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2022-06-20 - Ordinance 2022-064 - Providing for the issuance of Tax Increment Financing Revenue Notes (Buffalo Grove Lake Cook Road Project) and providing for the execution of a depository agreement and note orders in connection therewithORDTNANCE NUM BER 2022-064 AN ORDINANCE providing for the issuance of Tax Increment Financing Revenue Notes (Buffalo Grove Lake Cook Road Project), of the Village of Bullalo Grove, Lake and Cook Counties. Illinois, and providing for the execution of a depository agreement and note orders in connection therewith. Adopted by the President and Board of Trustees on the 20th da) of June.2022. Published in Pamphlet Form by Authority of said Corporate Authorities on the 20th day of June, 2022 ORDr\A\cE Nr:MBER 2022-064 AN ORDINANCE providing lor the issuance of Tax Increment Financing Revenue Notes (Buffalo Grove Lake Cook Road Project), of the Village of Buffalo Grove, Lake and Cook Counties, Illinois, and providing for the execution of a depository agreement and note orders in connection therewith. WHEREAS. the Village of Buffalo Grove, Lake and Cook Counties, Illinois (the " Village "), is a duly organized and existing municipality created under the provisions of the law ofthe State oflllinois (the "State"). and is now operating under the provisions ofthe Illinois Municipal Code, as amended (the " Municipal Code "), including the Tax Increment Allocation Redevelopment Act, as supplemented and amended (the "TIF Act"), the Local Covemment Debt Reform Act of the State, as amended (the "Debt Reform Act"), the other Omnibus Bond Acts of the State, each as amended, and the powers ofthe Village as a home rule unit of government authorized to exercise any power or perform any function pertaining to its govemment and affairs, including, but not limited to, the power to tax and incur debt (the " Home Rule Powers" and, collectively with the Municipal Code. the TIF Act, the Debt Reform Act and the other Omnibus Bonds Acts, the "lcl ")l and WHEREAS, in accordance with the Act. on the 20th day of July, 2020, the President and Board of Trustees ofthe Village (the "Corporate Authorities") adopted (A) Ordinance No. 2020- 056, approving a redevelopment plan (the " Redevelopment Plan") and project for The 2020 Buffalo Grove Lake Cook Road TIF District Redevelopment Project Area (as legally described in the Redevelopment Agreement (as hereinafter defined), the " Redevelopmenl Project Area"), (B) Ordinance No. 2020-057, designating the Redevelopment Project Area, and (C) Ordinance No. 2020-058, adopting tax increment allocation financing for the Redevelopment Project Area and creating a special tax allocation fund therefor (the "Special Tax Allocation Fund"); and WHEREAS, on the 20th day of June. 2022, the Corporate Authorities adopted Ordinance Number 2022-062, authorizing the execution of that certain Redevelopment Agreement (the " Redevelopment Agreement") among the Village, IMKD 5 LLC (the " Retail Developer") and BGA Residential, LLC (the " Residential Developer" and, together with the Retail Developer, the " Developers "); and WHEREAS, pursuant to the Redevelopment Agreement the Developers have agreed to assemble real properfy or rights therein on a site within the Redevelopment Project Area (as legally described in the Redevelopment Agreement, the " Property "), and to construct on the Property certain retail, commercial and office improvements (including all electrical, engineering, financial, legal and other related services and expenditures, collectively, the " Redevelopment Proiect"), as described in the Redevelopment Agreement; and WHEREAS, the Village has heretofore determined that it is advisable and necessary and in the best interests of the Village that the costs of the Redevelopment Project now be paid or reimbursed, and, to that effect, the Village wishes to provide in this Ordinance for the issuance of the hereinafter defined Notes, for the continuation and operation of the Special Tax Allocation Fund and the accounts therein, and for the execution of a Depository Agreement (as hereinafter defined) to be executed by the Village related to certain ofthe Notes; and WHEREAS, all ofthe costs of the Redevelopment Project to be financed with the proceeds of the Notes constitute eligible "redevelopment project costs" under the TIF Act and have been approved by the Corporate Authorities in the Redevelopment Plan; and WHEREAs, the Village has insufficient cash on hand and lalldrlly available to pay the costs of the Redevelopment Project and does hereby determine that it is necessary and advisable at this time to borrow money, and in evidence thereofissue various series ofrevenue notes ofthe Village in the aggregate principal amount ofnot to exceed $28,000,000 to pay the same; and WHEREAS, the Corporate Authorities hereby determine that it is advisable to provide for the issuance of the Notes secured by the Village Funds (as hereinafter defined) and to establish the priority of Iiens therefrom: Now, THEREFoRp, Be It Ordained by the President and Board of Trustees of the Village of Buffalo Grove, Lake and Cook Counties, Illinois, in the exercise of its home rule powers, as follows: Section l. Incorporation of Preambles. The Corporate Authorities hereby find that all of the recitals contained in the preambles to this Ordinance are true, correct and complete and do incorporate them into this Ordinance by this reference. Section 2. Definitions. The following words and terms used in this Ordinance shall have the following meanings unless the context or use clearly indicates another or different meaning is intended. A. The following words and terms are as defined in the preambles hereto. Act Corporate Authorities Debt Relorm Act Developers Home Rule Powers Municipal Code Property Redevelopment Agreement Redevelopment Plan Redevelopment Project Redevelopment Project Area Residential Developer Retail Developer Special Tax Allocation Fund State TIF Act Viltage B. The following words and terms are defined as set forth. "Accounts " means, collectively, the First Lien Note and Interest Account, the Second Lien Note and Interest Account and the Third Lien Note and Interest Account. "Authorized Denominations" means $100,000 and increments of$1 in excess thereof, or such other denominations as set forth in a Note Order. " Bond Counsel" means Chapman and Cutler LLP, Chicago, Illinois, or any other nationally recognized bond counsel acceptable to the Village. "Code " mears the Intemal Revenue Code of 1986, as amended. "Counties" means The Counties oflake and Cook, Illinois. " County Clerl<s" means the County Clerks of the Counties. "Current Debt Service Requiremer?