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1985-039ORDINANCE NO. 85- 39 AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF $12,550,000 CONVERTIBLE VARIABLE RATE DEMAND MULTI - FAMILY HOUSING REVENUE BONDS (WINDBROOKE APARTMENTS PROJECT), SERIES 1985, OF THE VILLAGE OF BUFFALO GROVE, ILLINOIS, FOR THE PURPOSE OF MAKING A LOAN TO AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO, NOT PERSONALLY BUT AS TRUSTEE, EDWARD ZALE AND ROBERTA ZALE (COLLECTIVELY, THE "OWNERS "), IN ORDER TO FINANCE THE ACQUISITION, CONSTRUCTION AND IMPROVEMENT OF CERTAIN MULTI - FAMILY RESIDENTIAL RENTAL FACILITIES TO BE LOCATED IN SAID VILLAGE; AUTHORIZING THE EXECUTION AND DELIVERY OF AN INDENTURE OF TRUST SECURING SAID SERIES 1985 BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF A LOAN AGREEMENT AMONG SAID VILLAGE AND THE OWNERS; AUTHORIZING THE EXECUTION AND DELIVERY OF A MORTGAGE AND SECURITY AGREEMENT, AN ASSIGNMENT OF RENTS AND LEASES, AN ASSIGNMENT OF CONSTRUCTION DOCUMENTS AND A COLLATERAL AGREEMENT TO SECURE SAID SERIES 1985 BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF A TENDER AGENT AGREEMENT; AUTHORIZING THE EXECUTION AND DELIVERY OF A REGULATORY AGREEMENT IN CONNECTION WITH SUCH FACILITIES; AUTHORIZING THE EXECUTION AND DELIVERY OF A BOND PURCHASE AGREEMENT AMONG SAID VILLAGE, THE OWNERS AND THE INITIAL PURCHASER OF THE SERIES 1985 BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF AN OFFICIAL STATEMENT AND RATIFYING AND CONFIRMING THE CIRCULATION OF A PRELIMINARY OFFICIAL STATEMENT RELATING TO THE SERIES 1985 BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF VARIOUS DOCUMENTS IN CONNECTION WITH THE FOREGOING; REPEALING ALL ORDINANCES, RESOLUTIONS OR PORTIONS THEREOF IN CONFLICT WITH THE PROVISIONS HEREOF; PROVIDING FOR AN EFFECTIVE DATE; AND CONCERNING RELATED MATTERS. WHEREAS, the Village of Buffalo Grove, Cook and Lake Counties, Illinois (the "Issuer ") is a duly constituted and existing municipality within the meaning of Section 1 of Article VII of the 1970 Constitution of the State of Illinois (the "State "), is a "home rule unit" under Section 6(a) of Article VII of said Constitution, and is a political subdivision of the State; and � r WHEREAS, under the provisions of Chapter 3.24 of the Village of Buffalo Grove Municipal Code, as amended (the "Act ") adopted under the authority of Section 6(a) of Article VII of the 1970 Constitution of the State, the Issuer is authorized to issue its revenue bonds for the purpose, among others, of financing the cost of acquiring, constructing, improving and equipping "multi- family housing projects" (as that term is defined in the Act); and WHEREAS, pursuant to such authorization, the Issuer has determined to finance the acquisition, construction and improvement of nineteen apartment buildings containing 236 one and two bedroom apartments and certain facilities functionally related and subordinate thereto including a swimming pool, cabana and parking (the "Project "), to be located within the boundaries of the Issuer and to be owned by American National Bank and Trust Company of Chicago, not personally but as Trustee under a Trust Agreement dated July 18, 1985 and known as Trust No. 64638; and WHEREAS, the Issuer finds that it is proper, necessary and desirable to issue the Series 1985 Bonds (herein defined) for the purpose of providing funds to finance the acquisition, construction and improvement of the Project and to authorize such actions as might be required in connection therewith; and WHEREAS, the Issuer finds that the issuance of the Series 1985 Bonds to finance the acquisition, construction and improvement of the Project will comply with the requirements of the Act and will further the public purposes to be served by the issuance of bonds under the Act by alleviating the shortage within the Issuer of decent, safe and sanitary housing, including housing which persons of low and moderate income can afford, and thereby improving the public health, safety, and general welfare of the Issuer and its inhabitants; and WHEREAS, on July 9, 1985, the Village President of the Issuer held a public hearing on the financing of the Project pursuant to public notice duly published in the Buffalo Grove Herald on June 21, 1985, and approved the Bonds as the applicable elected representative of the Issuer as required by the Tax Equity and Fiscal Responsibility Act of 1982; and WHEREAS, it is necessary for the Issuer to execute and deliver a Loan Agreement dated as of July 1, 1985 (the Loan "Agreement "), among the Issuer and the Owners; and WHEREAS, it is necessary for the Issuer to execute and deliver an Indenture of Trust dated as of July 1, 1985 (the -2 "Indenture "), to as trustee for Trustee "); and 6 0 LaSalle National Bank, of Chicago, Illinois, the holders of the Series 1985 Bonds, (the "Bond WHEREAS, it is necessary for the Issuer to execute and deliver a Mortgage and Security Agreement (the "Mortgage ") from the Owners to the Issuer, an Assignment of Rents and Leases (the "Assignment of Rents ") from the Owners to the Issuer, an Assignment of Construction Documents (the "Assignment of Construction Documents ") from the Owners to the Issuer, and a Collateral Agreement (the "Collateral Agreement ") among the Issuer, the Bond Trustee, the Owner and Northwestern Savings and Loan Association (the "Credit Facility Issuer ".), each dated as of July 1 , 1985, in order to secure the Series 1985 Bonds; and WHEREAS, it is necessary for the Issuer to execute and deliver a Tender Agent Agreement dated as of July 1, 1985 (the "Tender Agent Agreement ") among the Issuer, the Owners, the Bond Trustee, Manufacturers Hanover Trust Company, of New York, New York (the "Tender Agent "), the Credit Facility Issuer and the Remarketing Agent (as defined in the Indenture); and WHEREAS, it is necessary for the Issuer to execute and deliver a Bond Purchase Agreement (the. "Bond Purchase Agreement "), dated July 16, 1985 with respect to the sale of the Series 1985 Bonds, among the Issuer, the Owners and Prudential -Bache Securities, Inc., of Chicago, Illinois (the "Purchaser "); and WHEREAS, it is necessary and desirable for the Issuer to execute and deliver a Declaration of Restrictive Covenants and Regulatory Agreement dated as of July 1, 1985 (the "Regulatory Agreement ") among the Issuer, the Owners and the Bond Trustee with respect to the Project; and WHEREAS, it is necessary and desirable for the Issuer to authorize the execution and delivery of an Official Statement (the "Official Statement ") and to ratify and confirm the circulation of a preliminary Official Statement (the "Preliminary Official Statement ") relating to the Series 1985 Bonds; and WHEREAS, it is necessary for the Issuer to authorize the execution and delivery of other certificates, documents and papers and the performance of acts necessary or desirable in connection with the issuance and sale of the Series 1985 Bonds and the implementation of this Bond Ordinance; and -3- WHEREAS, there have been prepared and presented to, and are before this Board of Trustees, the Preliminary Official Statement dated July _, 1985 and drafts dated July 15, 1985 of the following documents: 1. Form of proposed Loan Agreement; 2. Form of proposed Indenture; 3. Form of Series 1985 Bonds (contained in the Indenture); 4. Form of proposed Mortgage; 5. Form of proposed Assignment of Rents; 6. Form of proposed Assignment of Construction Documents; 7. Form of proposed Collateral Agreement; 8. Form of proposed Tender Agent Agreement; 9. Form of proposed Regulatory Agreement; 10. Form of proposed Bond Purchase Agreement; and WHEREAS, the Act and all documents to be signed by the Issuer provide that the Series 1985 Bonds shall not constitute nor give rise to a general obligation of the Issuer or be a charge against its taxing powers and that the Series 1985 Bonds will be payable only from the revenues and receipts derived from the Loan Agreement and secured only by the pledge and assignment under the Loan Agreement and the Indenture of such revenues and of a note (the "Note ") of the Owners in the same principal amount as the aggregate principal amount of the Series 1985 Bonds and by the Mortgage, the Assignment of Rents, the Assignment of Construction Documents, the Collateral Agreement, and a direct -pay letter of credit (the "Letter of Credit ") to be dated the date of issuance and delivery of the Series 1985 Bonds issued to the Bond Trustee by the Credit Facility Issuer for the account of the Owners; NOW, THEREFORE, BE IT ORDAINED BY THE PRESIDENT AND BOARD OF TRUSTEES OF THE VILLAGE OF BUFFALO GROVE, COOK AND LAKE COUNTIES, ILLINOIS, AS FOLLOWS: Section 1. Findings; Public Benefits. The President and Board of Trustees of the Issuer hereby find and determine: (1) that the Project described in the Loan Agreement to be acquired, constructed and :improved with the proceeds of the Series 1985 Bonds herein authorized is a "multi- family housing project" as that phrase is used in the Act, and (2) that acquisition, construction and improvement of the Project will further the public purposes to be served by the issuance of Bonds under the Act by alleviating the shortage within