HomeMy WebLinkAboutOrd 5724 02/17/2009
ORDINANCE NUMBER 5724
AN ORDINANCE providing for the issuance of $10,000,000 General
Obligation Bonds, Series 2009, of the Village of Mount Prospect,
Cook County, Illinois, and providing for the levy and collection of
a direct annual tax for the payment of the principal of and interest
on said bonds.
Adopted by the President and Board
of Trustees on the 17th day of
February, 2009.
TABLE OF CONTENTS
SECTION
HEADING
PAGE
PREAMBLES ......................................................................................................................................1
SECTION 1. DEFINITIONS...............................................................................................................2
SECTION 2. INCORPORATION OF PREAMBLES.................................................................................3
SECTION 3. DETERMINATION TO ISSUE BONDS .............................................................................3
SECTION 4. BOND DETAILS............................................................................................................4
SECTION 5. EXECUTION; AUTHENTICATION ....... .................... ........................................... .............5
SECTION 6. OPTIONAL REDEMPTION .............................................................................................6
SECTION 7. REDEMPTION PROCEDURE...........................................................................................6
SECTION 8. REGISTRATION AND EXCHANGE OR TRANSFER OF BONDS; PERSONS
TREATED AS OWNERS ........... ....................... ................................ ..... ............9
SECTION 9. GLOBAL BOOK-ENTRY SYSTEM .......... ................ ............................. .........................1 0
SECTION 10. FORM OF BOND ......... ........................ ........ ........ ......................................................13
SECTION 11. TAX LEVy........................................................................................................... ....19
SECTION 12. FILING WITH COUNTY CLERK.. .......... ......................................................................21
SECTION 13. SALE OF BONDS ......................... ......................... ............... .....................................21
SECTION 14. CREATION OF FUNDS AND APPROPRIATIONS ...........................................................22
SECTION 15. NON-ARBITRAGE AND TAX-EXEMPTION ........... ......................................................23
SECTION 16. RIGHTS AND DUTIES OF BOND REGISTRAR AND PAYING AGENT ............................41
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SECTION 17. DEFEASANCE......................................................................................................... .42
SECTION 18. CONTINUING DISCLOSURE UNDERTAKING ..............................................................42
SECTION 19 . MUNICIPAL BOND INSURANCE ................................................................................43
SECTION 20. SEVERABILITY.........................................................................................................4 3
SECTION 21. REPEALER.............................................................................................................. .43
SECTION 22. EFFECTIVE DATE.................................................................................................... .44
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ORDINANCE NUMBER 5724
AN ORDINANCE providing for the issuance of $10,000,000 General
Obligation Bonds, Series 2009, of the Village of Mount Prospect,
Cook County, Illinois, and providing for the levy and collection of
a direct annual tax for the payment of the principal of and interest
on said bonds.
WHEREAS by virtue of its population, and pursuant to the provisions of Section 6 of
Article VII of the Constitution of the State of Illinois, the Village of Mount Prospect, Cook
County, Illinois (the "Village "), is a home rule unit and may exercise any power or perform any
function pertaining to its government and affairs including, but not limited to, the power to tax
and to incur debt; and
WHEREAS pursuant to the provisions of said Section 6, the Village has the power to incur
debt payable from ad valorem property tax receipts or from any other lawful source and maturing
within 40 years from the time it is incurred without prior referendum approval; and
WHEREAS the President and Board of Trustees of the Village (the "Board") has
considered the needs of the Village and has heretofore determined and does hereby determine
that it is advisable, necessary and in the best interests of the Village to construct and equip a
replacement fire station, expand the public works facility and relocate the emergency operations
center (the "Project"); and
WHEREAS the estimated cost to the Village of the Project, including costs of issuance for
the hereinafter defined Bonds, is the sum of $10,000,000 plus any estimated available amount of
interest earnings on said sum prior to its expenditure; and
WHEREAS there are insufficient funds on hand and available to pay the costs of the
Project, and it is necessary for that purpose that a sum to pay such costs be borrowed at this time,
and in evidence of such indebtedness, general obligation bonds of the Village be issued in the
principal amount of $10,000,000, and that such indebtedness be incurred in accordance with the
Act as hereinafter defined, and without submitting the question of incurring such indebtedness to
the electors of the Village for their approval; and
WHEREAS the Board does hereby determine that it is advisable and in the best interests of
the Village to borrow $10,000,000 at this time pursuant to the Act for the purpose of paying the
costs of the Project and, in evidence of such borrowing, issue its full faith and credit bonds in the
principal amount of $10,000,000:
Now THEREFORE Be It Ordained by the President and Board of Trustees of the Village of
Mount Prospect, Cook County, Illinois, in the exercise of its home rule powers, as follows:
Section 1. Definitions. In addition to such other words and terms used and defined in
this Ordinance, the following words and terms used in this Ordinance shall have the following
meanings, unless, in either case, the context or use clearly indicates another or different meaning
is intended:
"Act" means, collectively, the Illinois Municipal Code, as supplemented and amended,
the home rule powers of the Village under Section 6 of Article VII of the Illinois Constitution of
1970; and, in the event of conflict between the provisions of said code and home rule powers, the
home rule powers shall be deemed to supersede the provisions of said code.
"Board" means the President and Board of Trustees of the Village.
"Bond" or "Bonds" means one or more, as applicable, of the $10,000,000 General
Obligation Bonds, Series 2009, authorized to be issued by this Ordinance.
"Bond Fund" means the Bond Fund established and defined In Section 14 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.
