1991-042ORDINANCE NO. 91 -42
ORDINANCE authorizing and directing the
execution of an Escrow Agreement in con-
nection with the issuance of $8,060,000
Special Service Area Number One Refunding
Bonds, Series 1991, of the Village of
Buffalo Grove, Lake and Cook Counties,
Illinois.
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WHEREAS, the Village of Buffalo Grove, Lake and Cook
Counties, Illinois (the "Municipality "), has provided by
Ordinance No. 91 -41 heretofore adopted by the President and Board
of Trustees of the Municipality (the "Corporate Authorities ") on
the 18th day of March, 1991, for the issuance 'of $8,060,000
Special Service Area Number One Refunding Bonds, Series 1991,
dated April 1, 1991 (the "Bonds "); and
WHEREAS, proceeds of the Bonds will be used to refund
in advance of maturity the outstanding Special Service Area
Number One Bonds, Series 1985, of the Municipality (the "Refunded
Bonds "), as more fully described in the form of Escrow Agreement
set forth herein (the "Escrow Agreement "); and
WHEREAS, in order to properly provide for the refunding
of the Refunded Bonds, it will be necessary to place proceeds of
the Bonds in trust with an escrow agent to be invested by such
escrow agent, on behalf of the Municipality, in U.S. Treasury
Certificates of Indebtedness, Notes or Bonds (State and Local
Government Series); and
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WHEREAS, in accordance with the terms of the Refunded
Bonds and with the provisions of the escrow agreement, the
Refunded Bonds are to be called for redemption in advance of
maturity, and it is necessary to make such call and provide for
the giving of proper notice to holders or registered owners of
the Refunded Bonds; and
WHEREAS, such investments must be of amount and kind
such that the principal and interest thereon will be sufficient,
when added to such beginning deposit on demand to be derived from
proceeds of the Bonds with the escrow agent as may be necessary,
to pay all interest and premium on and principal of the Refunded
Bonds up to and including the redemption of the Refunded Bonds on
December 1, 1996; and
WHEREAS, it is necessary that the Corporate Authorities
authorize the form of agreement with an escrow agent and direct
the execution of the Escrow Agreement by officers of the Munici-
pality:
NOW, THEREFORE, Be It Ordained by the President and
Board of Trustees of the Village of Buffalo Grove, Lake and Cook
Counties, Illinois, as follows:
Section 1. Definitions. The words and terms used in
this ordinance shall have the definitions set forth for them in
the Escrow Agreement, unless the context or use of same shall
clearly indicate that another meaning is intended.
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Section 2. The Funding of the Escrow. As provided in
the Bond Ordinance, so much of the proceeds of the Bonds as may
be necessary shall be used to pay all interest and premium on and
principal of the Refunded Bonds up to and including the redemp-
tion of the Refunded Bonds on December 1, 1996. Such money will
be deposited in trust in the Escrow Account with the Escrow Agent
as provided in this ordinance. The amount thereof necessary to
be deposited in the Escrow Account shall be conclusively estab-
lished under the terms of the Escrow Agreement by. the execution
thereof by designated officers of the Municipality.
Section 3. Call of Certain of the Refunded Bonds. In
accordance with the redemption provisions of the ordinance au-
thorizing the issuance of the Refunded Bonds, the Municipality by
the Corporate Authorities does hereby make provision for the
payment of and does hereby call (subject only to the delivery of
the Bonds) the Refunded Bonds for redemption and payment prior to
maturity on December 1, 1996, all as further provided by the
terms of the Agreement.
Section 4. Form and Authorization of Escrow Agree-
ment. The Escrow Agreement and all the terms thereof, in the
form provided hereby, and the Escrow Agent as named therein is
hereby approved, and the Village President and Village Clerk are
hereby authorized and directed to execute the Escrow Agreement in
the name of the Municipality. The Escrow Agreement shall be in
substantially the following form:
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ESCROW AGREEMENT
This Escrow Agreement dated as of April 1, 1991, but
actually executed on the date witnessed hereinbelow, by and
between the Village of Buffalo Grove, Lake and Cook Counties,
Illinois, and The First National Bank of Chicago, a national
banking association organized and operating under the laws of the
United States of America, with its principal corporate trust
office located in Chicago, Illinois, not individually but in the
capacity as hereinafter described, for and in consideration of
the mutual promises herein contained:
W I T N E S S E H
Article 1. DEFINITIONS
The following words and terms used in this Agreement
shall have the following meanings unless the context or use
clearly indicates another or different meaning:
Section 1.01. "Agreement" means this Escrow Agreement
dated as of April 1, 1991.