the Issuer of decent, safe and sanitary housing, including housing which persons of low and moderate income can afford, and thereby improving the public health, safety, and general welfare of the Issuer and its inhabitants. Section 2. Authorization of Series 1985 Bonds. In order to pay the cost of acquiring, constructing and improving the Project, there are hereby authorized to be issued, sold and delivered $12,550,000 aggregate principal amount of the Issuer's Convertible Variable Rate Demand Multi - Family Housing Revenue Bonds (Windbrooke Apartments Project), Series 1985 (the "Series 1985 Bonds "). Section 3. Terms of the Series 1985 Bonds. The Series 1985 Bonds shall be designated "Convertible Variable Rate Demand Multi - Family Housing Revenue Bonds (Windbrooke Apartments Project), Series 1985," shall be issuable as fully- registered bonds in the denomination of $5,000 or, any integral multiple thereof, shall be numbered "R -1" and upwards as provided in the Indenture, and may be exchanged for other fully registered Series 1985 Bonds of the denomination of $5,000 or any integral multiple thereof, subject to the conditions and limitations set forth in the Indenture. The Series 1985 Bonds shall be dated as of the date of the first authentication and delivery of the Series 1985 Bonds, except as otherwise provided in the Indenture, and shall mature, subject to prior redemption, upon the terms and conditions set forth in the Indenture, on July 1, 2009. The principal of, premium, if any, and interest on the Series 1985 Bonds shall be payable in any coin or currency of the United States of America which, at the respective dates of payment thereof, is legal tender for the payment of public and private debts, and such principal, premium, if any, and interest shall be payable to the registered owner thereof. Payment of the principal of and premium, if any, on the Series 1985 Bonds shall be made only upon presentation and surrender thereof, as the same become due, at the principal corporate trust office of the Bond Trustee. Interest on the Series 1985 Bonds shall be paid (i) by check or draft mailed on the Interest Payment Date (defined below) to the registered owner -5- U • thereof as of the close of business on the Record Date (as defined in the Indenture) immediately preceding such Interest Payment Date, at their addresses as they appear on the registration books of the Issuer maintained by the Bond Trustee or at such other addresses as are furnished to the Bond Trustee in writing by such registered owner by the close of business on the Record Date with respect to an Interest Payment Date, or (ii) during any Variable Rate Period (as defined in the Indenture), by wire transfer on the Interest Payment Date to such registered owner as of the close of business on the Record Date next preceding an Interest Payment Date if such registered owner shall provide written notice to the Bond Trustee by the close of business on such Record Date of such wire transfer addresses within the continental United States of America as such registered owner shall specify (provided, that such wire transfer shall only be made with respect to an owner of $1,000,000 or more in aggregate principal amount of the Bonds as of the close of business on such Record Date), except that defaulted interest shall be paid as provided in the Indenture. The Series 1985 Bonds shall bear interest from and including the date thereof until payment of the principal or redemption price thereof shall have been made or provided for in accordance with the provisions of the Indenture, whether at maturity, upon redemption or otherwise. Interest on the Series 1985 Bonds shall be paid on each Interest Payment Date. During a Variable Rate Period, interest on the Series 1985 Bonds shall be computed upon the basis of a 365 or 366 -day year, as applicable, for the number of days actually elapsed. During a Fixed Rate Period, interest on the Series 1985 Bonds shall be computed upon the basis of a 360 -day year consisting of twelve (12) thirty (30) day months. "Interest Payment Date" means (i) during a Variable Rate Period, the first Business Day (as defined in the Indenture) of each calendar month, commencing August 1, 1985 and through and including the day next succeeding the last day of such Variable Rate Period; and (ii) during a Fixed Rate Period (as defined in the Indenture), the day next succeeding the last day of such Fixed Rate Period, and either semi - annually on each January 1 and July 1, commencing on the January 1 or July 1 next succeeding the first day of such Fixed Rate Period or quarterly on each January 1, April 1, July 1, and October 1, commencing on the first such date next succeeding the first day of such Fixed Rate Period, as provided in the Indenture. For the First Interest Period beginning on the date of issuance and delivery of the Series 1985 Bonds and ending on July 31, 1985, the Series 1985 Bonds shall bear interest at a !M • • rate equal to five percent (5.0%) per annum. Thereafter and prior to the first conversion, if any, of the interest rate on the Bonds to a Fixed Interest Rate, the Series 1985 Bonds shall bear interest at the Variable Interest Rate. The interest so payable on an Interest Payment Date for an Interest Period during a Variable Rate Period shall be based upon the Variable Interest Rate in effect during each Variable Interest Period or portion thereof during such Interest Period. In the case of the first Interest Payment Date, the interest so payable on such date shall be based upon the interest rate on the Series 1985 Bonds during the First Interest Period. The Variable Interest Rate shall the lesser of eighteen percent (18 %) per annum and a rate determined by the Remarketing Agent on each Determination Date (defined below) to be the interest rate which, when borne by the Series 1985 Bonds, would be the interest rate necessary but which would not exceed the interest rate necessary to enable the Remarketing Agent to sell such Series 1985 Bonds on such date at 100% of the principal amount thereof. If, however, for any reason such rate is held to be invalid or unenforceable by a court of law for any Variable Interest Period, the Variable Interest Rate for such Variable Interest Period shall be not more than one hundred twenty percent (120 %) nor less than eighty percent (80 %) of the Interest Index (defined below) for such Variable Interest Period and shall be the interest rate determined by the Remarketing Agent to be the minimum rate necessary to enable the Remarketing Agent to sell the Series 1985 Bonds on such date at 100% of the principal amount thereof; provided, however, that if for any reason such latter rate cannot be established or is held to be invalid or unenforceable by a court of law for any Variable Interest Period, the Variable Interest Rate for such Variable Interest Period shall be determined by the Remarketing Agent and shall be equal to sixty -five percent (65 %) of the yield applicable to 13 -week United States Treasury bills on the basis of the average per annum discount rate at which such 13 -week Treasury bills shall have been sold (i) at the most recent Treasury auction during the next preceding Interest Period (or, with respect to the Variable Interest Period next succeeding the First Interest Period, during the First Interest Period) or (ii) if no such auction shall have been conducted during the next preceding Variable Interest Period or the First Interest Period, as appropriate, at the most recent Treasury auction conducted prior to the next preceding Variable Interest Period or the First Interest Period, as appropriate. The Variable Interest Rate so established on a Determination Date shall be the Variable Interest Rate applicable to the Series 1985 Bonds and -7- shall remain in effect for a period (a "Variable Interest Period ") commencing on such Determination Date to but not including the earlier of (1) the next succeeding Determination Date, or (2) the date, if any, on which the interest rate on the Bonds is converted to a Fixed Interest Rate. The term "Determination Date" includes the first day of each Interest Period during a Variable Rate Period, commencing August 1, 1985, and any Business Day on which a Bond is required to be purchased pursuant to Bondholder demand. In the event that it shall become necessary during any Variable Interest Period to determine the Variable Interest Rate with reference to an Interest Index as described above, the Indexing Agent (as defined in the Indenture) shall promptly, upon notice given by the Owners or Credit Facility Issuer, determine and make available to the Bond Trustee, the Owners, the Credit Facility Issuer and the Remarketing Agent an Interest Index for such Variable Interest Period and thereafter shall determine for each succeeding Variable Interest Period an Interest Index as of the first day of each such Variable Interest Period. Each Interest Index shall be the average of thirty -day yield evaluations at par of securities (whether or not actually issued), the interest on which is exempt from federal income taxation, of not less than twenty (20) Component Issuers (described herein) selected by,the Indexing