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"Bond Registrar" means The Bank of New York Mellon Trust Company, National
Association, having trust offices in Chicago, Illinois, or such other institution having fiduciary
capacity and having corporate trust offices in Chicago, Illinois, or successor or assigns.
"Code" means the Internal Revenue Code of 1986, as amended.
"County Clerk" means the County Clerk of The County of Cook, Illinois.
"Ordinance" means this Ordinance, numbered as set forth on the title page hereof, and
passed by the Board on the 17th day of February, 2009.
"Paying Agent" means The Bank of New York Mellon Trust Company, National
Association, having trust offices in Chicago, Illinois, or such other institution having fiduciary
capacity and having corporate trust offices in Chicago, Illinois, or successor or assigns.
"Pledged Taxes" means the taxes levied on the taxable property within the Village to pay
principal of and interest on the Bonds as provided in Section 11 hereof.
"Project" or "Project" means the Village capital expenditures as described and defined
as such in the preambles to this Ordinance.
"Tax-exempt" means, with respect to the Bonds, the status of interest paid and received
thereon as excludable from the gross income of the owners thereof under the Code for federal
income tax purposes except to the extent that such interest is taken into account in computing an
adjustment used in determining the alternative minimum tax for certain corporations.
"Village" means the Village of Mount Prospect, Cook County, Illinois.
Section 2. Incorporation of Preambles. The Board hereby finds that all of the recitals
contained in the preambles to this Ordinance are true, correct and complete and does 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 to complete the Project, to pay all related costs and expenses incidental thereto, and to
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borrow money and issue the Bonds for such purposes. It is hereby found and determined that
such borrowing of money is necessary for the welfare of the government and affairs of the
Village, is for a proper public purpose or purposes and is in the public interest, and is authorized
pursuant to the Act; and these findings and determinations shall be deemed conclusive.
Section 4. Bond Details. For the purpose of providing for such costs, there shall be
issued and sold the Bonds in the principal amount of $10,000,000. The Bonds shall be
designated "General Obligation Bonds, Series 2009"; be dated March 11, 2009 (the "Dated
Date "); 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 integral multiples thereof (but no single
Bond shall represent principal maturing on more than one date), shall be numbered consecutively
in such fashion as shall be determined by the Bond Registrar, and shall become due and payable
serially (subject to right of prior redemption as hereinafter set forth) on December 1 of the years
and in the amounts and bearing interest at the rates per annum as follows:
YEAR AMOUNT RATE
2009 $ 200,000 3 .000%
2023 1,035,000 4.000%
2024 1 ,560,000 4.000%
2025 1 ,650,000 4.200%
2026 1,750,000 4.300%
2027 1 ,850,000 4.375%
2028 1 ,955,000 4.500%
Each Bond shall bear interest from the later of its Dated Date as herein provided 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 June 1 and December 1 of
each year, commencing on December 1, 2009. Interest on each Bond shall be paid by check or
draft of the Paying Agent, payable upon presentation thereof in lawful money of the United
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States of America, to the person in whose name such Bond is registered at the close of business
on the applicable Record Date (the "Record Date "), and mailed to the registered owner of the
Bond as shown in the Bond Register or at such other address furnished in writing by such
Registered Owner. The Record Date shall be the 15th day of the month next preceding any
regular or other interest payment date occurring on the 1 st day of any month and 15 days
preceding any interest payment date occasioned by the redemption of Bonds on other than the
first day of a month. The principal of the Bonds shall be payable in lawful money of the United
States of America upon presentation thereof at the principal corporate trust office of the Paying
Agent.
Section 5. Execution; Authentication. The Bonds shall be executed on behalf of the
Village by the manual or facsimile signature of its President and attested by the manual or
facsimile signature of its 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 such 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
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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.
Section 6. Optional Redemption. The Bonds maturing on or after December 1, 2023,
are subject to redemption prior to maturity at the option of the Village as a whole, or in part in
any order of maturity determined by the Village (less than all of the Bonds of a single maturity to
be selected by the Bond Registrar), on December 1, 2017, or on any date thereafter, at the
redemption price of par plus accrued interest to the date of redemption.
Section 7. Redemption Procedure. The Village shall, at least 45 days prior to the
redemption date (unless a shorter time period shall be satisfactory to the Bond Registrar), notify
the Bond Registrar of such redemption date and of the maturities and principal amounts of Bonds
to be redeemed. For purposes of any redemption of less than all of the Bonds of a single
maturity, the particular Bonds or portions of Bonds to be redeemed shall be selected by lot not
more than 60 days prior to the redemption date by the Bond Registrar for the Bonds of such
maturity by such method of lottery as the Bond Registrar shall deem fair and appropriate;
provided, however, that such lottery shall provide for the selection for redemption of Bonds or
portions thereof so that any $5,000 Bond or $5,000 portion of a Bond shall be as likely to be
called for redemption as any other such $5,000 Bond or $5,000 portion.
The Bond Registrar shall promptly notify the Village in writing of the Bonds or portions
of Bonds selected for redemption and, in the case of any Bond selected for partial redemption,
the principal amount thereof to be redeemed.
Unless waived by the registered owner of Bonds to be redeemed, official notice of any
such redemption shall be given by the Bond Registrar on behalf of the Village by mailing the
redemption notice by first-class mail not less than 30 days and not more than 60 days prior to the
date fixed for redemption to each registered owner of the Bond or Bonds to be redeemed at the
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address shown on the Bond Register or at such other address as is furnished in writing by such
registered owner to the Bond Registrar.