/ " means, with respect to any ofthe Notes, the principal ofand interest on such Note due during the current Note Year. " Designated Officers" means the President, Clerk, Deputy Village Clerk, Village Manager, Deputy Village Manager, Treasurer, and the Director of Finance and General Services or any two of them acting together, and successors or assigns. " Excess Amount Account" has the meaning set forth in Section l0 hereof. " Final Maturity" means (A) the date on which the Village has made provision for or payment in full of all principal of and interest on a series of the Notes, or (B) the Final Maturity Date. " Final Maturity Dale " means the earlier of20 years from the date ofissuance or December 31,2044. "First and Second Lien Note Issuance Date" mear,s the date on which the Funding Conditions (as defined in the Redevelopment Agreement) are met. "First Lien Debt Service Reserve Requirement" fieans $500,000. "First Lien Note and Interest Account" mearrs the First Lien Note and Interest Account of the Special Tax Allocation Fund created hereunder for the payment ofthe principal ofand interest on the First Lien Note. "Firsl Lien Note " means the Tax-Exempt Notes issued on the First and Second Lien Note Issuance Date for purposes of reimbursing a portion ofthe costs ofthe Project, payable from the First Lien Note and Interest Accounl. " lncremental Property Taxes " means the ad valorem taxes, ifany, arising from the taxes levied upon the Property, which taxes are atributable to the increases in the then current equalized assessed value ofeach taxable lot, block, tract, or parcel in the Property over and above the total initial equalized assessed value of each such lot, block, tract, or parcel of real property, all as determined by the County Clerks pursuant to and in accordance with the TIF Act, the TIF Ordinances and the Redevelopment Agreement. " lnflalionary Incremental Property Tax Revenues" means the annual projected incremental ad valorem taxes on certain property within the Redevelopment Project Area as set forth in the Redevelopment Agreement. "NCH Incremental Property Tax Revenues" means the Incremental Property Taxes generated from the parcels comprising the Northwest Community Hospital development including the future outlot, less Village administrative fees of 5Yo, all as provided in the Redevelopment Agreement. "Note Order" means the written note order signed by the Designated Officers either setting forth certain details ofa series ofthe Notes as described in Section 1l hereof or a Village Pledge Deficiency as described in Section 4(i) hereof. "Note Register" means the books ofthe Village kept by the Note Registrar to evidence the registration and transfer of the Notes. "Note Registrar " means the Treasurer of the Village, as note registrar and paying agent, or a successor thereto. "Note Year" means that 12 calendar month period beginning on January 2 ofany calendar year and ending on January 1 ofthe following calendar year. "Noteholder " or "holder" means the registered owner of a Note. "Nore.r " means, collectively, the First Lien Note, the Second Lien Note and the Third Lien Note. " Ordinance " means this Ordinance, numbered 2022-064 and passed by the Corporate Authorities on the 20th day of 1une,2022. "Outstanding" when used with reference to Notes, or "Notes Outstanding" means all Notes which have been authenticated and delivered by the Note Registrar, except the following: (a) Notes canceled or delivered to the Note Registrar for cancellation. (b) Notes that have become due (at maturity, on redemption, or otherwise) and for the payment, including interest accrued to the due date, of which sufficient moneys are held by the Note Registrar. (c) Notes deemed paid in accordance with this Ordinance. (d) Notes in lieu ofwhich others have been authenticated hereunder. " Project Incremental Property Tax Revenues" means the Incremental Property Taxes from the Project, less annual Village administrative fee of 570. "Property" shall have the meaning ascribed to such term in the Redevelopment Agreement. " Qualified Purchaser" means either (i) a "qualified institutional buyer" as defined in Rule 144,{ promulgated by the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended, or (ii) an "accredited investor" as defined in Rule 501 of Regulation D as promulgated by the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended, executing and delivering to the Village a Qualified Purchaser Letter. "Qualified Purchaser Lelter" means a leuer provided by a Qualified Purchaser to the Village in connection with the transfer or assignment ofthe First Lien Note or the Second Lien Note in a form customary in the industry lor transactions ofthis nature. " Record Date " means the date set forth in the Note Order for a series ofthe Notes ofeach calendar year with respect to any regularly scheduled interest payment date and the fifteenth day prior to any interest payment date caused by a redemption of Notes on other than a regularly scheduled interest payment date. "Sales Tax" shall have the meaning ascribed to such term in the Redevelopment Agreement. "Second Lien ly'ole " means the Tax-Exempt Notes issued on the First and Second Lien Note Issuance Date for purposes of reimbursing a portion ofthe costs ofthe Project, payable from the Second Lien Note and Interest Account. "Second Lien Note and Interest Account" means the Second Lien Note and Interest Account ofthe Special Tax Allocation Fund created hereunder for the payment ofthe principal of and interest on the Second Lien Note. "Shared Sales Tat Revenues " means fifty percent (50%) of the result of subtracting from Sales Tax the first $250,000 of Sales Tax per year. "Stqled Maturity " when used with respect to any Notes or any interest thereon means the date specified in the Notes as the fixed date on which the principal ofthe Notes or such interest is due and payable, whether by maturity, mandatory redemption, or otherwise. "Tax-Exempt" means, with respect to Notes, the status of interest accrued, paid and received thereon as excludable from the gross income of the owners thereof under the Code for federal income tax purposes. "Tax-Exempt Nores " means, collectively, all series of Notes issued as Tax-Exempt. "Tarable Notes" means any Notes issued hereunder on other than a Tax Exempt basis. "Third Lien Nore " means the Notes issued on the Third Lien Note Issuance Date for the purposes of reimbursing a portion ofthe costs ofthe Project, payable from the Village Funds. "Third Lien Note and Interest Account" means the Third Lien Note and Interest Account of the Special Tax Allocation Fund created hereunder for the payment of the principal of and interest on the Third Lien Note. " Third Lien Note Taxable Inlerest ncle " means the rate equal to the greater