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HomeMy WebLinkAboutOrd 3460 10/02/1984 ORDINANCE NO. 3460 AN ORDINANCE PROVIDING FOR THE FINANCING BY THE VILLAGE OF MOUNT PROSPECT, ILLINOIS, OF A PROJECT CONSISTING OF ACQUISITION OF REAL ESTATE AND CONSTRUCTION AND EQUIPPING OF A BUILDING AND RELATED PROPERTY IN ORDER THAT LEE'S MARKETING SERVICES, INC. MAY BE PROVIDED WITH FACILITIES TO RELIEVE CONDITIONS OF UNEMPLOYMENT AND ENCOURAGE THE INCREASE OF COMMERCE: AUTHORIZING AND PROVIDING FOR THE ISSUANCE BY SAID VILLAGE OF MOUNT PROSPECT, ILLINOIS OF ITS ECONOMIC DEVELOPMENT REVENUE BOND (LEE' MARKETING SERVICES, INC. INC. PROJECT) WHICH WILL BE PAYABLE SOLELY FROM THE RECEIPTS FROM A LOAN AGREEMENT; AUTHORIZING THE EXECUTION AND DELIVERY OF A LOAN AGREEMENT BETWEEN TPIE VILLAGE OF MOUNT PROSPECT, ILLINOIS AND FIRST NATIONAL BANK QF MOUNT PROSPECT, NOT PERSONALLY BUT SOLELY AS TRUSTEE UNDER A TRUST AGREEMENT DATED AUGUST 28, 1984 AND KNOWN AS TRUST NO. 1852, PROVIDING FOR THE FINANCING OF SAID PROJECT: AUTHORIZING THE EXECUTION AND DELIVERY OF AN ASSIGNMENT AND AGREEMENT AS SECURITY FOR THE PAYMENT OF SAID BOND: CONFIRMING SALE OF SAID BOND TO THE PURCHASER THEREOF: AND RELATED MATTERS. WHEREAS, the Village of Mount Prospect (the "Issuer") is a home rule unit of local government and is authorized and empowered by the provisions of Article VII, Section 6 of the 1970 Illinois Constitution and Ordinance No. 2925 passed by the Board of Trustees of the Issuer on July 17, 1979 as from time to time supplemented and amended (the "Enabling Ordinance"), to finance in whole or in part the cost of the acquisition, purchase, or extension of any economic development project in order to encourage economic development of the municipality; and WHEREAS, the Issuer is further authorized by the Enabling Ordinance to issue economic development revenue bonds payable solely from payments to be derived by the Issuer from the user of such facilities and secured by a mortgage and a pledge of said payments and the Enabling Ordinance provides that such bonds shall be entitled to a mortgage and a pledge of such payments; and WHEREAS, as a result of negotiations between the Issuer and First National Bank of Mount Prospect, not personally but solely as Trustee under a Trust Agreement dated August 28, 1984 and known as Trust No. 1852, an Illinois land trust (the "Borrower") and Donald L. Yoder and Sandra L. Kleemann of 100 ~st Northwest Highway, Mount Prospect, Illinois 60056 owners of 100% of the beneficial interest in the Land Trust (the "Beneficiaries"), contracts have been or will be entered into by the Borrower for the acquisition of land and construction and equipping of a light manufacturing and office facility (the "Project") within the boundaries of the Issuer, and which Project will be of the character and will accomplish the purposes provided by the Enabling Ordinance and the Issuer is willing to issue its economic development revenue bond to finance the Project upon terms which will be sufficient to pay the cost of acquisition, construction and equipping of the Project as evidenced by such economic development revenue bond, all as set forth in the details and provisions of the Loan Agreement hereinafter identified (the "Agreement"); and WHEREAS, the Project will be leased to Lee's Marketing Services, Inc., an Illinois corporation (the "Lessee") under the terms of the Lease Agreement dated as of October 1, 1984 by and between the Borrower, as lessor, and the Lessee, as lessee (the "Lease") and said Lease has been assigned by the Borrower to the Issuer for further assigning to First National Bank of Mount Prospect, Mount Prospect, Illinois (the "Bank"); and -2- WHEREAS, it is estimated that the costs of the Project, including costs relating to the preparation and issuance of the economic development revenue bond, will be not less than $800,000; and WHEREAS, the Project will create employment opportunities and enhance the tax base in the Village of Mount Prospect, Illinois; and WHEREAS, the Issuer proposes to sell the economic development revenue bond hereinafter authorized and designated "Economic Development Revenue Bond (Lee's Marketing Services, Inc. Project)" (the "Bond") upon a negotiated basis to the Bank; and WHEREAS, the Issuer held a Public Hearing pursuant to Section t03(k) of the Internal Revenue Code of 1954, as amended, on July 21, 1984 and hereby approves the issuance of the revenue bond; NOW, THEREFORE, BE IT ORDAINED BY THE PRESIDENT AND BOARD OF TRUSTEES OF THE VILLAGE OF MOUNT PROSPECT, COOK COUNTY, ILLINOIS, AS FOLLOWS: DEFINITIONS Section 1. The following words and terms as used in this Ordinance shall have the folIowing meanings unless the con- text or use indicates another or different meaning or intent: "Agreement" means the Loan Agreement dated as of October 1, 1984 by and between the Issuer and the Borrower, as from time to time amended and supplemented together with the Note of the Borrower in the form appended thereto. --3-- "A'ssig~ment" means the AsSignment and Agreement dated as of October 1, 1984 by and between the Issuer and the Bank. "Assignment of Leases and Rents" means the Assignment of Leases and Rents dated as of October 1, 1984 by and between the Borrower and the Issuer. "Bank" means First National Bank of Mount Prospect, Mount Prospect, Illinois, and its successors and assigns. "Beneficiaries" means