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O-861-94 11/22/94ORDINANCE No. 861 AN ORDINANCE providing for the issue of $790,000 General Obligation Refunding Bonds (Alternate Revenue Source), Series 1994, of the Village of Lemont, Cook, DuPage and Will Counties, Illinois. WHEREAS, the Village of Lemont, Cook, DuPage and Will Counties, Illinois (the "Village "), is a municipal corporation duly incorporated under the laws of the State of Illinois, and is now operating under the provisions of the Illinois Municipal Code, and all laws amendatory thereof and supplementary thereto (the "Municipal Code "); and WHEREAS, the Village has outstanding an Installment Contract, dated January 16, 1991, by and between the Village and Policchio Brothers Co., Mokena, Illinois (the "Installment Contract "), and assigned to Heritage Bank of Lemont (now known as NBD Bank), Lemont, Illinois, entered into for the purpose of improving the Village Hall; and WHEREAS, the President and Board of Trustees of the Village (the "Board ") has determined that it is necessary and desirable to refund the installments of principal and interest due on and after December 1, 1994, on the Installment Contract P through the issuance of alternate bonds of the Village (the "Refunding "); and WHEREAS, the Installment Contract is more fully described in the Escrow Agreement referred to in Section 11 hereof and is presently outstanding and unpaid and is a binding and subsisting legal obligation of the Village; and g WHEREAS, the cost of the Refunding is $790,000 and there are insufficient funds on hand and lawfully available to pay such cost; and WHEREAS, for the purpose of providing funds to pay the cost of the Refunding and in accordance with the provisions of the Local Government Debt Reform Act of the State of roll. MINUTES of the special public meeting of the President and Board of Trustees of the Village of Lemont, Cook, DuPage and Will Counties, Illinois, held at 418 Main Street, Lemont, Illinois, in said Village at 6:15 o'clock P.M., on the 2nd day of November, 1994. The President called the meeting to order and directed the Village Clerk to call the Upon the roll being called, the following Trustees answered present: Buschman, Chin, Latz, Markiewicz, Rimbo The following Trustees were absent from the meeting: Schobert The President announced that the next item of business before the President and Board of Trustees was the proposed issuance of $790,000 General Obligation Refunding Bonds (Alternate Revenue Source), Series 1994, for the purpose of refunding the outstanding Installment Contract, dated January 16, 1991, between the Village and Policchio Brothers Co., Mokena, Illinois, and assigned to Heritage Bank of Lemont (now known as NBD Bank), Lemont, Illinois. Following a discussion of said refunding and the issuance of bonds therefor, Trustee Markiewicz presented and the Village Clerk read in full an ordinance as follows: 316069.01.09 2016194/MIJ:11 /2/94 Illinois, as amended (the "Act"), the Board is authorized to issue alternate bonds, being general obligation bonds payable from (i) the principal proceeds received by the Village from time to time from the issuance of its general obligation bonds or notes to the fullest extent permitted by law, including Section 8 -5 -16 of the Municipal Code, and (ii) such other funds of the Village lawfully available and annually appropriated for such purpose (the sources described in the foregoing clauses (i) and (ii) being collectively referred to as the "Pledged Revenues"), as provided by the Act; and WHEREAS, the Refunding constitutes a lawful corporate purpose within the meaning of the Act; and WHEREAS, the Board, on the 26th day of September, 1994, adopted Ordinance Number 857 (the "Authorizing Ordinance"), authorizing the issuance of alternate bonds in an amount not to exceed $800,000 for the Refunding; and WHEREAS, on the 28th day of September, 1994, the Authorizing Ordinance, together with a notice in the statutory form, was published in the Southtown Economist, a newspaper of general circulation in the Village, and an affidavit evidencing the publication of the Authorizing Ordinance and said notice have heretofore been presented to the Board and made a part of the permanent records of the Village; and WHEREAS, more than thirty (30) days have expired from the date of publication of the Authorizing Ordinance and said notice, and no petition with the requisite number of valid signatures thereon was filed with the Village Clerk requesting that the question of the issuance of such bonds for the Refunding be submitted to referendum; and WHEREAS, the Board is now authorized to issue alternate bonds to the amount of $800,000 in accordance with the provisions of the Act to pay the costs of the Refunding, and -2- the Board hereby determines that it is necessary and desirable that there be issued at this time $790,000 of the bonds so authorized; and WHEREAS, the alternate bonds to be issued pursuant to this ordinance will be payable from the Pledged Revenues and the Pledged Taxes (as hereinafter defined); and WHEREAS, the Board hereby determines that the Pledged Revenues will provide in each year, an amount not less than 1.25 times debt service of the alternate bonds proposed to be issued; and WHEREAS, such determination of the sufficiency of the Pledged Revenues is supported by reference to a Feasibility Report (the "Report ") prepared by Flatland, Thomas & Company, Northfield, Illinois ("Flatland"): NOW, THEREFORE, Be It Ordained by the President and Board of Trustees of the Village of Lemont, Cook, DuPage and Will Counties, Illinois, as follows: Section 1. Incorporation of Preambles. The Board hereby finds that all of the recitals contained in the preambles to this ordinance are full, true and correct and does incorporate them into this ordinance by this reference. Section 2. Authorization. It is hereby found and determined that the Village has been authorized by the Act to borrow the sum of $800,000 upon the credit of the Village and as evidence of such indebtedness to issue alternate bonds, being general obligation bonds payable from the Pledged Revenues as provided by the Act, to said amount, the proceeds of said bonds to be used for the Refunding, and it is necessary and for the best interests of the Village that there be issued at this time $790,000 of the bonds so authorized. The Board hereby accepts and approves the Report, and it