of (i) 150% of the Third Lien Note Tax-Exempt Interest Rate or (ii) 600 basis points above the 20-year U.S. treasury security as set forth on the Daily Treasury Par Yield Curve Rates on the treasury.gov website on the Third Lien Note Issuance Date, but in no event to exceed twelve percent per annum (t2%). "Third Lien Note T*t-Exempt Interest Rate" means 6.75oh. "Third Lien Note Issuance Ddte" means the date on which all of the conditions set forth in the first sentence ofSection 5.3(B) olthe Redevelopment Agreement have been satisfied. "Village Funds " mears, collectively, the Project Incremental Property Tax Revenues, the NCH Incremental Property Tax Revenues, the Shared Sales Tax Revenues and the Inflationary Incremenlal Property Tax Revenues pledged to the payment ofthe Notes, subject to the terms of the Redevelopment Agreement. Section 3. Determination to Issue Notes. It is necessary and in the best interests ofthe Village to borrow money and issue the Notes to reimburse a portion of the costs of the Redevelopment Project as enumerated in the preambles hereto, and all related costs and expenses incidental thereto. It is hereby expressly found and determined that such borrowings are authorized pursuant to the Act, is a proper public purpose for the Village, and is further authorized pursuant to the home rule authority of the Village. Section 4. Note Details . (a) General. For the purposes specified in Section 3 there shall be issued to the Retail Developer, in reimbursement of TIF Eligible Expenses (as defined in the Redevelopment Agreement) incurred thereby, as determined in accordance with the Redevelopment Agreement, the various series of Notes described in paragraphs (b) through (d) of this Section. In the aggregate, the principal amount olall Notes issued hereunder, upon issuance, shall not exceed $28,000,000, with each series of the Notes being also subject to the separate, respective principal limitations set forth in said subsections (b) through (d). The Notes shall be issued pursuant to this Ordinance and a Note Order with respect to each series of Notes to be issued, and shall be issued upon the incurrence of TIF Eligible Expenses by the Retait Developer which has been certified to the Village as described in the Redevelopment Agreement. In accordance with Section 5.3(A) of the Redevelopment Agreement, the net proceeds from the issuance olthe Notes to the Retail Developer shall not exceed $22,750,000. (b) The First Lien Nore. The First Lien Note shall be issued on the First and Second Lien Note Issuance Date in a principal amount not to exceed $20.000,000, shall be designated "First Lien Tax Increment Revenue Note, Series 2022 (Buffalo Grove Lake Cook Road Project)" with such additional titles or designations as shall be deemed necessary to properly identifu the First Lien Note. shall be dated the date of the issuance thereof and shall also bear the date of authentication thereofall as set forth in a Note Order. The First Lien Note shall be Tax-Exempt Notes, shall be in fully registered form, shall be in Authorized Denominations, or such other denominations as shall be set forth in the applicable Note Order, shall be numbered consecutively in such fashion as shall be determined by the Note Registrar, and shall bear interest at the rate of interest set forth in the Note Order (such rate of interest not to exceed 6.75%). The principal of and interest on the First Lien Note will be payable on the dates ofthe years as set forth in the Note Order in accordance with an amortization schedule for the First Lien Note to be issued by the Village on the First and Second Lien Note Issuance Date and included in the Note Order for the First Lien Note, provided, however, that the final maturity ofthe First Lien Note pursuant to such amortization schedule shall be not later than the Final Maturity Date. (c) The Second Lien Note. The Second Lien Note shall be issued on the First and Second Lien Note Issuance Date in a principal amount not to exceed $4,000,000, shall be designated "Second Lien Ta.x Increment Revenue Note, Series 2022 (Btffalo Grove Lake Cook Road Project)" with such additional titles or designations as shall be deemed necessary to properly identifu the Second Lien Note, shall be dated the date ofthe issuance thereof. and shall also bear the date of authentication thereof all as set forth in a Note Order. The Second Lien Note shall be Tax-Exempt Notes, shall be in fully registered form, shall be in Authorized Denominations, or such other denominations as shall be set forth in the applicable Note Order, shall be numbered consecutively in such fashion as shall be determined by the Note Registrar, and shall bear interest at the rate of interest set forth in the Note Order (such rate of interest not to exceed 7 .00%). The principal of and interest on the Second Lien Note will be payable on the dates ofthe years as set forth in the Note Order in accordance with an amortization schedule for the Second Lien Note to be issued by the Village on the First and Second Lien Note Issuance Date and included in the Note Order for the Second Lien Note, provided, however, that the final maturity of the Second Lien Note pursuant to such amortization schedule shall be not later than the Final Maturity Date. (d) The Third Lien Note. The Third Lien Note shall be issued on the Third Lien Note Issuance Date in a principal amount not to exceed $8,000,000, shall be designated "Third Lien Tax Increment Revenue Note, Series 20_ (Buffalo Grove Lake Cook Road Project)" with such additional titles or designations as shall be deemed necessary to properly identift the Third Lien Note, shall be dated the date ofthe issuance thereof, and shall also bear the date of authentication thereofall as set forth in a Note Order. The Third Lien Note shall be in fully registered form, shall be in Authorized Denominations, or such other denominations as shall be set forth in the applicable Note Order, and shall be numbered consecutively in such fashion as shall be determined by the Note Registrar. The Third Lien Note, or any portion thereof, may be issued as Tax-Exempt Notes or Taxable Notes. Third Lien Note issued as Tax-Exempt Notes shall bear interest at the Third Lien Note Tax-Exempt Interest Rate, and Third Lien Note issued as Taxable Notes shall bear interest at the Third Lien Note Taxable Interest Rate. Interest on the Third Lien Note shall be payable on the dates set forth in the Note Order. The principal of the Third Lien Note shall be paid annually on the date set forth in the Note Order, and the amount so paid shall be equal to the amount on hand in the Special Tax Allocation Fund following payment of the principal of and interest then due on the First Lien Note and the Second