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HomeMy WebLinkAboutS11-79 r ORDINANCE NO. S11-79 Ordinance authorizing the issuance of a $1, 325, 000 Economic Development Revenue Bond, Series 1979 (Elgin Business Forms, Inc. Project) ; authorizing the execution and delivery of appropriate financing documents relating thereto; and confirming the sale of the Bond to the purchaser thereof, and related matters . WHEREAS , the City of Elgin (the "Issuer" ) , is a munic- ipal corporation and a home rule unit, under Section 6( a) of the Illinois Constitution of 1970, duly organized and validly exist- ing under the Constitution and laws of the State of Illinois , and is authorized and empowered by the provisions of Article VII , Section 6 of the 1970 Constitution of the State of Illinois and Ordinance No. S7-75 , duly adopted by the Issuer on July 23 , 1975 , as amended by Ordinance No. S2-78 duly adopted by the Issuer on March 8 , 1978 (the "Enabling Ordinance" ) to acquire, construct and equip an economic development project within the meaning of said Enabling Ordinance; and WHEREAS, the Issuer is further authorized by the Enabl- ing Ordinance to issue its revenue bonds payable solely from the revenues and receipts derived from such projects, and secured by a pledge of said revenues and receipts and by a mortgage on such projects, and the Enabling Ordinance provides that such revenue bonds shall have a lien on the revenues and receipts derived from such projects; and WHEREAS , the Issuer proposes to issue and sell its $1 , 325, 000 Economic Development Revenue Bond, Series 1979 (Elgin Business Forms, Inc . Project) (the "Series 1979 Bond" ) , in order to finance a portion of the cost of the acquisition, construction and equipping of a facility for commercial use (the "Project" ) , and said Series 1979 Bond will be issued under, secured by and contain such terms and provisions as are set forth in this ordi- nance (the "Bond Ordinance" ) ; the proceeds derived from the sale of the Series 1979 Bond are to be deposited with The Elgin Na- tional Bank as fiscal agent (the "Fiscal Agent" ) , pursuant to a certain Fiscal Agent Agreement, dated as of November 1, 1979, by and between the Fiscal Agent and the Issuer (the "Fiscal Agent Agreement" ) , and disbursed (i ) for the payment of the costs incurred in connection with the acquisition, construction and equipping of the Project, and (ii ) for such other purposes as are set forth herein; and WHEREAS , the cost of the Project will be not less than $1, 325, 000, and in order to finance a portion of said cost it is necessary and advisable that provision be made for the issuance, sale and delivery of the Series 1979 Bond in the principal amount of $1 , 325 , 000 , all as authorized and permitted by the Enabling Ordinance; and . t WHEREAS, as a result of negotiations between the Issuer and Elgin Business Forms , Inc. , an Illinois corporation (the "Borrower" ) , contracts have been or will be entered into by the Borrower for the acquisition, construction and equipping of the Project, to be owned by the Borrower and located within the corporate boundaries of the Issuer, it is proposed that the Issuer enter into a Loan Agreement, as hereinafter defined, with the Borrower pursuant to which the Issuer will lend the Borrower the proceeds derived from the sale of the Series 1979 Bond, constituting a sum sufficient, together with other moneys of the Borrower, to accomplish the purposes of the Enabling Ordinance, to wit: to create or maintain employment opportunities in the City of Elgin; and WHEREAS, the Project will create additional employment opportunities, increase the real estate tax and sales tax bases, and encourage capital investment in the City of Elgin, thereby fulfilling the purposes of the Enabling Ordinance; and WHEREAS, the Issuer proposes to sell the Series 1979 Bond upon a negotiated basis to The Elgin National Bank, Elgin, Illinois (the "Bond Purchaser" ) ; and WHEREAS, the Issuer has reviewed the following docu- ments proposed to be executed on behalf of the Issuer: 1 . The form of Loan Agreement, dated as of November 1 , 1979, by and between the Issuer, as lender, and the Borrower, as borrower, attached hereto as Exhibit A. 2 . The form of Pledge and Assignment, dated as of November 1, 1979, from the Issuer, as assignor, to the Bond Purchaser, as assignee, attached hereto as Exhibit B and 3 . The form of Fiscal Agent Agreement, dated as of Novem- ber 1, 1979, by and between the Issuer, as principal , and the Fiscal Agent, as agent for the Issuer, attached hereto as Exhibit C and WHEREAS , it appears that each of the instruments above referred to which are now before this meeting is in appropriate form and is an appropriate instrument to be executed and de- livered by this Issuer for the purpose intended: NOW, THEREFORE, Be It Ordained by the City Council of the City of Elgin, Illinois, as follows : Section 1 . Definitions . The terms defined in this Section 1 (except as herein expressly otherwise provided for, or unless the context clearly otherwise requires ) for all purposes of this ordinance and any ordinance amendatory hereof or supple- mental hereto shall have the respective meanings specified in this Section. Terms which are not defined in this Section shall have the meanings specified in Article I of the Loan Agreement -2- (except as herein otherwise expressly provided, or unless the context clearly requires otherwise ) . "Outstanding" or "Bonds outstanding" means all Bonds which have been duly issued and delivered by the Issuer under this Bond Ordinance, except: (a) Bonds theretofore cancelled; (b ) Bonds for the payment or redemption of which cash funds shall have been deposited with the Bond Purchaser (whether upon or prior to the maturity or redemption date of any such Bonds ) ; and (c ) Bonds in lieu of which others have been issued and delivered hereunder. If the lien of this Bond Ordinance shall be discharged pursuant to Section 32 hereof, no Bonds shall be deemed to be outstanding within the meaning of this provision. "Owner" means the Person in whose name any Bond shall have been registered. Section 2 . Authority to Acquire, Construct and Equip the Project. Based upon representations made by the Borrower to the Issuer, the Issuer hereby determines that the Cost of the Project will be not less than $1, 325 , 000; that the location of the Project within the corporate boundaries of the Issuer will promote the purposes of the Enabling Ordinance; that the financ- ing of the acquisition, construction and equipping of the Project by the Issuer through a loan of the proceeds of the Bonds to the Borrower is in the public interest and in furtherance of the purposes of the Enabling Ordinance; and that such financing is authorized by the Enabling Ordinance and this Bond Ordinance . It is hereby found and declared that the financing of the Cost of the Project, and the use of the Project by the Borrower as here- inafter provided, is necessary to accomplish the purposes of the Enabling Ordinance . Section 3 . Authorization of the Series 1979 Bond, and Security for the Bonds . For the purpose of providing funds to finance a portion of the Cost of the Project, there shall be issued, and is hereby authorized and directed to be issued the Series 1979 Bond of the Issuer. The Bonds and all interest thereon shall be paid solely from the revenues and receipts derived from the Loan Agreement (but excluding moneys received by the Issuer pursuant to its Unassigned Rights ) , and not from any other fund or source. The Bonds shall be issued in compliance with, and under authority of, the provisions of the Enabling Ordinance and this Bond Ordinance . The Issuer hereby pledges the revenues and receipts derived from the Loan Agreement to the payment of the principal of the Bonds , • -3- and the interest and redemption premium, if any, thereon. The Bonds shall be additionally secured by, among other things , the Assignment, the Collateral Security Agreement, the Mortgage, the Loan Agreement and the Construction Fund. The Bonds shall be limited obligations of the Issuer, the principal of and interest on which shall be payable solely from the sources specified in, and be secured as provided by, this Bond Ordinance . The Bonds, and any interest and redemption premium thereon, shall never constitute a general obligation of the Issuer, nor shall the Bonds ever constitute an indebtedness or loan of credit of the Issuer, the State or any other political subdivision thereof, within the meaning of any State constitutional provision or statutory limitation, and neither the Issuer, the State nor any other political subdivision thereof shall be liable thereon, and the Bonds shall neither constitute nor give rise to a pecuniary liability or a charge against the general credit or taxing powers of the Issuer, the State or any other political subdivision thereof. Such limitation shall be plainly stated on the face of each Bond together with a recital that such Bond has been issued under and in compliance with the provisions of the Enabling Ordinance . Any payments on the Bonds made to any owner thereof, or to any duly authorized representative of said owner, by the Borrower or the Issuer, or for the account of the Borrower or the Issuer, shall , for all purposes and in every respect, be deemed a payment of the Bonds , and such payments shall be applied in ac- cordance with the provisions of this Bond Ordinance. Nothing in this Bond Ordinance, the Loan Agreement, the Mortgage, the Collateral Security Agreement, the Fiscal Agent Agreement, the Bond Purchase Agreement or the Assignment shall be construed so as to create an obligation or commitment by the Issuer to expend any of its funds other than ( i ) the proceeds derived from the sale of the Bonds , (ii ) certain of the revenues and receipts to be received by the Issuer, or by any Person on the Issuer' s behalf, from the Loan Agreement, as provided herein, ( iii ) any proceeds accruing to the Issuer, or to any Person on the Issuer' s behalf, from insurance on the Project, (iv) any moneys accruing to the Issuer, or any Person on the Issuer ' s behalf, on account of any taking or condemnation of title to the whole or any part of the Project, and (v) any moneys arising out of the investment or reinvestment of said proceeds , income, rents , revenues , receipts or other moneys . It is hereby found, determined and declared by the Issuer