is hereby found and determined that Flatland is a feasibility analyst having a national reputation for expertise in such matters as the Report. -3- Section 3. Bond Details. There be borrowed on the credit of and for and on behalf of the Village the sum of $790,000 for the purposes aforesaid; and that alternate bonds of the Village (the "Bonds ") shall be issued in said amount and shall be designated "General Obligation Refunding Bonds (Alternate Revenue Source), Series 1994." The Bonds shall be dated November 1, 1994, and shall also bear the date of authentication, shall be in fully registered form, shall be in denominations of $5,000 each and authorized integral multiples thereof (but no single Bond shall represent installments of principal maturing on more than one date), shall be numbered 1 and upward, and the Bonds shall become due and payable serially (without option of prior redemption) on December 1 of each of the years, in the amounts and bearing interest per annum as follows: YEAR OF PRINCIPAL RATE OF MATEY AMOUNT INTEREST 1995 $ 95,000 4.85% 1996 100,000 5.20% 1997 105,000 5.40% 1998 110,000 5.65% 1999 120,000 5.80% 2000 125,000 5.90% 2001 135,000 6.00% The Bonds shall bear interest from their date or from the most recent interest payment date to which interest has been paid or duly provided for, until the principal amount of the Bonds is paid, such interest (computed upon the basis of a 360 -day year of twelve 30 -day months) being payable on December 1 of each year, commencing on December 1, 1995. Interest on each Bond shall be paid by check or draft of Amalgamated Bank of Chicago, Chicago, Illinois, as paying agent (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 fifteenth day of the month next preceding the interest payment date. The principal of the Bonds shall be payable in lawful -4- money of the United States of America at the principal corporate trust office of the Paying Agent. The Bonds shall be signed by the manual or facsimile signature of the President and shall be attested by the manual or facsimile signature of the Village Clerk, and the seal of the Village shall be affixed thereto or printed thereon, and 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 Municipal Services Corporation, Wheaton, Illinois, as bond registrar (the "Bond Registrar"), as authenticating agent of the Village for the Bonds 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 the Bond Registrar 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. Section 4. Registration of Bonds; Persons Treated as Owners. The Village shall cause books (the "Bond Register ") for the registration and for the transfer of the Bonds as provided in this ordinance to be kept at the principal office of the Bond Registrar, which is hereby constituted and appointed the registrar of the Village for the Bonds. The Village is -5- 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 office of the Bond Registrar duly endorsed by, or accompanied by a written instrument or instruments of s ' transfer in form satisfactory to the Bond Registrar and duly executed by, the registered owner or his Bond Registrar shall duly authorized in writing, the Village shall execute and the Bo l l authenticate, date and deliver in the name of the transferee or transferees a new fully denominations, for a like Bond or Bonds of the same maturity of authorized e e aggregate principal amount. Any fully registered Bond or Bonds may be exchanged at said office of the Bond Registrar for a like aggregate principal amount of Bond or Bonds maturity of other authorized denominations. The execution by the s of the registered Bond shall constitute full and due authorization of such Village of any fully uch Bond and the Bond Registrar shall thereby be authorized to authenticate, date and deliver such Bond, the principal amount of outstanding Bonds of each maturity authenticated Bond Registrar shall not exceed the authorized principal y thenticated by the P amount of Bonds for such maturity less previous retirements. The Bond Registrar shall not be required to transfer or exchange any Bond during beginning at the close of business on the fifteenth day of the month g the any interest payment date on such Bond and ending on such interest th next preceding g interest payment date. The person in whose name any Bond shall be registered shall be deemed and re as the absolute owner thereof for all purposes, and payment of the principal regarded any Bond shall be made only to or upon the order of the registered P pal of or interest on owner thereof or his legal representative. All such payments shall be valid and effectual to satisfy liability upon such Bond to the extent of the sum or sums so y and discharge paid. -6- 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. Section S. Form of Bond. The Bonds shall be in substantially the following form; provided, however, that if the text of the Bond is to be printed in its entirety on the front side of the Bond, then paragraph [2] and the legend, "See Reverse Side for Additional Provisions ", shall be omitted and paragraphs [6] through [10] shall be inserted immediately after paragraph [1]: REGISTERED REGISTERED NO. $ (Form of Bond - Front Side) UNITED STATES OF AMERICA STATE OF ILLINOIS COUNTIES OF COOK, DUPAGE AND WILL VILLAGE OF LEMONT GENERAL OBLIGATION REFUNDING BOND (ALTERNATE REVENUE SOURCE), SERIES 1994 :See Reverse Side : :for Additional . :Provisions Interest Maturity Dated Rate: % Date: December 1, Date: November 1, 1994 CUSIP Registered Owner: Principal Amount: [1] KNOW ALL MEN BY THESE PRESENTS, that the Village of Lemont, Cook, DuPage and Will Counties, 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 date of this Bond or from the most recent interest payment date to which interest has been paid at the Interest Rate per annum set forth above on December 1 of each year, commencing December 1, 1995, until said Principal Amount is paid. Principal of this Bond is payable in lawful money of the United States of America at the principal corporate trust office of Amalgamated Bank of Chicago, Chicago, Illinois, as paying agent (the "Paying Agent"). Payment of the installments of interest shall -8- be made to the Registered Owner hereof as shown on the registration books of the Village maintained by Municipal Services Corporation, Wheaton, Illinois, as bond registrar (the "Bond Registrar" ), at the close of business on the fifteenth day of the month