Section 1.02. "Bonds" means $8,060,000 Special Service
Area Number One Refunding Bonds, Series 1991, of the Munici-
pality, the proceeds of which are to be used for the refunding of
the Refunded Bonds.
Section 1.03. "Bond Ordinance" means Ordinance No.
91 -41 passed on the 18th day of March, 1991, by the Corporate
Authorities and authorizing the Bonds.
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Section 1.04. "Corporate Authorities" means the
President and Board of Trustees which is the governing body of
the Municipality.
Section 1.05. "Escrow Account" means the trust fund
created under the terms of this Agreement with the Escrow Agent
and comprised of the Government Securities and a certain begin-
ning deposit as more fully stated in Section 2.02 hereof.
Section 1.06. "Escrow Agent" means The First National
Bank of Chicago, a national banking association, organized and
operating under the laws of the United States of America, with
its principal corporate trust office located 'in Chicago,
Illinois, not individually but in the capacity for the uses and
purposes hereinafter mentioned, or any successor thereto.
Section 1.07. "Escrow SLGs" means United States
Treasury Certificates of Indebtedness, Notes and /or Bonds, State
and Local Government Series, purchased with original proceeds of
the Bonds in the amount of $7,896,700 and proceeds of the
Refunded Bonds in the amount of $399,100, and deposited
hereunder.
Section 1.08. "Government Securities" means the Escrow
SLGs and the Open Markets.
Section 1.09. "Municipality" means the Village of
Buffalo Grove, Lake and Cook Counties, Illinois.
Section 1.10. "Open Markets" means the obligations
guaranteed by the full faith and credit of the United States of
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America as to principal and interest, purchased with proceeds of
the Refunded Bonds in the amount of $1,185,400.65, and deposited
hereunder.
Section 1.11. "Paying Agent" means the American
National Bank and Trust Company of Chicago, Chicago, Illinois,
the paying agent and bond registrar for the Refunded Bonds.
Section 1.12. "Refunded Bonds" means the following
described bonds of the Municipality from time to time outstand-
ing:
$8,250,000 Special Service Area Number One Bonds, Series
1985, dated December 1, 1985, fully registered and with-
out coupons, due serially on December 1 of the years and
in the principal amounts and bearing interest at the
rates per annum as follows:
Year of
Principal
Rate of
Maturity
Amount
Interest
1999
$ 800,000
9.50%
2000
900,000
9.50%
2001
1,050,000
9.50%
2002
1,150,000
9.60%
2003
1,300,000
9.70%
2004
1,500,000
9.80%
2005
1,550,000
9.90%
Section 1.13.
"Treasurer" means
the Treasurer of the
Municipality or the Treasurer's designated agent.
ARTICLE II. CREATION OF ESCROW
Section 2.01. All of the Refunded Bonds are hereby
refunded by the deposit with the Escrow Agent of the sums set
forth in Sections 1.07 and 1.10 hereof. Such deposit shall be
sufficient to purchase the Government Securities described in
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Section 2.02 hereof which (with the beginning deposit) will
provide all moneys necessary to pay all interest and premium on
and principal of the Refunded Bonds up to and including the
redemption of the Refunded Bonds on December 1, 1996.
