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S9-97 ' r fe- CITY OF ELGIN ORDINANCE NO. S9-97 AN ORDINANCE PROVIDING FOR THE ISSUANCE OF $3, 350, 000 GENERAL OBLIGATION REFUNDING BONDS, SERIES 1997B OF THE CITY OF ELGIN, KANE AND COOK COUNTIES, AND PROVIDING FOR THE LEVY AND COLLECTION OF A DIRECT ANNUAL TAX FOR THE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON SAID BONDS ADOPTED BY THE CITY COUNCIL OF THE CITY OF ELGIN ON THIS 14TH DAY OF MAY, 1997 Published in pamphlet form by authority of the City Council of the City of Elgin, Kane and Cook Counties, Illinois, on this 16th day of May, 1997 . 1 t STATE OF ILLINOIS ) ) ss . COUNTY OF KANE CERTIFICATE I , Dolonna Mecum, certify that I am the duly appointed and acting municipal clerk of the City of Elgin, Cook and Kane Counties , Illinois . I further certify that on May 14, 1997, the Corporate Authorities of such municipality passed and approved Ordinance No. S7-97, entitled An Ordinance Providing for the Issuance of $3, 350, 000 General Obligation Corporate Refunding Bonds, Series 1997B, of the City of Elgin, Kane and Cook Counties, and elk Providing for the Levy and Collection of a Direct Annual Tax for the Payment of the Principal of and Interest on Said Bonds, which provided by its terms that it should be published in pamphlet form. The pamphlet form of Ordinance No. S7-97 , including the Ordinance and a cover sheet thereof , was prepared, and a copy of such Ordinance was posted in the municipal building, commencing on May 16 , 1997 , and continuing for at least ten days thereafter. Copies of such Ordinance were also available for public inspection upon request in the office of the municipal clerk. DATED at Elgin, Illinois, on May 16, 1997 . Ck)`&1.6v4iL_ ASZ.X.144,--■ Municipal Clerk ( SEAL) I k ORDINANCE NUMBER S9-97 AN ORDINANCE providing for the issuance of $3,350,000 General Obligation Refunding Bonds, Series 1997B, of the City of Elgin, Kane and Cook Counties, Illinois, and providing for the levy and collection of a direct annual tax for the payment of the principal of and interest on said bonds. WHEREAS the City of Elgin, Kane and Cook Counties, Illinois (the "City") is a duly organized municipality under the laws of the State of Illinois, operating generally under the Illinois Municipal Code, as amended; 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 City is a home rule unit and may exercise any power or perform any function pertaining to its government and affairs including, but not limited to, the power to tax and to incur debt (the Illinois Municipal Code as supplemented and, where in conflict, superseded by said constitutional powers and the hereinafter defined Enabling Ordinance being the "Act"); and WHEREAS pursuant to the provisions of the Act, the City has the power to incur debt payable from ad valorem property tax receipts or from any other lawful source and maturing within 40 years from the time it is incurred without prior referendum approval; and WHEREAS on the 23rd day of April, 1975, the City Council of the City (the "City Council") did adopt an ordinance determining the procedures to be followed in the borrowing of money for public purposes of the City and in evidence of such borrowing the issuing of full faith and credit bonds of the City without referendum approval, such ordinance being entitled: ' r ORDINANCE NO. G22-75 AN ORDINANCE establishing procedures to be followed by the City of Elgin, Kane and Cook Counties, Illinois, in issuing non- referendum general obligation bonds which ordinance was amended by Ordinance No. G14-80 adopted on January 28, 1980, by Ordinance No. 64-80 adopted on October 8, 1980, by Ordinance No. G39-82 adopted on July 28, 1982 and by Ordinance No. G31-92 adopted on June 17, 1992 (Ordinance No. G22-75 as so amended being referred to hereinafter as the "Enabling Ordinance"); and WHEREAS the City has heretofore issued the following outstanding and validly subsisting and unpaid obligations: GENERAL OBLIGATION CORPORATE PURPOSE BONDS, SERIES 1988 Original Principal Amount: $4,950,000 Dated: July 1, 1988 Originally Due: January 1 of the years 1990 through 2002 Amount proposed to be refunded: $1,300,000 Refunded Bonds Due January 1 as follows: YEAR AMOUNT ($) RATE (%) 1998 100,000 6.70 1999 200,000 6.90 2000 200,000 6.90 2001 600,000 7.00 2002 200,000 7.10 all of which bonds may be called for redemption on July 1, 1997, or on any interest payment date thereafter at the redemption price of par plus accrued interest (the "1988 Bonds"); and -2- ' r GENERAL OBLIGATION CORPORATE PURPOSE BONDS, SERIES 1990 Original Principal Amount: $7,720,000 Dated: August 15, 1990 Originally Due: January 1 of the years 1993 through 2004 Amount proposed to be refunded: $2,050,000 Refunded Bonds Due January 1 as follows: YEAR AMOUNT($) RATE(%) 2003 1,000,000 6.65 2004 1,050,000 _ 6.70 all of which bonds may be called for redemption