next preceding each interest payment date and shall be paid by check or draft of the Paying Agent, 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. [2] 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. [3] It is hereby certified and recited that all conditions, acts and things required by law to exist or to be done precedent to and in the issuance of this Bond did exist, have happened, been done and performed in regular and due form and time as required by 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; and that provision has been made for the collection of the Pledged Revenues and the Pledged Taxes to pay the interest hereon as it falls due and also to pay and discharge the principal hereof at maturity. [4] 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. [5] IN WITNESS WHEREOF, said Village of Lemont, Cook, DuPage and Will Counties, Illinois, by its President and Board of Trustees, has caused this Bond to be signed by the manual or duly authorized facsimile signature of the President, and to be attested by the manual or duly authorized facsimile signature of the Village Clerk, and has caused the -9- seal of the Village to be affixed hereto or printed h- - . ■ , all as of the Dated Date identified 4 imiaki/ .4-.. . IF1- Preside above. Attest: (SEAL) Village Clerk Date of Authentication: , 19 CER I IFICATE OF AUTHENTICATION This Bond is one of the Bonds described in the within mentioned ordinance and is one of the General Obligation Refunding Bonds (Alternate Revenue Source), Series 1994, of the Village of Lemont, Cook, DuPage and Will Counties, Illinois. Municipal Services Corporation, as Bond Registrar By Authorized Officer [6] Bond Registrar: Municipal Services Corporation Wheaton, Illinois Paying Agent: Amalgamated Bank of Chicago Chicago, Illinois [Form of Bond - Reverse Side] Village of Lemont Cook, DuPage and Will Counties, Illinois General Obligation Refunding Bond (Alternate Revenue Source), Series 1994 This Bond is one of a series of Bonds issued by the Village pursuant to the Local Government Debt Reform Act of the State of Illinois, as amended (the "Act"), and the Illinois Municipal Code, as amended (the "Code"), for the purpose of refunding the -10- outstanding Installment Contract, dated January 16, 1991, by and between the Village and Policchio Brothers Co., Mokena, Illinois, and assigned to Heritage Bank of Lemont (now known as NBD Bank), Lemont, Illinois, and is authorized by an authorizing ordinance adopted by the President and Board of Trustees of the Village (the "Board ") on the 26th day of September, 1994, and by a more complete bond ordinance adopted by the Board on the 2nd day of November, 1994 (the "Bond Ordinance"), in all respects as provided by law. [7] The Bonds are payable (a) from the principal proceeds received by the Village from time to time from the issuance of its general obligation bonds or notes to the fullest extent permitted by law, including Section 8 -5 -16 of the Code, and such other funds of the Village lawfully available and annually appropriated for such purpose (the "Pledged Revenues ") and (b) from ad valorem taxes levied against all of the taxable property in the Village without limitation as to rate or amount (the "Pledged Taxes"), all in accordance with the provisions of the Act and the Code. For the prompt payment of this Bond, both principal and interest at maturity, the full faith, credit and resources of the Village are hereby irrevocably pledged. [8] This Bond is transferable by the Registered Owner hereof in person or by his attorney duly authorized in writing at the principal office of the Bond Registrar in Wheaton, Illinois, but only in the manner, subject to the limitations and upon payment of the charges provided in the Bond Ordinance, and upon surrender and cancellation of this Bond. Upon such transfer a new Bond or Bonds of authorized denominations of the same maturity and for the same aggregate principal amount will be issued to the transferee in exchange therefor. [9] The Bonds are issued in fully registered form in the denomination of $5,000 each or authorized integral multiples thereof. This Bond may be exchanged at the principal office of the Bond Registrar for a like aggregate principal amount of Bonds of the of other authorized denominations, upon the terms set forth in the Bond a same The Bond Registrar shall not be required to transfer or exchange Ordinance. ange any Bond during the period beginning at the close of business on the fifteenth day of the month next re any interest payment date and ending at the opening of business on such interest payment p c in date. [10] The Village and the Bond Registrar may deem and treat the Registered hereof as the absolute owner hereof for the g Owner purpose of receiving payment of or on account of principal hereof and interest due hereon and for all other purposes and neither nor the Bond Registrar shall be affected by any notice to the contrary. the Village (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 attorney to transfer the said Bond on the books kept for registration thereof with in the premises, ith full power of Dated: Signature guaranteed: NOTICE: The signature to this assignment must correspond with the name owner as it appears upon the face of the within Bond in every p of the registered wi y alteration or enlargement or any change whatever, articular, without Section 6. Sale of Bonds. The Bonds hereby authorized shall be executed provided as soon after the passage hereof as may be, and d as in this thereupon be deposited with the Treasurer who receives the taxes of the Village, and be by said Treasurer delivered -12- to Bernardi Securities, Inc., Chicago, Illinois, the purchaser thereof (the "Purchaser"), upon receipt of the purchase price therefor, the same being $777,755 plus accrued interest to date of delivery. The contract for the sale of the Bonds heretofore entered into (the "Purchase Contract ") 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 interested, either directly or indirectly, in his own name or 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 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 Board are hereby authorized to take any action 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 7. Alternate Revenue Source; Appropriation; Additional Obligations; Tax Levy. For the purpose of providing funds required to pay the interest on the Bonds promptly when and as