Agent which shall include, without limitation, issuers of commercial paper, project notes, bond anticipation notes and tax anticipation notes. So long as the Series 1985 Bonds are rated by either Moody's (as defined in the Indentue) or S &P (as defined in the Indenture) in either of its two (2) highest long -term debt rating categories, each of the Component Issuers must either (a) have outstanding securities rated by either Moody's or S &P in its highest note or commercial paper rating category, or (b) have outstanding securities rated by either Moody's or S &P in either of its two (2) highest long -term debt rating categories and either (i) have no outstanding notes or commercial paper or (ii) have outstanding notes or commercial paper, none of which is rated by either Moody's or S &P. In the event that the Series 1985 Bonds are not rated by either Moody's or S&P in either of the two (2) highest long -term debt rating categories of such rating agency (but are rated otherwise by such rating agency), each of the Component Issuers must either (a) have outstanding securities rated by such rating agency in its note or commercial paper rating category correlative, in the judgment of the Indexing Agent, to the long -term debt rating category in which the Series 1985 Bonds are rated by such rating agency or (b) have outstanding securities rated by such rating agency in the same,long -term debt rating category as the Series 1985 Bonds are rated by such rating agency and either (i) have no outstanding notes or cammercial paper or (ii) have outstanding notes or commercial paper, none of which is rated by such rating agency. The specific issuers included in the Component Issuers may be changed from time to time by the Indexing Agent in its discretion, subject to the other requirements of this paragraph. In the event that the Bonds are rated by neither Moody's nor S &P, or in the event that the Indexing Agent no longer computes or fails to compute the Interest Index and no successor thereto permitted hereunder can be appointed by the Issuer, the Interest Index during each Variable Interest Period shall be determined by the Remarketing Agent and shall be equal to sixty -five percent (65 %) of the yield applicable to 13 -week United States Treasury bills determined on the basis of the average per annum discount rate at which such 13 -week Treasury bills shall have been sold at the most recent Treasury auction during the immediately preceding Variable Interest Period (or, with respect to the Variable Interest Period next succeeding the First Interest Period, during the First Interest Period), or, if no such auction shall have been conducted during the immediately preceding Variable Interest Period, the Interest Index during such Variable Interest Period shall be the same as for such preceding Variable Interest Period (provided that if no such auction shall have been conducted during the First Interest Period, at the most recent Treasury auction prior to the First Interest Period). The computation of the Interest Index by the Indexing Agent or the Remarketing Agent, as the case may be, and the determination of the Variable Interest Rate by the Remarketing Agent, shall be conclusive and binding.upon the owners of the Series 1985 Bonds, the Issuer, the Owners, the Credit Facility Issuer, the Bond Trustee and the Remarketing Agent. Notwithstanding any other provisions of the Indenture, during the period that the inital Credit Facility (as defined in the Indenture) is effective and securing the Series 1985 Bonds, the Series 1985 Bonds may not bear interest at a rate exceeding ten percent (10 %) per annum for any Interest Period without the written consent of the initial Credit Facility Issuer, which may be granted or withheld in its sole discretion. If for any Interest Period during such period the Series 1985 Bonds would under the provisions of the Indenture bear interest at a rate in excess of ten percent (10 %) per annum and the aforementioned written consent of the initial Credit Facility Issuer has not been filed with the Bond Trustee on or before the first day of such Interest Period, the Series 1985 Bonds shall bear interest for such Interest Period at the rate of ten percent (10 %) per annum. ME The Series 1985 Bonds shall be executed, shall otherwise be in such form, shall be subject to such provisions for mandatory and optional redemption and mandatory and optional tender for purchase, and shall be subject to such other terms and conditions as are set forth in the Indenture as executed and delivered. As provided in the Indenture, pending the preparation of definitive Series 1985 Bonds, the Issuer may execute and the Bond Trustee or Authenticating Agent may authenticate and deliver temporary Series 1985 Bonds which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any denomination, substantially of the tenor of the definitive Series 1985 Bonds in lieu of which they are issued, in registered form, and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Series 1985 Bonds may determine, as evidenced by their execution of such temporary Series 1985 Bonds. If temporary Series 1985 Bonds are issued, the Issuer will cause definitive Series 1985 Bonds to be prepared without unreasonable delay. After the preparation of definitive Series 1985 Bonds, the temporary Series 1985 Bonds shall be exchangeable for definitive Series 1985 Bonds upon surrender of the temporary Series 1985 Bonds at the principal corporate trust office of the Bond Trustee or of the Authenticating Agent without charge to the owner of such temporary Series 1985 Bonds. Upon surrender for cancellation of any one or more temporary Series 1985 Bonds, the Issuer shall execute and the Bond Trustee or Authenticating Agent shall authenticate and deliver in exchange therefor a like principal amount of definitive Series 1985 Bonds of authorized form and denomination. Until so exchanged, temporary Series 1985 Bonds shall in all respects be entitled to the security and benefits of the Indenture; and interest thereon, when and as payable, shall be paid to the owners of temporary Series 1985 Bonds as provided in the Indenture for definitive Series 1985 Bonds. Section 4. Limited Liability. The Series 1985 Bonds shall not be general obligations of the Issuer, the State of Illinois or any political subdivision thereof but shall be limited obligations payable solely out of the income and revenues derived from the Project No holder of any Series 1985 Bonds shall have the right to compel any exercise of taxing power of the Issuer, the State of Illinois or any political subdivision thereof to pay the Series 1985 Bonds or the interest or premium, if any, thereon, and the Series 1985 Bonds shall not constitute an indebtedness of the Issuer, the State of Illinois or any political subdivision thereof or a loan of credit thereof within the meaning of any constitutional or statutory provision. -10- No recourse shall be had for the payment of the principal of, or premium, if any,, or interest on any of the Series 1985 Bonds or for any claim based thereon or upon any obligation, covenant or agreement in the Indenture contained, against any past, present or future officer, employee or agent of the Issuer, or any incorporator, officer, director, member, employee or agent of any successor to the Issuer, as such, either directly or through the Issuer or any successor to the Issuer, under any rule of law or equity, statute or constitution or by the enforcement of any assessment or penalty or otherwise, and all such liability of any such incorporator, officer, director, member, employee or agent as such shall be expressly waived and released as a condition of and in consideration for the execution of the Indenture and the issuance of any of the Series 1985 Bonds. Section 5. Forms of Documents. Forms of the Loan Agreement, the Indenture, the Series 1985 Bonds, the Mortgage, the Assignment of Rents, the Assignment of Construction Documents, the Collateral Agreement, the Tender Agent Agreement, the Regulatory Agreement, the Preliminary Official Statement and the Bond Purchase Agreement are on file in the office of the Village Clerk, are before this meeting and are by this reference incorporated into this Bond Ordinance, and the Village Clerk is hereby directed to insert them into the minutes of the Board of Trustees and to retain them on file. Section 6. Sale of the Series 1985 Bonds; Delivery. Sale of the Series 1985 Bonds to the Purchaser is hereby ratified and confirmed. The Village President and Village Clerk or Deputy Village Clerk are hereby authorized and directed to execute, attest and seal the Series 1985 Bonds on behalf of the Issuer and to deliver the Series 1985 Bonds to the Purchaser upon payment to the Issuer of the purchase price for the Series 1985 Bonds (the price of $12,361,750) in accordance with the terms of the Indenture. Receipt by the Bond Trustee of the proceeds of sale of the Series 1985 Bonds shall constitute payment to the Issuer of the purchase price of the Series 1985 Bonds. Section 7. Loan Agreement. In order.to provide for the loan of the proceeds of the Series 1985 Bonds to acquire, construct and improve the Project