on January 1, 1999, or on any interest payment date thereafter at the redemption price of par plus accrued interest (the "1990 Bonds"); and WHEREAS the 1988 Bonds and the 1990 Bonds (collectively, the "Prior Bonds") bear interest at higher rates than those currently available in the bond markets, and may be refunded for net debt service savings; and WHEREAS pursuant to the Act, the City is authorized to issue general obligation bonds to accomplish the refunding (the "Refunding") of the Prior Bonds, and it is deemed necessary and desirable to provide for the issuance of $3,350,000 principal amount general obligation bonds for such purpose and for the purpose of realizing such net debt service savings; and WHEREAS the City Council of the City does hereby determine that it is advisable and in the best interests of the City to borrow an amount $3,350,000 at this time pursuant to the Act for the purpose of paying the costs of the Refunding and, in evidence of such borrowing, issue its full faith and credit bonds in the principal amount of$3,350,000; r -3- NOW THEREFORE Be It Ordained by the City Council of the City of Elgin, Kane and Cook Counties, Illinois, in the exercise of its home rule powers and in accordance with the Enabling Ordinance, as follows: Section 1. Definitions; Effect of Headings. In addition to such other words and terms used and defined in this Ordinance, the following words and terms used in this Ordinance shall have the following meanings, unless, in either case, the context or use clearly indicates another or different meaning is intended: "Act" means the Illinois Municipal Code, as supplemented and amended, and the home rule powers of the City under Section 6 of Article VII of the Illinois Constitution of 1970 and the Enabling Ordinance adopted pursuant to such home rule powers; 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. "Bonds" means the $3,350,000 General Obligation Refunding Bonds, Series 1997B, authorized to be issued by this Ordinance. "Bond Fund" means the Bond Fund established and defined in Section 14 of this Ordinance. "Bond Moneys" means the Pledged Taxes and any other moneys on deposit into the Bond Fund and investment income earned in the Bond Fund. "Bond Register" means the books of the City kept by the Bond Registrar to evidence the registration and transfer of the Bonds. "Bond Registrar" means LaSalle National Bank, located in Chicago, Illinois, a national banking association having trust powers, or its successors, or a successor as may be selected by the City and designated as Bond Registrar hereunder. "City" means the City of Elgin, Kane and Cook Counties, Illinois. -4- • "City Council" means the City Council of the City. "Code" means the Internal Revenue Code of 1986. "County Clerks" means the Clerks of The Counties of Kane and Cook, Illinois. "Escrow Agent" means LaSalle National Bank, Chicago, Illinois, a national banking association having trust powers, or its successors, or a successor as may be selected by the City and designated as Escrow Agent hereunder. "Escrow Agreement" means the escrow agreement by and between the City and the Escrow Agent as authorized in Section 14 hereof and set forth as Exhibit A. "Ordinance" means this Ordinance, numbered as set forth on the title page hereof, and passed by the City Council on the 14th day of May, 1997. "Paying Agent" means LaSalle National Bank, located in Chicago, Illinois, a national banking association having trust powers, or a successor thereto or a successor designated as Paying Agent hereunder. "Pledged Taxes" means the taxes levied on the taxable property within the City to pay principal of and interest on the Bonds as made in Section 10 hereof. "Prior Bonds" means the bonds of the City described and defined as such in the preambles to this Ordinance. "Refunding" means the refunding of the Prior Bonds from proceeds of the Bonds and such other lawfully available funds of the City as necessary. "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, in computing the environmental tax imposed on certain corporations and in computing the "branch profits tax" imposed on certain foreign corporations. -5- ' r Terms used in the singular may be referred to in the plural and vice-versa. Reference to either gender shall include the other. Other words and terms are as defined in various sections of this Ordinance. The Table of Contents and Headings in this Ordinance are for the convenience of the reader and have no legal effect. Section 2. Incorporation of Preambles. The City Council hereby finds that all of the recitals contained in the preambles to this Ordinance are true, correct and complete and does incorporate them into this Ordinance by this reference. Section 3. Determination To Issue Bonds. It is necessary and in the best interests of the City to provide for the Refunding, 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 necessary