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HomeMy WebLinkAboutORDINANCE - 2927 - 3/25/2003 - GEN OBLIG CAPITAL IMPROVE BONDSORDINANCE NUMBER 2927 AN ORDINANCE providing for the issuance of $10,000,000 General Obligation Capital Improvement Bonds, Series 2003A, of the Village of Elk Grove Village, Cook and DuPage Counties, Illinois, and providing for the levy and collection of a direct annual tax sufficient for the payment of the principal of and interest on said bonds. Adopted by the Mayor and Board of Trustees of the Village on the 25th day of March 2003. Published in Pamphlet Form by Authority of said Corporate Authorities on the 26th day of March 2003 TABLE OF CONTENTS SECTION HEADING PAGE SECTION 1. DEFINITIONS................................................................................................2 SECTION 2. INCORPORATION OF PREAMBLES................................................................5 SECTION 3. DETERMINATION TO ISSUE BONDS.............................................................5 SECTION 4. BOND DETAILS............................................................................................5 SECTION 5. BOOK ENTRY PROVISIONS...........................................................................7 SECTION 6. EXECUTION; AUTHENTICATION..................................................................9 SECTION 7. TERM BONDS, MANDATORY REDEMPTION AND COVENANTS; OPTIONAL REDEMPTION.......................................................9 SECTION 8. TERM BONDS PURCHASE OR REDEMPTION...............................................10 SECTION 9. REDEMPTION PROCEDURE.........................................................................I I SECTION 10. REGISTRATION OF BONDS; PERSONS TREATED AS OWNERS ...................15 SECTION 11. FORM OF BOND..........................................................................................16 SECTION 12. SECURITY FOR THE BONDS........................................................................22 SECTION 13. TAX LEVY; ABATEMENT...........................................................................23 SECTION 14. FILING WITH COUNTY CLERKS.................................................................25 SECTION 15. SALE OF BONDS; OFFICIAL STATEMENT...................................................25 SECTION 16. CREATION OF FUNDS AND APPROPRIATIONS............................................27 SECTION 17. CONTINUING DISCLOSURE UNDERTAKING...............................................29 SECTION 18. GENERAL TAX COVENANTS......................................................................30 SECTION 19. CERTAIN SPECIFIC TAX COVENANTS........................................................31 SECTION 20. RIGHTS AND DUTIES OF BOND REGISTRAR..............................................34 SECTION 21. MUNICIPAL BOND INSURANCE..................................................................36 SECTION 22. DEFEASANCE.............................................................................................36 SECTION 23. PUBLICATION OF ORDINANCE...................................................................37 SECTION 24. SUPERSEDER AND EFFECTIVE DATE.........................................................38 LIST OF EXHIBITS: A - BOND PURCHASE CONTRACT B - BOND ORDER C - CONTINUING DISCLOSURE UNDERTAKING RE ORDINANCE NUMBER 2927 AN ORDINANCE providing for the issuance of $10,000,000 General Obligation Capital Improvement Bonds, Series 2003A, of the Village of Elk Grove Village, Cook and DuPage Counties, Illinois, and providing for the levy and collection of a direct annual tax sufficient for the payment of the principal of and interest on said bonds. PREAMBLES WHEREAS A. The Village of Elk Grove Village, Cook and DuPage Counties, Illinois (the "Village') has a population in excess of 25,000 as determined by the last official census, and pursuant to the provisions of Section 6 of Article VII of the Constitution of the State of Illinois the Village is a home rule unit, and as such 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. B. 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. C. The Mayor and Board of Trustees of the Village (the "Corporate Authorities') previously have considered the needs of the Village and have determined and do hereby determine that it is advisable, necessary, and in the best interests of the Village to acquire and construct corporate capital improvements pursuant to the Capital Improvement Plan (Fiscal Years 2003 and 2004) of the Village (the "Project ") at an estimated cost of not less than $12,510,466_ D. The Corporate Authorities do hereby determine that there are insufficient funds of the Village on hand and lawfully available for the purpose of paying the costs of the Project and that it is advisable and in the best interests of the Village to borrow not to exceed $10,000,000 at this time pursuant to the Act as hereinafter defined for the purpose of paying a part of such costs and, in evidence of such borrowing, to issue the full faith and credit bonds of the Village in such principal amount. Now THEREFORE Be It Ordained by the Mayor and Board of Trustees of the Village of Elk Grove Village, Cook and DuPage Counties, Illinois, in the exercise of its home rule powers, as follows: Section 1. Definitions. Words and terms used in this Ordinance shall have the meanings given them, unless the context or use clearly indicates another or different meaning is intended. Words and terms defined in the singular may be used in the plural and vice -versa. Reference to any gender shall be deemed to include the other and also inanimate persons such as corporations, where applicable. A. The following words and terms are as defined in the preambles. Corporate Authorities Project Village B. The following words and terms are defined as set forth. "Act" means the Illinois Municipal Code, as supplemented and amended, and also 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. -2- "Ad Valorem Property Taxes" means the real property taxes levied to pay the bonds as described and levied in Section 13 of this Ordinance. "Bonds" means the General Obligation Capital Improvement Bonds, Series 2003A, authorized to be issued by this Ordinance. "Bond Fund" means the Bond Fund established and defined in Section 16 of this Ordinance. "Bond Moneys" means the taxes and any other moneys deposited into the Bond Fund and investment income held in the Bond Fund. "Bond Order" means that certain bond order, to be executed by any three of the Designated Officials acting together, and setting forth certain details of the Bonds as provided in Section 15 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. "Bond Registrar" means Deutsche Bank National Trust Company, a national banking association, having trust powers, with corporate trust offices located in the City of Chicago, Illinois, or its successors, in its capacity as bond registrar and paying agent under this Ordinance, or a substituted bond registrar and paying agent as hereinafter provided. "Book Entry Form" means the form of the Bonds as fully registered and available in physical form only to the Depository. "Code " means the Internal Revenue Code of 1986, as amended. "Counties" means The Counties of Cook and DuPage, Illinois. "County Clerks" means the