that the aggregate amounts payable in each year under the Loan Agreement are the amounts necessary in such year to pay the principal of, premium, if any, and interest on the Series 1979 Bond, and that the loan repayments and other monetary obligations undertaken by the Borrower in the Loan Agreement are sufficient to satisfy the monetary obligations required by the Enabling Ordinance to be undertaken by the user of an economic development project within the meaning of the Enabling Ordinance . -4- r - Bond, and that the loan repayments and other monetary obligations undertaken by the Borrower in the Loan Agreement are sufficient to satisfy the monetary obligations required by the Enabling Ordinance to be undertaken by the user of an economic development project within the meaning of the Enabling Ordinance. Section 4 . Description and Details of the Series 1979 Bond. The Series 1979 Bond shall be issued as one bond in fully registered form in the name of the Bond Purchaser, shall be num- bered R-1 and shall be in the denomination of $1, 325, 000 . The Series 1979 Bond shall be dated the date of its issuance and delivery, and shall bear interest from said date at a rate not exceeding 9% per annum payable on May 1 and November 1 of each year until maturity. The Series 1979 Bond shall mature on November 1, 1994 . The principal of the Series 1979 Bond shall be payable in annual installments , on November 1 of each year in the princi- pal amount set forth opposite such year in the following table: Year Principal Amount 1980 $ 50, 000 1981 55, 000 1982 55 , 000 1983 60 , 000 1984 65, 000 1985 70, 000 1986 75 , 000 1987 85, 000 1988 90 , 000 1989 95 , 000 1990 105, 000 1991 115, 000 1992 125 , 000 1993 135, 000 1994 145, 000 The Series 1979 Bond and the interest thereon shall be payable in lawful money of the United States of America to the registered owner thereof at the office of the Bond Purchaser. The Series 1979 Bond shall not be sold, transferred or assigned except to an "Institutional Investor, " as such term is hereinafter defined, and then only for the investment account of such Institutional Investor. The costs and charges of any trans- fer shall be paid by the purchaser, transferee or assignee thereof. The term Institutional Investor as used herein means a bank, savings and loan association, insurance company or other such financial institution which has a combined capital and surplus of at least $5 , 000, 000 . In the event the Series 1979 Bond is sold, transferred or assigned, the purchaser, transferee or assignee thereof must notify the Issuer and the Borrower of the new address for payment thereof; absent such notification, such sale, transfer or assignment shall be ineffective as against the Issuer and the -5- Borrower. The Series 1979 Bond shall bear on the face thereof the legend: "THIS SERIES 1979 BOND SHALL NOT BE SOLD, TRANSFERRED OR ASSIGNED EXCEPT TO AN "INSTITUTIONAL INVESTOR, " AS SUCH TERM IS DEFINED IN THE BOND ORDINANCE, AND THEN ONLY FOR THE INVEST- MENT ACCOUNT OF SUCH INSTITUTIONAL INVESTOR. " Section 5 . Prepayment of the Principal of the Series 1979 Bond. The principal installments of the Series 1979 Bond, over and above the payments required to be paid on an annual basis, shall be subject to prepayment at any time, on the occur- rence of any of the events set forth in Section 7 . 1 of the Loan • Agreement, at the option of the Issuer in whole or ( in the case of prepayment pursuant to any condemnation award) in part in inverse order of their due dates prior to the stated maturity thereof, but only after giving the notice specified in Section 6 of this Bond Ordinance, at an amount equal to the sum of the following: (1 ) an amount of money which will be sufficient to redeem the outstanding principal amount of the Bond on the next redemption date, including, without limitation, the principal al amount thereof, all interest to accrue to said date, the applicable premium if any, and expenses incurred or to be incurred in connection with the prepayment of the indebtedness hereunder and the redemption of the Series 1979 Bond, (2 ) an amount of money equal to the Issuer' s , Bond Purchaser' s and Fiscal Agent' s fees , charges and expenses , if any, accrued and to accrue until the redemption date, and (3 ) an amount of money sufficient to discharge all other liabilities of the Borrower accrued under the Loan Agreement. In addition, the principal installments due on the Series 1979 Bond on or after November 1, 1983 , shall be subject to prepayment at the option of the Issuer on or after November 1 , 1982 , in whole at any time, or in part on any interest payment date, and if in part then in the inverse order of their due dates , but only after giving the notice specified in Section 6 hereof, at a redemption price equal to the principal amount thereof to be redeemed. Upon the giving of notice to the Bond Purchaser, or, if the Bond Purchaser is no longer the owner of the Series 1979 Bond, to the owner of the Series 1979 Bond at that time, all or any portion of the Series 1979 Bond may, in the manner set forth above, be prepaid. Such prepayment shall be valid upon payment of the amount thereof to the Bond Purchaser, or, if the Bond Purchaser is no longer the owner of the Series 1979 Bond, to the owner of the Series 1979 Bond at that time, and the Issuer shall be fully released and discharged from all liability to the extent -6- of such payment, irrespective of whether such payment shall be endorsed upon the such Series 1979 Bond by the Bond Purchaser, or, if the Bond Purchaser is no longer the owner of the Series 1979 Bond, by the owner thereof at that time, and irrespective of any error or omission in such endorsement. The Series 1979 Bond is subject to mandatory redemption in the event that the Borrower is required to prepay the amounts payable under the Loan Agreement upon the occurrence of a "Deter- mination of Taxability, " as defined in Section 7 .3 of the Loan Agreement. If called for redemption upon the occurrence of a Determination of Taxability, the Series 1979 Bond shall be sub- ject to redemption by the Issuer at any time in whole and not in part, at a redemption price equal to the unpaid principal amount thereof, plus accrued interest to the redemption date, plus a redemption premium equal to one (1 ) year' s interest borne by the Series 1979 Bond for each twelve (12 ) month period or part there- of elapsed between the "Event of Taxability, " as defined in Section 7 .3 of the Loan Agreement, and the date of redemption, such aggregate amount constituting the total compensation due the Bond Purchaser, or, if the Bond Purchaser is no longer the owner of the Series 1979 Bond, the owner of the Series 1979 Bond at that time, as a result of an Event of Taxability. The owner of the Series 1979 Bond (or portion thereof) both at the time of an "Event of Taxability" (as defined in Section 7 . 3 of the Loan Agreement) and at the maturity or redemp- tion ( in whole or in part) thereof prior to the aforesaid redemp- tion date resulting from an Event of Taxability shall, upon presentation to the Issuer and the Borrower in writing of proof satisfactory to the Issuer and the Borrower that he was the owner of the Series 1979 Bond (or portion thereof) at such times , be entitled to a redemption premium equal to one ( 1 ) year' s interest borne by the Series 1979 Bond for each twelve (12 ) month period or part thereof elapsed between the "Event of Taxability, " as defined in Section 7 .3 of the Loan Agreement, and the date of redemption, such amount constituting the total compensation due such owner of the Series 1979 Bond (or portion thereof) as a result of the Event of Taxability. Notice having been given in the manner provided in Section 6 hereof, the Series 1979 Bond or the principal portions thereof so called for redemption or prepayment pursuant to this Section shall become due and payable on the dates so designated at the price and upon presentation and surrender thereof at the office specified in such notice. The Series 1979 Bond or the principal portions thereof shall continue to bear interest until paid. Section 6 . Notice of Prepayment. Notice of any pre- payment shall be given in the name of the Issuer by the Issuer or the Borrower to the owner of the Series 1979 Bond in the manner required for the giving of notice under the Loan Agreement, as specified in Section 9 . 1 thereof. Each such notice shall be -7- . t mailed at least thirty (30 ) days and not more than ninety (90 ) daysprior to the date fixed forprepayment, and shall s specify P Y the principal amount of the Series 1979 Bond to be prepaid, unless the giving of such notice is waived in writing by the owner of the Series 1979 Bond to be prepaid. Notice of any prepayment as herein provided shall be given only after written notification thereof from the Borrower to the Issuer has been given, and may only be given as long as the Borrower is not in default under the Loan Agreement. Failure to give such notice by mailing, or any defect therein, shall not affect the validity of the proceedings for such prepayment. Section 7. Person Treated as Owner. The person in whose name the Series 1979 Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all pur- poses, and payment of or on account of the principal of or inter- est on the Series 1979 Bond shall be made only to or upon the order of the owner thereof, or his duly authorized legal repre- sentative, and neither the Issuer nor the Borrower shall be affected by any notice to the contrary. All such payments shall be valid and effectual to satisfy and discharge the liability upon the Series 1979 Bond to the extent of the sum or sums so paid. Subject to the restrictions on transfer provided in Section 4 hereof, title to the Series 1979 Bond is transferable by the owner thereof or by his attorney duly authorized in writ- ing. Section 8 . Method of Execution of the Series 1979 Bond. The Series 1979 Bond shall be executed for and on behalf of the Issuer by the manual signature of its Mayor, and attested to by the manual signature of its City Clerk, with the seal of the Issuer impressed thereon. Section 9 . Form of the Series 1979 Bond. The Series 1979 Bond and the form of assignment attached thereto shall be in substantially the following form: -8- (FORM OF BOND) UNITED STATES OF AMERICA STATE OF ILLINOIS CITY OF ELGIN Economic Development Revenue Bond, Series 1979 (Elgin Business Forms , Inc . Project) Number R- $ The CITY OF ELGIN, a municipal corporation and a home rule unit, duly organized and validly existing under the Consti- tution and laws of the State of Illinois (the " Issuer" ) , for value received promises to pay, but only from the sources and as hereinafter provided, to THE ELGIN NATIONAL BANK or registered assigns, the principal sum of ONE MILLION THREE HUNDRED TWENTY- FIVE THOUSAND DOLLARS ( $1 , 325 , 000 ) , payable in installments , in the amounts and at the times as specified in the Schedule of Payments attached hereto, and in like manner to pay interest on the unpaid portion thereof from the date hereof at the rate of percent ( %) per annum payable semiannually on May 1 and November 1 in each year until said principal sum is paid, except as the provisions hereinafter set forth with respect to prepayment prior to maturity may become applicable hereto; prin- cipal of, premium, if any, and interest on this Series 1979 Bond being payable in lawful money of the United States of America at the address of the registered owner hereof provided to the Issuer and the Borrower, as hereinafter defined. In the event that the Issuer shall fail to make, or cause to be made, any of the pay- ments required herein to be made, the item or installment so in default shall continue as an obligation of the Issuer until the amount in default shall have been fully paid, and the Issuer agrees to pay the same, or to cause the same to be paid, on demand, with interest thereon at the rate of ten percent ( 10%) per annum, but if such rate should exceed the maximum rate al- lowed under the laws of the State of Illinois then at the maximum so allowed. Upon payment or prepayment of the principal of or interest on this Series 1979 Bond, the registered owner hereof shall note such payment on the Schedule of Payments attached hereto and made a part hereof. The issuance of this Series 1979 Bond has been duly authorized by the Issuer, and this Series 1979 Bond constitutes the entire issue known as the "Economic Development Revenue Bond, Series 1979 (Elgin Business Forms, Inc. Project) " of the Issuer in the principal amount of $1, 325, 000, authorized for the purpose of financing the acquisition, construction and equipping of a facility for commercial use within the corporate limits of the Issuer (the "Project" ) , and paying necessary expenses inci- -9- - r dental thereto, so as to fulfill the purposes of the Enabling Ordinance, as hereafter defined. This Series 1979 Bond has been issued under the Bond Ordinance, and along with the other bonds which may subsequently be issued under the provisions of the Bond Ordinance, as hereinafter defined, and any ordinance amendatory thereof or supplemental thereto (this Series 1979 Bond and such subsequent bonds hereinafter collectively referred to as the "Bonds" ) , are equally and ratably secured as to principal , premium, if any, and interest pursuant to an ordinance duly adopted by the Issuer on , 1979 (the "Bond Ordinance" ) , and are additionally secured by, among other things, a certain Loan Agreement (the "Loan Agreement" ) , dated as of November 1, 1979 , by and between the Issuer, as lender, and Elgin Business Forms , Inc. , an Illinois corporation, as borrower (the "Borrower" ) , a certain Pledge and Assignment (the "Assignment" ) , dated as of November 1, 1979, from the Issuer, as assignor, to The Elgin National Bank, Elgin, Illinois, as assignee (the "Bond Purchaser" ) , a certain Collateral Security Agreement (the "Collateral Security Agreement" ) , dated as of November 1 , 1979 , from the Borrower, as pLedgor, to the Bond Purchaser, as pledgee, and a certain Mort- gage (the "Mortgage" ) , dated as of November 1, 1979, from Elgin Enterprises, Ltd. , as mortgagor, to the Bond Purchaser, as mort- gagee. Reference is hereby made to the Bond Ordinance, the Loan Agreement, the Assignment, the Collateral Security Agreement and the Mortgage for a description of the Project, the nature and extent of the security for the Bonds, and a statement of the terms and conditions upon which this Series 1979 Bond and the other Bonds are issued and secured, the rights of the owners hereof and thereof, and the other matters set forth therein. A loan of the proceeds of this Series 1979 Bond has been made, pursuant to the Loan Agreement to the Borrower for the purpose of financing the costs of the Project. Pursuant to the Loan Agreement, the Borrower must pay to the Issuer, or its assignee, such amounts as will always be sufficient in the aggre- gate to pay the principal of and interest on the Bonds as the same mature and become due; and under the Loan Agreement, it is the obligation of the Borrower to operate and maintain the Pro- ject in good repair, to keep it properly insured and to pay all taxes, assessments , depreciation charges and other charges levied or assessed against or with respect to the Project. This Series 1979 Bond is issued in full compliance with the Constitution and laws of the State of Illinois , including particularly Article VII , Section 6 of the 1970 Constitution of the State of Illinois and Ordinance No. S7-75, duly adopted by the Issuer on July 23 , 1975, as amended by Ordinance No. S2-78 duly adopted by the Issuer on March 8, 1978 (the "Enabling Ordi- nance" ) . THIS SERIES 1979 BOND SHALL NOT BE SOLD, TRANSFERRED OR ASSIGNED EXCEPT TO AN "INSTITUTIONAL INVESTOR, " AS SUCH TERM IS DEFINED IN THE BOND ORDINANCE, AND THEN ONLY FOR THE INVESTMENT ACCOUNT OF SUCH INSTITUTIONAL INVESTOR. -10- Subject to the preceding paragraph, this Series 1979 Bond may be sold, transferred or assigned by the owner hereof in person, or by his attorney duly authorized in writing, but only in the manner, subject to the limitations and upon payment of the charges provided in the Bond Ordinance. Upon such sale, transfer or assignment, the purchaser, transferee or assignee hereof shall be entitled, at such purchaser' s, transferee ' s or assignee ' s expense, to the issuance of a new bond. The Issuer may deem and treat the party in whose name this Series 1979 Bond is registered as the absolute owner hereof for the purpose of receiving payments of, or on account of, principal hereof, and premium, if any, and interest due hereon, and for all other purposes, and neither the Issuer nor the Bor- rower shall be affected by any notice to the contrary, except as provided in the Bond Ordinance. The principal installments of this Series 1979 Bond, over and above the payments required to be paid on an annual basis, are subject to prepayment at any time, on the occurrence of any of the events set forth in Section 7 . 1 of the Loan Agree- ment, at the option of the Borrower, by the Issuer, in whole or (in the case of prepayment pursuant to any condemnation award) in part in inverse order of their due dates prior to the stated maturity thereof, but only after giving the notice specified below, at an amount equal to the sum of the following: an amount of money which will be sufficient to redeem this Series 1979 Bond on the next redemption date, including, without limitation, the principal amount hereof, all interest to accrue to said date, the applicable premium, if any, and expenses incurred or to be incurred in connection with the prepayment of the indebtedness evidenced hereby. In addition, the principal installments due on this Series 1979 Bond shall be subject to prepayment at the option of the Issuer on or after November 1 , 1982 , in whole at any time, or in part on any interest payment date, and if in part in the inverse order of their due dates prior to the stated maturity thereof, but only after giving the notice specified below, at a redemption price equal to the principal amount thereof to be redeemed. This Series 1979 Bond is subject to mandatory redemp- tion in the event that the Borrower is required to prepay the amounts payable under the Loan Agreement upon the occurrence of a "Determination of Taxability, " as defined in Section 7 . 3 of the Loan Agreement. If called for redemption upon the occurrence of a Determination of Taxability, this Series 1979 Bond shall be subject to redemption by the Issuer at any time in whole and not in part at a redemption price of the unpaid principal amount hereof, plus accrued interest to the redemption date, plus a re- demption premium equal to one (1 ) year' s interest borne by this Series 1979 Bond for each twelve ( 12 ) month period or part there- of elapsed between the "Event of Taxability, " as defined in Section 7 .3 of the Loan Agreement, and the date of redemption, such aggregate amounts constituting the total compensation due -11- the owner of this Series 1979 Bond as a result of an Event of Taxability. Any person who was an owner of this Series 1979 Bond both at the time of an "Event of Taxability" ( as defined in Section 7 .3 of the Loan Agreement) and at the maturity or redemp- tion ( in whole or in part) hereof prior to the aforesaid redemp- tion date resulting from an Event of Taxability shall , upon presentation to the Issuer and the Borrower in writing of proof satisfactory to the Issuer and the Borrower that he was the owner of this Series 1979 Bond at such times, be entitled to an amount, as a redemption premium, equal to one ( 1 ) year' s interest borne by this Series 1979 Bond for each twelve ( 12 ) month period or part thereof elapsed between the "Event of Taxability, " as de- fined in Section 7 . 