for the welfare of the government and affairs of the City, is for a proper public purpose or purposes and is in the public interest, and is authorized pursuant to the Act; and these findings and determinations shall be deemed conclusive. Section 4. Bond Details. There be borrowed on the credit of and for and on behalf of the City the sum of $3,350,000 for the purposes aforesaid; and that bonds of the City (the "Bonds") shall be issued in not to exceed said amount and shall be designated "General Obligation Refunding Bonds, Series 1997B." The Bonds shall be dated June 1, 1997 (the "Dated Date"), and shall also bear the date of authentication, shall be in fully registered form, shall be in denominations of $5,000 each and authorized integral multiples thereof (but no single Bond shall represent installments of principal maturing on more than one date), shall be numbered 1 and upward, and the Bonds shall become due and payable serially (not subject to prior redemption) on January 1 of the years and in the amounts and rok bearing interest at the rates percent per annum as follows: -6- YEAR AMOUNT ($) RATE (%) 1998 195,000 5.00 1999 190,000 5.00 2000 190,000 5.00 2001 600,000 5.00 2002 175,000 5.00 2003 1,000,000 5.50 2004 1,000,000 5.50 Each Bond shall bear interest from the later of its Dated Date as hereinabove provided or from the most recent interest payment date to which interest has been paid or duly provided for, until the principal amount of each such Bond is paid or duly provided for, such interest (computed upon the basis of a 360-day year of twelve 30-day months) being payable on January 1 and July 1 of each year, commencing on January 1, 1998. Interest on each Bond shall be paid by check or draft of the Paying Agent, payable upon presentation thereof in lawful money of the United States of America, to the person in whose name such Bond is registered at the close of business on the applicable Record Date (the "Record Date"), and mailed to the address of the registered owner of each Bond as it appears on the Bond Register or at such other address as is furnished in writing to the Bond Registrar. The Record Date shall be the 15th day of the month next preceding any regular or other interest payment date occurring on the first day of any month. 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 principal corporate trust office of the Paying Agent in the City of Elgin, Illinois, or at successor Paying Agent and locality. Section 5. Execution; Authentication. The Bonds shall be executed on behalf of the City by the manual or duly authorized facsimile signature of its Mayor and attested by the manual or duly authorized facsimile signature of its City Clerk, as they may determine, and shall have impressed or imprinted thereon the corporate seal or facsimile thereof of the -7- City. 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 City 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 6. Redemption. The Bonds are not subject to redemption prior to maturity. Section 7. Global Book-Entry System. The Bonds shall be initially issued in the form of a separate single fully registered Bond for each of the maturities of the Bonds as provided in Section 4 hereof, and the ownership of each such Bond shall be registered in the Bond Register in the name of Cede & Co., or any successor thereto ("Cede"), as nominee of The Depository Trust Company, New York, New York, and its successors and assigns ("DTC"). All of the outstanding Bonds shall be registered in the Bond Register in the name of Cede, as nominee of DTC, except as hereinafter provided. The Mayor, Treasurer and Clerk of the City are hereby authorized to execute and deliver on behalf of the City such letters to or agreements with DTC and the Bond Registrar as shall be necessary to effectuate -8- such book-entry system (any such letter or agreement being referred to herein as the "Representation Letter"). With respect to the Bonds registered in the Bond Register in the name of Cede, as nominee of DTC, the City and the Bond Registrar shall have no responsibility or obligation to any broker-dealer, bank or other financial institution for which DTC holds Bonds from time to time as securities depository (each such broker-dealer, bank or other financial institution being referred to herein as a "DTC Participant") or to any person on behalf of whom such a DTC Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, the City and the Bond Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede or any DTC Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any DTC Participant or any other person, other than a registered owner of a Bond as shown in the Bond Register, of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any DTC Participant or any other person, other than a registered owner of a Bond as shown in the Bond Register, of any amount with respect to principal of or interest on