County Clerks of the Counties. -3- "Depository" means The Depository Trust Company, a limited purpose trust company organized under the laws of the State of New York, its successors, or a successor depository qualified to clear securities under applicable state and federal laws. "Designated Officials" means the Mayor, Village Clerk, Director of Finance and Treasurer, or Village Manager of the Village. "Ordinance" means this Ordinance, numbered as set forth on the title page hereof, and passed by the Corporate Authorities on the 25th day of March 2003. "Rebate Fund" means the Rebate Fund authorized to be established and as defined in Section 19 of this Ordinance. "Record Date " means the 15th day of the month preceding any regular or other interest payment date occurring on the fust 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. "Tax-exempt" means, with respect to the Bonds, the status of interest paid and received thereon as not includible in the gross income of the owners thereof under the Code for federal income tax purposes except to the extent that such interest will be taken into account in computing an adjustment used in determining the alternative minimum tax for certain corporations. "Term Bonds" means Bonds subject to mandatory redemption by operation of the Bond Fund and designated as term bonds in the Bond Order. C. Definitions also appear in the above preambles or in specific sections, as appearing below. The table of contents preceding and the headings in this Ordinance are for the convenience of the reader and are not a part of this Ordinance. -4- Section 2. Incorporation of Preambles. The Corporate Authorities hereby find that all of the recitals contained in the preambles to this Ordinance are true, correct, and complete and do 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 and for the health, safety, and general welfare of the residents of the Village to provide funds for the Project, to pay all related costs and expenses incidental thereto, and to borrow money and issue the Bonds for such purposes. It is hereby found and determined that such borrowing of money is for a proper public purpose and is in the public interest and is authorized pursuant to the Act. These findings and determinations shall be deemed conclusive. Section 4. Bond Details. For the purpose of providing for the payment of such costs, there are hereby authorized to be issued and sold the Bonds in an aggregate principal amount of $10,000,000. The Bonds shall each be designated "General Obligation Capital Improvement Bond, Series 2003A. " The Bonds shall be in fully registered form and also in Book Entry Form. The Bonds shall be dated April 1, 2003 (the "Dated Date'), and shall also bear the date of authentication, shall be in fully registered form, shall be in denominations of $5,000 each or authorized integral multiples thereof (but no single Bond shall represent installments of principal maturing on more than one date), and shall be numbered consecutively in such fashion as shall be determined by the Bond Registrar. The Bonds shall become due and payable serially or as Term Bonds (subject to the right of prior redemption hereinafter stated) on January 1 of each of the years and in the respective amounts and bearing interest at the rates per annum (not exceeding 6.00% per annum) as follows: -5- YEAR AMOUNT ($) YEAR AMOUNT ($) 2006 660,000 2013 800,000 2007 670,000 2014 825,000 2008 685,000 2015 860,000 2009 705,000 2016 890,000 2010 725,000 2017 930,000 2011 745,000 2018 735,000 2012 770,000 ; provided, however, that the Designated Officers in the Bond Order may allocate up to $15,000 in each of the maturities to such other of the maturities as they shall designate; and provided, however, further, that any of the serial maturities as so stated in the Bond Order may be aggregated into one or more Term Bonds having mandatory redemptions (and final amount to be due at stated maturity) within these prescribed limits. Each Bond shall bear interest from the later of its Dated Date or from the most recent interest payment date to which interest has been paid or duly provided for, until the principal amount of such Bond is paid or provided for, such interest (computed upon the basis of a 360 -day year of twelve 30 -day months) being payable semi-annually commencing on July 1, 2003, and on January 1 and July 1 of each year thereafter. Interest on each Bond shall be paid by check or draft of the Bond Registrar, payable upon presentation thereof in lawful money of the United States of America, to the person in whose name such Bond is registered at the close of business on the applicable Record Date 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, or as otherwise may be agreed with the Depository for so long as the Depository is the registered owner as of a given Record Date. The principal of or redemption price due on the Bonds shall be payable in lawful money of the United States of America upon presentation thereof at the office' maintained for the purpose of the Bond Registrar, located in the City of Chicago, Illinois, or at successor Bond Registrar or locality. -6- Section S. Book Entry Provisions. The Bonds shall be initially issued in the form of a separate single fully registered Bond for each of the maturities of the Bonds. Upon initial issuance, the ownership of each such Bond shall be registered in the Bond Register in the name of the Depository or a designee or nominee of the Depository (such depository or nominee being the "Book Entry Owner'). Except as otherwise expressly provided, all of the outstanding Bonds from time to time shall be registered in the Bond Register in the name of the Book Entry Owner (and accordingly in Book Entry Form as such term is used in this Ordinance). Any Village officer, as representative of the Village, is hereby authorized, empowered, and directed to execute and deliver or utilize a previously executed and delivered Letter of Representations or Blanket Letter of Representations (either being the "Letter of Representations') substantially in the form common in the industry, or with such changes therein as the officer executing the Letter of Representations on behalf of the Village shall approve, his or her execution thereof to constitute conclusive evidence of approval of such changes, as shall be necessary to effectuate Book Entry Form. Without limiting the generality of the authority given with respect to entering into such Letter of Representations, it may contain provisions relating to (a) payment procedures, (b) transfers of the Bonds or of beneficial interests therein, (c) redemption notices and procedures unique to the Depository, (d) additional notices or communications, and (e) amendment from time to time to conform with changing customs and practices with respect to securities industry transfer and payment practices. With respect to Bonds registered in the Bond Register in the name of the Book Entry Owner, none of the Village, its Treasurer, or the Bond Registrar shall have any responsibility or obligation to any broker-dealer, bank, or other financial institution for which the Depository holds Bonds from time to time as securities depository (each such broker-dealer, bank, or other financial institution being referred to herein as a `Depository