Donald L. Yoder and Sandra L. Kleemann of 100 West Northwest Highway, Mount Prospect, Illinois 60056 owners of 100% of the beneficial interest in the Borrower with the power of direction over said Borrower being vested in him and his successors, heirs and assigns. "Bond" means the Bond authorized to be issued hereunder. "Bond Fund" means the Village of Mount Prospect, Illinois Bond Fund Section 7 (Lee's Marketing Services, hereof. "Bond Purchase Agreement" Inc. Project) created in means the Bond Purchase Agreement dated as of October 1, 1984 between the Issuer and the Bank. "Bond Ordinance" means this Ordinance. "Borrower" means First National Bank of Mount Prospect, as Trustee under Trust Agreement Number 1852 dated August 28, 1984 and not individually. "Code" means the Internal Revenue Code of 1954, as amended. "Corporate Guaranty" means the Guaranty Agreement dated as of October 1, 1984 from the Lessee to the Bank. -4- "E'nabl£ng Ordinance" mean~ Ordinance No. 2925 passed by the Board of Trustees of the Issuer on July 17, 1979, as from time to time supplemented and amended. The term "Event of Default" means those events specified in and defined in Section 11 hereof. The words "hereof," "herein," "hereunder" and other words of similar import refer to this Ordinance as a whole. "Issuer" means the Village of Mount Prospect, Illinois and its successors and assigns. "Lease" means the Lease Agreement dated as of October 1, 1984 between the Borrower and the Lessee. "Lessee" means Lee's Marketing Services, Inc., corporation and its successors and assigns. "Mortgage" or "Mortgage and Security Agreement" means the Mortgage and Security Agreement dated as of October 1, 1984 of the Borrower. "Person" means natural persons, partnerships, associa- tions, corporations and public bodies. "Personal Guaranty" means the Guaranty Agreement dated as of October 1, 1984 from the Beneficiaries to the Bank. "Prime Rate" means the interest rate per annum announced from time to time by First National Bank of Mount Prospect as its prime rate for short term loans to substantial commercial borrowers with the highest credit rating. "Project" means the Building, the Project Site and the Equipment and the acquisition, construction and installation thereof to be financed with the proceeds of the Bond, as each is defined and described in the Agreement. an Illinois -5- AUTHORIZATION OF THE PROJECT Section 2. That in order to promote the of the Village of Mount Prospect, Illinois and its general welfare inhabitants by relieving conditions of unemployment and encouraging the increase of industry and economic development, the Project shall be and is hereby authorized to be financed as described herein. It is hereby found and declared that the financing of the Project and the use thereof by the Borrower as hereinafter provided is necessary to accomplish the public purposes described in the preamble hereto and in the Enabling Ordinance. AUTHORIZATION AND PREPAYMENT OF BOND Section 3. That for the purpose of financing the cost of said Project there shall be and there is hereby authorized to be issued by the Issuer its Economic Development Revenue Bond (Lee's Marketing Services, Inc. Project), in the principal sum of $800,000, dated the date of issuance thereof, and payable to the order of the Bank in 59 consecutive equal monthly principal instal- lments of $3,333.33 each payable on the first day of each month commencing November 1, 1984 to and including September 1, 1989 with a final payment on October 1, 1989 of $603,333.53, and bearing interest on the unpaid principal at the rate of seventy-five percent (75%) per annum of the Prime Rate from the date of the delivery of the Bond (based on a year of 360 days), payable on the first day of each month commencing November 1, 1984 with a final payment of interest on October 1, 1989. The Prime Rate shall be adjusted on the first business day of each month to the Prime Rate effective on that day and shall be effective for that month. -6- In certain events (relating to the taxability for Federal income tax purposes of interest on the Bond), on the conditions, in the manner and with the effect set forth in the Agreement, the rate of interest on the Bond shall be equal to the Prime Rate plus one percent (1%) per annum from the Effective Date of Taxability, as defined in the Agreement. The Bond shall bear interest on any overdue principal and interest at a rate per annum equal to two percent (2%) higher than the interest on the Bond, until paid, to the maximum extent permitted by law. If certain events relating to condemnation or damage, as provided for in Sections 5.5 and 5.6 of the Agreement, occur, the Bond may be redeemed without penalty. Any moneys remaining in the Acquisition and Construction Fund after the Completion Date, as defined in the Agreement, shall be applied to the redemption of the principal installments of the Bond in the inverse order of installments without penalty. The Issuer shall have the option to redeem the Bond in whole or in part on any payment date at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest thereon to the date fixed for redemption. To exercise any option to redeem, the Issuer at the direction of the Borrower shall give written notice to the holder not less than five business days prior to the date which the Issuer at the direction of the Borrower shall designate