3 of the Loan Agreement, and the date of redemption, such amount constituting the total compensation due the owner of this Series 1979 Bond as a result of an Event of Taxability. In the event any principal over and above the principal required to be paid on an annual basis is intended to be prepaid as aforesaid, notice thereof identifying the amount of principal to be prepaid shall be given in the name of the Issuer by the Borrower or the Issuer by mailing (by certified or registered mail postage prepaid, return receipt requested) a copy of the prepayment notice at least thirty (30 ) days and not more than ninety (90 ) days prior to the date fixed for prepayment, to the owner of each Bond to be prepaid at the address furnished to the Issuer and the Borrower in writing by such owner, unless such notice is waived by the owners of the Bonds ; provided, however, that failure to give such notice by mailing, or any defect there- in, shall not affect the validity of any proceedings for the prepayment of principal with respect to which no such failure has occurred. The unpaid portions of the Bonds shall continue to bear interest until paid. Payment will be made upon presentation and surrender of the Bonds to be prepaid. If the Issuer shall default in the due and punctual payment of the interest on, or the principal of, or premium, if any, on any Bond when and as the same shall become due and pay- able, at maturity, by acceleration or otherwise, or if a default under the Bond Ordinance, the Loan Agreement, the Collateral Security Agreement, the Mortgage or the Assignment shall occur as provided therein, then, and at any time thereafter, unless and until the default shall have been cured or shall have been waived in the manner provided therein, the owner of this Series 1979 Bond may, upon written notice given by certified or registered mail to the Issuer and the Borrower, and to the owners of the remainder of the Bonds at the time outstanding under the Bond Ordinance, declare this Series 1979 Bond to be due and payable, and may proceed to enforce the rights embodied in this Series 1979 Bond, and any and all such other rights as the owner of this Series 1979 Bond may have, either by suit in equity or by action at law, or both. -12- The Bonds are payable solely from the revenues and receipts derived from the Loan Agreement and the Project, and otherwise as provided in the Bond Ordinance, the Collateral Security Agreement, the Assignment, the Mortgage and the Loan Agreement. Pursuant to the provisions of the Loan Agreement amounts sufficient in the aggregate for the prompt payment when due of the principal of, premium, if any, and interest on the Bonds are to be paid directly to the registered owners of such Bonds for the account of the Issuer pursuant to the terms and provisions of the Assignment. Any payments on the Bonds made to any registered owner or representative thereof by the Borrower or the Issuer, or for the account of the Borrower or the Issuer, shall for all purposes and in every respect be deemed a payment of the Bonds, and such funds shall be applied to the payment of the Bonds and shall satisfy and discharge the liability of the Issuer upon the Bonds . The Bonds are not, and shall not be deemed to consti- tute, either a general obligation or an indebtedness of the Issuer, or the State of Illinois or any other political subdivi- sion thereof, or a loan of credit thereof within the meaning of any constitutional or statutory provision of the State of Illi- nois ; but such Bonds shall be payable solely from the funds provided therefor as provided in the Bond Ordinance. Neither the faith and credit nor the taxing power of the State of Illinois , the Issuer, or any other political subdivision of the State of Illinois is pledged to the payment of the principal of such Bonds , the interest or any premium thereon, or other costs inci- dental thereto, and neither the State of Illinois, nor any other political subdivision of the State of Illinois shall be liable thereon. Neither the members of the Issuer nor any person exe- cuting the Bonds shall be personally liable on the Bonds solely by reason of issuance thereof. In certain events , on the conditions , in the manner and with the effect set forth in the Bond Ordinance, the principal of all of the Bonds issued under the Bond Ordinance, and then out- standing, may become or may be declared due and payable before the stated maturity thereof, together with interest accrued thereon. Modifications or alterations of the Bond Ordinance may be made only to the extent and in the circumstances permitted by the Bond Ordinance. IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts , conditions and things required to exist, happen and be per- formed precedent to and in the passage and approval of the Bond Ordinance and the issuance of this Series 1979 Bond do exist, have happened and have been performed in due time, form and manner as required by law; and that the issuance of this Series 1979 Bond, together with all other obligations of the Issuer re- lating hereto, shall not constitute an indebtedness of the Is- suer, the State of Illinois or of any other political subdivision thereof within the meaning of any constitutional or statutory provision of the State of Illinois . -13- IN WITNESS WHEREOF, the City of Elgin, has caused this Series 1979 Bond to be executed in its name by the manual signa- ture of its Mayor, and attested by the manual signature of its City Clerk, and its seal to be impressed hereon, all as of , 1979 . CITY OF ELGIN By Its : Mayor (SEAL) Attest: By Its : City Clerk (FORM OF ASSIGNMENT) ASSIGNMENT For value received, the undersigned sells , assigns and transfers unto this Series 1979 Bond of the Is- suer. NO SALE, ASSIGNMENT OR TRANSFER HEREOF SHALL BE EFFECTIVE UNTIL NOTICE THEREOF SHALL HAVE BEEN GIVEN TO THE ISSUER AND THE BORROWER IN THE MANNER REQUIRED FOR THE GIVING OF NOTICES UNDER SECTION 9 . 1 OF THE LOAN AGREEMENT. THIS SERIES 1979 BOND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED EXCEPT TO AN " INSTITUTIONAL INVESTOR, " AS SUCH TERM IS DEFINED IN THE BOND ORDINANCE, AND THEN ONLY FOR THE INVESTMENT ACCOUNT OF SUCH INSTITUTIONAL INVES- TOR. Dated: Signed: Witness : -14- (FORM OF SCHEDULE OF PAYMENTS ) SCHEDULE OF PAYMENTS Name of Recipient, Principal Title and Due Date Payment Date Paid Signature Section 10 . Execution and Delivery of the Series 1979 Bond; Deposit of Bond Proceeds ; Designation of Fiscal Agent py Issuer. The Mayor and the City Clerk of the Issuer are hereby authorized and directed to prepare and execute, in the manner hereinbefore specified, the Series 1979 Bond herein authorized, and to deliver the Series 1979 Bond to the purchaser thereof upon receipt of the purchase price therefor, namely 100% of the aggre- gate principal amount thereof. The Elgin National Bank is hereby designated Fiscal Agent for the Issuer for the purposes of, among other things, (i ) serving as the depository of the proceeds of the Series 1979 Bond as provided herein, (ii ) establishing and maintaining the Construction Fund as provided in Section 13 hereof, and ( iii ) performing such other obligations and respon- sibilities as shall be provided herein, in the Loan Agreement, the Fiscal Agent Agreement, the Mortgage, the Collateral Security Agreement and the Assignment. The rights and duties of the Fiscal Agent are further specified in Section 28 of this Bond Ordinance . The proceeds of said Series 1979 Bond shall be de- posited with the Fiscal Agent and applied as provided in Section 3 .3 of the Loan Agreement and Section 13 hereof. Section 11 . Construction Fund. There is hereby autho- rized and ordered to be established in the custody of the Fiscal Agent, a separate trust fund designated the "City of Elgin, Elgin Business Forms , Inc. Construction Fund" (the "Construction Fund" ) . The Fiscal Agent shall promptly deposit the proceeds derived from the sale of the Series 1979 Bond into the Construction Fund. The Construction Fund shall be used for the purpose of providing moneys to pay the Cost of the Project, in the manner and as provided in Section 3 .3 of the Loan Agreement. Any moneys not required for said purpose shall, when the Project is complete as provided in the Loan Agreement, be applied by the Fiscal Agent in the manner provided in Section 3 .3 (k) of the Loan Agreement. -15- Section 12 . Investments . As used herein, the term "Permitted Investments" shall mean those investments permitted by Section 3 . 8 of the Loan Agreement. Moneys held in the Construction Fund or in any other trust fund, upon instructions from the Borrower, shall be in- vested by the Fiscal Agent in Permitted Investments . No invest- ment shall be made pursuant to this Section for a period longer than the time period, determined by the Fiscal Agent, for which said moneys are not required for the purpose for which they are intended. All proceeds of, interest on and profit realized from investments held in any trust fund shall accrue to and become a part of the appropriate trust fund, and any loss resulting from such investment should be charged to such fund and paid by the Borrower on demand from its own funds . Section 13 . Application of the Construction Fund. The Fiscal Agent is authorized and directed to apply the amounts in the Construction Fund to the payment or reimbursement of the Cost of the Project, as defined in the Loan Agreement. The Fiscal Agent is hereby authorized and directed to make payments and reimbursements from the Construction Fund upon a requisition submitted to the Fiscal Agent and signed by the Authorized Borrower Representative in conformance in all respects with the requirements contained in Section 3 .3 of the Loan Agree- ment. Each requisition shall certify each item thereof as correct and proper under this Section, and that none of the items for which the requisition is made has formed the basis for any payment or reimbursement theretofore made from the Construction Fund, and shall have attached thereto proof of payment or an invoice, and, if appropriate, a bill of sale therefor. The Fiscal Agent shall keep and maintain adequate records pertaining to the Construction Fund and all disbursements therefrom, and shall file an accounting thereof with the Issuer and the Borrower annually on the anniver- sary of the date of the issuance and delivery of the Series 1979 Bond until completion of the Project, as evidenced by the certifi- cate required by Section 3 . 5 of the Loan Agreement. Section 14. Completion of the Project. The completion of the Project anand the payment of all costs and expenses incident thereto shall be evidenced by the filing with the Bond Purchaser, the Issuer and the Fiscal Agent of the certificate of the Autho- rized Borrower Representative required by the provisions of Sec- tion 3 . 5 of the Loan Agreement. As soon as is practicable, and in any event not more than sixty (60 ) days from the date of the certificate referred to in the preceding sentence, any balance remaining in the Construction Fund other than the amounts retained by the Fiscal Agent for the Cost of the Project not then due and payable (said balance being referred to in the Loan Agreement as "Surplus Construction Fund Money" ) shall be applied as provided in Section 3 . 