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HomeMy WebLinkAbout6. NEW BUSINESS 1/21/03 illage of Mount Prospect Mount Prospect, Illinois INTEROFFICE MEMORANDUM TO: FROM: DATE: SUBJECT: MICHAEL E. JANONIS, VILLAGE MANAGER DIRECTOR OF FINANCE JANUARY 14, 2003 PROPOSED BOND FINANCING PURPOSE: To present for the Village Board's consideration an ordinance authori~ng the issuance of $12,235,000,000 of general obligation bonds. BACKGROUND: On December 17, 2002 the Village Board authori~d staff to proceed with sale of $12,235,O00 of general obligation bonds to fund a portion of the costs of planning, designing and constructing a new village hall/community center and multi~level parking structure. In 2001 the Village issued $5,000,000 of general obligation bonds for the same purpose. DISCUSSION: The accompanying bond ordinance is presented for the Board's consideration. The sections of the ordinance dealing with interest rates, principal and interest repay'nent schedules and the tax levy schedule have been left blank for now since bids on the proposed financing will not be opened until t 1:00 a.m. on Tuesday, January 21, 2003. At the Board meeting that e~ening the Village's bond consultant will present a summary of the bid results and we shall distribute a completed bond ordinance. Attached is a copy of the projected debt service schedule that was distributed to the Board in December. At this time v,e do not expect interest rates to materiallychange from these estimates. RECOMMENDATION: It is recommended the Village Board waive the rules requiring two readings and adopt an ordinance authorizing the sale of $12,235,000 of general obligation bonds, Series 2003. DOUGLAS R. ELLSWORTH, CPA I:\Debt\2003 G,O\Bd Memo 1-14-03.doc Av~aGe Lift NIC ~ Tzc x l~rbitrao~ yi~ld ~.;~o~ X of (Total Otb~; ~rvice ~ly) w/~h D~ltvery uf ~/ t/ 3 36,957',45~ Filenaae~ HOUN~PR ORDINANCE NO. ORDINANCE AUTHORIZING THE ISSUANCE OF $12,2351000 GENERAL OBLIGATION BONDS, SERIES 2003, OF THE VILLAGE OF MOUNT PROSPECT, ILLINOIS BE iT ORDAINED BY THE PRESIDENT AND BOARD OF TRUSTEES OF THE VILLAGE OF MOUNT PROSPECT, ILLINOIS, AS FOLLOWS: Section 1. Authority, Purpose and Findings. This ordinance is adopted pursuant to and under the authority of Section 6 of Article VII of the Illinois Constitution of 1970 for the purpose of financing a portion of the costs of planning, design and construction of a new Village Hall and Community Center to be located at the north-east corner of Main Street and Busse Avenue and of a multi-level parking garage to be located adjacent to the Village Hall and Community Center, including the improvement of Fire Station No. 12, demolition and site work and Village Hall furnishings and equipment. The total estimated cost of these improvements is $17,483,391. The foregoing improvements or purposes are each authorized to be made or undertaken by the Village of Mount Prospect, Illinois. Section 2. Authorization and Terms of Bonds. The sum of $12,235,000 is appropriated to meet part of the estimated cost of the improvements or purposes described in Section 1 of this ordinance. Said estimated cost is inclusive of the cost of issuance of the bonds herein authorized. Pursuant to the home rule powers of the Village to incur debt payable from ad valorem property tax receipts and for the purpose of financing said appropriation, general obligation bonds of the Village are authorized to be issued and sold in an aggregate principal amount of $12,235,000, and shall be designated "General Obligation Bonds, Series 2003." Bonds shall be issuable in the denominations of $5,000 or any integral multiple thereof and may bear such identifying numbers or letters as shall be useful to facilitate the registration, transfer and exchange of bonds. Unless otherwise determined in the order to authenticate the bonds, each bond delivered upon the original issuance of the bonds shall be dated as of February 1, 2003. Each bond thereafter issued upon any transfer, exchange or replacement of bonds shall be dated so that no gain or loss of interest shall result from such transfer, exchange or replacement. The bonds shall mature on December 1 in each year shown in the following table in the respective principal amount set forth opposite each such year and the bonds maturing in each such year shall bear interest at the respective rate per annum set forth opposite such year: -2- Principal Interest Principal Interest Year Amount Rate Year Amount Rate 2003 $505,000 % 2013 2004 440,000 2014 2005 450,000 2015 2006 465,000 2016 2007 480,000 2017 2008 495,000 2018 2009 510,000 2019 2010 530,000 2020 2011 550,000 2021 2012 570,000 2022 $595,000 615 000 645 000 670 000 700 000 730 000 765 000 800 000 840 000 880 000 Each bond shall bear interest from its date, computed on the basis of a 360 day year consisting of twelve 30 day months and payable in lawful money of the United States of America on June 1,2003 and semiannually thereafter on each June 1 and December 1 at the rates per annum herein determined. The principal of the bonds shall be payable in lawful money of the United States of America upon presentation and surrender thereof at the principal corporate trust office of Bank One, National Association, in the City of Chicago, Illinois, which is hereby appointed as bond registrar and paying agent