the Bonds. The City and the Bond Registrar may treat and consider the person in whose name each Bond is registered in the Bond Register as the holder and absolute owner of such Bond for the purpose of payment of principal and interest with respect to such Bond, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever. The Bond Registrar shall pay all principal of and interest on the Bonds only to or upon the order of the respective registered owners of the Bonds, as shown in the Bond Register, or their respective attorneys duly authorized in writing, and all rhk such payments shall be valid and effective to fully satisfy and discharge the City's obligations -9- with respect to payment of principal of and interest on the Bonds to the extent of the sum or sums so paid. No person other than a registered owner of a Bond as shown in the Bond Register, shall receive a Bond certificate evidencing the obligation of the City to make payments of principal and interest with respect to any Bond. Upon delivery by DTC to the Bond Registrar of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede, the name "Cede" in this Ordinance shall refer to such new nominee of DTC. In the event that (i) the City determines that DTC is incapable of discharging its responsibilities described herein and in the Representation Letter, (ii) the agreement among the City, the Bond Registrar and DTC evidenced by the Representation Letter shall be terminated for any reason or (iii) the City determines that it is in the best interests of the beneficial owners of the Bonds that they be able to obtain certificated Bonds, the City shall notify DTC and DTC Participants of the availability through DTC of Bond certificates and the Bonds shall no longer be restricted to being registered in the Bond Register in the name of Cede, as nominee of DTC. At the time, the City may determine that the Bonds shall be registered in the name of and deposited with such other depository operating a global book- entry system, as may be acceptable to the City, or such depository's agent or designee, and if the City does not select such alternate global book-entry system, then the Bonds may be registered in whatever name or names registered owners of Bonds transferring or exchanging Bonds shall designate, in accordance with the provisions of Section 8 hereof. Notwithstanding any other provision of this Ordinance to the contrary, so long as any Bond is registered in the name of Cede, as nominee of DTC, all payments with respect to principal of and interest on such Bond and all notices with respect to such Bond shall be made and given, respectively, in the manner provided in the Representation Letter. -10- Section 8. Registration and Exchange or Transfer of Bonds; Persons Treated as Owners. The City shall cause books (the "Bond Register") for the registration and for the transfer of the Bonds as provided in this Ordinance to be kept at the principal corporate trust office of the Bond Registrar, in the City of Chicago, Illinois, which is hereby constituted and appointed the Bond Registrar of the City for the Bonds. The City is authorized to prepare, and the Bond Registrar or such other agent as the City may designate shall keep custody of, multiple Bond blanks executed by the City for use in the transfer and exchange of Bonds. Any Bond may be transferred or exchanged, but only in the manner, subject to the limitations, and upon payment of the charges as set forth in this Ordinance. Upon surrender for transfer or exchange of any Bond at the principal corporate trust office of the Bond Registrar, duly endorsed by or accompanied by a written instrument or instruments of transfer or exchange in form satisfactory to the Bond Registrar and duly executed by the registered owner or an attorney for such owner duly authorized in writing, the City 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 the same series, of like tenor, of the same maturity, bearing the same interest rate, of authorized denominations and for a like aggregate principal amount. The Bond Registrar shall not be required to transfer or exchange any Bond during the period from the close of business on the Record Date for an interest payment to the opening of business on such interest payment date. The execution by the City of any fully registered Bond shall constitute full and due authorization of such Bond, and the Bond Registrar shall thereby be authorized to authenticate, date and deliver such Bond; provided, however, that the principal amount of -11- Bonds of each maturity and series authenticated by the Bond Registrar shall not at any one time exceed the authorized principal amount of Bonds for such maturity and series and less the amount of such Bonds which have been paid. The person in whose name any Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of the principal of or interest on any Bond shall be made only to or upon the order of the registered owner thereof or his legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid. No service charge shall be made for any transfer or exchange of Bonds, but the City or the Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Bonds. Section 9. 