3 (k) of the Loan Agreement. -16- Section 15 . Payment of Principal and Interest; Condition of the Issuer' s Obligations . The Issuer covenants that it will promptly pay, or cause to be paid, the principal of, premium, if any, and interest on the Series 1979 Bond, including the payment of installments of principal required with respect thereto, at the place, on the dates and in the manner provided in this Bond Ordinance and in the Series 1979 Bond according to the true intent and meaning hereof and thereof. The principal of, premium, if any, and interest on the Series 1979 Bond are payable solely from the revenues and receipts derived from or in connection with the Loan Agreement and the Project (but excluding those amounts derived by the Issuer pursuant to its Unassigned Rights ) , which revenues and receipts are hereby specifically pledged to the payment thereof in the manner and to the extent specified in this Bond Ordinance and the Assignment. The Bonds are further secured by, among other things , the Loan Agreement, the Mortgage, the Assignment, the Collateral Security Agreement and the Construc- tion Fund. The Issuer shall not be required under this Bond Ordinance, the Mortgage, the Collateral Security Agreement, the Assignment or the Loan Agreement to expend any of its funds other than (i ) the proceeds derived from the sale of the Series 1979 Bond, ( ii ) the income, revenues, receipts and other moneys derived from the Loan Agreement or the Project (but excluding revenues and receipts derived by the Issuer pursuant to its Unassigned Rights ) , ( iii ) any income or gains therefrom, and ( iv) condemnation awards or insurance proceeds with respect to the Project. Each and every covenant herein made, including all covenants made in the various sections of this Bond Ordinance, is predicated upon the condition that any obligation for the payment of money incurred by the Issuer shall not constitute an indebtedness of the Issuer or a loan of credit thereof within the meaning of any constitu- tional or statutory provision, but shall be payable solely from the revenues and receipts derived from or in connection with the Project, including all moneys received by the Issuer (or its assignee under the Assignment) under the Loan Agreement, which revenues and receipts are hereby specifically pledged to the payment thereof in the manner and to the extent in this Bond Ordinance and the Assignment specified; and nothing in the Series 1979 Bond or this Bond Ordinance shall be considered to pledge any other funds or assets of the Issuer. Any provision of this Bond Ordinance to the contrary notwithstanding, the Issuer shall not be obligated to take any action or execute any instrument pursuant to any provision hereof (other than its obligations to pay principal of, premium, if any, and interest on the Series 1979 Bond) , unless ( i ) it shall have been requested to do so by the owner of thereof in writing, and (ii ) if compliance with such request can reasonably be expected to result in the incurrence by the Issuer of any fees or expenses , it shall have received from the Borrower or the owner assurances reasonably satisfactory to the Issuer that the Issuer will be promptly reimbursed for the full amount of such fees and expenses ; provided, however, that no limitation on the obligations of the Issuer contained herein by virtue of any lack of assurances -17- provided in ( ii ) above shall be deemed to prevent the occurrence of, and full force and effect of an event of default hereunder. Section 16 . Particular Covenants of the Issuer. Except as provided in Section 15 hereof, as long as any of the principal of, premium, if any, and interest on the Series 1979 Bonds remains outstanding and unpaid, or until provision has been made for the payment thereof, the Issuer covenants with the owner of the Series 1979 Bond as follows : ( a) The Issuer will comply fully with all the terms , provisions and conditions of the Loan Agreement, the Assignment, the Mortgage, the Collateral Security Agreement and the Fiscal Agent Agreement which require performance by, or impose duties on, the Issuer, and will not permit any default to occur on the part of the Issuer hereunder or thereunder; will fully and promptly enforce all of the terms , provisions and conditions of the Loan Agreement which require performance by, or impose duties on, the Borrower; and in the event of the occurrence of an event of default, as defined in the Loan Agreement, will , subject to the Assignment, the Mortgage and the Collateral Security Agree- ment, exercise, or cause the same to be exercised, all of the rights and remedies conferred upon the Issuer by the Loan Agree- ment for the full and complete protection of the security and rights of the owner of the Series 1979 Bond. (b ) The Issuer will enforce collection of the loan repayments and the payment of other fees, expenses and charges in the amounts and at the time set forth in the Loan Agreement authorized hereby, and will not reduce, or cause or permit to be reduced, the loan repayments and other fees , expenses and charges fixed, established and required by the Loan Agreement, nor change or alter the time or times when the same are due and payable under said Loan Agreement. The Issuer' s obligation to pay the expenses of such enforcement shall be limited to funds made available to it for that purpose by the owner of the Series 1979 Bond, or other interested parties . (c) The Issuer will not consent to any change, amend- ment, modification or termination of the Loan Agreement, except otherwise as provided herein or therein. (d) The Issuer will not issue any other obligations payable from payments to be made by the Borrower pursuant to the Loan Agreement, nor voluntarily create or cause to be created any debt, lien, pledge, assignment, encumbrance or other charge on said payments or on the property and rights subject to the Loan Agreement, except as provided in Sections 29 and 30 hereof. (e) The Issuer covenants that it will faithfully per- form at all times any and all covenants , undertakings , stipula- tions and provisions contained in this Bond Ordinance, in the Series 1979 Bond and in all proceedings pertaining hereto and thereto. The Issuer covenants that it is duly authorized under -18- I the Constitution and laws of the State of Illinois, including particularly and without limitation the Enabling Ordinance, to issue the Series 1979 Bond authorized hereby, to lend the Bor- rower the proceeds thereof by means of the Loan Agreement, and to pledge the revenues and receipts (and rights thereto ) hereby authorized to be pledged and assigned in the manner and to the extent herein and in the Assignment set forth; that all action on its part for the issuance of the Series 1979 Bond and the adop- tion of this Bond Ordinance has been duly and effectively taken; and that the Series 1979 Bond will be a valid and enforceable special obligation of the Issuer according to the import thereof. Section 17 . Insurance and Condemnation Proceeds . The Loan Agreement provides for the assignment to the Bond Purchaser of certain insurance proceeds and condemnation awards , damages and compensation with respect to the Project. The Issuer hereby agrees to the application of such moneys in said manner. Section 18 . Amendments or Modifications . Any provi- sion of the Series 1979 Bond, this Bond Ordinance, the Loan Agreement, the Mortgage, the Assignment, the Fiscal Agent Agree- ment or the Collateral Security Agreement may be modified or amended in any respect with the written consent of the owner of the Series 1979 Bond and the owners of all Additional Bonds then Outstanding, provided that the Borrower shall have given its prior approval in writing to any such modification or amendment if the same would permit, or be construed to permit, any change in the obligations of the Borrower as set forth in the Loan Agreement, the Collateral Security Agreement or the Mortgage . Every amendment or modification of a provision of this Bond Or- dinance, the Loan Agreement, the Assignment or the Fiscal Agent Agreement shall be expressed in an ordinance of the Issuer amend- ing or supplementing the provisions of this Bond Ordinance, and shall be deemed to be a part of this Bond Ordinance . It shall not be necessary to note on any outstanding Bond any reference to such amendment or modification. No subsequent owner of the Series 1979 Bond shall have any right to object to such supplemental ordinance, or to object to any of the terms and provisions contained therein or the operation thereof, or in any manner to question the propriety of the adoption thereof, or to enjoin or restrain the Issuer from adopting the same or from taking any action pursuant to the provisions thereof. Upon the adoption of any supplemental ordinance pur- suant to the provisions of this Section, this Bond Ordinance shall be, and be deemed to be, modified and amended in accordance therewith, and the respective rights, duties and obligations under this Bond Ordinance of the Issuer, the Fiscal Agent, the Borrower and the owner of the Series 1979 Bond shall thereafter be determined, exercised and enforced under this Bond Ordinance, subject in all respects to such modifications and amendments . -19- Section 19 . Enforcement. The provisions of this Bond Ordinance shall constitute a contract between the Issuer and the owner of the Series 1979 Bond. The owner of the Series 1979 Bond, in accordance with the provisions of Section 21 hereof and Section 10 of the Assignment, may sue in any action, either at law or in equity, to enforce or compel performance of all duties and obligations required by this Bond Ordinance to be done or performed by the Issuer or by the Borrower. Section 20 . Events of Default. Each of the following events is hereby defined as , and shall constitute, an "event of default" : (a) Default in the due and punctual payment of the principal of, premium, if any, or interest on the any Bond, whether at the stated maturity or required prepayment there- of, or upon proceedings for redemption thereof. (b ) Default in the performance or observance of any other covenant, agreement or condition on the part of the Issuer in this Bond Ordinance or in the Series 1979 Bond contained, and the continuance thereof for a period of thirty (30 ) days after written notice to the Borrower and to the Issuer given by the owner of the Series 1979 Bond. (c) The occurrence of an "event of default" under the Loan Agreement, the Mortgage, the Assignment or the Colla- teral Security Agreement. Upon the happening and continuance of any event of default, and the giving of