as the redemption date. All principal installments of the Bond or portion thereof designated for redemption will cease to bear interest on the specified redemption date, provided funds for their redemption are on deposit at the place of payment at that time. -7- The principal of and interest on the Bond shall be payable to the order of the Bank or its assigns in lawful money of the United States of America in immediately available funds at the address of the Bank as shown on the registration books of the Issuer. Upon request of the Borrower or the Issuer, the Bond shall be available for inspection by the Borrower or the Issuer at the offices of the Bank. The Bond is transferable only upon presentation to the Bank as Registrar with a written transfer duly acknowledged by the registered holder or his attorney and such transfer shall not be effective until it is noted upon the Bond and upon the books of the Issuer kept for that purpose by the Bank and is in compliance with all provisions of Section 103(j) of the Code and the regulations promulgated thereunder or proposed regula- tions published in the Federal Register. The Bank is hereby appointed as Registrar for purposes of bond registration. The Bond shall be signed by the President and attested by the Village Clerk of the Issuer and the corporate seal of the Issuer shall be affixed thereto. The Bond, together with interest thereon, shall be a limited obligation of the Issuer secured by a mortgage and payable solely from the receipts derived from the Agreement and the Lease (except to the extent paid out of moneys attributable to the Bond proceeds or the income from the temporary investment thereof) and shall be a valid claim of the Bank only against the Bond Fund and other moneys held by the Bank pursuant to, and the receipts derived from, the Agreement and the Lease, which receipts shall be used for no other purpose than to pay the principal of and interest on the Bond, except as may be otherwise expressly authorized in -8- this Bond Ordinance. The Bond and the obligation to pay interest thereon does not now and shall never constitute an indebtedness or a loan of credit of the Issuer, the State of Illinois or any political subdivision thereof, or a charge against their general taxing powers, within the meaning of any constitutional or statutory provisions of the State of Illinois, but shall be secured by a mortgage and payable solely from the receipts from the Agreement and the Lease. Section following form: BOND FORM That the Bond shall be in substantially the -9- ~THIS BOND MAY BE ~RANSFERRED ONLY AS A WHOLE UNITED STATES OF AMERICA STATE OF ILLINOIS VILLAGE OF MOUNT PROSPECT PAYABLE BY THE ISSUER SOLELY AND ONLY FROM RECEIPTS DERIVED FROM THE LOAN AGREEMENT HEREIN DEFINED ECONOMIC DEVELOPMENT REVENUE BOND (Lee's Marketing Services, Inc. Project) $800,000 The Village of Mount Prospect, Illinois, a municipality of the State of Illinois, created and existing under the Constitution and laws of the State of Illinois (the "Issuer"), for value received promises to pay solely and only from the source and as hereinafter provided, to the order of First National Bank of Mount Prospect, Mount Prospect, Illinois (the "Bank"), or its assigns, the principal sum of: EIGHT HUNDRED THOUSAND DOLLARS ($800,000) in 59 consecutive equal monthly principal installments of $3,333.33 each payable on the first day of each month commencing November 1, 1984 to and including September 1, 1989 with a final payment on October 1, 1989 of $603~333.53, and bearing interest on the unpaid principal at the rate of seventy-five percent (75%) per annum of the interest rate announced from time to time by the Bank as its prime rate for short term loans to substantial commercial borroWers with the highest credit rating (the "Prime Rate") from the date of the delivery of this Bond (based on a year of 360 days), payable on the first day of each month commencing November 1, 1984 with a -10- final payment of .interest on October 1, 1989. The Prime Rate shall be adjusted on the first business day of each month to the Prime Rate effective on that day and shall be effective for that month. In the event of a Determination of Taxability, as defined in the hereinafter described Loan Agreement, the Bond shall bear interest at a rate per annum equal to the Prime Rate plus one percent (1%) from the Effective Date of Taxability, as defined in the Loan Agreement. This Bond shall bear interest on any overdue principal and interest at a rate per annum equal to two percent (2%) higher than the interest on this Bond until paid to the maximum extent permitted by law. Both principal hereof and interest hereon are payable in immediately available funds at the address of the Bank as shown on the registration books of the Issuer. Payments of principal and interest, including prepay- ments of principal installments, shall be noted by the Bank. This Bond is issued in the principal sum of $800,000 pursuant to Ordinance No. 2925 passed by the Board of Trustees of the Issuer on July 17, 1979, as from time to time amended and supplemented (the "Enabling Ordinance") and to an Ordinance (the "Bond Ordinance") duly adopted by the Board of Trustees of the Issuer on , 1984 for the purpose of providing funds to finance the cost of acquiring a site and constructing and equipping a light manufacturing and office facility (hereinafter