Lien Note and the payment ofinterest due on the Third Lien Note. The Third Lien Note shall mature at Final Maturity. (e) Additional Provisions. Each Note shall bear interest from the later of its date of issuance as provided herein or from the most recent Interest Payment Date to which interest has been paid or duly provided for, until the principal amount ofsuch Notes are paid or duly provided for. lnterest when due shall be paid as hereinafter provided from (i) with respect to the First Lien Note, from the First Lien Note and Interest Account, (ii) with respect to the Second Lien Note. from the Second Lien Note and Interest Account, and (iii) with respect to the Third Lien Note, from the Third Lien Note and Interest Account. Failure to pay when due any installment of interest or principal on the Notes due to insufficiency of the Village Funds on deposit in such accounts, whether at Stated Maturity, Final Maturity or otherwise, shall in no event be deemed to be an event of default on the Notes, unless such insufficiency is caused by a default by the Village under the Redevelopment Agreement. It is hereby expressly provided that in the event that there is an insufficiency of the respective revenues pledged to the payment of a series of the Notes to pay any amount of principal of or interest on the Notes on Final Maturity, the obligation to pay any such principal ofor interest on the Notes shall be extinguished and shall not be deemed to be owing and unpaid, it being the express intent of the Village that the Notes and all obligations arising thereunder shall be fully released upon Final Maturity, unless such insufhciency is caused by a default by the Village under the Redevelopment Agreement. Interest on each Note shall be paid by check or draft ofthe Note Registrar, payable upon presentation thereof in la*rfirl money of the United States of America, to the person in whose name such Note is registered at the close of business on the Record Date, and mailed to the registered owner of the Note as shown in the Note Registrar or at such other address fumished in writing by such Registered Owner. The principal ofor redemption price due on the Notes shall be payable in lawful money olthe United States of America upon presentation thereofat the principal office maintained for the purpose by the Note Registrar. Section 5. Redemption. (a) Mandatory Redemption. Each of the First Lien Note and the Second Lien Note shall be issued as term notes and shall be subject to mandatory redemption from amounts on deposit in, respectively, the First Lien Note and Interest Account and the Second Lien Note and Interest Account as provided in the amortization schedule set forth in the respective Note Order for such series of the Notes, and as attached to the respective Notes. Each year, on the date set forth in the Note Order, the Note Registrar shall proceed with the redemption and prepayment of the First Lien Note and the Second Lien Note without further notice or direction from the Village, to the extent of and solely from the amount on deposit in the First Lien Note and Interest Account and the Second Lien Note and Interest Account, respectively. (b) Optional Redemption. The First Lien Note and the Second Lien Note are each subject to redemption prior to maturity at the option ofthe Village, in whole or in part, from any available funds, on a date set forth in the Note Order (which date is at least seven years after the First and Second Lien Note Issuance Date), and on any date thereafter, at the redemption price ofpar plus accrued interest to the redemption date. The Third Lien Note is subject to redemption prior to maturity at the option of the Village, in whole or in part, from any available funds, on any date, at the redemption price ofpar plus accrued interest to the redemption date. Section 6. Redemption Procedure. The Notes subject to redemption shall be identified and paid and redeemed and notice given pursuant to the procedures as follows: A. Notice to Note Registrar. The Village shall, at least five (5) days prior to the redemption date (unless a shorter time period shall be satisfactory to the Note Registrar), notiry the Note Registrar of such redemption date and of the maturities and principal amounts of Notes to be redeemed. B. Official Notice o.f Redemption. Unless waived by the registered owner of Notes to be redeemed, official notice of any such redemption shall be given by the Note Registrar on behalf of the Village by mailing the redemption notice by first class U.S. mail not less than 20 days and not more than 60 days prior to the date fixed for redemption to each registered owner of the Note or Notes to be redeemed at the address shown on the Note Register or at such other address as is fumished in writing by such registered owner to the Note Registrar. All official notices of redemption shall include at least the informalion as follows: (1) the redemption date; (2) the redemption price; (3) if less than all ofthe Outstanding Notes ofa particular maturity are to be redeemed, the identification (and, in the case of partial redemption of Notes within such maturity. the respective principal amounts) of the Notes to be redeemed; (4) a statement that on the redemption date the redemption price will become due and payable upon each such Note or portion thereof called for redemption and that interest thereon shall cease to accrue from and after said date; and (5) the place where such Notes are to be sunendered for payment ofthe redemption price, which place of payment shall be the principal office maintained for the purpose by the Note Registrar. C. Conditional Redemption. Unless moneys sufficient to pay the redemption price of the Notes to be redeemed shall have been received by the Note Registrar prior to the giving ofsuch notice ofredemption, such notice may, at the option ofthe Village, state that said redemption shall be conditional upon the receipt of such moneys by the Note Registrar on or prior to the date fixed for redemption. Ifsuch moneys are not received, such notice shall be ofno force and effect, the Village shall not redeem such Notes, and the Note Registrar shall give notice. in the same manner in w'hich the notice of redemption was given, that such moneys were not so received and that such Notes will not be redeemed. D. Notes Shall Become Due. Subject to the stated condition in paragraph C immediately preceding, olficial notice of redemption having been given as aforesaid, the Notes or portions of Notes so to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified. and from and after such date (unless the Village shall default in the payment ofthe redemption price) such Notes or portions ol Notes shall cease to bear interest. Upon surrender of such