Participant') or to any person on behalf of whom such a Depository Participant holds an interest -7- in the Bonds. Without limiting the meaning of the immediately preceding sentence, the Village, its Treasurer, and the Bond Registrar shall have no responsibility or obligation with respect to (a) the accuracy of the records of the Depository, the Book Entry Owner, or any Depository Participant with respect to any ownership interest in the Bonds, (b) the delivery to any Depository Participant or any other person, other than a registered owner of a Bond as shown in the Bond Register or as otherwise expressly provided in the Letter of Representations, of any notice with respect to the Bonds, including any notice of redemption, or (c) the payment to any Depository 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 principal of or interest on the Bonds. No person other than a registered owner of a Bond as shown in the Bond Register shall receive a Bond certificate with respect to any Bond. In the event that (a) the Village determines that the Depository is incapable of discharging its responsibilities described herein and in the Letter of Representations, (b) the agreement among the Village, the Bond Registrar, and the Depository evidenced by the Letter of Representations shall be terminated for any reason, or (c) the Village determines that it is in the best interests of the Village or of the beneficial owners of the Bonds either that they be able to obtain certificated Bonds or that another depository is preferable, the Village shall notify the Depository and the Depository shall notify the Depository Participants of the availability of Bond certificates, and the Bonds shall no longer be restricted to being registered in the Bond Register in the name of the Book Entry Owner. Alternatively, at such time, the Village may determine that the Bonds shall be registered in the name of and deposited with a successor depository operating a system accommodating Book Entry Form, as may be acceptable to the Village, or such depository's agent or designee, but if the Village does not select such alternate book entry system, then the Bonds shall be registered in whatever name or 8 names registered owners of Bonds transferring or exchanging Bonds shall designate, in accordance with the provisions of this Ordinance. Section 6. Execution; Authentication. The Bonds shall be executed on behalf of the Village by the manual or duly authorized facsimile signature of its Mayor and attested by the manual or duly authorized 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 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 7. Term Bonds, Mandatory Redemption and Covenants; Optional Redemption. The Bonds may be subject to mandatory redemption (as Term Bonds) as provided in the Bond Order; provided, however, that in such event the amounts due as provided for under such mandatory redemption shall be the amounts used to satisfy the test set forth in Section 4 of this Ordinance for the maximum amounts of principal due on the Bonds in any given year. Bonds -9- designated as Term Bonds shall be made subject to mandatory redemption by operation of the Bond Fund at a price of not to exceed par and accrued interest, without premium, on a given date of the years and in the amounts as shall be determined in the Bond Order. The Village covenants that it will redeem any Term Bonds pursuant to the mandatory redemption requirement for such Term Bonds and levy taxes accordingly. The Bonds shall also be subject to redemption prior to maturity at the option of the Village, from any available funds, in whole or in part on any date, not longer than ten and one-half (10-1/2) years from the Dated Date, as provided in the Bond Order, and if in part, in such order of maturities (and, if applicable, order of mandatory redemption payments) as shall be specified in the Bond Order, and if less than an entire maturity, in integral multiples of $5,000, selected by lot by the Bond Registrar as hereinafter provided, at the redemption price (expressed as a percentage of the principal amount being redeemed) of not to exceed 103% of par plus accrued interest to the date fixed for redemption, as provided in the Bond Order. Notwithstanding any other provision of this Ordinance, the Bond Order may provide for non -callable Bonds for the first ten and one-half (10-1/2) years. Section 8. Term Bonds Purchase or Redemption. If the Village redeems pursuant to optional redemption as hereinabove provided or purchases Term Bonds of any maturity and cancels the same from Bond Moneys as hereinafter described, then an amount equal to the principal amount of Term Bonds so redeemed or purchased shall be deducted from the mandatory redemption requirements provided for Term Bonds of such maturity, first, in the current year of such requirement, until the requirement for the current year has been fully met, and then in any order of such Term Bonds as due at maturity or subject to mandatory redemption in any year, as the Village shall determine. If the Village redeems pursuant to optional redemption or purchases Term Bonds of any maturity and cancels the same from moneys other than Bond Moneys, then an amount equal to the principal amount of Term Bonds so redeemed or -10- purchased shall be deducted from the amount of such Term Bonds as due at maturity or subject to mandatory redemption requirement in any year, as the Village shall determine. Section 9. Redemption Procedure. The Bonds subject to redemption shall be identified, notice given, and paid and redeemed pursuant to the procedures as follows. A. Notice to Registrar. For a mandatory redemption, unless otherwise notified by the Village, the Bond Registrar will proceed on behalf of the Village as its agent to provide for the mandatory redemption of such Term Bonds without any further order or direction hereunder or otherwise. For an optional redemption, the Village shall, at least 45 days prior to a 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. B. Selection of Bonds within a Maturity. 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 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, 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 make such selection upon the earlier of the irrevocable receipt of funds sufficient to pay the redemption price of the Bonds to be redeemed or the time of the giving of official notice of redemption. C. Official Notice of Redemption. 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 U.S. 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 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 name of the Bonds and at least the information as follows: (1) the redemption date; (2) the redemption price; (3) 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; (4) 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; and (5) the place where such Bonds are to be surrendered for payment of the redemption price, which place of payment shall be the principal office of the Bond Registrar maintained for that purpose. D. Conditional Redemption. 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, -12- 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 was given, that such moneys were not so received and that such Bonds will not be redeemed. K Bonds Shall Become Due. Subject to the stated condition in paragraph D immediately preceding, official notice of redemption having been given as described, 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. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid by the Bond Registrar 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. F. Insufficiency in Notice Not Affecting Other Bonds; Failure to Receive Notice; Waiver. 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 _13_ Bond Registrar, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In lieu of the foregoing official notice, so long as the Bonds are held in Book Entry Form, notice may be given as provided in the Representations Letter, and the giving of such notice shall constitute a waiver by the Depository and the Book Entry Owner, as registered owner, of the foregoing notice. G. New Bond in Amount Not Redeemed. 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. H. Effect of Nonpayment upon Redemption. If any Bond or portion of 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 bome by the Bond or portion of Bond so called for redemption. I. Bonds to be Cancelled; Payment to Identify Bonds. All Bonds which have been redeemed shall be cancelled and destroyed by the Bond Registrar and shall not be reissued. Upon the payment of the redemption price of Bonds being redeemed, each check or other transfer of funds issued for such purpose shall bear the CUSIP number identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer. J. Additional Notice. The Village agrees to provide such additional notice of redemption as it may deem advisable at such time as it determines to redeem Bonds, taking into account any requirements or guidance of the Securities and Exchange Commission, the Municipal Securities Rulemaking Board, the Government Accounting Standards Board, or any other federal or state agency having jurisdiction or authority in -14- such matters; provided, however, that such additional notice shall be (1) advisory in nature, (2) solely in the discretion of the Village, (3) not be a condition precedent of a valid redemption or a part of the Bond contract, and (4) any failure or defect in such notice shall not delay or invalidate the redemption of Bonds for which proper official notice shall have been given. Reference is also made to the provisions of the Continuing Disclosure Undertaking of the Village with respect to the Bonds, which may contain other provisions relating to notice of redemption of Bonds. Section 10. Registration of Bonds; Persons Treated as Owners. The Village shall cause books (the `Bond Register" as herein defined) for the registration and for the transfer of the Bonds as provided in this Ordinance to be kept at the principal office of the Bond Registrar so maintained for the purpose in the City of Chicago, Illinois, 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. Subject to the provisions of this Ordinance relating to the Bonds in Book Entry Form, 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 office of the Bond Registrar maintained for the purpose, 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 15- 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, the principal amount of Bonds of each maturity authenticated by the Bond Registrar shall not at any one 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 to any registered owner of Bonds 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 11. 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. -16- REGISTERED No. [FORM OF BOND - FRONT SIDE] REGISTERED UNITED STATES OF AMERICA STATE OF ILLINOIS THE COUNTIES OF COOK AND DUPAGE VILLAGE OF ELK GROVE VILLAGE GENERAL OBLIGATION CAPITAL IMPROVEMENT BOND, SERIES 2003A See Reverse Side for Additional Provisions. Interest Maturity Dated Rate: Date: January 1, Date: April 1, 2003 CUSIP: Registered Owner: Principal Amount: Dollars KNow ALL PERSONS BY THESE PRESENTS that the Village of Elk Grove Village, Cook and DuPage Counties, 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 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 January 1 and July 1 of each year, commencing July 1, 2003, 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 office maintained for the purpose by Deutsche Bank National Trust Company, a national banking -17- association, having trust powers, located in the City of Chicago, Illinois, as paying agent and bond registrar (the "Bond Registrar'). Payment of interest shall be made to the Registered Owner hereof as shown on the registration books of the Village maintained by such 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 preceding any regular interest payment date or a redemption on the first day of any month and the 15th day preceding any other interest payment date which may be occasioned by a redemption of Bonds on a day other than the first day of any month. Interest shall be paid by check or draft of the Bond Registrar, payable upon presentation in lawful money of the United States of America, mailed to the address of such Registered Owner as it appears on such registration books, or at such other address furnished in writing by such Registered Owner to the Bond Registrar, or as otherwise agreed by the Village and the Bond Registrar and a qualified securities clearing corporation for so long as this Bond is held by such qualified securities clearing corporation or its nominee, as depository, in Book Entry 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 levy and collection of a direct -18- annual tax, in addition to all other taxes, on all of the taxable property in the Village sufficient to pay the interest hereon as the same falls due (excepting that portion thereof provided for by the setting aside of funds at the time of the delivery of the Bonds) and also to pay and discharge the principal hereof at maturity. 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 Elk Grove Village, Cook and DuPage Counties, Illinois, by its Mayor and Board of Trustees, has caused this Bond to be executed by the manual or duly authorized facsimile signature of its Mayor and attested by the manual or duly authorized facsimile signature of its Village Clerk and its corporate seal or a facsimile thereof to be impressed or reproduced hereon, all as appearing hereon and as of the Dated Date identified above. ATTEST: Ann I. Walsh Village Clerk Village of Elk Grove Village Cook and DuPage Counties, Illinois [SEAL] -19- Craig B. Johnson Mayor Village of Elk Grove Village Cook and DuPage Counties, Illinois CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds described in the within -mentioned Ordinance and is one of the General Obligation Capital Improvement Bonds, Series 2003A, having a Dated Date of April 1, 2003, of the Village of Elk Grove Village, Cook and DuPage Counties, Illinois. Date of Authentication: DEUTSCHE BANK NATIONAL TRUST COMPANY as Bond Registrar IC Authorized Signer [FORM OF BOND - REVERSE SIDE] This bond is one of a series of bonds (the "Bonds') in the aggregate principal amount of $10,000,000 issued by the Village for the purpose of paying the costs of a municipal capital improvements Project, and of paying expenses incidental thereto, all as described and defined in Ordinance Number of the Village, passed by the Mayor and Board of Trustees on the 25th day of March 