redemption right) or the Village entering into
any agreement to maintain certain levels of types of assets for the benefit of a holder of a
bond or any credit enhancement with respect to the Bonds or the sale of any Bond -
financed property. The Village shall promptly contact Bond Counsel if such changes do
occur.
7.6. Permitted Changes; Opinion of Bond Counsel. The Yield restrictions
contained in paragraph 5.2 or any other restriction or covenant contained herein need not
be observed or may be changed if the Village receives an opinion of Bond Counsel to the
effect that such nonobservance or change will not result in the loss of any exemption for
the purpose of federal income taxation to which interest on the Bonds is otherwise
entitled.
7.7. Successors and Assigns. The terms, provisions, covenants and conditions of
this Section shall bind and inure to the benefit of the respective successors and assigns of
the Village Board and the Village.
7.8. Expectations. The Village Board has reviewed the facts, estimates and
circumstances in existence on the date of issuance of the Bonds. Such facts, estimates
and circumstances, together with the expectations of the Village as to future events, are
set forth in summary form in this Section. Such facts and estimates are true and are not
incomplete in any material respect. On the basis of the facts and estimates contained
herein, the Village has adopted the expectations contained herein. On the basis of such
facts, estimates, circumstances and expectations, it is not expected that the Sale Proceeds
or any other moneys or property will be used in a manner that will cause the Bonds to be
arbitrage bonds within the meaning of the Rebate Provisions and the Regulations. Such
expectations are reasonable and there are no other facts, estimates and circumstances that
would materially change such expectations.
The Village also agrees and covenants with the purchasers and holders of the Bonds from
time to time outstanding that, to the extent possible under Illinois law, it will comply with
whatever federal tax law is adopted in the future which applies to the Bonds and affects the Tax -
exempt status of the Bonds.
The Village Board hereby authorizes the officials of the Village responsible for issuing
the Bonds, the same being the President, Clerk and Treasurer of the Village, to make such further
covenants and certifications as may be necessary to assure that the use thereof will not cause the
Bonds to be arbitrage bonds and to assure that the interest on the Bonds will be Tax - exempt. In
connection therewith, the Village and the Village Board further agree: (a) through their officers,
to make such further specific covenants, representations as shall be truthful, and assurances as
may be necessary or advisable; (b) to consult with counsel approving the Bonds and to comply
with such advice as may be given; (c) to pay to the United States, as necessary, such sums of
money representing required rebates of excess arbitrage profits relating to the Bonds; (d) to file
such forms, statements, and supporting documents as may be required and in a timely manner;
and (e) if deemed necessary or advisable by their officers, to employ and pay fiscal agents,
financial advisors, attorneys, and other persons to assist the Village in such compliance.
Section 20. Registered Form. The Village recognizes that Section 149(a) of the Code
requires the Bonds to be issued and to remain in fully registered form in order that interest
thereon is exempt from federal income taxation under laws in force at the time the Bonds are
delivered. In this connection, the Village agrees that it will not take any action to permit the
Bonds to be issued in, or converted into, bearer or coupon form.
Section 21. Bond Registrar Covenants. If requested by the Bond Registrar, the
President and Village Clerk are authorized to execute the Bond Registrar's standard form of
agreement between the Village and the Bond Registrar with respect to the obligations and duties
of the Bond Registrar hereunder. Subject to modification by the express terms of any such
agreement, such duties shall include the following:
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(a) to act as bond registrar, authenticating agent, paying agent and transfer agent
as provided herein;
(b) to maintain a list of Bondholders as set forth herein and to furnish such list
to the Village upon request, but otherwise to keep such list confidential to the extent
permitted by law;
(c) to give notice of redemption of Bonds as provided herein;
(d) to cancel and/or destroy Bonds which have been paid at maturity or upon
earlier redemption or submitted for exchange or transfer;
(e) to furnish the Village at least annually a certificate with respect to Bonds
cancelled and/or destroyed; and
(f) to furnish the Village at least annually an audit confirmation of Bonds paid,
Outstanding Bonds and payments made with respect to interest on the Bonds.
The Village Clerk is hereby directed to file a certified copy of this Ordinance with the
Bond Registrar.
Section 22. Continuing Disclosure Undertaking. The Village President is hereby
authorized, empowered and directed to execute and deliver the Continuing Disclosure
Undertaking (the "Undertaking") in substantially the same form as now before the Village, or
with such changes therein as the individual executing the Undertaking on behalf of the Village
shall approve, his execution thereof to constitute conclusive evidence of his approval of such
changes. When the Undertaking is executed and delivered on behalf of the Village as herein
provided, the Undertaking will be binding on the Village and the officers, employees and agents
of the Village, and the officers, employees and agents of the Village are hereby authorized,
empowered and directed to do all such acts and things and to execute all such documents as may
be necessary to carry out and comply with the provisions of the Undertaking as executed.
Notwithstanding any other provision of this Ordinance, the sole remedies for failure to comply
with the Undertaking shall be the ability of the beneficial owner of any Bond to seek mandamus
or specific performance by court order, to cause the Village to comply with its obligations under
the Undertaking.
Section 23. Bond Insurance. The Village hereby accepts the commitment from MBIA
Insurance Corporation to issue a bond insurance policy, which commitment is attached hereto as
Exhibit A and incorporated herein by reference.
Section 24. Severability. If any section, paragraph, clause or provision of this
Ordinance shall be held invalid, the invalidity of such section, paragraph, clause or provision
shall not affect any of the other provisions of this Ordinance.
Section 25. Repealer. All ordinances, resolutions or orders, or parts thereof, in conflict
with the provisions of this Ordinance are to the extent of such conflict hereby repealed.
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Section 26. Effective Date. This Ordinance shall be effective immediately upon
adoption and approval.
Passed by the President and Board of Trustees on June 12, 2000.
AYES: 6
NAYS: 0
ABSENT:
0
RECORDED in the Village Records on June 12, 2000.
Published in pamphlet form on 6/13 , 2000.
ATTEST:
Village Clerk
[SEAL]
EXHIBIT A
BOND INSURANCE COMMITMENT