Section 2.02. The Municipality has deposited with the
Escrow Agent at the execution and delivery of this Escrow Agree-
ment the Government Securities and cash described as follows:
Description
Certificate
of
Indebtedness
Certificate
of
ESCROW SLGs
Dated April 4, 1991
Rate Maturity Date of First
Amount (o) Date 'Interest Payment
$ 303,200 5.6900
Indebtedness
102,400
6.0400
Note
106,600
6.2400
Note
109,800
6.6600
Note
113,500
6.9700
Note
117,500
7.0900
Note
121,600
7.2200
Note
126,100
7.3900
Note
130,600
7.4611
Note
135,600
7.4611
Note
140,600
7.4611
Note
6,788,300
7.4612
.$8,295,800
Beginning Cash
Balance = $ -0-
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06/01/91
12/01/91
06/01/92
12/01/92
06/01/93
12/01/93
06/01/94
12/01/94
06/01/95
12/01/95
06/01/96
12/01/96
06/01/91
12/01/91
06/01/91
06/01/91
06/01/91
06/01/91
06/01/91
06/01/91
06/01/91
06/01/91
06/01/91
06/01/91
Description
STRIP
%%� v o
OPEN MARKETS
Maturity
Amount
$1,855,000
Purchase
Price
$1,185,400.65
Rate of
Interest
-0-
Maturity
Date
11/15/96
Section 2.03. The Escrow Agent and the Municipality
have each received the report of Jerry L. Lacy, Certified Public
Accountant, Cave Creek, Arizona, that the principal of and income
and profit to be received from the Government Securities, when
paid at maturity, and the cash held in accordance with Section
2.02 hereof, will be sufficient, at all times pending the final
payment of the Refunded Bonds, to pay all interest and premium on
and principal of the Refunded Bonds up to and including the re-
demption thereof.
ARTICLE III. COVENANTS OF ESCROW AGENT
The Escrow Agent covenants and agrees with the Munici-
pality:
Section 3.01. The Escrow Agent will hold the Govern-
ment Securities and all income and profit derived therefrom and
all uninvested cash in a segregated and separate trust fund
account for the sole and exclusive benefit of the Municipality
and the holders of the Refunded Bonds to the purposes for which
escrowed.
Section 3.02. The Escrow Agent will reinvest available
uninvested balances (rounded down to an even $100) in the Escrow
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Account on deposit from time to time, whenever said balances
exceed $1,000, but only in zero -yield obligations issued directly
by the Bureau of Public Debt of the United States Treasury (cur-
rently designated "United States Treasury Securities - State and
Local Government Series - Certificates of Indebtedness, Notes, or
Bonds "). Investments so made shall be scheduled to mature on the
next succeeding interest payment date on the Refunded Bonds on
which such funds are required to pay debt service on the Refunded
Bonds. The.Escrow Agent shall hold balances not so invested in
the Escrow Account on demand and in trust for the purposes hereof
and shall secure same in accordance with applicable Illinois law
for the securing of public funds.
Section 3.03. The Escrow Agent will take no action in
the investment or securing of the proceeds of the Government
Securities which would cause the Bonds to be classified as
"arbitrage bonds" under Section 148 of the Internal Revenue Code
of 1986, and all lawful regulations promulgated thereunder, pro-
vided, it shall be under no duty to affirmatively inquire whether
the Government Securities as deposited are properly invested
under said Section; and, provided, further, it may rely on all
specific directions in this Agreement in the investment or rein-
vestment of balances held hereunder.
Section 3.04. The Escrow Agent will promptly collect
the principal,, income and profit from the Government Securities
and promptly apply the same solely and only to the payment of the
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principal of and interest and premium on the Refunded Bonds as
the same are due and redeemed and to such other purposes as are
herein expressly stated.
Section 3.05. The Escrow Agent will remit to the Pay-
ing Agent in good funds on or before each principal redemption
and interest payment date of the Refunded Bonds moneys sufficient
to pay such principal, premium and interest as will meet the
requirements for the timely payment of said Refunded Bonds as set
out in the report described in Section 2.03 hereof,'and each such
remittance shall fully release and discharge the Escrow Agent
from any further duty or obligation thereto under this Agreement.
Section 3.06. The Escrow Agent will make no payment of
fees, due or to become due, of the paying agent and bond regis-
trar on the Bonds or the Paying Agent, and the Municipality
covenants to pay the same as they become due.