called the "Project") and paying expenses incidental thereto, to the end that the Issuer may be able to relieve conditions of unemployment and encourage the increase of industry and economic -11- development within the Village of Mount Prospect, Illinois. The proceeds of this Bond will be used by the Issuer to pay or reimburse First National Bank of Mount Prospect, not personally but solely as Trustee under a Trust Agreement dated August 28, 1984 and known as Trust No. 1852, an Illinois land trust (the "Borrower") and Donald L. Yoder and Sandra L. Kleemann of Mount Prospect, Illinois, owners of 100% of the beneficial interest in the Borrower (the "Beneficiaries") for the costs of acquisition, construction and equipping of the Project, under the terms of a Loan Agreement dated as of October 1, 1984 (which agreement, as from time to time supplemented and amended, is hereinafter referred to as the "Agree- ment'') and the Project will be leased by the Borrower to Lee's Marketing Services, Inc., an Illinois corporation (the "Lessee") under the terms of a Lease Agreement dated as of October 1, 1984 between the Borrower, as lessor and the Lessee, as lessee (the "Lease"). This Bond is secured by a pledge and assignment of receipts derived by the Issuer pursuant to the Agreement and a mortgage on the Project pursuant to an Assignment and Agreement dated as of October 1, 1984 (the "Assignment") from the Issuer to the Bank, as more fully described in the Bond Ordinance. Reference is made to the Bond Ordinance for a description of the provisions, among others, with respect to the nature and extent of the security, the rights, duties and obligations of the Issuer, the rights of the Bank, and the terms on which this Bond is or may be issued and to all the provisions of which the Bank by the acceptance of this Bond assents. -12- If certain events relating to condemnation or damage, as provided for in Sections 5.5 and 5.6 of the Agreement, occur, the Bond may be redeemed without penalty. Any moneys remaining in the Acquisition and Construction Fund after the Completion Date, as defined in the Agreement, shall be applied to the redemption of the principal installments of the Bond in the inverse order of installments with0ut penalty. The Issuer shall have the option to redeem the Bond in whole or in part on any payment date at a price equal to 100% of the principal amount thereof plus accrued and unpaid interest thereon to the date fixed for redemption. To exercise any option to redeem, the Issuer at the direction of the Borrower shall give written notice to the holder not less than five business days prior to the date which the Issuer at the direction of the Borrower shall designate as the redemption date. All principal of this Bond or portion thereof designated for redemption will cease to bear interest on the specified redemption date, provided funds for such redemption are on deposit at the place of payment at that time. This Bond shall be fully registered as to both principal and interest in the name of the Bank in accordance with the Bond Ordinance, after which it shall be transferable only upon presenta- tion to the Bank as Registrar with a written transfer duly acknow- ledged by the registered holder or his attorney, and such transfer shall not be effective until it is noted upon this Bond and upon the books of the Issuer kept for that purpose by the Bank and is in compliance with all provisions of Section 103(j) of the Internal -13- Revenue Code of 1954, as amended, and the regulations promulgated thereunder or proposed regulations published in the Federal Register. The Bank has been appointed as Registrar for purposes of bond registration. This Bond is issued pursuant to and in full compliance with the Constitution and laws of the State of Illinois and the ordinances of the Issuer, particularly the Enabling Ordinance. This Bond and the obligation to pay interest hereon are limited obligations of the Issuer, secured by a mortgage and assignment and payable solely out of the receipts derived by the Issuer from the Agreement and the Lease and otherwise as provided in the Bond Ordinance and the Agreement. This Bond andlthe obligation to pay interest hereon shall not be deemed to constitute an indebtedness or a loan of credit of the Issuer, the State of Illinois or any political subdivision thereof, or a charge against their general taxing powers, within the meaning of any constitutional or statutory provision of the State of Illinois, but shall be secured by a mortgage and payable solely from the receipts derived by the Issuer from the Agreement and the Lease. Pursuant to the provisions of the Agreement, payments sufficient for the prompt payment when due of the principal of and interest on ~this Bond are to be paid by the Borrower to the Bank for the account of the Issuer and deposited in a special account created by the Issuer and designated "Village of Mount Prospect, Illinois Bond Fund (Lee's Marketing Services, Inc. Project)," and all receipts under the Agreement and the Lease have been duly pledged and assigned to the Bank pursuant to the Assignment for that purpose, under the Bond Ordinance to secure payment of such principal and interest. -14- In certain events, on the conditions, in the manner and with the effect set forth in the Bond Ordinance, the principal of this Bond may become or may be declared due and payable