and the payment by the Owners of an amount sufficient to pay the principal of and premium, if any, and interest on the Series 1985 Bonds, the Village President and Village Clerk or Deputy Village Clerk shall execute and deliver in the name and on behalf of the Issuer the Loan Agreement in substantially the form submitted to this Board of Trustees, which is hereby approved in all respects, -11- with such changes therein as shall be approved by the officers so executing such document, their approval to be evidenced by their signing of such document. Section 8. Acceptance of Note. In connection with the Series 1985 Bonds, the Issuer accepts as security for the Series 1985 Bonds the Note of the Owners and authorizes the Village President to endorse the Note, without recourse, to the Bond Trustee pursuant to the assignment made by the Issuer to the Bond Trustee in the Indenture. The Note shall be in substantially the form attached to the Loan Agreement. Section 9. Indenture; Appointment of Bond Trustee, Registrar and Paying Agent; Appointment of Remarketing Agent and Indexing Agent. In order to secure the Series 1985 Bonds by providing for the assignment of the Note and of certain of the Issuer's rights under the Loan Agreement, Mortgage, Assignment of Construction Documents, Assignment of Rents, and Collateral Agreement to the Bond Trustee, the Village President and Village Clerk or Deputy Village Clerk shall execute, acknowledge and deliver in the name and on behalf of the Issuer the Indenture in substantially the form submitted to this Board of Trustees, which is hereby approved in all respects, with such changes therein as shall be approved by the officers so executing such document, their approval to be evidenced by their signing of such document. LaSalle National Bank, of Chicago, Illinois, is hereby appointed as Bond Trustee, Registrar and Paying Agent under the Indenture. Prudential -Bache Securities, Inc., of New York, New York, is hereby appointed as Remarketing Agent under the Indenture. Prudential -Bache Securities, Inc., of New York, New York, is hereby appointed as Indexing Agent under the Indenture. Section 10. Mortgage and Assignments; Collateral Agreement. In order to further secure the Series 1985 Bonds, the Village President and Village Clerk or Deputy Village Clerk shall execute, acknowledge and deliver in the name and on behalf of the Issuer the Mortgage, the Assignment of Rents, the Assignment of Construction Documents, and the Collateral Agreement, each in substantially the respective forms submitted to this Board of Trustees, which are hereby approved in all respects with such changes therein as shall be approved by the officers so executing such respective documents, their approval to be evidenced by their signing of such documents. -12- Section 11. Tender Agent Agreement; Regulatory Agreement; Tender Agent and Authenticating Agent. The Village President and Village Clerk or Deputy Village Clerk shall execute and deliver in the name and on behalf of the Issuer the Tender Agent Agreement and the Regulatory Agreement in substantially the forms submitted to this Board of Trustees, which are hereby approved in all respects with such changes therein as shall be approved by the officers so executing such respective documents, their approval to be evidenced by their signing of such documents. The Issuer hereby approves the appointment of Manufacturers Hanover Trust Company, of New York, New York, as Tender Agent and Authenticating Agent under the Indenture and the Tender Agent Agreement. Section 12. Bond Purchase Agreement. The Village President and Village Clerk or Deputy Village Clerk shall execute and deliver in the name and on behalf of the Issuer the Bond Purchase Agreement in substantially the form submitted to this Board of Trustees, which is hereby approved in all respects with such changes therein as shall be approved by the officers so executing such document, their approval to be evidenced by their signing of such document. Section 13. Financing Statements. To evidence the security interests created by the various documents herein contemplated, the Village President and Village Clerk or Deputy Village Clerk are hereby authorized and directed to execute and deliver on behalf of the Issuer as debtor a financing statement or financing statements wherein the Bond Trustee is the secured party covering the Loan Agreement, the Note, the Mortgage, the Assignment of Rents, the Assignment of Construction Documents, and the Collateral Agreement, and all other and further rights and interests pledged and assigned to the Bond Trustee under the Loan Agreement and the Indenture. Section 14. Arbitrage. The Issuer recognizes that the purchasers and holders from time to time of the Series 1985 Bonds (including the Purchaser) will have accepted them on, and paid therefor a price which reflects, the understanding that interest thereon is exempt from Federal income taxation under laws in force at the time the Series 1985 Bonds shall have been delivered, except with respect to the interest on any Series 1985 Bond for any period during which such Series 1985 Bond is held by any person who is a "substantial user" of the Project or a "related person" within the meaning of Section 103(b)(6)(C) of the Code. In this connection, the Village President and Village Clerk or Deputy Village Clerk and -13- other appropriate officials of the Issuer are hereby authorized and directed to execute such certificates as shall be necessary to establish that the Series 1985 Bonds are not "arbitrage bonds" within the meaning of Section 103(c) of the Code, and any lawful regulations promulgated or proposed thereunder, including Sections 1.103 -13 and 1.103 -14 of the Income Tax Regulations (26 CFR Part 1) as the same presently exist, or may from time to time hereafter be amended, supplemented or revised. The Issuer covenants to and for the benefit of the holders of the Series 1985 Bonds from time to time (including the Purchaser) that no use will be made of the proceeds of the issue and sale of the Series 1985 Bonds or any other funds or' accounts of the Issuer which might be deemed to be available proceeds of the Series 1985 Bonds purchant to the provisions of Section 103(c) of the Code and the applicable regulations (proposed or promulgated) under which, if such use had been reasonably expected on the date of delivery of and payment for the Series 1985 Bonds, the Series 1985 Bonds would be classified as "arbitrage bonds" within the meaning of Section 103(c) of the Code. Pursuant to such covenant, the Issuer obligates itself to comply throughout the term of the issue of the Series 1985 Bonds with the requirements of the Code and any regulations promulgated hereunder. The Issuer further covenants that it will neither take any action nor omit to take any action the taking or omission of which would render interest on the Series 1985 Bonds subject to Federal income taxation. Any certificate given under this section shall be considered a representation of the Issuer under this Bond Ordinance, and an executed copy of any such certificate shall be filed in the office of the Village Clerk. Section 15. General. The Village President and Village Clerk or Deputy Village Clerk and all other officers of the Issuer are hereby authorized and directed, in the name and on behalf of the Issuer, to execute any and all certificates and other matters, and do any and all things deemed by them necessary or desirable in order to carry out the purposes of this Bond Ordinance (including the preambles hereto), the acquisition of the Project by the Owners, the issuance and sale of the Series 1985 Bonds and the securing of the Series 1985 Bonds under and pursuant to the Indenture. Section 16. Ratification of Proceedings. All proceedings, resolutions and actions of the Issuer and its officers and agents taken in connection with the issuance and sale of the Series 1985 Bonds are hereby ratified, confirmed and approved. Section 17. Execution of Bond Ordinance. Immediately after its passage, this Bond Ordinance shall be signed by the -14- 0 Village President and attested by the Village Clerk, be placed in the corporate records of the Issuer. and shall Section 18. Severability. It is hereby declared that all parts of this Bond Ordinance (except Section 4) are severable and that if any section, paragraph, clause or provision of this Bond Ordinance shall, for any reason, be held to be invalid or unenforceable, the invalidity or unenforceability of any such section, paragraph, clause or provision shall not affect the - remaining provisions of this Bond Ordinance. Section 19. Conflicting Ordinances, etc.. All ordinances, resolutions and regulations or parts thereof heretofore adopted or passed which are in conflict with any of the provisions of this Bond Ordinance are, to the extent of such conflict, hereby repealed. Section 20. Effective Date. This Bond Ordinance shall become effective and shall be in full force immediately upon its adoption. PASSED AND APPROVED this 15th day of July, 1985. Village President ATTEST: (► l CJ Village Clerk AYES: 6 - Marienthal, O'Reilly, Glover, Reid, Shields, Kowalski NAYES: 0 - None