2003 authorizing the Bonds (the "Ordinance'), pursuant to and in all respects in compliance with the applicable provisions of the Illinois Municipal Code, as supplemented and amended, and as further supplemented and, where necessary, superseded, by the powers of the Village as a home rule unit under the provisions of Section 6 of Article VII of the Illinois Constitution of 1970, (such code and powers being the "Act'), and with the Ordinance, which has been duly approved by the Mayor, and published, in all respects as by law required. [The Bonds due on January 1 of the years 20_ and 20_ are Term Bonds and are subject to mandatory redemption by operation of the Bond Fund at a price of par and accrued interest, without premium, on January 1 of the years and in the amounts as follows; -20- For the Term Bonds due January 1, 20_ YEAR AMOUNT ($) 20 20 with $ remaining to be paid at maturity in 20_. For the Term Bonds due January 1, 20_: YEAR AMOUNT ($) 20 20 20^ with $ remaining to be paid at maturity in 20_.] Those of the Bonds due on or after January 1, are subject to redemption prior to maturity, at the option of the Village, from any available funds, in whole or in part, on any date on or after January 1, _, and if in part, in any order of maturity (and, if applicable, any order of mandatory redemption payment) as selected by the Village, and if less than an entire maturity, in integral multiples of $5,000, selected by lot by the Bond Registrar, at the redemption price of par plus accrued interest to the date of redemption. In each case of redemption, such further terms and provision for notice of redemption shall be as set forth in the Ordinance. This Bond may be transferred or exchanged, but only in the manner, subject to the limitations, and upon payment of the charges as set forth in the Ordinance. The 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 _21_ Bonds or to transfer or exchange any Bond all or a portion of which has been called for redemption. The Village and the Bond Registrar may deem and treat the Registered Owner hereof as the absolute owner hereof for the purpose of receiving payment of or on account of principal hereof and interest due hereon and for all other purposes, and neither the Village nor the Bond Registrar shall be affected by any notice to the contrary. ASSIGNMENT FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto 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 12. ,Security for the Bonds. The Bonds are payable as a general obligation of the Village, for which the full faith and credit of the Village are irrevocably pledged, and are payable -22- from the levy of taxes on all of the taxable property in the Village, without limitation as to rate or amount. Section 13. Tax Levy; Abatement. For the purpose of providing funds required to pay the interest on the Bonds promptly when and as the same falls due (excepting that portion thereof provided for by the setting aside of funds at the time of the delivery of the Bonds) and to pay and discharge the principal 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 `Ad Valorem Property Taxes'): FOR THE YEAR A TAX SUFFICIENT TO PRODUCE THE DOLLAR SUM OF: 2003 650,000 for interest up to and including January 1, 2005 [net of interest otherwise provided for as set forth in Section 16] 2004 1,310,000 for principal and interest 2005 1,285,000 for principal and interest 2006 1,260,000 for principal and interest 2007 1,235,000 for principal and interest 2008 1,215,000 for principal and interest 2009 1,190,000 for principal and interest 2010 1,170,000 for principal and interest 2011 1,155,000 for principal and interest 2012 1,130,000 for principal and interest 2013 1,115,000 for principal and interest 2014 1,950,000 for principal and interest 2015 1,080,000 for principal and interest 2016 830,000 for principal and interest which levies shall be subject to adjustment to reflect the final terms of the Bonds, as set forth in the Bond Order. The Ad Valorem Property Taxes and other moneys on deposit (collectively, the "Bond Moneys') in the Bond Fund and allocable to the Bonds shall be applied to pay principal of and interest on the Bonds as follows: -23- A. Bond Moneys shall be applied to the payment of interest when due and principal or redemption price when due at maturity or as redeemed pursuant to mandatory redemption from the Bond Fund, or B. On or before 65 days preceding a mandatory redemption date, and provided notice is given to the Bond Registrar on or before said 65th day preceding a mandatory redemption date, Bond Moneys up to the amount of the redemption requirement on such mandatory redemption date plus interest due on Term Bonds on such date may be applied (1) to the purchase of Term Bonds of the maturity for which such mandatory redemption requirement was established at prices (including commissions and charges, if any) not exceeding par and accrued interest to such mandatory redemption date or (2) to the redemption of such Bonds, without premium, pursuant to optional redemption provisions applicable thereto. Upon the purchase or redemption of Term Bonds of any maturity pursuant to this paragraph (B), an amount equal to the principal amount of such Bonds or applicable portion thereof so purchased or redeemed shall be deducted from the mandatory redemption requirement as provided for Term Bonds of such maturity, first, in the current year of such requirement, until the requirement for the current year has been fully met, and then in any order of payment on the Term Bonds as due at maturity or subject to mandatory redemption in any year as the Village shall at such time determine. 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 Bonds that so long as any of the Bonds remain outstanding, the Village will take no action or fail to take any action -24- 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 Corporate Authorities 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 14. Filing with County Clerks. Promptly, after this Ordinance has become effective, a copy hereof, certified by the Village Clerk of the Village, shall be filed with each of the County Clerks. Upon the sale of the Bonds, such tax levies shall be modified as necessary pursuant to the terms of sale and as provided in the Bond Order. The County Clerks shall in and for each of the years 2003 to 2016, inclusive, ascertain the rate percent required to produce the aggregate Ad Valorem Property Taxes so provided to be levied in each of said years; and the County Clerks shall extend the same for collection on the tax books in connection with other taxes levied in said years in and by the Village for general corporate purposes of the Village; and, subject to abatement as stated hereinabove, 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 15. Sale of Bonds; Official Statement. Any three of the Designated Officials acting in concert are hereby authorized to proceed, without any further authorization or direction -25- whatsoever from the Corporate Authorities, to sell and deliver the Bonds upon the terms as prescribed in this Section, pursuant to one or more Bond Orders. The Bonds shall be sold and delivered to Legg Mason Wood Walker, Incorporated, Chicago, Illinois (the "Underwriter') at the price of not less than 97% of the par value of