before the stated maturity thereof, together with interest accrued thereon. Modifications, alterations or amendments of the provisions of the Bond Ordinance may be made only to the extent and in the circumstances permitted by the Bond Ordinance. IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required by the Constitution and laws of Illinois and the Enabling Ordinance to happen, exist and be performed precedent to and in the issuance of this Bond have happened, exist and have been performed in due time, form and manner as required by law. IN WITNESS WHEREOF, the Village of Mount Prospect, Illinois, by its governing body, has caused this Bond to be signed on its behalf by its President and attested by its Village Clerk and the corporate seal of said Issuer to be affixed hereto, all on October , 1984. VILLAGE OF MOUNT PROSPECT, ILLINOIS (SEAL) Attest: Village Clerk By President -15- 'PROVISIONS FOR REGISTRATION The Bond shall be registered on the books of the Village of Mount Prospect kept for that purpose by First National Bank of Mount Prospect, Mount Prospect, Illinois, as Bond Registrar. The principa on this Bond shall be payable only to or upon the order of the registered holder or his legal representative. REGISTRATION Date of Registration Name of Registered Owner First National Bank of Mount Prospect 999 North Elmhurst Road Mount Prospect, Illinois 60056 Signature of Registrar -16- cUSTODY AND APPLICATION OF PROCEEDS OF BOND: ACQUISITION AND CONSTRUCTION FUND Section 5. There is hereby created and established with the Bank, which is hereby constituted and appointed as depository for the Issuer, a special fund in the name of the Issuer to be designated "Village of Mount Prospect, Illinois Acquisition and Construction Fund" and identified with the name of the Borrower. The proceeds received by the Issuer upon the sale of the Bond shall be deposited in the Acquisition and Construction Fund which shall be held in a separate account by Bank as depository. Moneys in the Acquisition and Construction Fund shall be expended in accordance with the provisions of the Agreement, and particularly Section 3.6 thereof. The Bank, as depository, shall keep and maintain adequate records pertaining to the Acquisition and Construction Fund and all disbursements therefrom, and after the Project has been completed and a certificate of payment of all costs filed as provided in this Section, the Bank shall deliver copies of such records to the Issuer and the Borrower. The completion of the Project and payment of all costs and expenses incident thereto shall be evidenced by the filing with the Issuer and consented to by the Bank of a certificate of the Authorized Borrower Representative required by Section 3.7 of the Agreement. Any moneys thereafter remaining in the Acquisition and Construction Fund shall be applied in accordance with Section 3.6 of the Agreement. -17- PAYMENT OF AMOUNTS UNDER THE AGREEMENT Section 6. It is the declared intention of the Issuer to authorize the disbursement of the proceeds of the Bond in order to finance the acquisition, construction and equipping of the Project pursuant to the Agreement in substantially the form which has been presented to and is hereby approved by the governing body of the Issuer and which is now on file in the official records of the Issuer. The President is hereby authorized to execute and acknow- ledge said Agreement for and on behalf of the Issuer, and the Village Clerk is hereby authorized to attest same and to affix thereto the corporate seal of the Issuer. Said Agreement and the receipts thereof, including all moneys received under its terms and conditions, are to be sufficient to pay the principal of and interest on the Bond hereby authorized and are hereby pledged and ordered paid into the Bond Fund. The Agreement provides that the Borrower shall remit the required payments thereunder directly to the Bank for the account of the Issuer for deposit in said Bond Fund and such provision is hereby expressly approved. REVENUES: BOND FUND Section 7. The Bond and all payments required of the Issuer hereunder are not general obligations of the Issuer but are special and limited obligations secured by a mortgage and payable by the Issuer solely and only out of the receipts derived from the Agreement and the Lease as provided herein. -18- There is hereby created by the Issuer and ordered established with the Bank, as depository, a special fund to be designated "Village of Mount Prospect, Illinois Bond Fund (Lee's Marketing Services, Inc. Project)" (the "Bond Fund"), which shall be used to pay the principal of and the interest on the Bond. There shall be deposited into the Bond Fund, as and when received, (a) all prepayments specified in Article IV of the Agreement; (b) all payments and other amounts paid by the Borrower pursuant to Section 3.3 of the Agreement and by the Lessee pursuant to the Lease; and (c) all other moneys received by the Bank under and pursuant to any of the provisions of the Agreement and the Lease. The Bank is authorized and directed to apply amounts available therefor in the Bond Fund to the payment when due of the principal of and interest on the Bond. The Issuer covenants and agrees that should there be an Event of Default or event that with the passing of time or other- wise may become an Event of Default under the Agreement, the Issuer shall fully cooperate