Notes for redemption accordance with said notice, said Notes shall be paid by the Note Registrar at the redemption price. The procedure for payment of interest due as part ofthe redemption price shall be as herein provided for payment of interest otherwise due. E. Notes to be Cancelled. All Notes which have been redeemed shall be cancelled and destroyed by the Note Registrar and shall not be reissued. Section 7. Execution: Authentication. A. Execution. The Notes shall be executed on behalf of the Village by the manual or facsimile signature of its President and be attested by the manual or facsimile signature of its Village Clerk, as they may determine, and shall have impressed or imprinted thereon the corporate seal or facsimile thereof of the Village. In case any such officer whose signature shall appear on any Note shall cease to be such officer before the delivery ofsuch Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as ifsuch officer had remained in office until delivery. B. Authentication. All Notes shall have thereon a certificate of authentication, duly executed by the Note Registrar as authenticating agent of the Village and showing the date of authentication. No Note shall be valid or obligatory for any purpose or be entitled to any security or benefit under this Ordinance unless and until such certificate of authentication shall have been duly executed by the Note Registrar by manual signature, and such certificate of authentication upon any such Note shall be conclusive evidence that such Note has been authenticated and delivered under this Ordinance. The certificate of authentication on any Note shall be deemed to have been executed by it if signed by an authorized officer of the Note Registrar. but it shall not be necessary that the same oflicer sign the certificate of authentication on all of the Notes issued hereunder. Section 8. Registration of Notes; Identity of Owners. The Village hereby directs the Note Register to be kept at the principal office maintained for that purpose by the Note Registrar in Buffalo Grove, Illinois, which is hereby constituted and appointed the Note Registrar of the Village for the Notes. Notes may be transferred only on the Note Register. Upon surrender for transfer of any Note to the Note Registrar, duly endorsed for transfer or accompanied by an assignment duly executed by the holder or the holder's atlomey duly authorized in writing, the Note Registrar will authenticate a new Note or Notes ofthe same Series in an equal total principal amount and of the same maturity and registered in the name of the transferee. Notes may be exchanged for an equal total principal amount of Notes of the same series and of the same maturity of different authorized denominations. The Note Registrar will authenticate and deliver Notes that the Noteholder making the exchange is entitled to receive, bearing numbers not then outstanding. The Note Registrar will not be required to transfer or exchange any Note called for redemption or during the period beginning 15 days before the mailing ofnotice calling the Notes or any portion ofthe Notes for mandatory purchase or for redemption and ending on the mandatory purchase date or the redemption date, as the case may be. The Note Registrar shall deliver to the transferee any applicable notice of redemption or mandatory tender for purchase when it effects a transfer or exchange ofany Note after the mailing of notice calling the Note or any portion of the Note for redemption or mandatory tender for purchase. The registered owner of a Note shall be the absolute owner of the Note for all purposes, and payment ofprincipal or interest shall be made only to or upon the wfitten order of the holder or the holder's legal representative. The Note Registrar will require the payment by a Noteholder requesting exchange or transfer ofany tax or other govemmental charge required to be paid in respect ofthe exchange or transfer but will not impose any other charge. Each ofthe Notes may be transferred only as a whole, and not in part. The Notes may only be assigned, translerred or pledged as set forth in Section 14 hereof. Section 9. Form of the Noles. The First Lien Note shall be in substantially the form attached hereto as Exhibil A and the Second Lien Note shall be in substantially the form attached hereto as Exhibil B, each with such changes as may be required to reflect the requirements of the applicable Note Order and the Redevelopment Agreement. The Third Lien Note shall be in substantially the form attached hereto as Exhibit C, with such changes as may be required to reflect the requirements of the applicable Note Order and the Redevelopment Agreement. Section 10. Creation ofAccounts: Pledged oJ-Revenues; Flow of Funds. A. Crealion of Accounts. There are hereby created in the Village's Special Tax Allocation Fund, the following accounts ol the Village: the "First Lien Note and Interest Account",lhe "Second Lien Note arul Inleresl Account " and the "Third Lien Note and Interest Account-" There are hereby further created within the First Lien Note and Interest Account the following Accounts: the "Fjrst Lien Note General Accounl ", the "Firsl Lien Note Capitalized Interest Account " and the " First Lien Note Debt Sertice Reserve Account." Payments on the First Lien Note shall be made from the First Lien Note General Account. The First Lien Note Capitalized Interest Account shall hold proceeds of the First Lien Note, said amounts to be used to pay the first interest coming due on the First Lien Note ( "Capiralized Interest")until all amounts on deposit in said account have been fully spent. The First Lien Note Debt Service Reserve Account shall not be funded at the time ofthe issuance ofthe First Lien Note, but will be lunded over time and shall be held for the purpose ofpaying the principal ofand interest on the First Lien Note at such time as there is a deficiency in amounts on hand in the General Account to pay the principal ofand interest on the First Lien Note when due. The First Lien Note Capitalized Interest Account and the First Lien Note Debt Service Reserve Account shall be held by Amalgamated Bank of Chicago. Chicago, Illinois (the " Depository") pusuant to a Depository Agreement between the Village and the Depository in substantially the form attached hereto as Exhibit D. ln accordance with the Depository Agreement, the Depository will transfer funds to the Village for deposit into the General Account ofthe First Lien Note and Interest Account when necessary to make payments on the First Lien Note. There are hereby further created within the Second Lien Note and Interest Account the following Accounts: the "Second Lien Note General Account" and the "Second Lien Note Capitalized Interesl