the same falls due, and to pay and discharge the principal thereof at maturity, the Village covenants and agrees with the purchasers and the owners of the Bonds that the Village will issue its general obligation bonds or notes from time to time to the fullest extent permitted by law, including Section 8 -5 -16 of the Municipal Code, and deposit -13- the principal proceeds thereof, together with such other funds of the Village as may be lawfully and annually appropriated for such purpose (collectively, the "Pledged Revenues"), into the Bond Fund, as hereinafter defined. The Pledged Revenues are hereby pledged to the payment of the Bonds and the Board covenants and agrees to provide for, appropriate, collect and apply the Pledged Revenues to the payment of the Bonds and the provision of not less than an additional .25 times debt service thereon. The Village is authorized to issue from time to time additional obligations payable from the Pledged Revenues as permitted by law and to determine the lien priority of any such obligations. For the purpose of providing additional funds to pay the principal of and interest on the Bonds, 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 for each of the years while the Bonds or any of them are outstanding, 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: 1994 $142,804.79 1995 1996 1997 1998 1999 2000 $139,520.00 $139,320.00 $138,650.00 $142,435.00 $140,475.00 $143,100.00 for principal and interest to and including December 1, 1995 for principal and interest for principal and interest for principal and interest for principal and interest for principal and interest for principal and interest Interest or principal coming due at any time when there are insufficient funds on hand from the Pledged Taxes to pay the same shall be paid promptly when due from current funds on hand in advance of the collection of the Pledged Taxes herein levied; and when the -14- Pledged Taxes shall have been collected, reimbursement shall be made to said funds in the amount so advanced. The Village covenants and agrees with the purchasers and the owners of the Bonds that so long as any of the 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 Revenues or to levy and collect the Pledged Taxes. The Village and its officers will comply with all present and future applicable laws in order to assure that the Pledged Revenues will be available and that the Pledged Taxes will be levied, extended and collected as provided herein and deposited in the Bond Fund. Section 8. Filing with County Clerk. After this ordinance becomes effective, a copy hereof, certified by the Village Clerk, shall be filed with the County Clerks of The Counties of Cook, DuPage and Will, Illinois (the "County Clerks "); and 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 in said years the Pledged Taxes shall be levied and collected by and for and on behalf of the Village in like manner as taxes for corporate purposes of the Village for said years are levied and collected, and in addition to and in excess of all other taxes. Section 9. Abatement of Pledged Taxes. Whenever funds are or will be available to pay any principal of or interest on the Bonds when due, so as to enable the abatement of the Pledged Taxes levied for the same, the Board or the officers of the Village acting with proper authority, shall direct the abatement of the Pledged Taxes by the amount of Pledged -15- Revenues available or to be available, and proper notification of such abatement shall be filed with each of the County Clerks, in a timely manner to effect such abatement. Section 10. Bond Fund. There is hereby established a special fund of the Village known as the Alternate Bond and Interest Fund of 1994 (the "Bond Fund "). The Pledged Revenues and the Pledged Taxes shall be set aside as collected and be deposited into the Bond Fund, which is a trust fund established for the purpose of carrying out the covenants, terms and conditions imposed upon the Village by this ordinance. The Bonds are secured by a pledge of all of the moneys on deposit in the Bond Fund, and such pledge is irrevocable until the Bonds have been paid in full or until the obligations of the Village are discharged under this ordinance. Section 11. Appropriation of Bond Proceeds. Accrued interest received on the delivery of the Bonds is hereby appropriated for the purpose of paying first interest due on the Bonds and is hereby ordered deposited into the Bond Fund. Simultaneously with the delivery of the Bonds, the principal proceeds of the sale thereof, together with such funds of the Village as may be necessary, shall either be used for payment of the expenses of issuing the Bonds, or be deposited in escrow pursuant to an Escrow Agreement to be hereafter authorized by the Board for the purpose of paying principal of and interest on the Installment Contract as such become due. Section 12. 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 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 addition to providing the certifications, covenants and representations contained -16- herein the Village covenants not to take any action that would cause interest on the Bonds to become includable in the gross income of the holders thereof for federal income tax purposes. The 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. "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. "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 (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. -17- "Costs of Issuance" means the costs of issuing the Bonds, including underwriters' discount and legal fees. "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. "Escrow Account" means the account established pursuant to the Escrow Agreement. - "Escrow Agent" means Amalgamated Bank of Chicago, Chicago, Illinois, as escrow agent under the Escrow Agreement. "Escrow Agreement" means the agreement between the Escrow Agent and the Village providing for the deposit in trust of certain Government Securities for the purpose of refunding in advance of maturity the Prior Bonds. "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). "Government Securities" means the obligations held and to be held under the Escrow Agreement. "Gross Proceeds" means amounts in the Bond Fund and the Escrow Account. "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. "Prior Bond Fund" means the fund or funds, if any, established in connection with the