with the Bank at no cost to the Issuer and with the owners of the Bond to the end of fully protecting the rights and security of such owners. Nothing herein shall be construed as requiring the Issuer to us9 any funds or revenues from any source other than funds and revenues derived from the Agreement and the Lease. Any amounts remaining in the Bond Fund, after payment in full of the principal of and interest on the Bond (or provision for payment thereof) and the reasonable charges and expenses of the Bank, shall be paid to the Borrower upon the expiration or sooner termination of the term of the Agreement. -19- Notwithstanding anything herein to the contrary, reference to the Bond Fund shall not preclude direct payment of funds to the Bank for direct application for the purposes for which payments are made. ASSIGNMENT Section 8. As security for the due and punctual payment of the principal of and interest on the Bond hereby authorized, the Issuer hereby and pursuant to the Assignment assigns and pledges to the Bank all receipts derived by the Issuer pursuant to the Agreement (except any payment made pursuant to Section 6.4 of the Agreement relating to indemnification of the Issuer by the Borrower) and the Lease and all rights and remedies of the Issuer under the Agreement, the Note and the Mortgage to enforce payment thereof including a mortgage of the Project and in evidence of such assignment and pledge and in consideration of the agreement of the Bank to accept its responsibilities with respect to the Bond Fund created pursuant to Section 7 hereof, the President is hereby authorized to execute for and on behalf of the Issuer the Assignment and the Village Clerk is hereby authorized to attest the same and to affix thereto the corporate seal of the Issuer, and the President and Village Clerk are authorized and directed to cause the Assignment to be executed by the Bank with the Assignment to be in substantially the form which has been presented to and is hereby approved by the governing body of the Issuer and which is now on file in the official records of the Issuer. -20- INVESTMENTS; ARBITRAGE Section 9. Any moneys held as part of the Acquisition and Construction Fund created pursuant to Section 5 hereof or as part of Bond Fund created pursuant to Section 7 hereof, may be invested or reinvested on the direction of the Borrower, in accordance with the provisions of Section 3.10 of the Agreement. Any such investment shall be held by or under control of the Bank and shall be deemed at all times a part of the fund from which such investment was made and the interest accruing thereon and any profit realized from such investments shall be credited to such fund, and any loss resulting from such investments shall be charged to such fund, which loss shall be an obligation of the Borrower as provided in the Agreement. As and when any amount invested pursuant to this Section may be needed for disbursement, the Bank may cause a sufficient amount of the investments to be sold and reduced to cash to the credit of such funds regardless of the loss on such liquidation. The Issuer hereby covenants with the Bank that so long as any principal of the Bond remains unpaid, the governing body of the Issuer will not take or authorize the taking of any action which will cause the Bond to be classified as an "arbitrage bond" within the meaning of Section 103(c) of the Code and any regulations promulgated thereunder, including Section 1.103-13 and Section 1.103-14 of the Income Tax Regulations (26 CFR Part 1) as the same presently exist. For purposes of certifying as to matters of arbitrage, the President is hereby designated an officer responsible for issuing the Bond. -21- GENERAL COVENANTS Section 10. The Issuer covenants that it will promptly cause to be paid solely and only from the source mentioned in the Bond, the principal of and interest on the Bond hereby authorized at the place, on the dates and in the manner provided herein and in the Bond according to the true intent and meaning thereof. The Bond and the obligation to pay interest thereon are limited obligations of the Issuer, secured by a mortgage and pursuant to the Assignment are payable solely out of the receipts derived by the Issuer from the Agreement and otherwise as provided herein and in the Agreement. The Bond and the obligation to pay interest thereon shall not be deemed to constitute an indebtedness or a loan of credit of the Issuer, the State of Illinois or any political subdivision thereof, or a charge against their general taxing powers, within the meaning of any constitutional or statutory provision of the State of Illinois. The Issuer covenants that. it will faithfully perform at all times any and all covenants, undertakings, stipulations and provisions contained in the Bond Ordinance, in the Bond and in all proceedings of its governing body pertaining thereto. The Issuer covenants that it is duly authorized under the Constitution and laws of the State of Illinois, including particularly and without limitation the Enabling Ordinance, to issue the Bond authorized hereby, and to pledge and assign the receipts hereby pledged and assigned in the manner and to the extent herein set forth; that all action on its part for the issuance of the Bond has been duly and effectively taken and that the Bond is and will -22- be a valid and enforceable limited obligation