Account." Payments on the Second Lien Note shall be made from the Second Lien Note General Account. The Second Lien Note Capitalized Interest Account shall hold proceeds olthe Second Lien Note, said amounts to be used to pay the first interest coming due on the Second Lien Note until all amounts on deposit in said account have been fully spent. The Second Lien Note Capitalized Interest Account may, if so determined in the Note Order, be held by the Depository pursuant to a Depository Agreement between the Village and the Depository in substantially the form attached hereto as Exhibit D. In accordance with the Depository Agreement, the Depository will transfer funds to the Village for deposit into the General Accoturt ofthe Second Lien Note and Interest Account when necessary to make payments on the Second Lien Note. There are hereby further created within the Third Lien Note and Interest Account the following Accounts: the "Excess Amount Account",the "Tar-Exempt Third Lien Note Account" and the "Taxable Third Lien Note Account." Amounts on deposit in the Excess Amount Account shall be paid to the Retail Developer on the Third Lien Note Issuance Date to reimburse the Retail Developer for Eligibte Expenses. Payments on any Third Lien Note issued as Tax-Exempt Notes shall be paid from the Tax-Exempt Third Lien Note Account, and payments on any Third Lien Nots issued as Taxable Notes shall be paid from the Taxable Third Lien Note Account. B. Pledge of Village Funds. For the prompt payment of principal of and interest on the Notes when due, the Village hereby pledges, in accordance with the priorities set forth below, the Village Funds to the Notes. The Notes, together with the interest thereon are limited obligations of the Village, payable solely and only from (i) with respect to the First Lien Note, the Village Funds on hand in the First Lien Note and Interest Account, (ii) with respect to the Second Lien Note, the Village Funds on hand in the Second Lien Note and Interest Account and (iii) with respect to the Third Lien Note, the Village Funds on hand in the Third Lien Note and Interest ACCOUNI. NO NOTEHOLDER SHALL HAVE THE RIGHT TO COMPEL THE EXERCISE OF ANY TAXINC POWER OF THE VILLACE FOR PAYMENT OF PRINCIPAL THEREOF OR INTEREST ON THE NOTES. THE NorEs Do Nor CoNSTITUTE AN INDEBTEDNESS oF THE VILLAGE oR A LoAN oF CREDIT THEREoF WITHIN THE MEANING OF ANY STATUTORY OR CONSTITUTIONAL LIMITATION. FAILURE TO PAY WHEN DUE ANY INTEREST ON OR PRINCIPAL OF THE NOTES OUE TO INSUFFICIENCY OF THE VILLAGE FUNDS ON DEPOSIT IN THE APPLICABLE ACCOLNT. WHETHER AT STATED MATURITY. FINAL MATURITY OR OTHERWISE, SHALL IN NO EVENT BE DEEMED TO BE AN EVENT OF DEFAULT ON THE NOTES, LTNLESS SUCH INSUFFICIENCY IS CAUSED BY A DEFAULT BY THE VILLACE LNDER THE REDEVELOPMENT AGREEMFNT. C. Flow oJ Funds. The Village covenants and agrees that all Village Funds required to be deposited into the Special Tax Allocation Fund shall be deposited into the Special Tax Allocation Fund as provided in the Redevelopment Agreement. On December 15 of each year, the Treasurer shall deposit all Village Funds which have been received by the Treasurer for deposit into the Special Tax Allocation Fund for deposit to the separate accounts as follows: (a) First Lien Note and Interest Accornt The Treasurer shall first credit to and shall immediately transfer for deposit into the General Account of the First Lien Note and Interest Account the amount of Village Funds necessary to pay the Current Debt Service Requirement for the First Lien Note. If, upon any accounting there are Village Funds in the General Account First Lien Note and Interest Account in excess ofthe Current Debt Service Requirement for the First Lien Note, such excess funds shall first be transferred by the Treasurer to the First Lien Note Debt Service Reserve Account as described below. Except as hereinafter or in any Note Order provided. moneys to the credit of the First Lien Note and Interest Account shall be used solely and only for the purpose ofpaying principal of and premium. if any, and interest on the First Lien Note as the same become due upon maturity or redemption prior to maturity. (b) First Lien Debt Sentice Reserve Accounl. The Treasurer shall next credit the balance ofthe Village Funds to a separate and special account to maintain a debt service reserve for the outstanding First Lien Note, to be known as the First Lien Debt Service Reserve Account. The First Lien Debt Service Reserve Account shall be held by the Depository pursuant to the Depository Agreement. The Treasurer shall credit Village Funds to the First Lien Debt Service Reserve Account until the amount to the credit ofthe First Lien Debt Service Reserve Account aggregates the First Lien Debt Service Reserve Requirement. Thereafter no such payments shall be made by the Treasurer into the First Lien Debt Service Reserve Account except that when any money is paid out of said Account payments shall be resumed and continued until such account has been restored to an aggregate amount equal to the First Lien Debt Service Reserve Requirement. Monies on deposit in the First Lien Debt Service Reserve Account may be used to redeem the First Lien Note, provided, that such monies may only be used to redeem the First Lien Note in whole, and shall be transferred by the Treasurer to the First Lien Note and Interest Account as may be necessary from time to time to prevent or to remedy a default in the payment olprincipal of or interest or premium, if any. on the First Lien Note. \Vhenever the Treasurer has credited to and deposited into the First Lien Debt Service Reserve Account an amount of Village Funds sufficient to maintain a balance to the credit of said Account equal to the First Lien Debt Service Reserve Requirement, and subject to the provisions of and in any order of priority as provided in any Note Order executed in connection with First Lien Note, the Treasurer shall then remit remaining funds to the credit of the Special Tax Allocation Fund into the Second Lien Note and Interest Account. (c) Second Lien Note ond. Interest Account. The Treasurer shall next credit to and shall immediately transfer for deposit into the General Account of the Second Lien Note and Interest Account the amount of Village Funds necessary to pay the Cunent Debt Service Requirement for the Second Lien Note. If, upon any accounting there are Village Funds in the General Account of the Second Lien Note and Interest Account in excess ol the Current Debt Service Requirement for the Second Lien Note, the Treasurer shall then remit remaining funds to the credit of the Special Tax Allocation Fund into the Third Lien Note and Interest Account. Except as hereinafter or in any Note Order provided, moneys to