for the bonds. Interest on the bonds shall be payable on each interest payment date to the registered owners of record thereof appearing on the registration books maintained by the Village for such purpose at the principal corporate trust office of the bond registrar, as of the close of business on the 15th day of the calendar month next preceding the applicable interest payment date. Interest on the bonds shall be paid by check or draft mailed to such registered owners at their addresses appearing on the registration books or by wire transfer pursuant to an agreement by and between the Village and the registered owner. The bonds maturing on or after December t, 2012 shall be subject to redemption prior to maturity at the option of the Village and upon notice as herein provided, in such -3- principal amounts and from such maturities as the Village shall determine and by lot within a single maturity, on June 1, 2012 and on any date thereafter, at a redemption price equal to the principal amount thereof to be redeemed. In the event of the redemption of less than all the bonds of like maturity, the aggregate principal amount thereof to be redeemed shall be $5,000 or an integral multiple thereof and the bond registrar shall assign to each bond of such maturity a distinctive number for each $5,000 principal amount of such bond and shall select by lot from the numbers so assigned as many numbers as, at $5,000 for each number, shall equal the principal amount of such bonds to be redeemed. The bonds to be redeemed shall be the bonds to which were assigned numbers so selected; provided that only so much of the principal amount of each bond shall be redeemed as shall equal $5,000 for each number assigned to it and so selected. Notice of the redemption of bonds shall be mailed not less than 30 days nor more than 60 days prior to the date fixed for such redemption to the registered owners of bonds to be redeemed at their last addresses appearing on said registration books. The bonds or portions thereof specified in said notice shall become due and payable at the applicable redemption price on the redemption date therein designated, and if, on the redemption date, moneys for payment of the redemption price of all the bonds or portions thereof to be redeemed, together with interest to the redemption date, shall be available for such payment on said date, and if notice of redemption shall have been mailed as aforesaid (and notwithstanding any defect therein or the lack of actual receipt thereof by any registered owner) then from and after the redemption date interest on such bonds or portions thereof shall cease to accrue and become payable. If there shall be drawn for redemption less than all of a bond, the Village shall execute and the bond registrar shall authenticate and -4- deliver, upon the surrender of such bond, without charge to the owner thereof, in exchange for the unredeemed balance of the bond so surrendered, bonds of like maturity and of the denomination of $5,000 or any integral multiple thereof. The bond registrar shall not be required to transfer or exchange any bond after notice of the redemption of all or a portion thereof has been mailed. The bond registrar shall not be required to transfer or exchange any bond during a period of 15 days next preceding the mailing of a notice of redemption that could designate for redemption all or a portion of such bond. Section 3. Sale and Delivery. The bonds are sold to , as purchaser, at a price of $. and accrued interest from their date to the date of delivery and payment therefor. The Official Statement prepared with respect to the bonds is approved and "deemed final" as of its date for purposes of Securities and Exchange Commission Rule 15(c)2-12 promulgated under the Securities Exchange Act of 1934. The Village President, Village Clerk and other officials of the Village are authorized and directed to do and perform, or cause to be done or performed for or on behalf of the Village each and every thing necessary for the issuance of the bonds, including the proper execution and delivery of the bonds and the Official Statement. Section 4, Execution and Authentication. Each bond shall be executed in the name of the Village by the manual or authorized facsimile signature of its Village President and the corporate seal of the Village, or a facsimile thereof, shall be thereunto affixed or otherwise reproduced thereon and attested by the manual or authorized facsimile signature of its Village Clerk. -5- In case any officer whose signature, or a facsimile of whose signature, shall appear on any bond shall cease to hold such office before the issuance of the bond, such bond shall nevertheless be valid and sufficient for all purposes, the same as if the person whose signature, or a facsimile thereof, appears on such bond had not ceased to hold such office. Any bond may be signed, sealed or attested on behalf of the Village by any person who, on the date of such act, shall hold the proper office, notwithstanding that at the date of such bond such person may not have held such office. No recourse shall be had for the payment of any bonds against any officer who executes the bonds. Each bond shall bear thereon a certificate of authentication executed manually by the bond registrar. No bond shall be entitled to any