of the Issuer according to the true intent and meaning thereof. The Issuer covenants that it will execute, acknowledge and deliver such instruments and other documents as the owners of the Bond or the Bank may reasonably require for the better assuring, granting, pledging and assigning unto the Bank the interest of the Issuer in the Agreement as well as the rights of the Issuer in and to the receipts pursuant to the Assignment and hereby assigned and pledged to the payment of the principal of and interest on the Bond. The Issuer covenants and agrees that, except as herein and in the Agreement provided, it will not sell, convey, mortgage, encumber or otherwise dispose of any part of the receipts derived from the Agreement or of its rights under the Agreement. The Issuer covenants and agrees that all books and documents in its possession relating to the receipts derived from the Agreement shall at all reasonable times be open to inspection by the owners of the Bond or such accountants or other agencies as such owners may from time to time designate. The Issuer covenants and agrees that it shall through the Bank enforce all of its rights and all of the obligations of the Borrower under the Agreement for the benefit of the owners of the Bond. The Issuer shall protect the rights of the Bank hereunder with respect to the assignment and pledge of the receipts coming due under the Agreement. -23- EVENTS OF DEFAULT AND REMEDIES Section 11. Any Event of Default under Section 7.1 of the Agreement is hereby defined as and declared to be and to constitute an "Event of Default". Upon the occurrence of an Event of Default and so long as such Event is continuing, the Bank by notice in writing delivered to the Issuer and the Borrower, may declare the principal of the Bond and the interest accrued thereon immediately due and payable, and such principal and interest shall thereupon become and be immediately due and payable. Upon any such declaration all payments under the Agreement from the Borrower immediately shall become due and payable as provided in Section 7.2 of the Agreement. While any principal of or interest on the Bond is unpaid, the Issuer shall not exercise any of the remedies on default specified in Section 7.3 of the Agreement without prior written consent of the Bank. Upon the occurrence of an Event of Default, the Bank may pursue any available remedy at law or in equity by suit, action, mandamus or other proceeding to enforce the payment of the principal of and interest on the Bond and to enforce and compel the performance of the duties and obligations of the Issuer as herein set forth. No remedy by the terms of the Bond Ordinance conferred upon or reserved to the Bank is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in addition to any other remedy given to the Bank now or hereafter existing at law or in equity or by statute. -24- No delay or omission to exercise any right, power or remedy accruing upon any event of default shall impair any such right, power or remedy or shall be construed to be a waiver of any such event of default or acquiescence therein; and every such right, power or remedy may be exercised from time to time as often as may be deemed expedient. All moneys received pursuant to any right given or action taken under the provisions of this Section or under the provisions of Article VII of the Agreement (after payments of the costs and expenses of the proceedings resulting in the collection of such moneys and of the expenses, liabilities and advances incurred or made by the Issuer or the Bank) and all such moneys in the Bond Fund shall be applied to the payment of the principal of and interest on the Bond then due and unpaid to the person entitled thereto. Whenever moneys are to be applied pursuant to the provisions of this Section, such moneys shall be applied at such times, and from time to time, as the Bank shall determine, but in any event within fifteen business days after deposit of such moneys in the Bond Fund. The Bank shall give such notice as it may deem appropriate of the deposit with it of any such moneys and of the fixing of any such date, and shall not be required to make payment to the owner of the Bond until such Bond shall be presented to the Bank for appropriate endorsement or for cancel- lation if fully paid. Whenever all principal of and interest on the Bond have been paid under the provisions of this Section and all reasonable expenses of the Bank and the Issuer have been paid, any balance remaining in the Bond Fund shall be paid to the Borrower. -25- With regard to any Default concerning which notice is given to the Borrower under the provisions of the Bond Ordinance, the Issuer hereby grants the Borrower full authority for account of the Issuer to perform or observe any covenant or obligation alleged in said notice not to have been performed or observed, in the name and stead of the Issuer with full power to do any and all things and acts to the same extent that the Issuer could do in order to remedy such default. SALE OF THE BOND Section 12. The sale of the Bond hereby authorized to the Bank at a price of $800,000 and payment pursuant to the Bond Purchase Agreement in substantially the form which has been presented to it is hereby approved by the governing body of the Issuer and which is now on file in the official records of the Issuer, is hereby in all respects