Section 3.07. The charges, fees and expenses of the
Escrow Agent in the amount of $3,000 have been paid in advance,
and except as set forth in Section 3.08 hereof, all of the
charges, fees and expenses of the Escrow Agent for carrying out
any of the duties, terms or provisions of this Agreement shall be
paid solely therefrom.
i Section 3.08. The Municipality has called Refunded
i
Bonds for redemption and payment prior to maturity on December 1,
1996. The Escrow Agent will direct the Paying Agent to provide
for and give a timely notice of the call of the Refunded Bonds,
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and will give such timely notice if the Paying Agent does not do
SO. The Municipality shall reimburse the Escrow Agent for its
actual out of pocket expenses incurred in the giving of such
notice, but the failure of the Municipality to make such payment
shall not in any respect whatsoever relieve the Escrow Agent from
carrying out any of the duties, terms or provisions of this
,Agreement.
Section 3.09. The Escrow Agent has all the powers and
duties herein set forth with no liability in connection with any
act or omission to act hereunder, except for its own negligence.
or willful breach of trust, and shall be under no obligation to
institute any suit or action or other proceeding under this
Agreement or to enter any appearance in any suit, action or pro-
ceeding in which it may be defendant or to take any steps in the
enforcement of its, or any, rights and powers hereunder, nor
shall be deemed to have failed to take any such action, unless
and until it shall have been indemnified by the Municipality to
its satisfaction against any and all costs and expenses, outlays,
counsel fees and other disbursements, including its own reason-
able fees, and if any judgment, decree or recovery be obtained by
the Escrow Agent, payment of all sums due it, as aforesaid, shall
i
be a first charge against the amount of any such judgment, decree
or recovery.
Section 3.10. The Escrow Agent may in good faith buy,
sell or hold and deal in any of the Bonds or Refunded Bonds.
I
t
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Section 3.11. The Escrow Agent will submit to the
Treasurer a statement within ten (10) days after June 2 and
December 2 of each calendar year, commencing June 2, 1991, item-
izing all moneys received by it and all payments made by it under
the provisions of this Agreement during the preceding six (6)
month period, and also listing the Government Securities on
deposit therewith on the date of said report, including all
moneys held by it received as interest on or profit from the
collection of said Government Securities.
Section 3.12. If at any time it shall appear to the
Escrow Agent that the available proceeds of the Government Secu-
rities and deposits on demand in the Escrow Account will not be
sufficient to make any payment due to the holders of any of the
Refunded Bonds, the Escrow Agent shall notify the Municipality
not less than five ( 5 ) days prior to such date, and the Munici-
pality agrees that it will from a deficiency tax levy in Special
Service Area Number One of the Municipality make up the
anticipated deficit so that no default in the making of any such
payment will occur.
ARTICLE IV. COVENANTS OF MUNICIPALITY
The Municipality covenants and agrees with the Escrow
Agent as follows:
Section 4.01. The Escrow Agent shall have no respon-
sibility or liability whatsoever for (a) any of the recitals of
the Municipality herein, (b) the performance of or compliance
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,vith any covenant, condition, term or provision of the Bond Ordi-
nance, and (c) any undertaking or statement of the Municipality
hereunder or under said Bond Ordinance.
Section 4.02. The Municipality will promptly and with-
out delay remit to the Escrow Agent, as soon practical after
receipt of its written request, such sum or sums of money
available from a deficiency tax levy in Special Service Area
Number One of the Municipality as are necessary to make the
payments required under Section 3.12 hereof and to-fully pay and
discharge any obligation or obligations or charges, fees or
expenses incurred by the Escrow Agent in carrying out any of the
duties, terms or provisions of this Agreement, that are in excess
of the sums expressly deposited hereunder. The Municipality will
promptly pay all Paying Agent fees as submitted.
Section 4.03. All payments to be made by, and all acts
and things required to be done by, the Escrow Agent under the
terms and provisions hereof shall be made and done by said Escrow
Agent without any further direction or authority of the Munici-
pality or Treasurer.