right or benefit under this ordinance or shall be valid or obligatory for any purpose until such certificate of authentication shall have been duly executed by the bond registrar. Section 5. Transfer, Exchange and Registry. The bonds shall be negotiable, subject to the provisions for registration of transfer contained herein. Each bond shall be transferable only upon the registration books maintained by the Village for that purpose at the principal corporate trust office of the bond registrar, by the registered owner thereof in person or by his attorney duly authorized in writing, upon surrender thereof together with a written instrument of transfer satisfactory to the bond registrar and duly executed by the registered owner or his duly authorized attorney. Upon the surrender for transfer of any such bond, the Village shall execute and the bond registrar shall authenticate and deliver a new bond or bonds registered in the name of the transferee, of the same aggregate principal amount, maturity and interest rate as the surrendered bond. Bonds, upon surrender thereof at the principal corporate trust office of the bond registrar, with a written instrument satisfactory to the bond registrar, duly executed by the registered owner or his -6- attorney duly authorized in writing, may be exchanged for an equal aggregate principal amount of bonds of the same maturity and interest rate and of the denominations of $5,000 or any integral multiple thereof. For every such exchange or registration of transfer of bonds, the Village or the bond registrar may make a charge sufficient for the reimbursement of any tax, fee or other governmental charge required to be paid with respect to such exchange or transfer, which sum or sums shall be paid by the person requesting such exchange or transfer as a condition precedent to the exercise of the privilege of making such exchange or transfer. No other charge shall be made for the privilege of making such transfer or exchange. The provisions of the Illinois Bond Replacement Act shall govern the replacement of lost, destroyed or defaced bonds. The Village and the bond registrar may deem and treat the person in whose name any bond shall be registered upon the registration books as the absolute owner of such bond, whether such bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of or interest thereon and for all other purposes whatsoever, and all such payments so made to any such registered owner or upon his order shall be valid and effectual to satisfy and discharge the liability upon such bond to the extent of the sum or sums so paid, and neither the Village nor the bond registrar shall be affected by any notice to the contrary. Section 6. General Obligations, The full faith and credit of the Village are hereby irrevocably pledged to the punctual payment of the principal of and interest on the bonds. The bonds shall be direct and general obligations of the Village, and the Village shall be obligated to levy ad valorem taxes upon all the taxable property in the Village for the payment of the bonds and the interest thereon, without limitation as to rate or amount. -7- Section 7. Form of Bonds. The bonds shall be issued as fully registered bonds and shall be in substantially the following form, the blanks to be appropriately completed when the bonds are printed: No. INTEREST RATE ,% REGISTERED OWNER: PRINCIPAL AMOUNT: United States of America State of Illinois County of Cook VILLAGE OF MOUNT PROSPECT GENERAL OBLIGATION BOND, SERIES 2003 MATURITY DATE December 1, 20__ CEDE & CO. DATED DATE CUSIP February 1, 2003 The VILLAGE OF MOUNT PROSPECT, a municipal corporation and a home rule unit of the State of Illinois situate in the County of Cook, acknowledges itself indebted and for value received hereby promises to pay to the registered owner of this bond, or registered assigns, the principal amount specified above on the maturity date specified above, and to pay interest on such principal amount from the date hereof at the interest rate per annum specified above, computed on the basis of a 360 day year consisting of twelve 30 day months and payable in lawful money of the United States of America on June 1, 2003 and semiannually thereafter on June 1 and December 1 in each year until the principal amount shall have been paid, to the registered owner of record hereof as of the 15TM day of the calendar month next preceding such interest payment date, by wire transfer pursuant to an agreement by and between the Village and the registered owner, or otherwise by check or draft mailed to the registered owner at the address of such owner appearing on the registration books maintained by the Village for such purpose at the principal corporate trust office of Bank One, National AssoCiation, in the City of Chicago, Illinois, as bond registrar or its successor (the "Bond Registrar"). This bond, as to principal when due, will be payable in lawful money of the United States of America upon presentation and surrender of this bond at the principal corporate trust office of the Bond Registrar. The full faith and credit of the Village are irrevocably pledged for the punctual payment of the principal of and interest on this bond according to its terms. This bond is one of a series of bonds issued in the aggregate principal amount of $12,235,000, which