ABSENT: 0 - None -15- \\ Tr ORDINANCE NO. 85- 39 AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF $12,550,000 CONVERTIBLE VARIABLE RATE DEMAND MULTI - FAMILY HOUSING REVENUE BONDS (WINDBROOKE APARTMENTS PROJECT), SERIES 1985, OF THE VILLAGE OF BUFFALO GROVE, ILLINOIS, FOR THE PURPOSE OF MAKING A LOAN TO AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO, NOT PERSONALLY BUT AS TRUSTEE, EDWARD ZALE AND' ROBERTA ZALE (COLLECTIVELY, THE "OWNERS "), IN ORDER TO FINANCE THE ACQUISITION, CONSTRUCTION AND IMPROVEMENT OF CERTAIN MULTI - FAMILY RESIDENTIAL RENTAL FACILITIES TO BE LOCATED IN SAID VILLAGE; AUTHORIZING THE EXECUTION AND DELIVERY OF AN INDENTURE OF TRUST SECURING SAID SERIES 1985 BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF A LOAN AGREEMENT AMONG SAID VILLAGE AND THE OWNERS; AUTHORIZING THE EXECUTION AND DELIVERY OF A MORTGAGE AND SECURITY AGREEMENT, AN ASSIGNMENT OF RENTS AND LEASES, AN ASSIGNMENT OF CONSTRUCTION DOCUMENTS. AND A COLLATERAL AGREEMENT TO SECURE SAID SERIES 1985 BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF A TENDER AGENT AGREEMENT; AUTHORIZING THE EXECUTION AND DELIVERY OF A REGULATORY AGREEMENT IN CONNECTION WITH SUCH FACILITIES; AUTHORIZING THE EXECUTION AND DELIVERY OF A BOND PURCHASE AGREEMENT AMONG SAID VILLAGE, THE OWNERS AND THE.INITIAL PURCHASER OF THE SERIES 1985 BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF AN OFFICIAL STATEMENT AND RATIFYING AND CONFIRMING THE CIRCULATION OF A PRELIMINARY OFFICIAL STATEMENT RELATING TO THE SERIES 1985 BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF VARIOUS DOCUMENTS IN CONNECTION WITH THE FOREGOING; REPEALING ALL ORDINANCES, RESOLUTIONS OR PORTIONS THEREOF IN CONFLICT WITH THE PROVISIONS HEREOF; PROVIDING FOR AN EFFECTIVE DATE; AND CONCERNING RELATED MATTERS. WHEREAS, the Village of Buffalo Grove, Cook and Lake Counties, Illinois (the "Issuer ") is a duly constituted and existing municipality within the meaning of Section 1 of Article VII of the 1970 Constitution of the State of Illinois (the "State "), is a "home rule unit" under Section 6(a) of Article VII of said Constitution, and is a political subdivision of the State; and WHEREAS, under the provisions of Chapter 3.24 of the Village of Buffalo Grove Municipal Code, as amended (the "Act ") adopted under the authority of Section 6(a) of Article VII of the 1970 Constitution of the State, the Issuer is authorized to issue its revenue bonds for the purpose, among others, of financing the cost of acquiring, constructing, improving and equipping "multi- family housing projects" (as that term is defined in the Act); and WHEREAS, pursuant to such authorization, the Issuer has determined to finance the acquisition, construction and improvement of nineteen apartment buildings containing 236 one and two bedroom apartments and certain facilities functionally related and subordinate thereto including a swimming pool, cabana and parking (the "Project "), to be located within the boundaries of the Issuer and to be owned by American National Bank and Trust Company of Chicago, not personally but as Trustee under a Trust Agreement dated July 18, 1985 and known as Trust No. 64638; and WHEREAS, the Issuer finds that it is proper, necessary and desirable to issue the Series 1985 Bonds (herein defined) for the purpose of providing funds to finance the acquisition, construction and improvement of the Project and to authorize such actions as might be required in connection therewith; and WHEREAS, the Issuer finds that the issuance of the Series 1985 Bonds to finance the acquisition, construction and improvement of the Project will comply with the requirements of the Act and will further the public purposes to be served by the issuance of bonds under the Act by alleviating the shortage within the Issuer of decent, safe and sanitary housing, including housing which persons of low and moderate income can afford, and thereby improving the public health, safety, and general welfare of the Issuer and its inhabitants; and WHEREAS, on July 9, 1985, the Village President of the Issuer held a public hearing on the financing of the Project pursuant to public notice duly published in the Buffalo Grove Herald on June 21, 1985, and approved the Bonds as the applicable elected representative of the Issuer as required by the Tax Equity and Fiscal Responsibility Act of 1982; and WHEREAS, it is necessary for the Issuer to execute and deliver a Loan Agreement dated as of July 1, 1985 (the Loan "Agreement "), among the Issuer and the Owners; and WHEREAS, it is necessary for the Issuer to execute and deliver an Indenture of Trust dated as of July 1, 1985 (the -2- "Indenture "), to LaSalle National Bank, of Chicago, Illinois, as trustee for the holders of the Series 1985 Bonds, (the "Bond Trustee "); and WHEREAS, it is necessary for the Issuer to execute and deliver a Mortgage and Security Agreement (the "Mortgage ") from the Owners to the Issuer, an Assignment of Rents and Leases (the "Assignment of Rents ") from the Owners to the Issuer, an Assignment of Construction Documents (the "Assignment of Construction Documents ") from the Owners to the Issuer, and a Collateral Agreement (the "Collateral Agreement ") among the Issuer, the Bond Trustee, the Owner and Northwestern Savings and Loan Association (the "Credit Facility Issuer "), each dated as of July 1 , 1985, in order to secure the Series 1985 Bonds; and WHEREAS, it is necessary for the Issuer to execute and deliver a Tender Agent Agreement dated as of July 1, 1985 (the "Tender Agent Agreement ") among the Issuer, the Owners, the Bond Trustee, Manufacturers Hanover Trust Company, of New York, New York (the "Tender Agent "), the Credit Facility Issuer and the Remarketing Agent (as defined in the Indenture); and WHEREAS, it is necessary for the Issuer to execute and deliver a Bond Purchase Agreement (the "Bond Purchase Agreement "), dated July 16, 1985 with respect to the sale of the Series 1985 Bonds, among the Issuer, the Owners and Prudential -Bache Securities, Inc., of Chicago, Illinois (the "Purchaser "); and WHEREAS, it is necessary and desirable for the Issuer to execute and deliver a Declaration of Restrictive Covenants and Regulatory Agreement dated as of July 1, 1985 (the "Regulatory Agreement ") among the Issuer, the Owners and the Bond Trustee with respect to the Project; and WHEREAS, it is necessary and desirable for the Issuer to authorize the execution and delivery of an Official Statement (the "Official Statement ") and to ratify and confirm the circulation of a preliminary Official Statement (the "Preliminary Official Statement ") relating to the Series 1985 Bonds; and WHEREAS, it is necessary for the Issuer to authorize the execution and delivery of other certificates, documents and papers and the performance of acts necessary or desirable in connection with the issuance and sale of the Series 1985 Bonds and the implementation of this Bond Ordinance; and -3- WHEREAS, there have been prepared and presented to, and are before this Board of Trustees, the Preliminary Official Statement dated July , 1985 and drafts dated July 15, 1985 of the following documents: 1. Form of proposed Loan Agreement; 2. Form of proposed Indenture; 3. Form of Series 1985 Bonds (contained in the Indenture); 4. Form of proposed Mortgage; 5. Form of proposed Assignment of Rents; 6. Form of proposed Assignment of Construction Documents; 7. Form of proposed Collateral Agreement; 8. Form of proposed Tender Agent Agreement; 9.' Form of proposed Regulatory Agreement; 10. Form of proposed Bond Purchase Agreement; and WHEREAS, the Act and all documents to be signed by the Issuer provide that the Series 1985 Bonds shall not constitute nor give rise to a general obligation.of the Issuer or be a charge against its taxing powers and that the Series 1985 Bonds will be payable only from the revenues and receipts derived from the Loan Agreement and secured only by the pledge and assignment under the Loan Agreement and the Indenture of such revenues and of a note (the "Note ") of the Owners in the same principal amount as the aggregate principal amount of the Series 1985 Bonds and by the Mortgage, the Assignment of Rents, the Assignment of Construction Documents, the Collateral Agreement, and a direct -pay letter of credit (the "Letter of Credit ") to be dated the date of issuance and delivery of the Series 1985 Bonds issued to the Bond Trustee by the Credit Facility Issuer for the account of the Owners; NOW, THEREFORE, BE IT ORDAINED BY THE PRESIDENT AND BOARD OF TRUSTEES OF THE VILLAGE OF BUFFALO GROVE, COOK AND LAKE COUNTIES, ILLINOIS, AS FOLLOWS: Section 1. Findings; Public Benefits. The President and Board of Trustees of the Issuer hereby find and determine: 1XI''m (1) that the Project described in the Loan Agreement to be acquired, constructed and improved with the proceeds of the Series 1985 Bonds herein authorized is a "multi- family housing project" as that phrase is used in the Act, and (2) that acquisition, construction and improvement of the Project will further the public purposes to be served by the issuance of Bonds under the Act by alleviating the shortage within the Issuer of decent, safe and