All official notices of redemption shall include the full name of the Bonds and at least the
information as follows:
(a) the redemption date;
(b) the redemption price;
(c) if less than all of the outstanding Bonds of a particular maturity are to be
redeemed, the identification (and, in the case of partial redemption of Bonds within such
maturity, the respective principal amounts) of the Bonds to be redeemed;
(d) a statement that on the redemption date the redemption price will become
due and payable upon each such Bond or portion thereof called for redemption and that
interest thereon shall cease to accrue from and after said date;
(e) the place where such Bonds are to be surrendered for payment of the
redemption price, which place of payment shall be the principal corporate trust office of
the Paying Agent; and
(t) such other information then required by custom, practice or industry
standard.
Unless moneys sufficient to pay the redemption price of the Bonds to be redeemed shall
have been received by the Bond Registrar prior to the giving of such notice of redemption, such
notice may, at the option of the Village, state that said redemption shall be conditional upon the
receipt of such moneys by the Bond Registrar on or prior to the date fixed for redemption. If
such moneys are not received, such notice shall be of no force and effect, the Village shall not
redeem such Bonds, and the Bond Registrar shall give notice, in the same manner in which the
notice of redemption shall have been given, that such moneys were not so received and that such
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Bonds will not be redeemed. Otherwise, prior to any redemption date, the Village shall deposit
with the Paying Agent an amount of money sufficient to pay the redemption price of all the
Bonds or portions of Bonds which are to be redeemed on that date.
Subject to the provisions for a conditional redemption described above, notice of
redemption having been given as aforesaid, the Bonds or portions of Bonds so to be redeemed
shall, on the redemption date, become due and payable at the redemption price therein specified,
and from and after such date (unless the Village shall default in the payment of the redemption
price), such Bonds or portions of Bonds shall cease to bear interest. Neither the failure to mail
such redemption notice, nor any defect in any notice so mailed, to any particular registered
owner of a Bond, shall affect the sufficiency of such notice with respect to other registered
owners. Notice having been properly given, failure of a registered owner of a Bond to receive
such notice shall not be deemed to invalidate, limit or delay the effect of the notice or redemption
action described in the notice. Such notice may be waived in writing by a registered owner of a
Bond entitled to receive such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by registered owners shall be filed with the Bond
Registrar, but such filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds
shall be paid by the Paying Agent at the redemption price. The procedure for the payment of
interest due as part of the redemption price shall be as herein provided for payment of interest
otherwise due. Upon surrender for any partial redemption of any Bond, there shall be prepared
for the registered owner a new Bond or Bonds of like tenor, of authorized denominations, of the
same maturity, and bearing the same rate of interest in the amount of the unpaid principal.
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If any Bond or portion of a Bond called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid or duly provided for, bear interest
from the redemption date at the rate borne by the Bond or portion of Bond so called for
redemption. All Bonds which have been redeemed shall be cancelled and destroyed by the Bond
Registrar and shall not be reissued.
As part of their respective duties hereunder, the Bond Registrar and Paying Agent shall
prepare and forward to the Village a statement as to notice given with respect to each redemption
together with copies of the notices as mailed and published.
Section 8. Registration and Exchange or Transfer of Bonds; Persons Treated as
Owners. The Village shall cause books 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 for the Bonds. The Village
is authorized to prepare, and the Bond Registrar or such other agent as the Village may designate
shall keep custody of, multiple Bond blanks executed by the Village for use in the transfer and
exchange of Bonds.
Any 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 this Ordinance. Upon surrender for
transfer or exchange 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 or exchange
in form satisfactory to the Bond Registrar and duly executed by the registered owner or an
attorney for such owner 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 or, in the
case of an exchange, the registered owner, a new fully registered Bond or Bonds of like tenor, of
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the same maturity, bearing the same interest rate, of authorized denominations, for a like
aggregate principal amount.
The Bond Registrar shall not be required to transfer or exchange any Bond during the
period from the close of business on the Record Date for an interest payment to the opening of
business on such interest payment date or during the period of 15 days preceding the giving of
notice of redemption of Bonds or to transfer or exchange any Bond all or a portion of which has
been called for redemption.
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, that the principal amount of Bonds of each
maturity authenticated by the Bond Registrar shall not at anyone time exceed the authorized
principal amount of Bonds for such maturity less the amount of such Bonds which have been
paid.
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 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.
Section 9. Global Book-Entry System. If requested by the hereinafter defined
Purchaser, 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 4 hereof. Upon
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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 The Depository Trust
Company, New York, New York, and its successors and assigns ("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, Village Clerk and Village Treasurer and the
Bond Registrar are each authorized to execute and deliver, on behalf of the Village, such letters
to or agreements with DTC as shall be necessary to effectuate such book-entry system (any such
letter or agreement being referred to herein as 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
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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 4 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
Ordinance 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
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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
name or names registered owners of Bonds transferring or exchanging Bonds shall designate, in
accordance with the provisions of Section 8 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 10. Form of Bond. 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.
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[FORM OF BOND - FRONT SIDE]
REGISTERED
No.
REGISTERED
$
UNITED STATES OF AMERICA
STATE OF ILLINOIS
COUNTY OF COOK
VILLAGE OF MOUNT PROSPECT
GENERAL OBLIGATION BOND, SERIES 2009
See Reverse Side for
Additional Provisions.
Interest
Rate: %
Maturity
Date: December 1, 20
Dated
Date: March 11, 2009
CUSIP:
Registered Owner: CEDE & CO.