written notice to the Borrower and the Issuer of such event, the owner of the Series 1979 Bond may, by notice in writing delivered to the Issuer and the Borrower, declare the principal of the Series 1979 Bond then Outstanding and the interest accrued thereon to be due and payable immedi- ately without presentment, demand, protest or other notice of any kind, which are hereby waived, and upon any such declaration the same shall become and be immediately due and payable, anything in this Bond Ordinance or in the Series 1979 Bond contained to the contrary notwithstanding. The right of the owner to make any such declaration as aforesaid, however, is subject to the condi- tion that if, at any time after such declaration, all overdue installments of interest and the principal of the Series 1979 Bond which shall have matured by their terms , together with the reasonable and proper charges , expenses and liabilities of the owner, the Fiscal Agent and the Issuer, shall either be paid by or for the account of the Issuer, or provision satisfactory to the owner, the Fiscal Agent and the Issuer shall be made for such payment, and the mortgaged and pledged premises shall not have been sold as provided in this Bond Ordinance, the Mortgage and the Collateral Security Agreement, and all other existing de- faults shall have been cured, then, and in every such case, any such default and its consequences shall , ipso facto, be deemed to be annulled, but no such annulment shall extend to or affect any -20- other default, or impair or exhaust any right or power consequent thereon. The Issuer hereby grants to the Borrower full authority for the account of the Issuer to perform any covenant or obliga- tion, the non-performance of which is alleged in any notice received by the Borrower to constitute an event of default, in the name and place of the Issuer, with full power to do any and all things and acts to the same extent as the Issuer and perform any such things and acts with the power of substitution. For purposes of this Section, notice shall be deemed to have been given, if given in the manner required by Section 9 . 1 of the Loan Agreement for the giving of notices thereunder. Section 21 . Foreclosure and Enforcement of Remedies . Upon the happening and continuance of any event of default, and the giving of notice to the Borrower and the Issuer as provided in Section 20 hereof, then and in every case the owner of the Series 1979 Bond may proceed to protect and enforce its rights under the Enabling Ordinance, the Loan Agreement, the Assignment, the Mortgage, the Collateral Security Agreement and this Bond Ordinance forthwith by such suits , actions or special proceedings in equity or at law, or proceedings in the office of any board or officer having jurisdiction, whether for the specific performance of any covenant or agreement contained in this Bond Ordinance, the Loan Agreement, the Assignment, the Collateral Security Agreement, or the Mortgage, or in aid of the execution of any power granted herein, therein or in the Enabling Ordinance, or for the enforcement of any legal or equitable rights or remedies , including, with the prior written consent of all Bond owners , the sale of all or any part of the Project, subject to statutory requirements , if any, to the highest bidder and all right, title and interest, claim and demand therein and thereto, and all right of redemption thereof, as the owner shall determine. In the enforcement of any right or remedy under this Bond Ordinance, the Assignment, the Loan Agreement, the Mortgage, the Collateral Security Agreement, or the Enabling Ordinance, the owner of the Series 1979 Bond shall be entitled to sue for, enforce payment on and receive any and all amounts then due and unpaid or becoming due from the Issuer, for principal, interest or otherwise under any provision of this Bond Ordinance, the Enabling Ordinance, the Loan Agreement, the Assignment, the Collateral Security Agreement, the Mortgage, or the Series 1979 Bond, with interest on overdue payments at the rate or rates of interest specified in the Bonds, together with any and all costs and expenses of collection and of all proceedings hereunder and thereunder, without prejudice to any other right or remedy of the owner, and to recover and enforce judgment or decree against the Issuer, but solely as provided herein and therein, for any por- tion of such amounts remaining unpaid, with interest, costs and expenses , and to collect (but solely from the moneys available for said purpose) , in any manner provided by law, the moneys adjudged or decreed to be payable. -21- Section 22 . Application of Revenues and Receipts After Default. All moneys received by the owner of the Series 1979 Bond pursuant to any right given or action taken under the provi- sions of this Bond Ordinance shall, after payment of the costs and expenses of the proceedings resulting in the collection of such money, and of the expenses, liabilities and advances incurred or made by the owner, be applied to the payment of the Bonds . Whenever the Series 1979 Bond shall have been paid un- der the provisions of this Section, and all expenses and charges of the owner of the Series 1979 Bond, the Fiscal Agent and the Issuer shall have been paid, any balance remaining shall be paid to or upon the order of the Borrower. Section 23 . Waivers of Events of Default; Actions ty the Owner. The owner of the Series 1979 Bond may waive any event of default hereunder. All rights of action under this Bond. Ordinance, the Assignment, the Mortgage, the Loan Agreement, the Collateral Security Agreement or the Series 1979 Bond, may be en- forced without the production thereof at any trial or other proceeding relating thereto . Section 24 . Effect of Discontinuance of Proceedings . If any proceeding taken on account of any event of default shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the owner of the Series 1979 Bond, then and in every such case, the Borrower, the Issuer and the owner shall be restored, respectively, to its former obligations and rights hereunder. Section 25 . Remedies not Exclusive; Delay or Omission. No remedy by the terms of this Bond Ordinance, the Assignment, the Loan Agreement, the Collateral Security Agreement or the Mortgage conferred upon or reserved to the owner of the Series 1979 Bond is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given under this Bond Ordinance, the Assignment, the Loan Agreement, the Collateral Security Agreement or the Mortgage, now or hereafter existing at law or in equity. No delay or omission to exercise any right or power arising upon any event of default shall impair any right or power, or shall be construed to be a waiver of any such default or an acquiescence therein; and every power and remedy given by this Bond Ordinance, the Assignment, the Loan Agreement, the Collateral Security Agreement or the Mortgage may be exercised from time to time and as often as may be deemed expedient by the owner of the Series 1979 Bond. Section 26 . Acceleration in the Event of Default. In the event that the principal of or interest on the Series 1979 Bond is not paid according to the terms hereof and thereof either on maturity, mandatory prepayment, call for redemption or the occurrence of an event of default under this Bond Ordinance, the -22- Loan Agreement, the Mortgage, or the Assignment, the owner of the Series 1979 Bond, in accordance with the provisions of Section 10 of the Assignment, may, by written notice, effective upon deposit in the mail, and if sent by certified or registered mail, given to the Issuer, declare the principal of the Series 1979 Bond to be due and payable immediately; and upon such declaration given as aforesaid, the principal of said Bond shall be immediately due and payable, anything in the Series 1979 Bond or in this Bond Ordinance contained to the contrary notwithstanding. The owner of the Series 1979 Bond may rescind and annul such declaration and its consequences , but no such rescission or annulment shall extend to or affect any other default, or impair any rights consequent thereon. Section 27 . Defeasance . If the Issuer shall pay or cause to be paid, or there shall otherwise be paid, to the owners of the Bonds , or their representative, the principal or redemption premium, if any, and interest due or to become due thereon, at the times and in the manner stipulated in this Bond Ordinance, and all other amounts due under this Bond Ordinance, the Mort- gage, the Loan Agreement, the Collateral Security Agreement and the Assignment are paid in full, then the pledge of any revenues and receipts from or in connection with the Project under this Bond Ordinance, the Loan Agreement, the Collateral Security Agreement, the Mortgage and the Assignment, and the estate and rights hereby, in the Mortgage, the Loan Agreement, the Colla- teral Security Agreement and the Assignment granted, and all covenants , agreements and other obligations of the Issuer to the owners of the Bonds , shall thereupon cease, terminate and become void, and be discharged and satisfied. In such event, the Bond owners shall cancel and discharge the lien of this Bond Ordinance, the Assignment, the Loan Agreement, the Collateral Security Agreement, and the Mortgage, and shall execute and deliver to the Issuer and the Borrower, and record in all offices appropriate therefor, all such instruments as may be appropriate to satisfy such lien and to evidence such discharge and satisfaction, and the Fiscal Agent and the Issuer shall pay over or deliver to the Borrower or its order all moneys or securities held by them or their representative pursuant to this Bond Ordinance which are not required for the payment of the principal of, redemption premium, if any, or interest on the Bonds not theretofore paid or redeemed and all other amounts due under this Bond Ordinance . Section 28 . Provisions Relating to the Fiscal Agent. (a) The Fiscal Agent shall signify its acceptance of its duties and obligations hereunder, under the Assignment, the Loan Agreement, the Mortgage and the Collateral Security Agree- ment by its execution of the Fiscal Agent Agreement. All provi- sions of this Section shall be construed as extending to and including all of the rights, duties and obligations imposed upon the Fiscal Agent under the Assignment, the Loan Agreement, the Mortgage and the Collateral Security Agreement as fully for all intents and purposes as