ARTICLE V. IRREVOCABILITY OF AGREEMENT
Section 5.01. All of the rights, powers, duties and
obligations of the Escrow Agent hereunder shall be irrevocable
and shall not be subject to amendment by the Escrow Agent and
shall be binding on any successor to the Escrow Agent during the
term of this Agreement.
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Section 5.02. All of the rights, powers, duties and
obligations of the Municipality hereunder shall be irrevocable
and shall not be subject to amendment by the Municipality and
shall be binding on any successor to the officials now comprising
the Corporate Authorities of the Municipality during the term of
this Agreement.
Section 5.03. All of the rights, powers, duties and
obligations of the Treasurer hereunder shall be irrevocable and
shall not be subject to amendment by the Treasurer and shall be
binding on any successor to said official now in office during
the term of this Agreement.
ARTICLE VI. NOTICES TO THE MUNICIPALITY,
THE TREASURER AND THE ESCROW AGENT
Section 6.01. All notices and communications to the
Municipality and the Corporate Authorities shall be addressed in
writing to:
Village of Buffalo Grove
50 Raupp Boulevard
Buffalo Grove, Illinois 60089
Attention: Village Clerk
Section 6.02. All notices and communications to the
Escrow Agent shall be addressed in writing to:
Corporate Trust Department
The First National Bank of Chicago
One First National Plaza Suite 0126
Chicago, Illinois 60670
F
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Section 6.03. All notices and communications to the
Treasurer shall be addressed in writing to:
Village Treasurer
Village of Buffalo Grove
50 Raupp Boulevard
Buffalo Grove, Illinois 60089
ARTICLE VII. TERMINATION OF AGREEMENT
Section 7.01. Upon the retirement of the Refunded
Bonds as hereinabove provided for, the Escrow Agent will transfer
any balance,remaining in the Escrow Account to the Treasurer with
due notice thereof mailed to the Municipality, and thereupon this
Agreement shall terminate.
IN WITNESS WHEREOF, the Village of Buffalo Grove, Lake
and Cook Counties, Illinois, has caused this Agreement to be
signed in its name by its Village President, to be attested by
the Village Clerk of the Municipality under its _municipal seal
hereunto affixed; and The First National Bank of Chicago,
Chicago, Illinois, not individually, but in the capacity as
hereinabove described, has caused this Agreement to be signed in
its corporate name by one of its officers and to be attested by
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one of its officers under its corporate seal hereunto affixed,
all effective as of this 4th day of April, 1991.
VILLAGE OF BUFFALO GROVE, LAKE AND
COOK COUNTIES, ILLINOIS
By !' }�
Attest:,. Village President
Tyt
.
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L -V; lage Clerk
.SEAL )
1`
THE FIRST NATIONAL BANK OF CHICAGO
Chicago, Illinois
By
is
Attest:
Its
(BANK SEAL)
This Escrow Agreement received and acknowledged by me
effective this 4th day of April, 1991.
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PFI
FinancejDirector
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Section 5. Purchase of Government Securities. Griffin,
Kubik, Stephens & Thompson, Inc., Chicago, Illinois, and Chapman
and Cutler, Chicago, Illinois, be and the same are each hereby
authorized to act as agent for the Municipality in the purchase
of the Government Securities described and set forth in the
Agreement.
Section 6. Severability. If any Section, paragraph,
clause or provision of this ordinance shall be held invalid, the
invalidity of such Section, paragraph, clause or provision shall
not affect any of the other provisions of this ordinance.
Section 7. Repealer. All ordinances, resolutions or
orders or parts thereof in conflict with the provisions of this
ordinance are to the extent of such conflict hereby repealed.
Section 8. Effective Date. This ordinance shall be in
effect immediately upon its passage by the Corporate Authorities
and signing and approval by the Village President of the
Municipality. This ordinance shall not be codified.
ADOPTED March 18, 1991.
AYES: 6 - Marienthal Reid Shifrin Mathias O'Malley, Kahn
NAYS: 0 -
ABSENT: 0 - None
APPROVED March 18, 1991.
Attest:
Village Preside
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