Principal Amount: DOLLARS
KNow ALL PERSONS BY THESE PRESENTS that the Village of Mount Prospect, Cook
County, Illinois, a municipality, home rule unit, 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 (subject to the right of prior redemption as hereinafter stated), 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
June 1 and December 1 of each year, commencing December 1, 2009, until said Principal
Amount is paid or duly provided for. The principal of or redemption price on this Bond is
payable in lawful money of the United States of America upon presentation hereof at the
principal corporate trust office of The Bank of New York Mellon Trust Company, National
Association, Chicago, Illinois, as paying agent (the "Paying Agent"). Payment of interest shall
be made to the Registered Owner hereof as shown on the registration books of the Village
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maintained by The Bank of New York Mellon Trust Company, National Association, Chicago,
Illinois, as bond registrar (the "Bond Registrar"), at the close of business on the applicable
Record Date (the "Record Date "). The Record Date shall be the 15th day of the month next
preceding of any regular or other interest payment date occurring on the 1 st day of any month
and 15 days preceding any interest payment date occasioned by the redemption of Bonds on
other than the 1 st day of a month. Interest 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, or as otherwise
agreed by the Village and Cede & Co., as nominee, or successor, for so long as this Bond is held
by The Depository Trust Company, New York, New York, the depository, or nominee, in book-
entry only form as provided for same.
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 conditions, acts and things required by the
Constitution and Laws of the State of Illinois to exist or to be done precedent to and in the
issuance of this Bond, including the authorizing Act, have existed and have been properly done,
happened and been performed in regular and due form and time as required by law; that the
indebtedness of the Village, represented by the Bonds, and including all other indebtedness of
the Village, howsoever evidenced or incurred, does not exceed any constitutional or statutory or
other lawful limitation; and that provision has been made for the collection of a direct annual tax,
in addition to all other taxes, on all of the taxable property in the Village sufficient to pay the
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interest hereon as the same falls due and also to pay and discharge the principal hereof at
maturity.
THE VILLAGE HAS DESIGNATED THIS BOND AS A "QUALIFIED TAX-EXEMPT OBLIGATION"
PURSUANT TO SECTION 265(b )(3) OF THE INTERNAL REVENUE CODE OF 1986.
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 Mount Prospect, Cook County, Illinois, by its
President and Board of Trustees, has caused this Bond to be executed by 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.
President, Village of Mount Prospect,
Cook County, Illinois
ATTEST:
Village Clerk, Village of Mount Prospect,
Cook County, Illinois
[SEAL]
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Date of Authentication:
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CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the within-mentioned Ordinance and is one of
the General Obligation Bonds, Series 2009, having a Dated Date of March 11, 2009, of the
Village of Mount Prospect, Cook County, Illinois.
THE BANK OF NEW YORK MELLON TRUST
COMPANY, NATIONAL ASSOCIATION,
as Bond Registrar
By
Authorized Officer
Bond Registrar and Paying Agent:
The Bank of New York Mellon Trust
Company, National Association,
Chicago, Illinois
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[FORM OF BOND - REVERSE SIDE]
This bond is one of a series of bonds (the "Bonds") in the aggregate principal amount of
$10,000,000 issued by the Village for the purpose of paying the costs of the Project and paying
expenses incidental thereto, all as described and defined in the ordinance authorizing the Bonds
(the "Ordinance "), pursuant to and in all respects in compliance with the applicable provisions
of the Illinois Municipal Code, as supplemented and amended, and as further supplemented and,
where necessary, superseded, by the powers of the Village as a home rule unit under the
provisions of Section 6 of Article VII of the Illinois Constitution of 1970 (such code and powers
collectively, being the "Act"), and with the Ordinance, which has been duly passed by the
President and Board of Trustees of the Village and approved by the President.
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. Upon surrender for
transfer or exchange of this Bond at the principal corporate trust office of the Bond Registrar,
duly endorsed by or accompanied by a written instrument or instruments of transfer or exchange
in form satisfactory to the Bond Registrar and duly executed by the Registered Owner or an
attorney for such owner 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 or, in the
case of an exchange, the Registered Owner, a new fully registered Bond or Bonds of like tenor,
of the same maturity, bearing the same interest rate, of authorized denominations, for a like
aggregate principal amount.
The Bond Registrar shall not be required to transfer or exchange any Bond during the
period from the close of business on the Record Date for an interest payment to the opening of
business on such interest payment date or during the period of 15 days preceding the giving of
notice of redemption of Bonds or to transfer or exchange any Bond all or a portion of which has
been called for redemption.
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Certain of the Bonds are subject to optional redemption as set forth in the Ordinance.
Notice of any such redemption shall be given by the Bond Registrar on behalf of the Village as
set forth in the Ordinance.
The Village, the Bond Registrar and the Paying Agent 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 and interest due hereon and for all other purposes, and the Village,
the Bond Registrar and the Paying Agent shall not be affected by any notice to the contrary.