sanitary housing, including housing which persons of low and moderate income can afford, and thereby improving the public health, safety, and general welfare of the Issuer and its inhabitants. Section 2. Authorization of Series 1985 Bonds. In order to pay the cost of acquiring, constructing and improving the Project, there are hereby authorized to be issued, sold and delivered $12,550,000 aggregate principal amount of the Issuer's Convertible Variable Rate Demand Multi- Family Housing Revenue Bonds (Windbrooke Apartments Project), Series 1985 (the "Series 1985 Bonds "). Section 3. Terms of the Series 1985 Bonds. The Series 1985 Bonds shall be designated "Convertible Variable Rate Demand Multi- Family Housing Revenue Bonds (Windbrooke Apartments Project), Series 1985," shall be issuable as fully- registered bonds in the denomination of $5,000 or. any integral multiple thereof, shall be numbered "R -1" and upwards as provided in the Indenture, and may be exchanged for other fully registered Series 1985 Bonds of the denomination of $5,000 or any integral multiple thereof, subject to the conditions and limitations set forth in the Indenture. The Series 1985 Bonds shall be dated as of the date of the first authentication and delivery of the Series 1985 Bonds, except as otherwise provided in the Indenture, and shall mature, subject to prior redemption, upon the terms and conditions set forth in the Indenture, on July 1, 2009. The principal of, premium, if any, and interest on the Series 1985 Bonds shall be payable in any coin or currency of the United States of America which, at the respective dates of payment thereof, is legal tender for the payment of public and private debts, and such principal, premium, if any, and interest shall be payable to the registered owner thereof. Payment of the principal of and premium, if any, on the Series 1985 Bonds shall be made only upon presentation and surrender thereof, as the same become due, at the principal corporate trust office of the Bond Trustee. Interest on the Series 1985 Bonds shall be paid (i) by check or draft mailed on the Interest Payment Date (defined below) to the registered owner -5- thereof as of the close of business. on the Record Date (as defined in the Indenture) immediately preceding such Interest Payment Date, at their addresses as they appear on the registration books of the Issuer maintained by the Bond Trustee or at such other addresses as are furnished to the Bond Trustee in writing by such registered owner by the close of business on the Record Date with respect to an Interest Payment Date, or (ii) during any Variable Rate Period (as defined in the Indenture), by wire transfer on the Interest Payment Date to such registered owner as of the close of business on the Record Date next preceding an Interest Payment Date if such registered owner shall provide written notice to the Bond Trustee by the close of business on such Record Date of such wire transfer addresses within the continental United States of America as such registered owner shall specify (provided, that such wire transfer shall only be made with respect to an owner of $1,000,000 or more in aggregate principal amount of the Bonds as of the close of business on such Record Date), except that defaulted interest shall be paid as provided in the Indenture. The Series 1985 Bonds shall bear interest.from and including the date thereof until payment of the principal or redemption price thereof shall have been made or provided for in accordance with the provisions of the Indenture, whether at maturity, upon redemption or otherwise. Interest on the Series 1985 Bonds shall be paid on each Interest Payment Date. During a Variable Rate Period, interest on the Series 1985 Bonds shall be computed upon the basis of a 365 or 366 -day year, as applicable, for the number of days actually elapsed. During a Fixed Rate Period, interest on the Series 1985 Bonds shall be computed upon the basis of a 360 -day year consisting of twelve (12) thirty (30) day months. "Interest Payment Date" means (i) during a Variable Rate Period; the first Business Day (as defined in the Indenture) of each calendar month, commencing August 1, 1985 and through and including the day next succeeding the last day of such Variable Rate Period; and (ii) during a Fixed Rate Period (as defined in the Indenture), the day next succeeding the last day of such Fixed Rate Period, and either semi - annually on each January 1 and July 1, commencing on the January 1 or July 1 next succeeding the first day of such Fixed Rate Period or quarterly on each January 1, April 1, July 1, and October 1, commencing on the first such date next succeeding the first day of such Fixed Rate Period, as provided in the Indenture. For the First Interest Period beginning on the date of issuance and delivery of the Series 1985 Bonds and ending on July 31, 1985, the Series 1985 Bonds shall bear interest at a EME rate equal to five percent (5.0%) per annum. Thereafter and prior to the first conversion, if any, of the interest rate on the Bonds to a Fixed Interest Rate, the Series 1985 Bonds shall bear interest at the Variable Interest Rate. The interest so payable on.an Interest Payment Date for an Interest Period during a Variable Rate Period shall be based upon the Variable Interest Rate in effect during each Variable Interest Period or portion thereof during such Interest Period. In the case of the fir -.st Interest Payment Date, the interest so payable on such date shall be based upon the interest rate on the Series 1985 Bonds during the First Interest Period. The Variable Interest Rate shall the lesser of eighteen percent (18 %) per annum and a rate determined by the Remarketing Agent on each Determination Date (defined below) to be the interest rate which, when borne by the Series 1985 Bonds, would be the interest rate necessary but which would not exceed the interest rate necessary to enable the Remarketing Agent to sell such Series 1985 Bonds on such date at 100% of the principal amount thereof. If, however, for any reason such rate is held to be invalid or unenforceable by a court of law for any Variable Interest Period, the Variable Interest Rate for such Variable Interest Period shall be not more than one hundred twenty percent (120 %) nor less than eighty percent (80 %) of the Interest Index (defined below) for such Variable Interest Period and shall be the interest rate determined by the Remarketing Agent to be the minimum rate necessary to enable the Remarketing Agent to sell the Series 1985 Bonds on such date at 100% of the principal amount thereof; provided, however, that if for any reason such latter rate cannot be established or is held to be invalid or unenforceable by a court of law for any Variable Interest Period, the Variable Interest Rate for such Variable Interest Period shall be determined by the Remarketing Agent and shall be equal to sixty -five percent (65 %) of the yield applicable to 13 -week United States Treasury bills on the basis of the average per annum discount rate at which such 13 -week Treasury bills shall have been sold (i) at the most recent Treasury auction during the next preceding Interest Period (or, with respect to the Variable Interest Period next succeeding the First Interest Period, during the First Interest Period) or (ii) if no such auction shall have been conducted during the next preceding Variable Interest Period or the First Interest Period, as appropriate, at the most recent Treasury auction conducted prior to the next preceding Variable Interest Period or the First Interest Period, as appropriate. The Variable Interest Rate so established on a Determination Date shall be the Variable Interest Rate applicable to the Series 1985 Bonds and -7- shall remain in effect for a period (a "Variable Interest Period ") commencing on such Determination Date to but not including the earlier of (1) the next succeeding Determination Date, or (2) the date, if any, on which the interest rate on the Bonds is converted to a Fixed Interest Rate. The term "Determination Date" includes the first day of each Interest Period during a Variable Rate Period, commencing August 1, 1985, and any Business Day on which a Bond is required to be purchased pursuant to Bondholder demand. In the event that it shall become necessary during any Variable Interest Period to determine the Variable Interest Rate with reference to an Interest Index as described above, the Indexing Agent (as defined in the Indenture) shall promptly, upon notice given by the Owners or Credit Facility Issuer, determine and make available to the Bond Trustee, the Owners, the Credit Facility Issuer and the Remarketing Agent an Interest Index for such Variable Interest Period and thereafter shall determine for each succeeding Variable Interest Period an Interest Index as of the first day of each such Variable Interest Period. Each Interest Index shall be the average of thirty -day yield evaluations at par of securities (whether or not actually issued), the interest on which is exempt from federal income taxation, of not less than twenty (20) Component Issuers (described herein) selected by.the Indexing Agent which shall include, without