if this Section were contained therein. -23- (b) (i ) The Fiscal Agent shall have no responsibility for the validity or sufficiency of this Bond Ordinance, the Assignment, the Loan Agreement, the Mortgage, the Collateral Security Agreement or the security provided hereunder and there- under, or for the due execution hereof and thereof by the Issuer, or in respect of the title or the value of the Project, or in respect of the validity of the Bonds, or to see to the recording or filing of this Bond Ordinance, the Assignment, the Loan Agree- ment, the Mortgage, the Collateral Security Agreement, any financ- ing statement or any other document or instrument whatsoever. The recitals, statements and representations contained in this Bond Ordinance and in the Series 1979 Bond shall be construed as having been made by and on the part of the Issuer, and not by and on the part of the Fiscal Agent, and the Fiscal Agent does not assume any responsibility for the correctness of the same. (ii ) The Fiscal Agent shall not be liable or responsi- ble for the failure of the Issuer to perform any act required of it by this Bond Ordinance, or for the loss of any moneys arising through the insolvency or the act, default or omission of any depository other than itself in which such moneys shall have been deposited under this Bond Ordinance . The Fiscal Agent shall not be responsible for the application of any of the proceeds of the Bonds or any other moneys deposited with it and paid out, invested, withdrawn or transferred in accordance with this Bond Ordinance, or for any loss resulting from any such investment. The Fiscal Agent shall not be liable in connection with the performance of its duties under this Bond Ordinance, the Assignment, the Loan Agreement, the Collateral Security Agreement or the Mortgage, except for its own misconduct, negligence or bad faith. The immunities and exemptions from liability of the Fiscal Agent contained herein shall extend to its directors , officers , employ- ees and agents . (c) The Fiscal Agent shall be entitled to receive and collect from the Borrower payment or reimbursement for reasonable fees for services rendered hereunder and under the Fiscal Agent Agreement, and all advances, counsel fees and other expenses reasonably and necessarily made or incurred by the Fiscal Agent in connection therewith. Before taking any action hereunder, the Fiscal Agent may require that a satisfactory indemnity bond be furnished for the reimbursement of all expenses to which it may be put, and to protect it against all liability, except liability which has resulted from its own misconduct, negligence or bad faith by reason of any action so taken. (d) The Fiscal Agent shall be protected and shall incur no liability in acting or proceeding, or in not acting or not proceeding, in good faith, reasonably and in accordance with the terms of this Bond Ordinance and the Fiscal Agent Agreement, upon any resolution, order, notice, request, consent, waiver, certificate, statement, affidavit, requisition, bond or other paper or document which it shall in good faith believe to be genuine and to have been adopted or signed by the proper Person, -24- or to have been prepared and furnished pursuant to any provision of this Bond Ordinance, or upon the written opinion of Indepen- dent Counsel or Bond Counsel, Independent Engineer, appraiser, or accountant believed in good faith by the Fiscal Agent to be qualified in relation to the subject matter. (e ) The Fiscal Agent may resign and thereby become discharged of its duties under this Bond Ordinance and the Fiscal Agent Agreement by notice in writing given to the Issuer, the Bond Purchaser, all of the Bond owners and the Borrower, but such resignation shall only take effect immediately upon the appoint- ment of a successor fiscal agent pursuant to subsection ( f) of this Section. The Fiscal Agent may be removed at any time by an in- strument or instruments in writing, filed with the Fiscal Agent, the Issuer and the Borrower, and signed by the owners of all of the Bonds . The Fiscal Agent shall promptly give notice of its receipt of such filing to the Issuer and the Borrower. ( f) If at any time the Fiscal Agent shall resign, be removed, be dissolved or otherwise become incapable of acting in such capacity, or shall be adjudged a bankrupt or insolvent, or if a receiver, liquidator or conservator thereof or of its pro- perty shall be appointed, or if any public officer shall take charge or control of the Fiscal Agent or of its property or affairs, or if the position of Fiscal Agent shall become vacant for any other reason, the Issuer shall appoint a successor Fiscal Agent to fill such vacancy. (g) Any business entity into which the Fiscal Agent may be merged or converted, or with which it may be consolidated, or any business entity resulting from any merger, conversion or consolidation to which the Fiscal Agent shall be a party, or any business entity to which the Fiscal Agent may sell or transfer all or substantially all of its assets , provided such business entity shall be a national banking association or a bank or trust company duly organized under the laws of any state of the United States of America, and authorized to conduct a banking or trust business in the State, and shall be authorized by law to perform all the duties imposed upon it by this Bond Ordinance and the Fiscal Agent Agreement, shall be the successor to such Fiscal Agent without the execution or filing of any paper or the perfor- mance of any further act. Section 29 . Issuance of Additional Bonds . As long as no event of default hereunder is occurring, the Issuer at its sole discretion and, at the request of the Borrower, subject to the prior written approval of the owners of the Bonds then out- standing, and to the extent permitted by law in effect at the time thereof, shall use its best efforts to issue Additional Bonds on a parity with the Series 1979 Bond and any Additional Bonds theretofore or thereafter issued for the purposes specified in Section 3 .2 of the Loan Agreement. Before any Additional -25- Bonds are issued, there shall be delivered to the Fiscal Agent the items required therefor by Section 34 hereof. Additional Bonds shall be issued in such series and principal amounts, shall be dated, shall bear interest at such rate or rates , shall be subject to redemption at such times and prices, and shall mature in such years as the ordinance supple- mental hereto authorizing the issuance thereof shall fix and determine . Section 30 . Delivery of Additional Bonds . Upon the execution and delivery in each instance of an appropriate ordi- nance supplemental hereto, the Issuer shall issue, execute and deliver to the purchasers thereof such Additional Bonds , all as hereafter in this Section 30 provided. Prior to the delivery of any such Additional Bonds there shall be filed with the Fiscal Agent: (a) A valid and effective amendment to the Loan Agree- ment, pursuant to Section 3 .2 thereof, providing for the inclusion within the Project of any real estate and inter- ests therein, and any buildings , structures , facilities , machinery, equipment and related property to be acquired by purchase or construction from the proceeds of the Additional Bonds , and providing for an increase in the obligations of the Borrower in accordance with Section 4 . 2 of the Loan Agreement. (b) A valid and effective supplemental ordinance providing for the issuance of such Additional Bonds, and subjecting to the lien of this Bond Ordinance, the Mortgage, the Collateral Security Agreement, the Loan Agreement and the Assignment, as appropriate, any and all real estate and interests therein, and any buildings , structures , facili- ties , machinery, equipment, fixtures and related property (whether real , personal or mixed) acquired by purchase or construction from the proceeds of such Additional Bonds , and pledging and assigning the additional amounts payable under the Loan Agreement to the payment of the Bonds . (c) A duly certified copy of an ordinance of the Issuer theretofore duly adopted and approved authorizing the execution and delivery of such such amendment to the Loan Agreement and the Assignment, and the issuance of such Additional Bonds . (d) The proceeds of such Additional Bonds shall be paid over to the Fiscal Agent and deposited to the credit of the Construction Fund as provided in Section 11 hereof (or to such other funds as are provided and created by the supplemental ordinance ) . -26- (e) A certificate signed by the Authorized Borrower Representative to the effect that no event of default under this Bond Ordinance, the Assignment, the Mortgage, the Col- lateral Security Agreement or the Loan Agreement is occur- ring or will result from the issuance of such Additional Bonds . ( f) An opinion of Bond Counsel to the effect that the issuance of such Additional Bonds will not affect the tax- exempt status of all Bonds Outstanding. Section 31 . Sale of Bond. The Series 1979 Bond is hereby sold to The Elgin National Bank at a price of par and accrued interest. Section 32 . Form, Execution and Authorization of Fi- nancing Documents . The Issuer, by its Mayor and its City Clerk, is authorized to enter into the Loan Agreement, the Assignment and the Fiscal Agent Agreement, which instruments are to be substantially in the form now before this meeting and hereby approved and which instruments the Mayor and the City Clerk of the Issuer are hereby authorized and directed to execute for and on behalf of, and as the act and deed of, the Issuer. The Loan Agreement, the Assignment and the Fiscal Agent Agreement as executed and delivered by the Mayor and the City Clerk of the Issuer, shall each be in substantially the respective forms now before this meeting and hereby approved, or with such changes therein as shall be approved by the officers of the Issuer exe- cuting the same, their execution thereof to constitute conclusive evidence of their approval and the approval of the City Council of the Issuer of any and all changes or revisions therein from the forms of said instruments now before this meeting, and from and after the execution and delivery of the above-mentioned documents, the officers, agents and employees of the Issuer are hereby authorized, empowered and directed to do all such acts and things , and to execute all such documents and instruments, as may be necessary to carry out and comply with the provisions