ASSIGNMENT
FOR V ALUE RECEIVED, the undersigned sells, assigns and transfers unto
I Here insert Social Security Number,
Employer Identification Number or
other Identifying Number
(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 transfer and 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 11. 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
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thereof at maturity, 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 sufficient for that
purpose; and there is hereby levied on all of the taxable property in the Village, in addition to all
other taxes, the following direct annual taxes (the Pledged Taxes as hereinabove defined):
FOR THE YEAR
A TAX SUFFICIENT TO PRODUCE THE DOLLAR SUM OF:
2008 $ 505,689.58 for interest and principal up to and including
December 1, 2009
2009 $ 417,262.50 for interest
2010 $ 417,262.50 forinterest
2011 $ 417,262.50 for interest
2012 $ 417,262.50 for interest
2013 $ 417,262.50 for interest
2014 $ 417,262.50 for interest
2015 $ 417,262.50 for interest
2016 $ 417,262.50 for interest
2017 $ 417,262.50 forinterest
2018 $ 417,262.50 for interest
2019 $ 417,262.50 forinterest
2020 $ 417,262.50 for interest
2021 $ 417,262.50 for interest
2022 $1,452,262.50 for interest and principal
2023 $1,935,862.50 for interest and principal
2024 $1,963,462.50 for interest and principal
2025 $1,994,162.50 for interest and principal
2026 $2,018,912.50 for interest and principal
2027 $2,042,975.00 for interest and principal
The Pledged Taxes and other moneys on deposit in the Bond Fund shall be applied to pay the
principal of and interest on the Bonds.
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 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 registered owners of the
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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 levy and
collect the foregoing tax levy. The Village and its officers will comply with all present and
future applicable laws in order to assure that the Pledged Taxes may be levied, extended and
collected as provided herein and deposited into the Bond Fund.
Whenever other funds from any lawful source are made available for the purpose of
paying any principal of or interest on the Bonds so as to enable the abatement of the taxes levied
herein for the payment of same, the Board shall, by proper proceedings, direct the deposit of
such funds into the Bond Fund and further shall direct the abatement of the taxes by the amount
so deposited. A certified copy or other notification of any such proceedings abating taxes may
then be filed with the County Clerk in a timely manner to effect such abatement.
Section 12. Filing with County Clerk. Promptly, as soon as this Ordinance becomes
effective, a copy hereof, certified by the Village Clerk of the Village shall be filed with the
County Clerk; and the County Clerk shall in and for each of the years 2008 to 2027, inclusive,
ascertain the rate percent required to produce the aggregate tax hereinbefore provided to be
levied in each of said years; and the County Clerk 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 such annual tax shall be levied and collected
by and for and on behalf of the Village in like manner as taxes for general corporate purposes for
said years are levied and collected, and in addition to and in excess of all other taxes.
Section 13. Sale of 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 First Trust Portfolios L.P.,
Wheaton, Illinois, the purchaser thereof (the "Purchaser "), upon receipt of the purchase price
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therefor, the same being $9,911,841.65; 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 financially interested directly in his
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 (the "Official Statement") is hereby ratified, approved and
authorized; the execution and delivery of the 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, the Official Statement and the Bonds.
Section 14. Creation of Funds and Appropriations. The proceeds derived from the sale
of the Bonds shall be used as follows:
A. Accrued interest and premium, if any, on the Bonds shall be and is hereby
appropriated for the purpose of paying the first interest due on the Bonds, and to such end
is hereby ordered to be deposited into the "General Obligation Bonds, Series 2009, Bond
Fund" (the "Bond Fund"), hereby created, which shall be the fund for the payment of
principal of and interest on the Bonds. Taxes received for the payment of the Bonds shall
be deposited into the Bond Fund and used solely and only for the purpose of paying the
Bonds. Interest received from investments on deposit in the Bond Fund shall be retained
therein as a credit against future deposits or transferred to such other fund as the Board
may from time to time determine.
The Pledged Taxes shall either be deposited into the Bond Fund and used solely
and only for paying the principal of and interest on the Bonds or be used to reimburse a
fund or account from which advances to the Bond Fund may have been made to pay
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principal of or interest on the Bonds prior to receipt of Pledged Taxes. Interest income or
investment profit earned in the Bond Fund shall be retained in the Bond Fund for
payment of the principal of or interest on the Bonds on the interest payment date next
after such interest or profit is received or, to the extent lawful and as determined by the
Board, transferred to such other fund as may be determined. The Village hereby pledges,
as equal and ratable security for the Bonds, all present and future proceeds of the Pledged
Taxes for the sole benefit of the registered owners of the Bonds, subject to the reserved
right of the Board to transfer certain interest income or investment profit earned in the
Bond Fund to other funds of the Village, as described in the preceding sentence.
B. The balance of the proceeds of the Bonds shall be set aside in a separate
fund, hereby created, and designated as the "Project Fund" (the "Project Fund").
Money in the Project Fund shall be used to pay all costs of the Project and all costs and
expenses incidental or allocable or related thereto, including all costs of issuance of the
Bonds. The Board reserves the right, as it becomes necessary from time to time, to revise
the list of expenditures hereinabove set forth, to change priorities, to revise cost
allocations between expenditures and to substitute projects, in order to meet current needs
of the Village; subject, however, to the tax covenants set forth herein.
Section 15. 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 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
hereinafter defined 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, under present rules, the
Village may be treated as a "taxpayer" in such examination and agrees that it will respond in a
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commercially reasonable manner to any inquiries from the Internal Revenue Service in
connection with such an examination. 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:
"Affiliated Person" means any Person that (a) at any time during the six months
prior to the execution and delivery of the Bonds, (i) has more than five percent of the
voting power of the governing body of the Village in the aggregate vested in its directors,
officers, owners, and employees or, (ii) has more than five percent of the voting power of
its governing body in the aggregate vested in directors, officers, board members or
employees of the Village or (b) during the one-year period beginning six months prior to
the execution and delivery of the Bonds, (i) the composition of the governing body of
which is modified or established to reflect (directly or indirectly) representation of the
interests of the Village (or for which an agreement, understanding, or arrangement
relating to such a modification or establishment during that one-year period) or (ii) the
composition of the governing body of the Village is modified or established to reflect
(directly or indirectly) representation of the interests of such Person (or for which an
agreement, understanding, or arrangement relating to such a modification or
establishment during that one-year period).