the credit of the Second Lien Note and Interest Account shall be used solely and only for the purpose of paying principal ofand premium, ifany, and interest on the Second Lien Note as the same become due upon maturity or redemption prior to maturity. (d) Third Lien Note and Interest Account. The Treasurer shall next credit to and shall immediately transfer for deposit into the Third Lien Note and Interest Account all of the remaining Village Funds. Until suchtime as the funds held in the First Lien Note Capitalized lnterest Fund have been depleted, such Village Funds shall be deposited into the Excess Amount Account. At the time of the issuance of the Third Lien Note, the funds on hand in the Excess Amount Account shalI be paid to the Retail Developer and the Excess Amount Account shall be closed. Following the issuance of the Third Lien Note, the Viilage Funds shall be deposited into the Tax-Exempt Third Lien Note Account until the amount in said account is sufficient to pay the principal ofand interest on any Tax-Exempt Third Lien Note then outstanding. after which the Village Funds shall be deposited into the Taxable Third Lien Note Account until the amount in said account is sufficient to pay the principal ofand interest on any Taxable Third Lien Note then outstanding. If upon any accounting and such application of funds, there are Village Funds on deposit in the Third Lien Note and Interest Account in excess of the amount necessary or pledged to pay the Third Lien Note, such Village Funds shall be transferred to the General Account as described below. (e) General Account. All moneys remaining to the credit ofthe ofthe Special Tax Allocation Fund. after crediting the required amounts to the respective accounts hereinabove provided for. shall be credited by the Treasurer to the General Account. Moneys on deposit in the General Account shall be transferred by the Treasurer first, il necessary. to the Note Registrar to remedy any deficiencies in any prior accounts in the Special Tax Allocation Fund; second. to the hereinafter-created Rebate Fund as needed to maintain the Tax-Exempt status of any Tax-Exempt Notesl and thereafter at the further discretion ofthe Corporate Authorities, as follows, in any order ofpriority mentioned: (D for the purpose ofpaying any costs of the Redevelopment Project, including any expenses of the Depository and any expenses ofthe Village relating specifically to the administration of. or provision of govemmental services to, the Redevelopment Project Area and the Redevelopment Project; (ii) lor the purpose of redeeming any Notes; (iii) for the purpose olpurchasing any Notes at a price not in excess of par and accrued interest and applicable redemption premium to the date of purchase; (iv) for the purpose ofrefunding or prepaying any Notes; (v) for the purpose of establishing such additional reserves as may be deemed necessary by the Corporate Authorities; (vi) for the purpose ofpaying principal ofor premium or interest on any obligations of the Village issued to pay costs of the Redevelopment Project, whether or not secured by a pledge of monies on deposit in the Special Tax Allocation Fund; (vii) for the purpose of reimbursing the Village for any transfers made from any lawfully available funds of the Village; (viii) for the purpose of distributing such funds to the taxing districts or municipal corporations having the power to tax real property in the Redevelopment Project Area in accordance with Section 1l-74.4-7 ofthe TIF Act; or (ix) for any other purpose related to the Redevelopment Project Area or the Redevelopment Project pursuant to the TIF Act. Notes may be issued secured solely by Village Funds held in and to the credit ofthe General Account, and such Notes shall be in all respects subordinate in right of payment and lien and junior to the Notes. Section I I . Delivery of the Notes, Execution of Note Order. The Designated Officers are hereby authorized to proceed, without any further authorization or direction whatsoever from the Corporate Authorities, to deliver the Notes as directed in the Redevelopment Agreement. The officers ofthe Village are hereby authorized to proceed, without any further official authorization or action by the Corporate Authorities, to approve or execute. or both, such documents as shall be necessary to effectuate the issuance and delivery of the Notes, with such insertions, deletions, additions, modifications or changes as they shall reasonably determine to be desirable, necessary and in the best interests ofthe Village, their approval or execution thereofto constitute ratification by the Corporate Authorities ofany such insertion, deletion. addition, modification or change with no further official action, authorization or determination ol the Corporate Authorities. The agreements in the Redevelopment Agreement for the sale ofthe Notes to the Retail Developer are hereby ratified, approved and confirmed, it being hereby expressly found that no person holding any office of the Village either by election or appointment is in any manner financially interested, either directly in his own narne or indirectly in the name ofany other person, association, trust or corporation. in said agreement with the Retail Developer for the purchase ofthe Notes. Oflcers of the Village as may be necessary are hereby further authorized to execute such documents, including, specifically, the Depository Agreements and such closing documents and certifications as shall be required by Bond Counsel to render their opinion relating to the validity of the Tax-Exempt Notes and the treatment of interest thereon for federal income taxation purposes. In connection with the issuance of each series of the Notes, the Designated Officers shall prepare a Note Order, which shall include the pertinent details of the Notes as required hereby including, specifically, the principal amount of such series of Notes, the amount ofthe First Lien Debt Service Reserve Requirement, ifapplicable, the amount of proceeds of any First Lien Note or Second Lien Note which will be used to pay Capitalized Interest, and the name of the Retail Developer to which such Notes shall be issued. The Note Order shall be made available to all Corporate Authorities members at the next public meeting thereoi but such action shall be for information purposes only, it being the express intent of the Corporate Authorities that the Designated Officers shall be fully authorized and directed to sell, execute and deliver the Notes as herein provided without further official action of the Corporate Authorities. The Note Order shall be delivered, along with the typewritten Notes executed by the Village as provided in this Ordinance. Section 12. Creation and Maintenance of