are authorized and issued under and pursuant to Section 6 of Article VII of the illinois Constitution of 1970 and under and in accordance with an ordinance adopted by the President and Board of Trustees of the Village on January 21, 2003 and entitled: "Ordinance Authorizing the Issuance of $12,235,000 General Obligation Bonds, Series 2003, of the Village of Mount Prospect, Illinois." The bonds of such series maturing on or after December 1, 2012 are subject to redemption prior to maturity at the option of the Village and upon notice as herein provided, in such principal amounts and from such maturities as the Village shall determine and by lot within a single maturity, on June 1, 2012 and on any date thereafter, at a redemption price equal to the principal amount thereof to be redeemed. Notice of the redemption of bonds will be mai[ed not less than 30 days nor more than 60 days prior to the date fixed for such redemption to the registered owners of bonds to be redeemed at their last addresses appearing on such registration books. The bonds or portions thereof specified in said notice shall become due and payable at the applicable redemption price on the redemption date therein designated, and if, on the redemption -9- date, moneys for payment of the redemption price of all the bonds or portions thereof to be redeemed, together with interest to the redemption date, shall be available for such payment on said date, and if notice of redemption shall have been mailed as aforesaid (and notwithstanding any defect therein or the lack of actual receipt thereof by any registered owner) then from and after the redemption date interest on such bonds or portions thereof shall cease to accrue and become payable. This bond is transferable only upon such registration books by the registered owner hereof in person, or by his attorney duly authorized in writing, upon surrender hereof at the principal corporate trust office of the Bond Registrar together with a written instrument of transfer satisfactory to the Bond Registrar duly executed by the registered owner or by his duly authorized attorney, and thereupon a new registered bond or bonds, in the authorized denominations of $5,000 or any integral multiple thereof and of the same aggregate principal amount, maturity and interest rate as this bond shall be issued to the transferee in exchange therefor. In like manner, this bond may be exchanged for an equal aggregate principal amount of bonds of the same maturity and interest rate and of any of such authorized denominations. The Village orthe Bond Registrar may make a charge sufficient for the reimbursement of any tax, fee or other governmental charge required to be paid with respect to the transfer or exchange of this bond. No other charge shall be made for the privilege of making such transfer or exchange. The Village and the Bond Registrar may treat and consider the person in whose name this bond is registered as the absolute owner hereof for the purpose of receiving payment of, or on account of, the principal and interest due hereon and for all other purposes whatsoever. This bond shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been duly executed by the Bond Registrar. It is hereby certified, recited and declared that all acts, conditions and things required to be done, exist and be performed precedent to and in the issuance of this bond in order to make it a legal, valid and binding obligation of the Village have been done, exist and have been performed in regular and due time, form and manner as required by law, and that the series of bonds of which this bond is one, together with all other indebtedness of the Village, is within every debt or other limit prescribed by law. -11- IN WITNESS WHEREOF, the Village of Mount Prospect has caused this bond to be executed in its name and on its behalf by the manual or facsimile signature of its Village President, and its corporate seal, or a facsimile thereof, to be hereunto affixed or otherwise reproduced hereon and attested by the manual or facsimile signature of its Village Clerk. Dated: February 1, 2003 VILLAGE OF MOUNT PROSPECT Village President Attest: CERTIFICATE OF AUTHENTICATION This bond is one of the General Obligation Bonds, Series 2003, described in the within mentioned Ordinance. BANK ONE, NATIONAL ASSOCIATION, as Bond Registrar By Authorized Signer Village Clerk -12- ASSIGNMENT For value received the undersigned sells, assigns and transfers unto the within bond and hereby irrevocably constitutes and appoints attorney to transfer the said bond on the books kept for registration thereof, with full power of substitution in the premises. Dated Signature Guarantee: -13- Section 8. Levy and Extension of Taxes. For the purpose of providing the money required to pay the interest on the bonds when and as the same falls due and to pay and discharge the principal thereof as the same shall mature, there is hereby levied upon all the taxable property in the Village, in each year while any of the bonds shall be outstanding, a direct annual tax sufficient for that purpose in addition to all other taxes, as follows: Tax Levy Year A Tax Sufficient to Produce 2OO2 2003 2004 2005 2006 2007 2O08 20O9 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Interest or principal coming due at any time when