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. -12- [Form of Bond - Front Side] REGISTERED REGISTERED NO. $ UNITED STATES OF AMERICA STATE OF ILLINOIS THE COUNTIES OF KANE AND COOK CITY OF ELGIN GENERAL OBLIGATION REFUNDING BOND, SERIES 1997B See Reverse Side for Additional Provisions. Interest Maturity Dated Rate: % Date: January 1, Date: June 1, 1997 CUSIP: Registered Owner: CEDE&CO. Principal Amount: Dollars KNOW ALL PERSONS BY THESE PRESENTS that the City of Elgin, Kane and Cook Counties, Illinois, a municipality, home rule unit, and political subdivision of the State of Illinois (the "City"), 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 (not subject to right of prior redemption), 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 January 1, 1997, and until said Principal Amount is paid or duly provided for. The principal of or redemption price on this Bond is payable in lawful money of the United States of America upon presentation hereof at the principal corporate trust office of LaSalle National Bank, located in Chicago, Illinois, as paying agent (the "Paying Agent"). Payment of interest shall be made to the Registered Owner hereof as shown on the registration books of the City -13- maintained by said LaSalle National Bank, as bond registrar (the "Bond Registrar"), at the close of business on the applicable Record Date (the "Record Date"). The Record Date shall be the 15th day of the month next preceding any regular or other interest payment date occurring on the first 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. Interest shall be paid by check or draft of the Paying Agent, payable upon presentation in lawful money of the United States of America, mailed to the address of such Registered Owner as it appears on such registration books or at such other address furnished in writing by such Registered Owner to the Bond Registrar. 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 City, represented by the Bonds, and including all other indebtedness of the City, howsoever evidenced or incurred, does not exceed any constitutional or statutory or other lawful limitation; and that provision has been made for the collection of a direct annual tax, in addition to all other taxes, on all of the taxable property in the City sufficient to pay the interest hereon as the same falls due and also to pay and discharge the principal hereof at maturity. The City has designated this Bond as a "qualified tax-exempt obligation" pursuant to Section 265(b)(3) of the Internal Revenue Code of 1986. -14- 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 City of Elgin, Kane and Cook Counties, Illinois, by its City Council, 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 City 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. Mayor, City of Elgin Kane and Cook Counties, Illinois Ai LEST: City Clerk, City of Elgin Kane and Cook Counties, Illinois [SEAL] Date of Authentication: CERTIFICATE Bond Registrar and Paying Agent: OF LaSalle National Bank, AUTHENTICATION Chicago, Illinois This Bond is one of the Bonds described in the within-mentioned Ordinance and is one of the General Obligation Refunding Bonds, Series 1997B, having a Dated Date of June 1, 1997, of the City of Elgin, Kane and Cook Counties, Illinois. LASALLE NATIONAL BANK, as Bond Registrar By Authorized Officer -15- [Form of Bond - Reverse Side] This bond is one of a series of bonds (the "Bonds") in the aggregate principal amount of$3,350,000 issued by the City for the purpose of paying the costs of a certain "Refunding" of bonds, and of paying expenses incidental thereto, all as described and defined in the ordinance authorizing the Bonds (the "Ordinance"), pursuant to and in all respects in compliance with the applicable provisions of the Illinois Municipal Code, as supplemented and amended, and as further supplemented and, where necessary, superseded, by the powers of the City 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 passed by the City Council of the City, approved by the Mayor, and published, in all respects as by law required. Subject to the provisions relating to this Bond remaining in book-entry only form, this k 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 this Bond at the principal corporate trust office of the Bond Registrar, duly endorsed by or accompanied by a written instrument or instruments of transfer or exchange in form satisfactory to the Bond Registrar and duly executed by the registered owner or an attorney for such owner duly authorized in writing, the City 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 the same series, of like tenor, of the