"Bond Counsel" means Chapman and Cutler LLP 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
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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 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.
"De minimis Amount of Original Issue Discount or Premium" means with respect
to an obligation (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.
"Net Sale Proceeds" means amounts actually or constructively received from the
sale of the Bonds reduced by any such amounts that are deposited in a reasonably
required reserve or replacement fund for the Bonds.
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"Person" means any entity with standing to be sued or to sue, including any
natural person, corporation, body politic, governmental unit, agency, authority,
partnership, trust, estate, association, company, or group of any of the above.
"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.
"Private Business Use" means any use of the Project by any Person other than a
state or local government unit, including 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, except for use of the Project on the same basis as the general
public. Private Business Use includes any formal or informal arrangement with any
person other than a state or local governmental unit that conveys special legal
entitlements to any portion of the Project that is available for use by the general public or
that conveys to any person other than a state or local governmental unit any special
economic benefit with respect to any portion of the Project that is not available for use by
the general public.
"Qualified Administrative Costs of Investments" means (a) reasonable, direct
administrative costs (other than carrying costs) such as separately stated brokerage or
selling commissions but not legal and accounting fees, recordkeeping, custody and
similar costs; or (b) all reasonable administrative costs, direct or indirect, incurred by a
publicly offered regulated investment company or an External Commingled Fund.
"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. pt. 344.
"Rebate Fund" means the fund, if any, identified and defined in paragraph 4.2
herein.
"Rebate Provisions" means the rebate requirements contained in Section 148(f)
of the Code and in the Regulations.
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"Regulations" means United States Treasury Regulations dealing with the
tax-exempt bond provisions of the Code.
"Reimbursed Expenditures" means expenditures of the Village paid prior to
Closing to which Sale Proceeds or investment earnings thereon are or will be allocated.
"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).
"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 o/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. Except
for any accrued interest on the Bonds used to pay first interest due on the 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 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.
2.2. 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 Net 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 March 11, 2012, at which time it is anticipated that
all Sale Proceeds and investment earnings thereon will have been spent.
2.3. Reimbursement. None of the Sale Proceeds or investment earnings thereon
will be used for Reimbursed Expenditures.
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2.4. Working Capital. All Sale Proceeds and investment earnings thereon 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;
(e) principal of or interest on the Bonds paid from unexpected excess
Sale Proceeds and investment earnings thereon; and
(f) investment earnings that are commingled with substantial other
revenues and are expected to be allocated to expenditures within six months.
2.5. Consequences of Contrary Expenditure. The Village acknowledges that if
Sale Proceeds 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.
It is expected that the Sale Proceeds deposited into the Project Fund, including
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 paragraph 2.2 hereof, 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. Interest earnings on the
Project Fund and the Bond Fund have not been earmarked or restricted by the Board for a
designated purpose.
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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. The Village acknowledges that any such hedge could affect, among other things,
the calculation of Bond Yield under the Regulations. 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.
The Village also acknowledges that if it acquires a hedging contract with an
investment element (including e.g. an off-market swap agreement, or any cap agreement
for which all or a portion of the premium is paid at, or before the effective date of the cap
agreement), then a portion of such hedging contract may be treated as an investment of
Gross Proceeds of the Bonds, and be subject to the fair market purchase price rules,
rebate and yield restriction. The Village agrees not to use proceeds of the Bonds to pay
for any such hedging contract in whole or in part. The Village also agrees that it will not
give any assurances to any Bond holder or any credit or liquidity enhancer with respect to
the Bonds that any such hedging contract will be entered into or maintained. The Village
recognizes that if a portion of a hedging contract is determined to be an investment of
gross proceeds, such portion may not be fairly priced even if the hedging contract as a
whole is fairly priced.
2.9. Internal Revenue Service Audits. The Village represents that the Internal
Revenue Service has not contacted the Village regarding any obligations issued by or on
behalf of the Village. To the best of the knowledge of the Village, no such obligations of
the Village are currently under examination by the Internal Revenue Service.
3.1. Use o/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. No Sale Proceeds will be used to pre-pay for
goods or services to be received over a period of years prior to the date such goods or
services are to be received. No Sale Proceeds or any investment earnings thereon will be
used to pay for or otherwise acquire goods or services from an Affiliated Person.
(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, other than
the Rebate Fund if it is created as provided in paragraph 4.2 hereof.
(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 issuance of the Bonds
to be paid by the Village will be paid at the time of Closing.
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(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 2.6 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, securities or will have
any property, including cash, securities or any other property held as a passive vehicle for
the production of income or for investment purposes, that constitutes:
(i) Sale Proceeds;
(ii) amounts in any fund or account with respect to the Bonds (other than
the Rebate Fund);
(Hi) 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 (e.g., 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 holders of the Bonds or a guarantor of the Bonds); or
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(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 required to be maintained at least at a particular level 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 20 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. 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.
4.2. 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 owners of the Bonds. Except as provided in the Regulations, moneys in the
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.
4.3. Records. The Village agrees to keep and retain or cause to be kept and
retained until three 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 ofliquidation; and G) 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
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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. The
Village will continuously invest all amounts on deposit in the Rebate Fund, together with
the amounts, if any, to be transferred to the Rebate Fund, in any investment permitted
under this Ordinance. In making investments of Gross Proceeds or of amounts in the
Rebate Fund the Village shall take into account prudent investment standards and the
date on which such moneys may be needed. Except as provided in the next sentence, all
amounts that constitute Gross Proceeds and all amounts in the Rebate Fund shall be
invested at all times to the greatest extent practicable, 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. In the event moneys cannot be invested, other
than as provided in this sentence due to the denomination, price or availability of
investments, the amounts shall be invested in an interest bearing deposit of a bank with a
yield not less than that paid to the general public or held uninvested to the minimum
extent necessary.