issuance of the Prior Bonds to pay the debt service on the Prior Bonds. "Prior Bond Proceeds" means amounts actually or constructively received from the sale of the Refunded 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 the Refunded Bonds were issued but only if it is to be paid within one year after the Refunded Bonds were issued and (b) amounts -18- derived from the sale of any right that is part of the terms of a Refunded Bond or is otherwise associated with a Refunded Bond (e.g., a redemption right). "Prior Bonds" means the Village's outstanding Installment Contract being refunded by the Bonds, as more particularly described in the preambles hereof. "Prior Project" means the facilities financed, directly or indirectly with the proceeds of the Prior Bonds. "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. "Refunded Bonds" means those certain installments of the Prior Bonds due on and after December 1, 1994, being refunded by the Bonds. -19- "Regulations" means United States Treasury Regulations dealing with the tax - exempt bond provisions of the Code. "Reimbursed Expenditures" means amounts, if any, used from Sale Proceeds and investment earnings thereon to reimburse the Village for an expenditure paid prior to Closing. "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). "Sale Proceeds Funds" means the funds containing amounts derived by the sale of the Bonds or investment earnings thereon. "Transferred Proceeds" means Prior Bond Proceeds, plus investment earnings thereon, which have not been spent prior to the date principal on the Refunded Bonds is discharged by the Bonds. "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 refund in advance of maturity the Refunded Bonds 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 costs financed with Sale Proceeds and investment earnings thereon are expected to be used with respect to property owned by a government unit or a Section 501(c)(3) organization. 2.2. Bond Fund Investment. 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 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. Except to pay the Refunded Bonds, 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 -20- 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. None of the Sale Proceeds or investment earnings thereon will be used for Reimbursed Expenditures. 2.4. Working Capital. All amounts in the Sale Proceeds Funds will be used, directly or indirectly, to pay principal of, interest on and redemption premium on (if any) the Refunded Bonds, other than the following: (a) payments of interest on the Bonds for the period commencing at Closing and ending on the date one year after the date on which the Prior Project is Placed -in- Service; (b) Costs of Issuance and Qualified Administrative Costs of Investments; (c) payments of rebate or Yield Reduction Payments made to the United States under the Regulations; and (d) 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 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. 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. 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 or the Prior 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 account for the hedge fails to clearly reflect the economic substance of the transaction. 2.9. Abusive Transactions. Neither the Village nor any member of the same Controlled Group as the Village has employed a device or entered into any -21- arrangements or understandings in connection with the issuance of the Bonds or the advance refunding of the Refunded Bonds, or in connection with any transaction or series of transactions related to the issuance of the Bonds or the advance refunding of the Refunded Bonds, to obtain a material financial advantage based on arbitrage. Neither the Village nor any member of the same Controlled Group as the Village will realize any material financial advantage based on arbitrage in connection with the issuance of the Bonds or the advance refunding of the Refunded Bonds, or in connection with any transaction or series of transactions related to the issuance of the Bonds or the advance refunding of the Refunded Bonds. In particular, neither the Village nor any member of the same Controlled Group as the Village will receive a rebate or credit resulting from any payments having been made in connection with the issuance of the Bonds or the advance refunding of the Refunded Bonds. 3.1. Use of Proceeds. (a) The use of the Sale Proceeds and investment earnings thereon and the funds held under this Ordinance at the time of Closing are described in the preceding Section 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 at the time of Closing. 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. The Prior Bonds. (a) As of the earlier of (i) the time of the Closing or (ii) the date three years after the Prior Bonds were issued, all Prior Bond Proceeds, including investment earnings thereon, were completely spent. (b) As of the date hereof, no Prior Bond Proceeds or money or property of any kind (including cash) is on deposit in any fund or account, regardless of where held or the source thereof, with respect to the Prior Bonds or any credit enhancement or liquidity device relating to the foregoing, or is otherwise restricted to pay the Village's obligations other than amounts on deposit in the Escrow Account. (c) The Prior Bond Fund was used primarily to achieve a proper matching of revenues and earnings with principal and interest payments on the Prior Bonds in each bond year. The Prior Bond Fund was depleted at least once a year, except for a -22- reasonable carry over amount not to exceed the greater of (i) the earnings on the investment of moneys in such account for the immediately preceding bond year or (ii) one - twelfth (1 /12th) of the principal and interest payments on the Prior Bonds and the other bonds secured by such account for the immediately preceding bond year. (d) At the time the Prior Bonds were issued, the Village reasonably expected to spend at least 85% of the proceeds (including investment earnings) of the Prior Bonds to be used for non - refunding purposes for such purposes within three years of the date the Prior Bonds were issued and such proceeds were so spent. Not more than 50% of the proceeds of the Prior Bonds to be used for non - refunding purposes was invested in investments having a substantially guaranteed Yield for four years or more. (e) The Refunded Bonds subject to redemption prior to maturity will be called on the first optional redemption date of the Refunded Bonds. (f) The Refunded Bonds do not include any advance refunding obligations. 