of said documents as executed. Section 33 . Execution of Other Instruments and Certi- ficates . The Mayor and the City Clerk for and on behalf of the Issuer, are hereby authorized and directed to do any and all things necessary to effect the execution and delivery of the Loan Agreement, the Mortgage and the Collateral Security Agreement by the Borrower, the Assignment, the Mortgage, the Collateral Secur- ity Agreement by the Bond Purchaser, the Fiscal Agent Agreement by the Fiscal Agent, the performance of all obligations of the Issuer under and pursuant to this Bond Ordinance, the Loan Agree- ment, the Assignment, the Mortgage, the Collateral Security Agreement and the Fiscal Agent Agreement, the execution and delivery of the Series 1979 Bond, and the performance of all other acts of whatever nature necessary to effect and carry out the authority conferred by this Bond Ordinance and the other above-mentioned documents . The Mayor and the City Clerk of the -27- Issuer are hereby further authorized and directed for and on behalf of the Issuer to execute all papers, documents, certifi- cates and other instruments that may be required for the carrying out of the authority conferred by this Bond Ordinance and the other above-mentioned documents, or to evidence the said author- ity and its exercise . Section 34 . Priority of Bond Ordinance, Assignment, Loan Agreement, Collateral Security Agreement and Mortgage. This Bond Ordinance, the Loan Agreement, the Collateral Security Agreement, the Assignment and the Mortgage are given in order to secure funds to finance the acquisition, construction and equip- ping of the Project and, by reason thereof, it is intended that this Bond Ordinance, the Assignment, the Loan Agreement, the Collateral Security Agreement and the Mortgage shall be superior to any laborers ' , mechanics ' , materialmen' s or other liens which may be placed upon the Project. Section 35 . Creation of Lien; Indebtedness . The Issuer shall not create or suffer to be created any lien or charge upon or pledge of the revenues and receipts derived from or in connection with the Project, except the lien, charge and pledge created by this Bond Ordinance, the Loan Agreement, the Assignment and the Series 1979 Bond. The Issuer agrees that the owner of the Series 1979 Bond, in its own name or in the name of the Issuer, may and is hereby granted the right to enforce all rights of the Issuer and all obligations of the Borrower under and pursuant to the Loan Agreement whether or not the Issuer is in default in its covenant to enforce such rights and obliga- tions . The Issuer shall not incur any indebtedness or issue any evidences of indebtedness other than the Series 1979 Bond or the Additional Bonds herein authorized secured by a lien on or pledge of such revenues and receipts which is prior to or equal with the lien and pledge securing the Bonds hereunder, said lien continuing as long as any of the Bonds are Outstanding. The Issuer further covenants and agrees not to sell , convey, trans- fer, mortgage or encumber its interest in the Loan Agreement, except as specifically permitted under this Bond Ordinance, the Mortgage, the Collateral Security Agreement, the Loan Agreement and the Assignment. Section 36 . Instruments of Further Assurance . The Issuer covenants that it will do, execute, acknowledge and deli- ver, or cause to be done, executed, acknowledged and delivered, such supplemental ordinances and further acts , instruments and transfers as the owner of the Series 1979 Bond may reasonably require for the better assuring, transferring, conveying, pledg- ing, assigning and confirming unto the owner, all and singular, the property herein described and the revenues and receipts pledged hereby to the payment of the principal of, premium, if any, and interest on the Series 1979 Bond. Any and all property hereafter acquired which is of the kind or nature herein provided -28- to be and become subject to the lien of the Assignment shall, ipso facto, and without any further conveyance, assignment or act on the part of the Issuer or the owner of the Series 1979 Bond, become and be subject to the lien of the Assignment as fully and completely as though specifically described therein. Section 37 . Recording and Filing. The Loan Agreement, the Assignment, the Collateral Security Agreement and the Mort- gage, or appropriate summaries thereof, shall be recorded in the office of the Recorder of Deeds of Kane County, Illinois and/or in such other office or offices as may be at the time provided by law as the proper place or places for the recordation thereof. security interests in the personal property (and rights therein) constituting a part of the Project shall be perfected in the manner required by the Illinois Uniform Commercial Code, and any security agreement or interest which might in any way conflict with or supercede the priority of such security interests created in the Project security interests required to be created hereby. The Loan Agreement, the Assignment, the Collateral Security Agreement and the Mortgage shall be re-recorded and re-indexed by the Borrower whenever, in the opinion of the Independent Counsel , such action is necessary to preserve the lien thereof; and, in addition, such financing or continuation statements as in the opinion of such Independent Counsel become necessary to preserve said lien shall be filed in such offices by the Borrower as shall be required by the Illinois Uniform Commercial Code to maintain the prior perfected status required hereby. The Borrower will within twenty (20 ) days after any such filing, recording or other act, furnish the Bondowner with an opinion of Independent Counsel as to the adequacy, and reciting the details of such filing, re- cording or other act, and specifying any re-recording or re-filing to be effected in the future with respect to the security inter- ests required to be created hereby. Section 38 . Rights Under Loan Agreement. The Issuer agrees that the Bond owners as pledgees and assignees of the revenues and receipts derived from the Loan Agreement under the Assignment, shall , subject to the provisions thereof, have the legal power to exercise all of the rights, powers and privileges of the Issuer under the Loan Agreement, including the right to enforce all of the obligations of the Borrower thereunder. Section 39 . Provisions of this Bond Ordinance . The provisions of this Bond Ordinance are hereby declared to be separable, and if any section, phrase or provision shall for any reason be declared to be invalid, such declaration shall not affect the validity of the remainder of the sections , phrases and provisions . Section 40 . Covenants , Stipulations , Obligations and Agreements of the Issuer. All covenants , stipulations , obliga- tions and agreements of the Issuer contained in this Bond Ordi- nance, in the Loan Agreement, the Fiscal Agent Agreement and the Assignment shall be deemed to be the covenants, stipulations , -29- obligations and agreements of the Issuer to the full extent authorized or permitted by law, and all such covenants , stipula- tions , obligations and agreements shall be binding upon the Issuer and its successors from time to time, and upon any board or body to which any powers or duties affecting such covenants , stipulations, obligations and agreements shall be transferred by or in accordance with law; and, except as otherwise provided in this Bond Ordinance or in the other instruments contemplated hereby to which the Issuer is or is to be a party, all rights , powers and privileges conferred, and duties and liabilities imposed, upon the Issuer by the provisions of this Bond Ordi- nance, the Fiscal Agent Agreement, the Assignment or the Loan Agreement shall be executed or performed by the Issuer or by such officers, board or body as may be required by law to exercise such powers and to perform such duties . No covenant, stipulation, obligation or agreement here- in contained, or contained in the Fiscal Agent Agreement, the Assignment or the Loan Agreement, shall be deemed to be a cove- nant, stipulation, obligation or agreement of any officer, agent or employee of the Issuer, nor shall any officer executing the Series 1979 Bond be liable personally thereon or be subject to any personal liability or accountability by reason of the is- suance thereof, nor shall the Issuer be liable to perform any act beyond the issuance of the Bond, the delivery thereof and the deposit of the proceeds of sale thereof with the Fiscal Agent. Section 41 . Small Issue Election. The Issuer hereby elects to have the provisions of Section 103 (b ) (6 ) (D) of the Internal Revenue Code of 1954, as amended (the "Code" ) , applied to the Series 1979 Bond approved and authorized pursuant to this Bond Ordinance, and the Mayor and the City Clerk of the Issuer be and they hereby are authorized, empowered and directed to take any and all further action which may be required to implement and effectuate such election, including, without limitation, the preparation and filing of such statements or other documents as may be deemed by them to be necessary or advisable in order to comply with the procedures set forth in Section 1 . 103-10(b ) ( 2 ) (vi ) of the Income Tax Regulations (26 CFR Part 1 ) promulgated under Section 103 of the Code, and all acts heretofore taken by them in this connection are hereby ratified and confirmed. Section 42 . Conflicting Ordinances . All ordinances in conflict herewith are hereby repealed to the extent of such conflict. Notwithstanding the foregoing sentence the initial resolution of the Issuer with respect to the Project, passed and approved on September 26, 1979, shall not be repealed either in whole or in part. Section 43 . Effective Date. This Bond Ordinance shall take effect and be in force from and after its passage. -30- PASSED AND APPROVED by the City Council of the City of Elgin, thisl4th day ofNovember, 1979 . By s/ Richard L. Verbic Its : Mayor Attest: By `161-1.. 1c Its : City C1rk Councilman West moved and Councilman Hill seconded the motion that said Ordinance No . S11 -79as presented and read be adopted. After full discussion thereof, the Mayor directed that the motion to adopt said Ordinance No . SI1 -79 as presented be put to a vote on roll call , which resulted as fol- lows : VOTING AYE: 7 VOTING NAY: 0 The Mayor thereupon declared Ordinance No . Si1 -79 duly adopted and approved. -31- g t_1 dN& -S