the principal amount thereof, plus accrued interest to the date of delivery. Such sale shall be made upon the advice (in the form of a written certificate or report) of the Underwriter that the net interest cost rate on the Bonds, calculated in accordance with customary market practice, does not exceed 6.00% and that the terms of the Bonds are fair and reasonable in view of current conditions in the bond markets. Nothing in this Section shall require the Designated Officials to sell any of the Bonds if in their judgment, aided by the Underwriter, the conditions in the bond markets shall have deteriorated from the time of adoption thereof or the sale of all or any portion of the Bonds shall for some other reason not be deemed advisable, but the Designated Officials shall have the authority to sell the Bonds in any event so long as the limitations set forth in this Ordinance and the conditions of this Section shall have been met. Upon the sale of the Bonds, the Designated Officials and any other officers of the Village as shall be appropriate, shall be and are hereby authorized and directed to approve or execute, or both, such documents of sale of the Bonds as may be necessary, including, without limitation, the Bond Order, a Preliminary Official Statement, an Official Statement, a Bond Purchase Contract (as hereinafter defined), and closing documents. The Corporate Authorities, by the members voting hereon, find and determine that no person holding any office of the Village either by election or appointment, is in any manner financially interested either directly, in his or her own name, or indirectly in the name of any other person, association, trust or corporation in said contract with the Underwriter for the purchase of the Bonds. The distribution of a Preliminary Official Statement relating to the Bonds is hereby in all respects authorized and approved, and the proposed use by the Underwriter of an Official Statement (in substantially the -26- form of the Preliminary Official Statement but with appropriate variations to reflect the final terms of the Bonds) is hereby approved. A bond purchase contract for the sale of the Bonds to the Underwriter (the "Bond Purchase Contract'), substantially in the form attached hereto as Exhibit A, is hereby in all respects authorized and approved. Upon the sale of the Bonds, the Designated Officials shall prepare the Bond Order, to be substantially in the form of Exhibit B attached hereto, which shall include the pertinent details of sale as provided herein, and such shall be entered into the records of the Village and made available to all members of the Corporate Authorities at a public meeting thereof. The Designated Officials shall also file with the County Clerk the Bond Order or like document including a statement of taxes. The authority granted in this Ordinance to the Designated Officers to sell Bonds as provided herein shall expire on June 1, 2003. Section 16. Creation of Funds and Appropriations. A. There is hereby created a "General Obligation Capital Improvement Bonds, Series 2003A, Bond Fund" (the "Bond Fund'), which shall be the fund for the payment of principal of and interest on the Bonds. Accrued interest and premium, if any, received upon delivery of the Bonds shall be deposited into the Bond Fund and be applied to pay first interest coming due on the Bonds. Further, at the time of the delivery of the Bonds, a sum of proceeds sufficient, together with accrued interest, to provide for the payment of interest on the Bonds up to and including January 1, 2004, shall be set aside in the Bond Fund and used to pay such interest. B. The Ad Valorem Property Taxes shall either be deposited into the Bond Fund and used 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 principal of or interest on the Bonds prior to receipt of Ad Valorem Property Taxes. Interest income or -27- 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 Corporate Authorities, transferred to such other fund as may be determined. The Village hereby pledges, as equal and ratable security for the Bonds, all Bond Moneys on deposit in the Bond Fund for the sole benefit of the registered owners of the Bonds, subject to the reserved right of the Corporate Authorities 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. C. The amount necessary from the proceeds of the Bonds shall be used to pay costs of issuance of the Bonds and shall be retained by the Village Treasurer to pay such expenses. Any disbursements for expenses shall be made from time to time as necessary. Any excess from the money held for such purpose shall be deposited into the Project Fund not more than six months from the date of issuance of the Bonds, and the Expense Fund shall thereupon be closed. D. The remaining proceeds of the Bonds shall be deposited into the General Obligation Capital Improvement Bonds, Series 2003A, Project Fund (the "Project Fund'), hereby created. Moneys in such fund shall be withdrawn from time to time as needed for the payment of costs of the Project and paying the fees and expenses incidental thereto not paid out of the Expense Fund, and for no other purpose. The Corporate Authorities reserve the right, as it becomes necessary or advisable from time to time, to revise the list of expenditures for the Project, 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 various covenants set forth in this Ordinance and in related certificates given in connection with delivery of the Bonds. E. Funds on deposit in the Project Fund may be invested by the Director of Finance of the Village in any lawful manner and in accordance with the Village's investment policy. 28- Investment earnings shall first be reserved and transferred to such other account as and to the extent necessary to pay any "excess arbitrage profits" or "penalty in lieu of rebate" under Code Section 148 to maintain the Tax-exempt status of the Bonds, and the remainder shall be retained for costs of the Project. Within sixty (60) days after full depletion of the Project Fund, or if the Project is completed and all Project costs payable from the Fund have been fully paid, the Director of Finance of the Village shall certify to the Corporate Authorities the fact of such depletion or the Village engineer shall certify to such completion and payment, and upon approval of such certification by the Corporate Authorities, moneys (if any) which remain shall be transferred as directed by the Corporate Authorities, and such Fund shall be closed. F. Alternatively to the creation of any of the funds described above, the Village acting through its Director of Finance may allocate Bond Moneys or the proceeds of the Bonds to one or more related funds of the Village already in existence and in accordance with good accounting practice; provided, however, that this shall not relieve the Village or Director of Finance of the duty to account and invest for the Bond Moneys and the proceeds of the Bonds as herein provided, as if such funds had in fact been created. Section 17. Continuing Disclosure Undertaking. Any one of the Designated Officials of the Village is hereby authorized, empowered, and directed to execute and deliver the Continuing Disclosure Undertaking (the "Continuing Disclosure Undertaking's in substantially the same form as now before the Village as Exhibit C to this Ordinance or with such changes therein as the officer executing the Continuing Disclosure Undertaking on behalf of the Village shall approve, his or her execution thereof to constitute conclusive evidence of his or her approval of such changes. 