there shall be insufficient funds on hand to pay the same shall be paid promptly when due from current funds on hand in advance of the collection of the taxes herein levied; and when said taxes shall have been collected, reimbursement shall be made to the said funds in the amounts thus advanced. As soon as this ordinance becomes effective, a copy thereof certified by the Village Clerk, which certificate shall recite that this ordinance has been duly adopted, shall be filed with the County Clerk of Cook County, Illinois, who is hereby directed to ascertain the rate -14- per cent required to produce the aggregate tax hereinbefore provided to be levied in the years 2002 to 2021, inclusive, and to 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 in like manner as taxes for general corporate purposes for said years are levied and collected and, when collected, such taxes shall be used for the purpose of paying the principal of and interest on the bonds herein authorized as the same become due and payable. Section 9. Debt Service Fund. Moneys derived from taxes herein levied are appropriated and set aside for the purpose of paying principal of and interest on the bonds when and as the same come due. All of such moneys, and all other moneys to be used for the payment of the principal of and interest on the bonds, shall be deposited in the "2003 Debt Service Fund", which is hereby established as a special fund of the Village and shall be administered as a bona fide debt service fund Under the Internal Revenue Code of 1986. All accrued interest received upon the issuance of the bonds shall be deposited in the 2003 Debt Service Fund. The moneys deposited orto be deposited into the 2003 Debt Service Fund, including the tax receipts derived from the taxes levied pursuant to this ordinance, are pledged as security for the payment of the principal of and interest on the bonds. The pledge is made pursuant to Section 13 of the Local Government Debt Reform Act and shall be valid and binding from the date of issuance of the bonds. All such tax receipts and the moneys held in the 2003 Debt Service Fund shall immediately be subject to the lien of such pledge without any physical delivery or fur[her act and the lien of such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the Village irrespective of whether such parties have notice thereof. -15- Section 10. Bond Proceeds Fund. All of the proceeds of sale of the bonds (exclusive of accrued interest) shall be deposited in the "2003 Bond Proceeds Fund", which is hereby established as a special fund of the Village. Moneys in the 2003 Bond Proceeds Fund shall be used for the improvements or purposes specified in Section 1 of this ordinance and for the payment of costs of issuance of the bonds, but may hereafter be reappropriated and used for other purposes if such reappropriation is permitted under illinois law and will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the bonds. Section 11. Investment Regulations. No investment shall be made of any moneys in the 2003 Debt Service Fund or the 2003 Bond Proceeds Fund except in accordance with the tax covenants set forth in Section 12 of this ordinance. All income derived from such investments in respect of moneys or securities in any Fund shall be credited in each case to the Fund in which such moneys or securities are held. Any moneys in any Fund that are subject to investment yield restrictions may be invested in United States Treasury Securities, State and Local Government Series, pursuant to the regulations of the United States Treasury Department, Bureau of Public Debt, or in any tax-exempt bond that is not an "investment property" within the meanin9 of Section 148(b)(2) of the Internal Revenue Code of 1986. The Village Treasurer and agents designated by him are hereby authorized to submit, on behalf of the Village, subscriptions for such United States Treasury Securities and to request redemption of such United States Treasury Securities. Section 12. Tax Covenants. The Village shall not take, or omit to take, any action lawful and within its power to take, which action or omission would cause interest on any bond to become subject to federal income taxes in addition to federal income taxes to which interest on such bond is subject on the date of original issuance thereof. The Village shall not permit any of the proceeds of the bonds, or any facilities financed with such proceeds, to be used in any manner that would cause any bond to constitute a "private activity bond" within the meaning of Section 141 of the Internal Revenue Code of 1986. The Village shall not permit any of the proceeds of the bonds or other moneys to be invested in any manner that would cause any bond to constitute an "arbitrage bond" within the meaning of Section 148 of the Internal Revenue Code of 1986 ora "hedge bond" within the meaning of Section 149(g) of the Internal Revenue Code of 1986. The Village shall comply with the provisions of Section 148(f) of the Internal Revenue Code of 1986 relating to the rebate of certain investment earnings at periodic intervals to the United States of America. Section 13. Continuing Disclosure. Forthe benefit of the beneficial owners of the bonds, the Village covenants and agrees to provide an annual report containing certain financial information