limitation, issuers of commercial paper, project notes, bond anticipation notes and tax anticipation notes. So long as the Series 1985 Bonds are rated by either Moody's (as defined in the Indentue) or S &P (as defined in the Indenture) in either of its two (2) highest long -term debt rating categories, each of the Component Issuers must either (a) have outstanding securities rated by either Moody's or S &P in its highest note or commercial paper rating category, or (b) have outstanding securities rated by either Moody's or S &P in either of its two (2) highest long -term debt rating categories and either (i) have no outstanding notes or commercial paper or (ii) have outstanding notes or commercial paper, none of which is rated by either Moody's or S &P. In the event that the Series 1985 Bonds are not rated by either Moody's or S &P in either of the two (2) highest long -term debt rating categories of such rating agency (but are rated otherwise by such rating agency), each of the Component Issuers must either (a) have outstanding securities rated by such rating agency in its note or commercial paper rating category correlative, in the judgment of the Indexing Agent, to the long -term debt rating category in which the Series 1985 Bonds are rated by such rating agency or (b) have outstanding securities rated by such rating agency in the same long -term debt rating category as the 5111 Series 1985 Bonds are rated by such rating agency and either (i) have no outstanding notes or commercial paper or (ii) have outstanding notes or commercial paper, none of which is rated by such rating agency. The specific issuers included in the Component Issuers may be changed from time to time by the Indexing Agent in its discretion, subject to the other requirements of this paragraph. In the event that the Bonds are rated by neither Moody's nor S &P, or in the event that the Indexing.Agent no longer computes or fails to compute the Interest Index and no successor thereto permitted hereunder can be appointed by the Issuer, the Interest Index during each Variable Interest Period shall be determined by the Remarketing Agent and shall be equal to sixty -five percent (65 %) of the yield applicable to 13 -week United States Treasury bills determined on the basis of the average per annum discount rate at which such 13 -week Treasury bills shall have been sold at the most recent Treasury auction during the immediately preceding Variable Interest Period (or, with respect to the Variable Interest Period next succeeding the First Interest Period, during the First Interest Period), or, if no such auction shall have been conducted during the immediately preceding Variable Interest Period, the Interest Index during such Variable Interest Period shall be the same as for such preceding Variable Interest Period (provided that if no such auction shall have been conducted during the First Interest Period, at the most recent Treasury auction prior to the First Interest Period). The computation of the Interest Index by the Indexing Agent or the Remarketing Agent, as the case may be, and the determination of the Variable Interest Rate by the Remarketing Agent, shall be conclusive and binding.upon the owners of the Series 1985 Bonds, the Issuer, the Owners, the Credit Facility Issuer, the Bond Trustee and the Remarketing Agent. Notwithstanding any other provisions of the Indenture, during the period that the inital Credit Facility (as defined in the Indenture) is effective and securing the Series 1985 Bonds, the Series 1985 Bonds may not bear interest at a rate exceeding ten percent (10 %) per annum for any Interest Period without the written consent of the initial Credit Facility Issuer, which may be granted or withheld in its sole discretion. If for any Interest Period during such period the Series 1985 Bonds would under the provisions of the Indenture bear interest at a rate in excess of ten percent (10 %) per annum and the aforementioned written consent of the initial Credit Facility Issuer has not been filed with the Bond Trustee on or before the first day of such Interest Period, the Series 1985 Bonds shall bear interest for such Interest Period at the rate of ten percent (10 %) per annum. The Series 1985 Bonds shall be executed, shall otherwise be in such form, shall be subject to such provisions for mandatory and optional redemption and mandatory and optional tender for purchase, and shall be subject to such other terms and conditions as are set forth in the Indenture as executed and delivered. As provided in the Indenture, pending the preparation of definitive Series 1985 Bonds, the Issuer may execute and the Bond Trustee or Authenticating Agent may authenticate and deliver temporary Series 1985 Bonds 'which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any denomination, substantially of the tenor of the definitive Series 1985 Bonds in lieu of which they are issued, in registered form, and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Series 1985 Bonds may determine, as evidenced by their execution of such temporary Series 1985 Bonds. If temporary Series 1985 Bonds are issued, the Issuer will cause definitive Series 1985 Bonds to be prepared without unreasonable delay. After the preparation of definitive Series 1985 Bonds, the temporary Series 1985 Bonds shall be exchangeable for definitive Series 1985 Bonds upon surrender of the temporary Series 1985 Bonds at the principal corporate trust office of the Bond Trustee or of the Authenticating Agent without charge to the owner of such temporary Series 1985 Bonds. Upon surrender for cancellation of any one or more temporary Series 1.985 Bonds, the Issuer shall execute and the Bond Trustee or Authenticating Agent shall authenticate and deliver in exchange therefor a like principal amount of definitive Series 1985 Bonds of authorized form and denomination. Until so exchanged, temporary Series 1985 Bonds shall in all respects be entitled to the security and benefits of the Indenture; and interest thereon, when and as payable, shall be paid to the owners of temporary Series 1985 Bonds as provided in the Indenture for definitive Series 1985 Bonds. Section 4. Limited Liability. The Series 1985 Bonds shall not be general obligations of the Issuer, the State of Illinois or any political subdivision thereof but shall be limited obligations payable solely out of the income and revenues derived from the Project. No holder of any Series 1985 Bonds shall have the right to compel any exercise of taxing power of the Issuer, the State of Illinois or any political subdivision thereof to pay the Series 1985 Bonds or the interest or premium, if any, thereon, and the Series 1985 Bonds shall not constitute an indebtedness of the Issuer, the State of Illinois or any political subdivision thereof or a loan of credit thereof within the meaning of any constitutional or statutory provision. -10- . A No recourse shall be had for the payment of the principal of, or premium, if any., or interest on any of the Series 1985 Bonds or for any claim based thereon or upon any obligation, covenant or agreement in the Indenture contained, against any past, present or future officer, employee or agent of the Issuer, or any incorporator, officer, director, member, employee or agent of any successor to the Issuer, as such, either directly or through the Issuer or any successor to the Issuer, under any rule of law or equity, statute or constitution or by the enforcement of any assessment or penalty or otherwise, and all such liability of any such incorporator, officer, director, member, employee or agent as such shall be expressly waived and released as a condition of and in consideration for the execution of the Indenture and the issuance of any of the Series 1985 Bonds. Section 5. Forms of Documents. Forms of the Loan Agreement, the Indenture, the Series 1985 Bonds, the Mortgage, the Assignment of Rents, the Assignment of Construction Documents, the Collateral Agreement, the Tender Agent Agreement, the Regulatory Agreement, the Preliminary Official Statement and the Bond Purchase Agreement are on file in the office of the Village Clerk, are before this meeting and are by this reference incorporated into this Bond Ordinance, and the Village Clerk is hereby directed to insert them into the minutes of the Board of Trustees and to retain them on file. Section 6. Sale of the Series 1985 Bonds; Delivery. Sale of the Series 1985 Bonds to the Purchaser is hereby ratified and confirmed. The Village President and Village Clerk or Deputy Village Clerk are hereby authorized and directed to execute, attest and seal the Series 1985 Bonds on behalf of the Issuer and to deliver the Series 1985 Bonds to the Purchaser upon payment to the _Issuer of the purchase price for the Series 1985 Bonds (the price of $12,361,750) in accordance with the terms of the Indenture.