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 _29_ 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 18. General Tax Covenants. The Village hereby covenants that it will not take any action, omit to take any action or permit the taking or omission of any action within its control (including, without limitation, making or permitting any use of the proceeds of the Bonds) if taking, permitting, or omitting to take such action would cause any of the Bonds to be an arbitrage bond or a private activity bond within the meaning of the Code or would otherwise cause the interest on the Bonds to be included in the gross income of the recipients thereof for federal income tax purposes. The Village acknowledges that, in the event of an examination by the Internal Revenue Service of the exemption from Federal income taxation for interest paid on the Bonds, under present rules, the Village is treated as the "taxpayer" in such examination and agrees that it will respond in a commercially reasonable manner to any inquiries from the Internal Revenue Service in connection with such an examination. In furtherance of the foregoing provisions, but without limiting their generality, the Village agrees: (a) through its officers, to make such further specific covenants, representations as shall be truthful, and assurances as may be necessary or advisable; (b) to comply with all representations, covenants, and assurances contained in certificates or agreements as may be prepared by counsel approving the Bonds; (c) to consult with such counsel and to comply with such advice as may be given; (d) to file such forms, statements, and supporting documents as may be required and in a timely -30- manner; and (e) if deemed necessary or advisable by its officers, to employ and pay fiscal agents, financial advisors, attorneys, and other persons to assist the Village in such compliance. Section 19. Certain Specific Tax Covenants. A. None of the Bonds shall be a "private activity bond" as defined in Section 141(a) of the Code; and the Village certifies, represents, and covenants as follows: (1) Not more than 5% of the net proceeds and investment earnings of the Bonds is to be used, directly or indirectly, in any activity carried on by any person other than a state or local governmental unit. (2) Not more than 5% of the amounts necessary to pay the principal of and interest on the Bonds will be derived, directly or indirectly, from payments with respect to any private business use by any person other than a state or local governmental unit. (3) None of the proceeds of the Bonds is to be used, directly or indirectly, to make or finance loans to persons other than a state or local governmental unit. (4) No user of the real or personal property of the Village acquired, constructed, or improved with the proceeds of the Bonds, other than the Village or another governmental unit, will use the same on any basis other than the same basis as the general public; and no person, other than the Village or another governmental unit, will be a user of such property as a result of (i) ownership or (ii) actual or beneficial use pursuant to a lease, a management or incentive payment contract other than as expressly permitted by the Code, or (iii) any other arrangement. B. The Bonds shall not be "arbitrage bonds' under Section 148 of the Code; and the Village certifies, represents, and covenants as follows: (1) With respect to the Project, the Village has heretofore incurred or within six months after delivery of the Bonds expects to incur substantial binding obligations to be -31- paid for with money received from the sale of the Bonds, said binding obligations comprising binding contracts for the Project in not less than the amount of 5% of the proceeds of the Bonds. (2) More than 85% of the proceeds of the Bonds are expected to be expended on or before three years for the purpose of paying the costs of the Project. (3) All of the principal proceeds of the Bonds and investment earnings thereon are expected to be used, needed, and expended for the purpose of paying the costs of the Project including expenses incidental thereto. (4) Work on the Project is expected to proceed with due diligence to completion. (5) Except for the Bond Fund, the Village has not created or established and will not create or establish any sinking fund reserve fund or any other similar fund to provide for the payment of the Bonds. The Bond Fund has been established and will be funded in a manner primarily to achieve a proper matching of revenues and debt service and will be depleted at least annually to an amount not in excess of 1112th the particular annual debt service on the Bonds. Money deposited into the Bond Fund will be spent within a 13 -month period beginning on the date of deposit, and investment earnings in the Bond Fund will be spent or withdrawn from the Bond Fund within a one-year period beginning on the date of receipt. (6) Amounts of money related to the Bonds required to be invested at a yield not materially higher than the yield on the Bonds, as determined pursuant to such tax certifications or agreements as the Village officers may make in connection with the issuance of the Bonds, shall be so invested; and appropriate Village officers are hereby authorized to make such investments. -32- (7) Unless an applicable exception to Section 148(f) of the Code, relating to the rebate of "excess arbitrage profits" to the United States Treasury (the "Rebate Requirement') is available to the Village, the Village will meet the Rebate Requirement. (8) Relating to other applicable exceptions, any Village officer charged with issuing the Bonds is hereby authorized to make such elections under the Code as such officer shall deem reasonable and in the best interests of the Village. If such election may result in a "penalty in lieu of rebate" as provided in the Code, and such penalty is incurred (the "Penalty'), then the Village shall pay such Penalty. (9) The officers of the Village shall cause to be established, at such time and in such manner as they may deem necessary or appropriate hereunder, a "General Obligation Capital Improvement Bonds, Series 2003A, Rebate [or Penalty, if applicable] Fund" (the "Rebate Fund') for the Bonds, and such officers shall further, not less frequently than annually, cause to be transferred to the Rebate Fund the amount determined to be the accrued liability under the Rebate Requirement or Penalty. Said officers shall cause to be paid to the United States Treasury, without further order or direction from the Corporate Authorities, from time to time as required, amounts sufficient to meet the Rebate Requirement or to pay the Penalty. However, reference is made to paragraph (7) above. (10) Interest earnings in the Project Fund and the Bond Fund are hereby authorized to be transferred, without further order or direction from the Corporate Authorities, from time to time as required, to the Rebate Fund for the purposes herein provided; and proceeds of the Bonds and other