and operating data relating to the Village and to provide notices of the occurrence of certain enumerated events, if material. The annual report shall be filed with each Nationally Recognized Municipal Securities Information Repository and with the Illinois state information depository, if any, within 210 days after the close of the Village's fiscal year, The information to be contained in the annual report shall consist of the annual audited financial statement of the Village and such additional information as noted in the Official Statement under the caption "Continuing Disclosure." Each annual audited financial statement will conform to generally accepted accounting principles applicable to governmental units and will be prepared in -17- accordance with standards of the Governmental Accounting Standards Board. If the audited financial statement is not available, then an unaudited financial statement shall be included in the annual report and the audited financial statement shall be filed within 30 days after it becomes available. The Village also covenants and agrees, for the benefit of the beneficial owners of the bonds, to provide timely notice to the Municipal Securities Rulemaking Board and to the Illinois state information depository, if any, of any failure of the Village to file any such annual report within the 210 day period and of the occurrence of any of the following events with respect to the bonds, if material: (1) principal and interest payment delinquencies; (2) non-payment related defaults; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions or events affecting the tax-exempt status of the bonds; (7) modifications to rights of bondholders; (8) bond calls; (9) defeasances; (10) release, substitution or sale of property securing repayment of the bonds; and (11) rating changes. It is found and determined that the Village has agreed to the undertakings contained in this Section in order to assist participating underwriters of the bonds and brokers, dealers and municipal securities dealers in complying with Securities and Exchange Commission Rule 15c2-12(b)(5) promulgated under the Securities Exchange Act of 1934. The chief financial officer of the Village is authorized and directed to do and perform, or cause to be done or performed, for or on behalf of the Village, each and every thing necessary to accomplish the undertakings of the Village contained in this Section for so long as Rule 15c2-12(b)(5) is applicable to the bonds and the Village remains an "obligated person" under the Rule with respect to the bonds. -18- The undertakings contained in this Section may be amended by the Village upon a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of the obligated person, or type of business conducted, provided that (a) the undertaking, as amended, would have complied with the requirements of Rule 15(c)2-12(b)(5) at the time of the primary offering, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances and (b) in the opinion of nationally recognized bond counsel selected by the Village, the amendment does not materially impair the interests of the beneficial owners of the bonds. Section 14. Bond Registrar. The Village covenants that it shall at all times retain a bond registrar with respect to the bonds, that it will maintain at the designated office of such bond registrar a place where bonds may be presented for payment and registration of transfer or exchange and that it shall require that the bond registrar maintain proper registration books and perform the other duties and obligations imposed upon the bond registrar by this ordinance in a manner consistent with the standards, customs and practices of the municipal securities business. The bond registrar shall signify its acceptance of the duties and obligations imposed upon it by this ordinance by executing the cer[ificate of authentication on any bond, and by such execution the bond registrar shall be deemed to have certified to the Village that it has all requisite power to accept, and has accepted such duties and obligations not only with respect to the bond so authenticated but with respect to all the bonds. The bond registrar is the agent of the Village and shall not be liable in connection with the performance of its duties except for its own negligence or default. The bond registrar shall, however, be responsible for any representation in its certificate of authentication on the bonds. -19- The Village may remove the bond registrar at any time. In case at any time the bond registrar shall resign or shall be removed or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or if a receiver, liquidator or conservator of the bond registrar, or of its property, shall be appointed, or if any public officer shall take charge or control of the bond registrar or of its property or affairs, the Village covenants and agrees that it will thereupon appoint a successor bond registrar. The Village shall mail notice of any such appointment made by it to each registered owner of bonds within twenty days after such appointment. Section 15. Book-Entry System. In order to provide for the initial issuance of the bonds in a form that provides for a system of book-entry only transfers, the ownership of one fully registered bond for each maturity, in the aggregate principal amount of such