authorized, approved and confirmed. The President is hereby authorized and directed to execute said Bond Purchase Agreement for and on behalf of the Issuer, and the Village Clerk is hereby authorized to attest the same and to affix thereto the corporate .seal of the Issuer. PERFORMANCE PROVISIONS Section 13. The President and Village Clerk, for and on behalf of the Issuer be, and each of them hereby is, authorized and directed to do any and all things necessary to effect the performance of all obligations of the Issuer under and pursuant -26- to the Bond Ordinance, the execution and delivery of the Bond and the performance of all other acts of whatever nature necessary to effect and carry out the authority conferred by the Bond Ordinance. The President and Village Clerk be, and they are hereby, further authorized and directed for and on behalf of the Issuer, to execute all papers, documents, certificates and other instruments that may be required for the carrying out of the authority conferred by this Ordinance or to evidence said authority, including without limitation the signing of IRS Form 8038 and the filing thereof as therein required, and to exercise and otherwise take all necessary action to the full realization of the rights, accomplishments and purposes of the Issuer under the Agreement, the Assignment and the Bond Purchase Agreement and to discharge all of the obligations of the Issuer thereunder. NOTICES Section 14. It shall be sufficient service of any notice or other paper on the Issuer if the same shall be duly mailed to the Issuer by registered or certified mail, postage prepaid, return receipt requested, addressed to the Issuer at 100 South Emerson Street, Mount Prospect, Illinois 60056, Attention: Village Manager, or to such other address as the Issuer may from time to time file with the Bank and the Borrower. It shall be sufficient service of any notice or other paper on the Borrower if the same shall be duly mailed to the Borrower by registered or certified mail, postage prepaid, return receipt requested, addressed to 100 West Northwest Highway, Mount Prospect, Illinois 60056 -27- or to such other address as the Borrower may from time to time file with the Issuer and the Bank. It shall be sufficient service of any notice or other paper on the Bank if the same shall be duly mailed to the Bank by registered or certified mail, postage prepaid, return receipt requested, addressed to the Bank at 999 North Elmhurst Road, Mount Prospect, Illinois 60056, Attention: Commercial Loan Department or to such other address as the Bank may from time to time file with the Issuer and the Borrower. BOND ORDINANCE A CONTRACT: PROVISIONS FOR MODIFICATIONS, ALTERATIONS AND AMENDMENTS Section 15. The provisions of this Bond Ordinance shall constitute a contract between the Issuer and the owner or owners of the Bond hereby authorized; and after the issuance of the Bond no modification, alteration, or amendment or supplement to the provisions of this Bond Ordinance shall be made in any manner except with the written consent of the owner or owners of the Bond until such time as all principal of and interest on the Bond shall have been paid in full. SATISFACTION AND DISCHARGE Section 16. Ail rights and obligations of the Issuer and the Borrower under the Agreement, the Assignment, the Bond, the Note, the Mortgage, the Lease, the Bond Purchase Agreement and the Bond Ordinance shall terminate and such instruments shall -28- cease to be of further effect, and the Bank shall cancel the Bond, deliver it to the Issuer, and deliver a copy of the cancelled Bond to the Borrower, and shall assign and deliver to the Borrower any moneys in the Bond Fund required to be paid to the Borrower under Section 7 hereof (except moneys held by the Bank for the payment of principal of or interest on the Bond) when: (a) all expenses of the Issuer and the Bank shall have been paid; (b) the Issuer and the Borrower shall have performed all of their covenants and promises in the Agreement, the Assignment, the Bond, the Note, the Lease, the Mortgage, the Bond Purchase Agreement and in the Bond Ordinance; and (c) all principal of and interest on the Bond have been paid. APPROVAL Section 17. Approval is hereby granted of the issuance of the Bond pursuant to Section 103(k) of the Code. SEVERABILITY Section 18. If any section, paragraph, clause or pro- vision of this Bond Ordinance shall be ruled by any court of competent jurisdiction to be invalid, the invalidity of such section, paragraph, clause or provision shall not affect any of the remaining provisions hereof. -29- APTION~ Section 19. The captions or headings of the Bond Ordinance are for convenience only and in no way define, limit or describe the scope or intent of any provision of the Bond Ordinance. PROVISIONS IN CONFLICT REPEALED Section 20. All ordinances, resolutions, and orders, or parts thereof, in conflict with the provisions of this Bond Ordinance, are, to the extent of such conflict, hereby repealed, and this Bond Ordinance shall be in full force and effect upon its approval. Presented at a regular meeting of the governing body of the Village of Mount Prospect, Illinois held on the 2nd day of Octob~~ ? 1984. This Ordinance passed and approved on roll call vote this 2n~ay of ~ctobet~'1984. Vi-1 la~: Cie rk (SEAL) Ayes: Nays: None Preside~% Arthur, Floros, Murauskis~ Van Geem, Wattenberg -30'