same maturity, bearing the same interest rate, of authorized denominations and for a like aggregate principal amount. The Bond Registrar shall not be required to transfer or exchange any Bond during the period from the close of business on the Record Date for an interest payment to the opening of business on such interest payment date. -16- The City, the Bond Registrar and the Paying Agent may deem and treat the Registered Owner hereof as the absolute owner hereof for the purpose of receiving payment of or on account of principal hereof and interest due hereon and for all other purposes, and the City, the Bond Registrar and the Paying Agent shall not be affected by any notice to the contrary. ASSIGNMENT FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto (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. rib* 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. -17- Section 10. Tax Levy. For the purpose of providing funds required to pay the interest on the Bonds promptly when and as the same falls due, and to pay and discharge the principal thereof at maturity and as subject to mandatory redemption, there is hereby levied upon all of the taxable property within the City, 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 City, in addition to all other taxes, the following direct annual taxes (the Pledged Taxes): FOR THE YEAR A TAX SUFFICIENT TO PRODUCE THE SUM OF: 1997 $ 357,750.00 for interest and principal up to and including January 1, 1999 (net of debt service on the Prior Bonds) 1998 $ 348,250.00 for interest and principal 1999 $ 748,750.00 for interest and principal (11114' 2000 $ 293,750.00 for interest and principal 2001 $1,110,000.00 for interest and principal 2002 $1,055,000.00 for interest and principal The Pledged Taxes and other moneys (excepting proceeds of the Bonds) on deposit (collectively, the "Bond Moneys") in the Bond Fund shall be applied to pay principal of and interest on the Bonds. Interest or principal coming due at any time when there are insufficient funds on hand from the Pledged Taxes to pay the same shall be paid promptly when due from current funds on hand in advance of the collection of the Pledged Taxes herein levied; and when the Pledged Taxes shall have been collected, reimbursement shall be made to said funds in the amount so advanced. The City covenants and agrees with the purchasers and registered owners of the Bonds that so long as any of the Bonds remain outstanding, the City will take no action or fail to take any action which in any way would adversely affect the ability of the City to levy and collect the foregoing tax levy. The City and its officers will comply with all -18- 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 City Council 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 Clerks in a timely manner to effect such abatement. - Section 11. Filing with County Clerk. Promptly, as soon as this Ordinance becomes effective, a copy hereof, certified by the City Clerk of the City, shall be filed with the County Clerks and the County Clerks shall in and for each of the years 1997 to 2002, inclusive, ascertain the rate percent required to produce the aggregate tax hereinbefore 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 City for general corporate purposes of the City; and in said years such annual tax shall be levied and collected by and for and on behalf of the City 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 12. Continuing Disclosure Undertaking. The Mayor or the Treasurer of the City is hereby authorized, empowered and directed to execute and deliver the Continuing Disclosure Undertaking (the "Continuing Disclosure Undertaking") in substantially the same form as now before the City Council, or with such changes therein as the individual executing the Continuing Disclosure Undertaking on behalf of the City shall approve, his -19- execution thereof to constitute conclusive evidence of his approval of such changes. When the Continuing Disclosure Undertaking is executed and delivered on behalf of the City as herein provided, the Continuing Disclosure Undertaking will be binding on the City and the officers, employees and agents of the City, and the officers, employees and agents of the City 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 City to comply with its obligations under the Continuing Disclosure Undertaking. Section 13. Sale of Bonds. The Bonds shall be executed as in this Ordinance provided as soon after the passage hereof as may be, shall be deposited with the City Treasurer, and shall be by the Treasurer delivered to the purchasers thereof, namely, John Nuveen & Co. Incorporated, Chicago, Illinois (the "Purchasers"), upon payment of the purchase price agreed upon, the same being not less than $3,429,135.40 plus accrued interest to date of delivery. The contract for the sale of the Bonds to the Purchasers, heretofore entered into, is