3.4. The Escrow Account. (a) The Escrow Account will be funded at Closing. (b) The uninvested cash and anticipated receipts from the Government Securities on deposit in the Escrow Account, without regard to any reinvestment thereof, will be sufficient to pay, when due, principal and interest on the Refunded Bonds as such become due and payable and to redeem the outstanding principal amount of the Refunded Bonds on the first optional redemption date of the Refunded Bonds, at the applicable redemption price thereof. (c) Any moneys remaining on deposit in the Escrow Account upon the final disbursement of funds sufficient to pay principal and interest of the Refunded Bonds shall be transferred by the Escrow Agent to the Bond Fund to be used to pay interest on the Bonds. 3.5. No Other Gross Proceeds. (a) Except for the Bond 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); (iii) Transferred Proceeds; -23- (iv) 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); (v) 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; (vi) 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 (vii) 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 remaining economic life of the Prior Project is at least twenty years. The weighted average maturity of the Bonds does not exceed seven years and does not exceed 120 percent of the average reasonably expected economic life of the Prior 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 have been 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 -24- Rebate 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. Fair Market Value; 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 -25- substantial penalties for early withdrawal shall be made only if either (i) the Yield 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) a bona fide solicitation is made for a specified GIC and at least three bona fide bids from different providers that have no material financial interest in the Bonds (e.g., as underwriters or brokers) are received; (ii) the highest - yielding GIC for which a qualifying bid is made (determined net of broker's fees) is in fact purchased; (iii) the Yield on the GIC (determined net of broker's fees) is not less than the Yield then available from the provider on reasonably comparable GICs, if any, offered to other persons from a source of funds other than Gross Proceeds of tax- exempt obligations; (iv) the determination of the terms of the GIC takes into account as a significant factor the Village's reasonably expected drawdown schedule for the amounts to be invested, except for amounts deposited in the Bond Fund; (v) the terms of the GIC, including collateral security requirements, are reasonable; and (vi) 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. 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 -26- 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. 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. 4.5. Arbitrage Elections. The Village hereby waives its right to invest Sale Proceeds of the Bonds and investment earnings thereon in the Escrow Account in investments with Yields higher than Bond Yield. The President and Village Treasurer are both 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 1994, 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) 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 1994. 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 calendar year 1994. Therefore, subject to -27- 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. (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) all amounts other than Sale Proceeds for the first 30 days after they become Gross Proceeds; and (v) all amounts derived from the investment of Sale Proceeds and investment earnings thereon (except for investments in the Escrow Account) 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. (d) Except for an amount not to exceed the lesser of $100,000 or five percent of Prior Bond Proceeds, the Village acknowledges that all Prior Bond Proceeds must be invested at market prices and at a Yield not in excess of the Yield on the Prior Bonds (plus, to the extent applicable, for amounts in any related project or construction fund, 1 /8th of one percent). 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. -28- 5.4. Federal Guarantees. Except for investments meeting the requirements of paragraph 5.2(b) hereof and except for investments in the Escrow Account, 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). No portion of the payment of principal or interest on the Bonds or any other 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. Escrow Yield. The Yield on the Government Securities purchased with Sale Proceeds of the Bonds, taking into account any Transferred Proceeds, not greater than 5.657, which is less than the Yield of 5.659 on the Bonds. 6.1. Payment and Use Tests. (a) No more than five percent of the proceeds of each issue of the Prior Bonds and investment earnings thereon were 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 each issue of the Prior Bonds or the Bonds considered separately were not and 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 by or to the Village) in respect of property, or borrowed money, used or to be used in any activity carried on by any person other than a state or local governmental unit. (c) No more than five percent of the proceeds of each issue of the Prior Bonds and investment earnings thereon were used, and no more than five percent of the Sale Proceeds of the Bonds and investment earnings thereon will be used, directly or indirectly, to make or finance loans to any persons. (d) No users of the Prior Project other than state or local governmental units has or will use more than five percent of such facilities, considered separately, on any basis other than the same basis as the general public; and no person other than a state -29- or local governmental unit has been or will be users of more than five percent of any Prior Project as a result of (i) ownership, (ii) actual or beneficial use pursuant to a lease or a management, service, incentive payment or output contract, or (iii) any other similar arrangement, agreement or understanding, whether written or oral. 6.2. U.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. 