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
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;
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(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;
(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 subparagraph (b)(xi) ofthis paragraph;
(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
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(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.
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.
A single investment, or multiple investments awarded to a provider based on a
single bid may not be used for funds subject to different rules relating to rebate or yield
restriction.
The foregoing provisions of this paragraph 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 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 and forego the protection provided by the
safe harbors provided herein.
4.5. Arbitrage Elections. The President, Village Clerk and Treasurer of the
Village are hereby authorized to execute one or more elections regarding certain matters
with respect to arbitrage.
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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 (including accrued interest)
at which the Purchaser sold at least ten percent of the principal amount of each maturity
of the Bonds to the public (excluding bond houses, brokers or similar persons or
organizations acting in the capacity of underwriters, placement agents or wholesalers).
All of the Bonds have been the subject of a bona fide initial offering to the public
(excluding bond houses, brokers, or similar persons or organizations acting in the
capacity of underwriters, placement agents or wholesalers) at prices equal to those set
forth in the Official Statement. Based upon prevailing market conditions, such prices are
not less than the fair market value of each Bond as of the sale date for the Bonds.
5.2. Yield Limits. Except as provided in paragraph (a) or (b), 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, if only amounts in the
Project Fund are subject to this yield limitation, 1/8th of one percent.
The following may be invested without Yield restriction:
(a)(i) 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;
(ii) amounts on deposit in the Project Fund that are reasonably expected
to pay for the costs of the Project, costs of issuance of the Bonds, or interest on
the Bonds during the three year period beginning on the date of issue of the Bonds
prior to three years after Closing;
(iii) 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;
(b )(i) An amount not to exceed the lesser of $100,000 or five percent of the
Sale Proceeds;
(ii) amounts invested in Qualified Tax Exempt Obligations (to the extent
permitted by law and this Ordinance);
(iii) amounts in the Rebate Fund;
(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 or
investment earnings thereon for a period of one year from the date received.
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5.3. Continuing Nature of Yield Limits. Except as provided in paragraph 7.10
hereof, 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(a) 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, 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 otherwise 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), including a lease, incentive payment, research or
output contract or any similar arrangement, agreement or understanding with 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). Neither this paragraph nor paragraph 5.5 hereof applies to any
guarantee 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 or the Bonneville Power
Administration 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.
5.5. Investments After the Expiration of Temporary Periods, Etc. After the
expiration of the temporary period set forth in paragraph 5.2(a)(ii) hereof, amounts in the
Project Fund may not be invested in (i) federally insured deposits or accounts (as defined
in Section 149(b)(4)(B) of the Code) or (ii) investments constituting obligations of or
guaranteed, directly or indirectly, by the United States (except obligations of the United
States Treasury or investments in obligations issued pursuant to Section 21B(d)(3) of the
Federal Home Loan Bank Act, as amended (e.g., Refcorp Strips). Any other amounts
that are subject to the yield limitation in paragraph 5.2 hereof because paragraph 5.2(a)
hereof is not applicable and amounts not subject to yield restriction only because they are
described in paragraph 5.2(b) hereof, are also subject to the limitation set forth in the
preceding sentence.
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 Private Business Use. The Village acknowledges that, for purposes of the
preceding sentence, Gross Proceeds used to pay costs of issuance and other common
costs (such as capitalized interest and fees paid for a qualified guarantee or qualified
hedge) or invested in a reserve or replacement fund must be ratably allocated among all
the purposes for which Gross Proceeds are being used.
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(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 Private Business Use 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 be used in any Private Business Use.
(c) No more than the lesser of five percent of the sum 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. The Village acknowledges that, for purposes of the
preceding sentence, Gross Proceeds used to pay costs of issuance and other common
costs (such as capitalized interest and fees paid for a qualified guarantee or qualified
hedge) or invested in a reserve or replacement fund must be ratably allocated among all
the purposes for which Gross Proceeds are being used.
(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.
6.2. IR.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 in calendar year 2009, the Village has
not issued any tax-exempt obligations of any kind other than the 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) issued by or on behalf
of the Village during calendar year 2009 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 2009 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 1 03 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
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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 2009 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
paragraphs 4.3, 4.4(c) and 7.9 hereof shall not terminate until the third anniversary of the
date the Bonds are fully paid and retired.
7.2. Separate Issue. 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 tax-exempt 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 of sale of
the Bonds any tax-exempt obligations other than the Bonds that are reasonably expected
to be paid out of substantially the same source of funds as the Bonds.
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
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
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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. Purchase of Bonds by Village. The Village will not purchase any of the
Bonds except to cancel such Bonds.
7.5. First Call Date Limitation. The period between the date of Closing and the
first call date of the Bonds is not more than 10-1/2 years.
7.6. 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 be 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.
7. 7. First Amendment. 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. 8. 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. The Village shall promptly contact Bond
Counsel if such changes do occur.