Funds: Appropriations; Investments. The performance by the Developers of their obligations pursuant to the Redevelopment Agreement shall be deemed to be consideration for the issuance of the Notes. To that end the Designated Officers are hereby expressly directed to issue the Notes as herein authorized and as provided and pursuant to the conditions set forth in the Redevelopment Agreement, upon delivery from time to time to the Village ofsuch evidence ofperformance as required by the Redevelopment Agreement, without further official action or direction by the Corporate Authorities. All proceeds ofa series ofthe Notes shall be deemed fully expended upon the date ofthe issuance ofa series ofthe Notes. Section I 3. Additional Notes. While any ofthe Notes issued hereunder are Outstanding, the Village may not issue any additional notes senior in lien with respect to the Village Funds to the Notes or on parity with the Notes with respect to the Village Funds without the written consent of the Noteholders ofall ofthe Outstanding Notes. The Village reseryes the right to issue additional notes subordinate to the Notes payable from the Village Funds. Section 11. Restrictions on Transfer. The Notes may only be assigned, transferred or pledged in accordance with this paragraph. Any of the Notes may be assigned to or pledged as collateral to any lender, or trustee in connection with the issuance of certificates of participation in such Notes, providing financing for the Project in accordance with the Redevelopment Agreement. The First Lien Note and the Second Lien Note may be transferred or assigned only to a Developer (as defined in the Redevelopment Agreement), an afhliate of a Developer or to a Qualified Purchaser or trustee as permitted below. Prior to the initial transfer or assignment of the First Lien Note or the Second Lien Note to a Qualified Purchaser, the Qualified Purchaser shall deliver to the Village a Qualified Purchaser Letter executed by an authorized officer of the Qualified Purchaser in a customary form for transactions of this nature. In connection with any assignment or transfer of the First Lien Note or the Second Lien Note. the assignment to a trustee for the benefit of a Qualified Purchaser is expressly authorized and, in such case, the Qualified Purchaser Letter may be executed by the owners of interest in the trust. The Third Lien Note may be transferred only to a Developer or an affiliate of a Developer. Section I5. Non-Arbitrage and Tax Exemptton. The Village hereby covenants that it will not take any action, omit to take any action or permit the taking or omission olany action within its control (including, without limitation, making or permitting any use ofthe proceeds ofthe Tax- Exempt Notes) if taking, permitting or omitting to take such action would cause any of the Tax- Exempt Notes to be an arbitrage bond or a private activity bond within the meaning of the Code, or would otherwise cause the interest on the Tax-Exempt Notes to be included in the gross income ofthe recipients thereof for federal income tax purposes. The Village acknowledges that, in the event ofan examination by the Intemal Revenue Service ( '1RS") of the exemption from federal income taxation for interest paid on the Tax-Exempt Notes, under present rules, the Village may be treated as a "taxpayer" in such examination and agrees that it will respond in a commercially reasonable manner to any inquiries from the IRS in connection with such an examination. The Village also agrees and covenants with the purchasers and Noteholders of the Tax-Exempt Notes from time to time outstanding that, to the extent possible under Illinois law, it will comply with whatever federal tax law is adopted in the future which applies to the Tax-Exempt Notes and affects the tax-exempt status of the Tax-Exempt Notes. The Corporate Authorities hereby authorize and direct the Designated Officers to make such further covenants and certifications as may be necessary to assure that the use thereof will not cause the Tax-Exempt Notes to be arbitrage bonds and to assure that the interest in the Tax- Exempt Notes will be exempt from federal income taxation. In connection therewith, the Village and the Corporate Authorities further agree: (a) through their offrcers, to make such further specific covenants, representations as shall be truthful, and assurances as may be necessary or advisable; (b) to consult with counsel approving the Tax-Exempt Notes and to comply with such advice as may be given; (c) to pay to the United States, as necessary, such sums of money representing required rebates of excess arbitrage profits relating to the Tar-Exempt Notes; (d) to file such forms, statements, and supporting documents as may be required and in a timely manner; and (e) if deemed necessary or advisable by their officers, to employ and pay fiscal agents, financial advisors, attorneys, and other persons to assist the Viltage in such compliance. Section 16. Record-Keeping Policy and Post Issuance Compliance Matters. On March 2S,20ll, the Board adopted a record-keeping policy (the "Policy") in order to maintain sufficient records to demonstrate compliance with its covenants and expectations to ensure the appropriate federal tax status for the Notes and other debt obligations ofthe Village, the interest on which is excludable from "gross income" for federal income tax purposes or which enable the Village or the holder to receive federal tax benefits, including, but not limited to, qualified tax credit bonds and other specified tax credit bonds. The Board hereby reaffirms the Policy. Section 17. Publication of Ordinonce. A full, true and complete copy of this Ordinance shall be published within ten days after passage in pamphlet form by authority ofthe Corporate Authorities. Section 18. Superseder and Effective Date. All ordinances, resolutions and orders, or parc thereof, including any provision of the code ofordinances ofthe Village, in conflict herewith are to the extent of such conflict hereby superseded; and this Ordinance shall be in full force and effect immediately upon its passage, approval and publication. Seclion 20. Severability. Ifany section, paragraph, clause or provision ofthis Ordinance shall be held invalid, the invalidity ofsuch section, paragraph, clause or provision shall not alfect any ofthe other provisions ofthis Ordinance. AYES: 5 - Ottenheimer, Weidenfeld, Johnson, Smith, Pike Ne.vs: 0 - None ABSF\T: I - Stein AppRovED: this 20th day olJune,2022. President Recorded in Village Records: this 20th day ofJune,2022. Published in pamphlet form by authority ofthe President and Board ofTrustees at on the 20th day of Jr"rne. 2022. Attest: Yillage Viliage ol Bulf alo Grove Lake and Cook.Ciiunties, Illinois