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 Prior Project. No acquisition or improvement made as a Material Part of the Prior Project has been or is expected to be sold or otherwise disposed of in whole or in part prior to the last maturity of the Bonds. "Material Part" means (i) land, or (ii) any improvement, or (iii) personal property or fixtures in excess of that which is expected to be sold, traded in or discarded upon wearing out or becoming obsolete. 7.4. 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 1994 other than the Bonds nor have any tax- exempt obligations of any kind been issued on behalf of the -30- Village and (iii) not more than $10,000,000 of obligations of any kind (including the Bonds) issued by or on behalf of the Village during calendar year 1994 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 1994 it will issue any Section 265 Tax - Exempt Obligations (other than the 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) that exceed the aggregate amount of $10,000,000 during calendar year 1994 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. 7.5. Future Events. The Village acknowledges 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. 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. Excess Proceeds. Gross Proceeds of the Bonds and investment earnings thereon and all unspent Prior Bond Proceeds as of the date of Closing and investment earnings thereon do not exceed by more than one percent of the Sale Proceeds of the Bonds the amount that will be used for: Bonds; (i) payment of principal of or interest or call premium on the Refunded -31- (ii) payment of pre- issuance accrued interest on the Bonds and interest on the Bonds that accrues for a period up to the completion date of any capital project for which the prior issue was issued, plus one year; (iii) payment of cost of issuance of the Bonds; (iv) payment of administrative costs allocable to repaying the Refunded Bonds, carrying and repaying the Bonds or investments of the Bonds; (v) Prior Bond Proceeds that will be used or maintained for the - governmental purpose of the Refunded Bonds; (vi) interest on purpose investments; and (vii) amounts that will be used or maintained for the governmental purpose of the Bonds. 7.8. 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 Board and the Village. 7.9. Expectations. The 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 Board hereby authorizes the officials of the Village responsible for issuing the Bonds, the same being the President and Village Treasurer, to make such further covenants and certifications as may be necessary to assure that the use thereof will not cause the Bonds -32- to be arbitrage bonds and to assure that the interest in the Bonds will be exempt from federal income taxation. In connection therewith, the Village and the 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 13. 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 14. List of Bondholders. The Bond Registrar shall maintain a list of the names and addresses of the holders of all Bonds and upon any transfer shall add the name and address of the new Bondholder and eliminate the name and address of the transferor Bondholder. Section 15. Duties of Bond Registrar. 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 which may include the following: (a) to act as bond registrar, authenticating agent, paying agent and transfer agent as provided herein; -33- (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; (c) to cancel and /or destroy Bonds which have been paid at maturity or submitted for exchange or transfer; (d) to furnish the Village at least annually a certificate with respect to Bonds cancelled and/or destroyed; and (e) to furnish the Village at least annually an audit confirmation of Bonds paid, Bonds outstanding and payments made with respect to interest on the Bonds. Section 16. Provisions a Contract. The provisions of this ordinance shall constitute a contract between the Village and the owners of the outstanding Bonds. All covenants relating to the Bonds and the conditions and obligations imposed by Section 15 of the Act are enforceable by any holder of the Bonds affected, any taxpayer of the Village and the People of the State of Illinois acting through the Attorney General or any designee. Section 17. Severability. If any section, paragraph or provision of this ordinance shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions of this ordinance. Section 18. Repeal. All ordinances, resolutions or parts thereof in conflict herewith be and the same are hereby repealed and this ordinance shall be in full force and effect forthwith upon its adoption. Adopted November 2, 1994. AYES: Buschman, Chin, Latz, Markiewicz, Rimbo NAYS: 0 ABSENT: Schobert ovember 2, 1994. Attest: Village Clerk, Board of Trustees sident Recorded in the Village Records on November 2, 1994. Trustee Latz moved and Trustee Buschman seconded the motion that said ordinance as presented and read by the Village Clerk be adopted. After a full discussion thereof, the President directed that the roll be called for a vote upon the motion to adopt said ordinance as read. Upon the roll being called, the following Trustees voted AYE: Buschman, Chin, Latz, Markiewicz, Rimbo. Schobert absent. and the following Trustees voted NAY: 0 Whereupon the President declared the motion carried and said ordinance adopted, approved and signed the same in open meeting and directed the Village Clerk to record the same in full in the records of the President and Board of Trustees of the Village of Lemont, Cook, DuPage and Will Counties, Illinois, which was done. Other business not pertinent to the adoption of said ordinance was duly transacted at said meeting. Upon motion duly made, seconded and carried, the meeting was adjourned. rn Village Clerk STATE OF ILLINOIS ) ) SS COUNTY OF COOK ) CERTIFICATION OF MINUTES I, the undersigned, do hereby certify that I am the duly qualified and acting Village Clerk of the Village of Lemont, Cook, DuPage and Will Counties, Illinois (the "Village"), and as such official am the keeper of the records and files of the President and Board of the - Trustees of the Village (the "Board"). I further certify that the foregoing is a full, true and complete transcript of that portion of the minutes of the meeting of the Board held on the 2nd day of November, 1994, insofar as the same relates to the