hereby in all respects approved and confirmed, and the officer(s) of the City designated therein are authorized and directed to execute the agreement on behalf of the City, it being hereby declared that no person holding any office of the City, either by election or appointment, is in any manner interested, either directly or indirectly, in his own name or the name of any other person, association, trust or corporation, in such contract for the sale of the Bonds to the Purchasers. rbk -20- The distribution by the Purchasers of the Preliminary Official Statement relating to Y Y g the Bonds, dated April 24, 1997, is hereby in all respects ratified, authorized and approved, and the proposed use by the Purchaser of an Official Statement (in substantially the form of the Preliminary Official Statement but with appropriate variations to reflect the final terms of the Bonds) is hereby authorized and approved. Such officer or officers of the City as are designated therein are hereby authorized to execute and deliver the Official Statement on behalf of the City. Section 14. Creation of Funds and Appropriations. A. There is hereby created the "General Obligation Refunding Bonds, Series 1997B, 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. B. The Pledged Taxes shall either be deposited into the Bond Fund and used solely and only for paying the principal of and interest on the Bonds or be used to reimburse a fund or account from which advances to the Bond Fund may have been made to pay principal of or interest on the Bonds prior to receipt of Pledged Taxes. Interest income or investment profit earned in the Bond Fund shall be retained in the Bond Fund for payment of the principal of or interest on the Bonds on the interest payment date next after such interest or profit is received. The City hereby pledges, as equal and ratable security for the Bonds, all present and future proceeds of the Pledged Taxes for the sole benefit of the registered owners of the Bonds. C. The amount necessary from the proceeds of the Bonds as determined by the City Treasurer shall be deposited into a separate fund, hereby created, designated the -21- "Expense Fund" to be used to pay expenses of issuance of the Bonds. Disbursements from such fund shall be made from time to time as necessary. Any excess in said fund shall be deposited the Bond Fund after six months from the date of issuance of the Bonds. D. The remaining proceeds of the Bonds as is necessary, together with such money in the debt service fund for the Prior Bonds as may be advisable for the purpose, shall be used to provide for the Refunding, including the payment of such expenses as may be designated, pursuant to the provisions of an Escrow Agreement with the Escrow Agent as is designated, all in accordance with the provisions of an Escrow Agreement, substantially in the form attached hereto as Exhibit A to this Ordinance, made a part hereof by this reference, and hereby approved; the officers appearing signatory to such Escrow Agreement are hereby authorized and directed to execute same, their execution to constitute conclusive proof of action in accordance with this Ordinance, and approval of all completions or revisions necessary or appropriate to effect the Refunding. Section 15. General Arbitrage Covenants. The City covenants with the purchasers and registered owners of the Bonds from time to time outstanding that moneys on deposit in any fund or account in connection with the Bonds, whether or not such moneys were derived from the proceeds of the sale of the Bonds or from any other source, will not be used in a manner which will cause the Bonds to be "arbitrage bonds" within the meaning of Code Section 148 and any lawful regulations promulgated thereunder, as the same presently exist or may from time to time hereafter be amended, supplemented or revised. Section 16. Registered Form. The City recognizes that Section 149 of the Code requires the Bonds to be issued and to remain in fully registered form in order to be and remain Tax-exempt. In this connection, the City agrees that it will not take any action to permit the Bonds to be issued in, or converted into, bearer or coupon form. -22- Section 17. Further Tax Covenants. The City agrees to comply with all provisions of the Code which, if not complied with by the City, would cause the Bonds not to be Tax- exempt. In furtherance of the foregoing provisions, but without limiting their generality, the City 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 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 City in such compliance. Section 18. Qualified Tax-exempt Obligations. The City recognizes the provisions of Section 265(b)(3) of the Code which provide that a "qualified tax-exempt obligation" as therein defined may be treated by certain financial institutions as if it were acquired on August 7, 1986, for certain purposes. The City