7. 9. Records Retention. The Village agrees to keep and retain or cause to be
kept and retained sufficient records to support the continued exclusion of the interest paid
on the Bonds from federal income taxation, to demonstrate compliance with the
covenants in this Ordinance and to show that all tax returns related to the Bonds
submitted or required to be submitted to the Internal Revenue Service are correct and
timely filed. Such records shall include, but are not limited to, basic records relating to
the Bond transaction (including this Ordinance and the Bond Counsel opinion);
documentation evidencing the expenditure of Bond proceeds; documentation evidencing
the use of Bond-financed property by public and private entities (i.e., copies of leases,
management contracts and research agreements); documentation evidencing all sources
of payment or security for the Bonds; and documentation pertaining to any investment of
Bond proceeds (including the information required under paragraphs 4.3 and 4.4 hereof
and in particular information related to the purchase and sale of securities, SLGs
subscriptions, yield calculations for each class of investments, actual investment income
received from the investment of proceeds, guaranteed investment contracts and
documentation of any bidding procedure related thereto and any fees paid for the
acquisition or management of investments and any rebate calculations). Such records
shall be kept for as long as the Bonds are outstanding, plus three (3) years after the later
of the final payment date of the Bonds or the final payment date of any obligations or
series of obligations issued to refund directly or indirectly all or any portion of the Bonds.
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7.10. Permitted Changes; Opinion of Bond Counsel. The Yield restrictions
contained in paragraph 5.2 hereof or any other restriction or covenant contained herein
need not be observed or may be changed if 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 and the Village receives an opinion of Bond Counsel
to such effect. Unless the Village otherwise directs, such opinion shall be in such form
and contain such disclosures and disclaimers as may be required so that such opinion will
not be treated as a covered opinion or a state or local bond opinion for purposes of
Treasury Department regulations governing practice before the Internal Revenue Service
(Circular 230) 31 C.F.R. pt. 10.
7.11. 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.
7.12. 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 Sale Proceeds,
investment earnings thereon 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, Village 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 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
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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 16. Rights and Duties of Bond Registrar and Paying Agent. If requested by the
Bond Registrar or the Paying Agent, or both, any officer of the Village is authorized to execute
standard forms of agreements between the Village and the Bond Registrar or Paying Agent with
respect to the obligations and duties of the Bond Registrar or Paying Agent hereunder. In
addition to the terms of such agreements and subject to modification thereby, the Bond Registrar
and Paying Agent by acceptance of duties hereunder agree:
(a) to act as bond registrar, paying agent, authenticating agent, and transfer
agent as provided herein;
(b) as to the Bond Registrar, 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) as to the Bond Registrar, to cancel and/or destroy Bonds which have been
paid at maturity or submitted for exchange or transfer;
(e) as to the Bond Registrar, to furnish the Village at least annually a certificate
with respect to Bonds cancelled and/or destroyed; and
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(t) 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.
The Village Clerk of the Village is hereby directed to file a certified copy of this
Ordinance with the Bond Registrar and the Paying Agent.
Section 17. Defeasance. Any Bond or Bonds which (a) are paid and cancelled,
(b) which have matured and for which sufficient sums been deposited with the Paying Agent to
pay all principal and interest due thereon, or (c) for which sufficient Defeasance Obligations
have been deposited with the Paying Agent or similar institution having trust powers to pay,
taking into account investment earnings on such obligations, all principal of and interest on such
Bond or Bonds when due at maturity or as called for redemption, pursuant to an irrevocable
escrow or trust agreement, shall cease to have any lien on or right to receive or be paid from the
Pledged Taxes hereunder 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 of the
outstanding Bonds. All covenants relative to the Tax-exempt status of the Bonds; and payment,
registration, transfer, and exchange; are expressly continued for all Bonds whether outstanding
Bonds or not.
For purposes of this Section, "Defeasance Obligations" means (a) direct and general full
faith and credit obligations of the United States Treasury ("Directs "), (b) certificates of
participation or trust receipts comprised wholly of Directs or (c) other obligations
unconditionally guaranteed as to timely payment by the United States Treasury.
Section 18. Continuing Disclosure Undertaking. The President of the Village is hereby
authorized, empowered and directed to execute and deliver a Continuing Disclosure Undertaking
under Section (b)( 5) of Rule 15c2-12 adopted by the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended (the "Continuing Disclosure
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Undertaking"). When the Continuing Disclosure Undertaking is executed and delivered on
behalf of the Village as herein provided, the Continuing Disclosure 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 Continuing Disclosure Undertaking as executed. Notwithstanding any other
provision of this Ordinance, the sole remedies for failure to comply with the Continuing
Disclosure 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 Continuing Disclosure Undertaking.
Section 19. Municipal Bond Insurance. In the event the payment of principal and
interest on the Bonds is insured pursuant to a municipal bond insurance policy (the "Municipal
Bond Insurance Policy") issued by a bond insurer (the "Bond Insurer"), and as long as such
Municipal Bond Insurance Policy shall be in full force and effect, the Village and the Bond
Registrar agree to comply with such usual and reasonable provisions regarding presentment and
payment of the Bonds, subrogation of the rights of the Bondholders to the Bond Insurer when
holding Bonds, amendment hereof, or other terms, as approved by the President of the Village on
advice of counsel, his or her approval to constitute full and complete acceptance by the Village
of such terms and provisions under authority of this Section.
Section 20. 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 21. 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 22. Effective Date. This Ordinance shall be in full force and effect immediately
upon its passage and approval.
AYEs: Hoefert, Juracek, Kom, Matuszak, Polit, Zadel
NAYS: None
ABSENT: None
ADOPTED: February 17,2009
APPROVED: February 17, 2009
,af~/ #f~
President, Village of Mount Prospect
Cook County, Illinois
Recorded In Village Records: February 17,2009.
ATTEST:
Uf
Village Clerk, Village of
Cook County, Illinois
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