adoption of Ordinance No. 861 entitled: AN ORDINANCE providing for the issue of $790,000 General Obligation Refunding Bonds (Alternate Revenue Source), Series 1994, of the Village of Lemont, Cook, DuPage and Will Counties, Illinois. a true, correct and complete copy of which said ordinance as adopted at said meeting appears in the foregoing transcript of the minutes of said meeting. I do further certify that the deliberations of the Board on the adoption of said ordinance were conducted openly, that the vote on the adoption of said ordinance was taken openly, that said meeting was held at a specified time and place convenient to the public, that notice of said meeting was duly given to all of the news media requesting such notice, that said meeting was called and held in strict compliance with the provisions of the Open Meetings Act of the State of Illinois, as amended, and with the provisions of the Illinois Municipal Code, as amended, and that the Board has complied with all of the provisions of said Act and said Code and with all of the procedural rules of the Board. IN WITNESS WHEREOF, I hereunto affix my official signature and seal of the Village, this 2nd day of November, 1994. (SEAL) Y/i7,hicreee,,, Village Clerk STATE OF ILLINOIS ) ) SS COUNTY OF COOK ) FILING CERTIFICATE I, the undersigned, do hereby certify that I am the duly qualified and acting County Clerk of Cook County, Illinois, and as such official I do further certify that on the day _ of November, 1994, there was filed in my office a duly certified copy of Ordinance No. 861 entitled: AN ORDINANCE providing for the issue of $790,000 General Obligation Refunding Bonds (Alternate Revenue Source), Series 1994, of the Village of Lemont, Cook, DuPage and Will Counties, Illinois. duly adopted by the President and Board of Trustees of the Village of Lemont, Cook, DuPage and Will Counties, Illinois, on the 2nd day of November, 1994, and that the same has been deposited in the official files and records of my office. IN WITNESS WHEREOF, I hereunto affix my official signature and the seal of said County, this day of November, 1994. County Clerk of Cook County, Illinois (SEAL) STATE OF ILLINOIS ) ) SS COUNTY OF DUPAGE ) FILING CERTIFICATE I, the undersigned, do hereby certify that I am the duly qualified and acting County Clerk of DuPage County, Illinois, and as such official I do further certify that on the day of November, 1994, there was filed in my office a duly certified copy of Ordinance No. &6 t entitled: AN ORDINANCE providing for the issue of $790,000 General Obligation Refunding Bonds (Alternate Revenue Source), Series 1994, of the Village of Lemont, DuPage, DuPage and Will Counties, Illinois. duly adopted by the President and Board of Trustees of the Village of Lemont, Cook, DuPage and Will Counties, Illinois, on the 2nd day of November, 1994, and that the same has been deposited in the official files and records of my office. IN WITNESS WHEREOF, I hereunto affix my official signature and the seal of said County, this day of November, 1994. County Clerk of DuPage County, Illinois (SEAL) STATE OF ILLINOIS ) ) SS COUNTY OF WILL ) FILING CERTIFICATE I, the undersigned, do hereby certify that I am the duly qualified and acting County Clerk of Will County, Illinois, and as such official I do further certify that on the day _ of November, 1994, there was filed in my office a duly certified copy of Ordinance No. $ (9 f entitled: AN ORDINANCE providing for the issue of $790,000 General Obligation Refunding Bonds (Alternate Revenue Source), Series 1994, of the Village of Lemont, Will, DuPage and Will Counties, Illinois. duly adopted by the President and Board of Trustees of the Village of Lemont, Cook, DuPage and Will Counties, Illinois, on the 2nd day of November, 1994, and that the same has been deposited in the official files and records of my office. IN WITNESS WHEREOF, I hereunto affix my official signature and the seal of said County, this day of November, 1994. County Clerk of Will County, Illinois (SEAL) STATE OF ILLINOIS COUNTY OF COOK ) SS ) SPECIAL MEETING CERTIFICATE I, the undersigned, do hereby certify that I am the duly qualified and acting Village Clerk of the Village of Lemont, Cook, DuPage and Will Counties, Illinois (the "Village "), _ and as such official I do further certify as follows: 1. That on the 31st day of October , 1994, a special meeting (the "Meeting ") of the President and Board of Trustees of the Village (the "Corporate Authorities ") was called for the 2nd day of November, 1994, by the President or any three members of the Corporate Authorities by giving notice thereof in writing, in accordance with the proceedings of the Corporate Authorities providing for the call and notice of special meetings (the "Board Notice"). 2. That the Board Notice, including the agenda for the Meeting, was served upon all of the members of the Corporate Authorities by personal service (i.e. personal service or mail), not less than 24 hours before the Meeting. The Lemont Reporter, Lemont Metropolitan, Daily Southtown, 3. That Joliet Herald, Town Talk /Shopper, Chicago Tribune Same being all of the news media that have filed a request for such notice of special meetings of the Corporate Authorities were also given the Board Notice in the same manner as was given to said members of the Corporate Authorities. 4. That attached hereto as Exhibit 1 is a true, correct and complete copy of the Board Notice. 5. That on the 1st day of November , 1994, public notice of the Meeting, stating the time and place of, and including the agenda for, the Meeting, 317403.01.02 20161 94/M IJ:10/31 /94 trOt was posted at 418 Main Street, Lemont, Illinois, the same being the principal office of the Corporate Authorities (the "Public Notice"). 6. That on said day the Public Notice was also supplied to the news media listed in paragraph 3 hereof. 7. That attached hereto as Exhibit 2 is a true, correct and complete copy of the Public Notice. 8. That the Meeting was duly called, noticed and held in strict compliance with all of the provisions of the Open Meetings Act of the State of Illinois, as amended, the Illinois Municipal Code, as amended, and the ordinances, resolutions, rules, regulations and proceedings of the Corporate Authorities. IN WITNESS WHEREOF, I hereunto affix my official signature and the seal of the Village, this 2nd day of November , 1994. [SEAL] [Attach Exhibits 1 and 2] Village Clerk