hereby designates each of the Bonds as may be from time to time outstanding for purposes of Section 265(b)(3) of the Code as a "qualified tax-exempt obligation" as provided therein. In support of such designation, the City certifies, represents and covenants as follows: A. None of the Bonds is a "private activity bond" as defined in Section 141(a) of the Code. B. Including the Bonds (herein designated), the City (including any entities subordinate thereto) has not and does not reasonably expect to issue in excess of $10,000,000 in Tax-exempt obligations during calendar year 1997. t -23- C. Including the Bonds (herein designated), not more than $10,000,000 of obligations issued by the City (including any entities subordinate thereto) during the calendar year 1997 have been to date or will be designated by the City for purposes of said Section 265(b)(3). Section 19. Rights and Duties of Bond Registrar and Paying Agent. If requested by the Bond Registrar or the Paying Agent, or both, any officer of the City is authorized to execute standard forms of agreements between the City and the Bond Registrar or Paying Agent with respect to the obligations and duties of the Bond Registrar or Paying Agent hereunder. In addition to the terms of such agreements and subject to modification thereby, the Bond Registrar and Paying Agent by acceptance of duties hereunder agree: (a) to act as bond registrar, paying agent, authenticating agent, and transfer agent as provided herein; (b) as to the Bond Registrar, to maintain a list of Bondholders as set forth herein and to furnish such list to the City upon request, but otherwise to keep such list confidential to the extent permitted by law; (c) as to the Bond Registrar, to cancel and/or destroy Bonds which have been paid at maturity or upon redemption or submitted for exchange or transfer; (d) as to the Bond Registrar, to furnish the City at least annually a certificate with respect to Bonds canceled and/or destroyed; and (e) to furnish the City at least annually an audit confirmation of Bonds paid, Bonds outstanding and payments made with respect to interest on the Bonds. The City Clerk of the City is hereby directed to file a certified copy of this Ordinance with the Bond Registrar and the Paying Agent. -24- • Section 20. Taxes Previously Levied. The taxes previously levied to pay principal of and interest on the Prior Bonds, to the extent such principal and interest is provided for from the proceeds of the Bonds or from the Escrow Account under the Escrow Agreement as hereinabove described, shall be abated. The filing of a certificate of abatement with the County Clerk shall constitute authority and direction for the County Clerk to make such abatement. Any of such taxes which have been collected or cannot yet be abated, and subject to use of same as may be required by the Code in assuring the Tax-exempt status of the Bonds, shall be applied to the payment of amounts due on the Bonds. Section 21. Defeasance. Any Bond or Bonds which (a) are paid and canceled, (b) which have matured and for which sufficient sums been deposited with the Paying Agent to pay all principal and interest due thereon, or (c) for which sufficient United States funds and direct United States Treasury obligations have been deposited with the Paying Agent 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 trust agreement, shall cease to have any lien on or right to receive or be paid from the Bond Moneys or Pledged Taxes hereunder and shall no longer have the benefits of any covenant for the registered owners of outstanding Bonds as set forth herein as such relates to lien and security of the outstanding Bonds. All covenants relative to the Tax-exempt status of the Bonds; and payment, registration, transfer, and exchange; are expressly continued for all Bonds whether outstanding Bonds or not. Section 22. Call of the Prior Bonds. In accordance with the redemption provisions of the respective ordinances authorizing the issuance of the Prior Bonds, the City by the City Council does hereby make provision for the payment of and does hereby call (subject only to -25- • , • the delivery of the Bonds) the Prior Bonds for redemption and payment prior to maturity on Y P PY P Y July 1, 1997 for the 1988 Bonds and January 1, 1999 for the 1990 Bonds, all as provided by the terms of the Escrow Agreement. 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 City Council. Section 24. Repealer, 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. AYES: Councilmembers Gavin, Gilliam, McKevitt, Schock, Walters , Yearman, and Mayor Kelly NAYS: None ABSENT: None ADOPTED: May 14, 1997 APPROVED: May 14, 1997 Mayor, City of Elgin Kane and Cook Counties, Illinois Recorded In City Records: May 14, 1997. Published in pamphlet form by authority of the City Council on May 14, 1997. ATTEST: rik City Clerk, City of Elgin Kane and Cook Counties, Illinois -26-