- Receipt by the Bond Trustee of the proceeds of sale of the Series 1985 Bonds shall constitute payment to the Issuer of the purchase price of the Series 1985 Bonds. Section 7. Loan Agreement. In order.to provide for the loan of the proceeds of the Series 1985 Bonds to acquire, construct and improve the Project and the payment by the Owners of an amount sufficient to pay the principal of and premium, if any, and interest on the Series 1985 Bonds, the Village President and Village Clerk or Deputy Village Clerk shall execute and deliver in the name and on behalf of the Issuer the Loan Agreement in substantially the form submitted to this Board of Trustees, which is hereby approved in all respects, -11- R with such changes therein as shall be approved by the officers so executing such document, their approval to be evidenced by their signing of such document. Section 8. Acceptance of Note. In connection with the Series 1985 Bonds, the Issuer accepts as security for the Series 1985 Bonds the Note of the Owners and authorizes the Village President to endorse the Note, without recourse, to the Bond Trustee pursuant to the assignment made by the Issuer to the Bond Trustee in the Indenture. The Note shall be in substantially the form attached to the Loan Agreement. Section 9. Indenture; Appointment of Bond Trustee, Registrar and Paying Agent; Appointment of Remarketing Agent and Indexing Agent. In order to secure the Series 1985 Bonds by providing for the assignment of the Note and of certain of the Issuer's rights under the Loan Agreement, Mortgage, Assignment of Construction Documents, Assignment of Rents, and Collateral Agreement to the Bond Trustee, the Village President and Village Clerk ..or Deputy Village Clerk shall execute, acknowledge and deliver in the name and on behalf of the Issuer the Indenture in substantially the form submitted to this Board of Trustees, which is hereby approved in all respects, with such changes therein as shall be approved by the officers so executing such document, their approval to be evidenced by their signing of such document. LaSalle National Bank, of Chicago, Illinois, is hereby appointed as Bond Trustee, Registrar and Paying Agent under the Indenture. Prudential -Bache Securities, Inc., of New York, New York, is hereby appointed as Remarketing Agent under the Indenture. Prudential -Bache Securities, Inc., of New York, New York, is hereby appointed as Indexing Agent under the Indenture. Section 10. Mortgage and Assignments; Collateral Agreement. In order to further secure the Series 1985 Bonds, the Village President and Village Clerk or Deputy Village Clerk shall execute, acknowledge and deliver in the name and on behalf of the Issuer the Mortgage, the Assignment of Rents, the Assignment of Construction Documents, and the Collateral Agreement, each in substantially the respective forms submitted to this Board of Trustees, which are hereby approved in all respects with such changes therein as shall be approved by the officers so executing such respective documents, their approval to be evidenced by their signing of such documents. -12- Section 11. Tender Agent Agreement; Regulatory Agreement; Tender Agent and Authenticating Agent. The Village President and Village Clerk or Deputy Village Clerk shall execute and deliver in the name and on behalf of the Issuer the Tender Agent Agreement and the Regulatory Agreement in substantially the forms submitted to this Board of Trustees, which are hereby approved in all respects with such changes therein as shall be approved by the officers so executing such - respective documents, their approval to be evidenced by their signing of such documents. The Issuer hereby approves the appointment of Manufacturers Hanover Trust Company, of New York, New York, as Tender Agent and Authenticating Agent under the Indenture and the Tender Agent Agreement. Section 12. Bond Purchase Agreement. The Village President and Village Clerk or Deputy Village Clerk shall execute and deliver in the name and on behalf of the Issuer the Bond Purchase Agreement in substantially the form submitted to this Board of Trustees, which is hereby approved in all respects with such changes therein as shall be approved by the officers so executing such document, their approval to be evidenced by their signing of such document. Section 13. Financing Statements. To evidence the security interests created by the various documents herein contemplated, the Village President and Village Clerk or Deputy Village Clerk are hereby authorized and directed to execute and deliver on behalf of the Issuer as debtor a financing statement or financing statements wherein the Bond Trustee is the secured party covering the Loan Agreement, the Note, the Mortgage, the Assignment of Rents, the Assignment of Construction Documents, and the Collateral Agreement, and all other and further rights and interests pledged and assigned to the Bond Trustee under the Loan Agreement and the Indenture. Section 14. Arbitrage. The Issuer recognizes that the purchasers and holders from time to time of the Series 1985 Bonds (including the Purchaser) will have accepted them on, and paid therefor a price which reflects, the understanding that interest thereon is exempt from Federal income taxation under laws in force at the time the Series 1985 Bonds shall have been delivered, except with respect to the interest on any Series 1985 Bond for any period during which such Series 1985 Bond is held by any person who is a "substantial user" of the Project or a "related person" within the meaning of Section 103(b)(6)(C) of the Code. In this connection, the Village President and Village Clerk or Deputy Village Clerk and -13- other appropriate officials of the Issuer are hereby authorized and directed to execute such certifi -cater as shall be necessary to establish that the Series 1985 Bonds are not "arbitrage bonds" within the meaning of Section 103(c) of the Code, and any lawful regulations promulgated or proposed thereunder, including Sections 1.103 -13 and 1.103 -14 of the Income Tax Regulations (26 CFR Part 1) as the same presently exist, or may from time to time hereafter be amended, supplemented or revised.. _ The Issuer covenants to and for the benefit of the holders of the Series 1985 Bonds from, time to time (including the Purchaser) that no use will be made of the proceeds of the issue and sale of the Series 1985 Bonds or any other funds or accounts of the Issuer which might be deemed to be available proceeds of the Series 1985 Bonds purchant to the provisions of Section 103(c) of the Code and the applicable regulations (proposed or promulgated) under which, if such use had been reasonably expected on the date of delivery of and payment for the Series 1985 Bonds, the Series 1985 Bonds would be classified as "arbitrage bonds" within the meaning of Section 103(c) of the Code. Pursuant to such covenant, the Issuer obligates itself to comply throughout the term of the issue of the Series 1985 Bonds with the requirements of the Code and any regulations promulgated hereunder. The Issuer further covenants that it will neither take any action nor omit to take any action the taking or omission of which would render interest on the Series 1985 Bonds subject to Federal income taxation. Any certificate given under . this section shall be considered a representation of the Issuer under this Bond Ordinance, and an executed copy of any such certificate shall be filed in the office of the Village Clerk. Section 15. General. The Village President and Village Clerk or Deputy Village Clerk and all other officers of the Issuer are hereby authorized and.directed, in the name and on behalf of the Issuer, to execute any and all certificates and other matters, and do any and all things deemed by them necessary or desirable in order to carry out the purposes of this Bond Ordinance (including the preambles hereto), the acquisition of the Project by the Owners, the issuance and sale of the Series 1985 Bonds and the securing of the Series 1985 Bonds under and pursuant to the Indenture. Section 16. Ratification of Proceedings. All proceedings, resolutions and actions of the Issuer and its officers and agents taken in connection with the issuance and sale of the Series 1985 Bonds are hereby ratified, confirmed and approved. Section 17. Execution of Bond Ordinance. Immediately after its passage, this Bond Ordinance shall be signed by the -14- t Village President and attested by the Village Clerk, and shall be placed in the corporate records of the Issuer. Section 18. Severability. It is hereby declared that all parts of this Bond Ordinance (except Section 4) are severable and that if any section, paragraph, clause or provision of this Bond Ordinance shall, for any reason, be held to be invalid or unenforceable, the invalidity or. unenforceability of any such section, paragraph, clause or provision shall not affect the remaining provisions of this Bond Ordinance. Section 19. Conflicting Ordinances, etc.. All ordinances, resolutions and regulations or parts thereof heretofore adopted or passed which are in conflict with any of the provisions of this Bond Ordinance are, to the extent of such conflict, hereby repealed. Section 20. Effective Date. This Bond Ordinance shall become effective and shall be in full force immediately upon its adoption. PASSED AND APPROVED this 15th day of July, 1985. Village President ATTEST: Village, ; .lerk AYES: 6 - Marienthal, O'Reilly, Glover, Reid, Shields, Kowalski NAYES: 0 - None ABSENT: 0 - None -15-