funds of the Village are also hereby authorized to be used to meet the Rebate Requirement or to pay the Penalty, but only if -33- necessary after application of investment earnings as aforesaid and only as appropriated by the Corporate Authorities. C. None of the proceeds of the Bonds will be used to pay, directly or indirectly, in whole or in part, for an expenditure that has been paid by the Village prior to the date hereof except architectural or engineering costs incurred prior to commencement of any of the Project or expenditures for which an intent to reimburse it as properly declared under Treasury Regulations Section 1.103-18. This Ordinance is in itself a declaration of official intent under Treasury Regulations Section 1.103-18 as to all costs of the Project paid after the date hereof and prior to issuance of the Bonds. D. The Village reserves the right to use or invest moneys in connection with the Bonds in any manner or to make changes in the Project list or to use the Village infrastructure acquired, constructed, or improved as part of the Project in any manner, notwithstanding the representations and covenants in Sections 18 and 19 herein, provided it shall first have received an opinion from an attorney or a firm of attorneys of nationally recognized standing in matters pertaining to Tax-exempt bonds to the effect that use or investment of such moneys or the changes in or use of such infrastructure as contemplated will not result in loss or impairment of Tax-exempt status for the Bonds. Section 20. Rights and Duties of Bond Registrar. If requested by the Bond Registrar, and upon approval as to form by the Village Attorney, any officer of the Village is authorized to execute standard forms of agreements between the Village and the Bond Registrar with respect to the obligations and duties of the Bond Registrar hereunder. In addition to the terms of such agreements and subject to modification thereby, the Bond Registrar by acceptance of duties hereunder agrees: (a) to act as bond registrar, paying agent, authenticating agent, and transfer agent as provided herein; (b) to maintain a list of Bondholders as set forth herein and to furnish -34- such list to the Village upon request, but otherwise to keep such list confidential to the extent permitted by law; (c) to cancel and/or destroy Bonds which have been paid at maturity or submitted for exchange or transfer; (d) to furnish the Village at least annually a certificate with respect to Bonds cancelled and/or destroyed; and (e) to furnish the Village at least annually an audit confirmation of Bonds paid, Bonds outstanding and payments made with respect to interest on the Bonds. The Village covenants with respect to the Bond Registrar and the Bond Registrar respectively further covenants and agrees as follows: (A) The Village shall at all times retain a Bond Registrar with respect to the Bonds; it will maintain at the designated office(s) of such Bond Registrar a place or places where Bonds may be presented for payment, registration, transfer or exchange; and it will require that the Bond Registrar properly maintain the Bond Register and perform the other duties and obligations imposed upon it by this Ordinance in a manner consistent with the standards, customs and practices of the municipal securities industry. (B) The Bond Registrar shall signify its acceptance of the duties and obligations imposed upon it by this Ordinance by executing the certificate 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. Any Bond Registrar shall be the agent of the Village and shall not be liable in connection with the performance of its duties except for its own negligence or willful wrongdoing. Any Bond Registrar shall, however, be responsible for any representation in its certificate of authentication on Bonds. (C) The Village may remove the Bond Registrar at any time. In case at any time the Bond Registrar shall resign, shall be removed, shall become incapable of acting, or shall be adjudicated a bankrupt or insolvent, or if a receiver, liquidator, or conservator of the Bond Registrar or of the property thereof shall be appointed, or if any public officer shall take charge or control of the Bond -35- Registrar or of the property or affairs thereof, the Village covenants and agrees that it will thereupon appoint a successor Bond Registrar. The Village shall give notice of any such appointment made by it to each registered owner of any Bond within twenty days after such appointment in the same manner, or as nearly the same as may be practicable, as for a redemption of Bonds. Any Bond Registrar appointed under the provisions of this Section shall be either the Village officer entrusted with custody of the Village funds or a bank, trust company, or national banking association maintaining its principal corporate trust office in Illinois or in the Borough of Manhattan, New York, New York, and having capital and surplus and undivided profits in excess of $100,000,000. The Village Clerk of the Village is hereby directed to file a certified copy of this Ordinance with the Bond Registrar. Section 21. Municipal Bond Insurance. In the event the payment of principal of and interest on the Bonds is insured pursuant to a municipal bond insurance policy (a "Municipal Bond Insurance Policy') issued by a bond insurer (a "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 any of the Designated Officials 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 22. Defeasance. Any Bond or Bonds which (a) are paid and cancelled, (b) which have matured and for which sufficient sums been deposited with the Bond Registrar to pay all principal and interest due thereon, or (c) for which sufficient funds and Defeasance Obligations have been deposited with the Bond Registrar or similar institution 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 -36- trust agreement, shall cease to have any lien on or right to receive or be paid from Bond Moneys or the Bond Fund 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) noncallable, non -redeemable, direct and general full faith and credit obligations of the United States Treasury ("Directs'), (b) certificates of participation or trust receipts in trusts comprised wholly of Directs or (c) other noncallable, non -redeemable, obligations unconditionally guaranteed as to timely payment to maturity by the United States Treasury. Section 23. Publication of Ordinance. A full, true, and complete copy of this Ordinance shall be published within ten days after passage in pamphlet form by authority of the Corporate Authorities. _37- Section 24. Superseder and Effective Date. All ordinances, resolutions, and orders, or parts thereof, in conflict herewith, are to the extent of such conflict hereby superseded; and this Ordinance shall be in full force and effect immediately upon its passage, approval, and publication. ADOPTED: March 25, 2003 Trustees: Feichter, Lissner, Petri, Prochno, AYES: Czarnik and Dill NAYS: None ABSENT: None APPROVED: March .2-512003 Craig B. Johnson Mayor Village of Elk Grove Village Cook and DuPage Counties, Illinois Published in pamphlet form by authority of the Mayor and Board of Trustees on March 26, 2003. ATTEST: Ann I. Walsh Village Clerk Village of Elk Grove Village Cook and DuPage Counties, Illinois -38-