maturity, shall be registered in the name of Cede & Co., as a nominee of The Depository Trust Company, as securities depository for the bonds. The Village Treasurer is authorized to execute and deliver on behalf of the Village such letters to, or agreements with, the securities depository as shall be necessary to effectuate such book-entry system. The Vii[age may remove the securities depository at any time. In case at any time the securities depository shall resign or shall be removed or shall become incapable of acting, then the Village shall appoint a successor securities depository to provide a system of book-entry only transfers for the bonds, by written notice to the predecessor securities depository directing it to notify its participants (those persons for whom the securities depository holds securities) of the appointment of a successor securities depository. The Village may terminate the system of book-entry only transfers for the bonds at any time, by written notice to the securities depository directing it to notify its participants of the availability of bond certificates. In such event, the Village shall issue and the bond -20- registrar shall authenticate, register and deliver to the beneficial owners of the bonds, bond certificates in replacement of such beneficial owners' beneficial interests in the bonds, all as shown in the records maintained by the securities depository. Section 16. Defeasance and Payment of Bonds. (A) If the Village shall pay or cause to be paid to the registered owners of the bonds, the principal and interest due or to become due thereon, at the times and in the manner stipulated therein and in this ordinance, then the pledge of taxes, securities and funds hereby pledged and the covenants, agreements and other obligations of the Village to the registered owners and the beneficial owners of the bonds shall be discharged and satisfied. (B) Any bonds or interest installments appertaining thereto, whether at or prior to the maturity or the redemption date of such bonds, shall be deemed to have been paid within the meaning of paragraph (A) of this Section if (1) in case any such bonds are to be redeemed prior to the maturity thereof, there shall have been taken all action necessary to call such bonds for redemption and notice of such redemption shal~ have been duly given or provision shall have been made for the giving of such notice, and (2) there shall have been deposited in trust with a bank, trust company or national banking association acting as fiduciary for such purpose either (i) moneys in an amount which shall be sufficient, or (ii) "Federal Obligations" as defined in paragraph (C) of this Section, the principal of and the interest on which when due will provide moneys which, together with any moneys on deposit with such fiduciary at the same time for such purpose, shall be sufficient, to pay when due the principal of and interest due and to become due on said bonds on and prior to the applicable redemption date or maturity date thereof. (C) As used in this Section, the term "Federal Obligations" means (i) non-callable, direct obligations of the United States of America, (ii) nomcallable and non-prepayable, -21- direct obligations of any agency of the United States of America, which are unconditionally guaranteed by the United States of America as to full and timely payment of principal and interest, (iii) non-callable, non-prepayable coupons or interest installments from the securities described in clause (i) or clause (ii) of this paragraph, which are stripped pursuant to programs of the Department of the Treasury of the United States of America, or (iv) coupons or interest installments stripped from bonds of the Resolution Funding Corporation. Section 17. Ordinance to Constitute a Contract. The provisions of this ordinance shall constitute a contract between the Village and the registered owners of the bonds. Any pledge made in this ordinance and the provisions, covenants and agreements herein set forth to be performed by or on behalf of the Village shall be for the equal benefit, protection and security of the owners of any and all of the bonds. All of the bonds, regardless of the time or times of their issuance, shall be of equal rank without preference, priority or distinction of any of the bonds over any other thereof except as expressly provided in or pursuant to this ordinance. This ordinance shall constitute full authority for the issuance of the bonds and to the extent that the provisions of this ordinance conflict with the provisions of any other ordinance or resolution of the Village, the provisions of this ordinance shall control. If any section, paragraph or provision of this ordinance shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions of this ordinance. Section 18. Publication. The Village Clerk is hereby authorized and directed to publish this ordinance in pamphlet form and to file copies thereof for public inspection in her office. -22- Section 19. Effective Date. This ordinance shall become effective upon its passage, approval and publication in pamphlet form. Adopted this 21s~ day of January, 2003, by roll call vote as follows: Ayes: List Names Nays: Approved: January 21, 2003 Published in pamphlet form: January 22, 2003 (SEAL) Attest: Village Clerk Village President -23-