Ordinance 2007-009 UNITED CITY OF YORKVILLE
KENDALL COUNTY
STATE OF ILLINOIS
ORDINANCE NUMBER 2007 - ff \
i
AN ORDINANCE PROVIDING FOR ISSUANCE OF
UNITED CITY OF YORKVILLE, KENDALL COUNTY, ILLINOIS
SALES TAX REVENUE BONDS, SERIES 2007
( KENDALL MARKETPLACE PROJECT)
ADOPTED BY THE
CITY COUNCIL
OF THE
UNITED CITY OF YORKVILLE
KENDALL COUNTY
STATE OF ILLINOIS
The 23rd day of January, 2007
Published in pamphlet form by authority of the City Council of the United City of Yorkville,
Kendall County, Illinois this 23rd day of January, 2007.
CH12_659942.2
I
ORDINANCE NO. 2007 - -�
AN ORDINANCE PROVIDING FOR ISSUANCE OF
UNITED CITY OF YORKVILLE, KENDALL COUNTY, ILLINOIS
SALES TAX REVENUE BONDS, SERIES 2007
( KENDALL MARKETPLACE PROJECT)
BE IT ORDAINED BY THE CITY COUNCIL OF THE UNITED CITY OF
YORKVILLE, KENDALL COUNTY, ILLINOIS, AS FOLLOWS:
Section 1. Findines and Declarations. It is found and declared by the City Council of
the United City of Yorkville, Kendall County, Illinois (the "Cily") as follows:
a. The City has previously designated the Kendall Marketplace Business
District described more fully in Exhibit A to this Ordinance (the "Business District ")
pursuant to Ordinance Number 2006 -1V adopted on December 12, 2006 (the
"Desimation Ordinance ") and the provisions of the Business District Development and
Redevelopment Act, 65 ILLS 5/11 -74.3 et M. (the "Business District Act ") and has
otherwise complied with all other conditions precedent required by the Business District
Act.
b. It is necessary and in the best interests of the City to provide at this time
improvements benefiting the Business District consisting of landscaping, storm and
sanitary sewer facilities, lighting, parking, and other eligible costs to serve the Business
District (the "Improvements "). The City presently estimates the total cost of these
Improvements together with costs of borrowing money for that purpose, funding
administrative expenses and providing for necessary debt service reserves and capitalized
interest (collectively, the "Costs of the Improvements") to be approximately $12,000,000.
C. The City does not have sufficient funds on hand or available from other
sources with which to pay the Costs of the Improvements.
d. It is in the best interests of the City to issue not to exceed $12,000,000
principal amount of its Sales Tax Revenue Bonds, Series 2007 (Kendall Marketplace
Project) (the " Bonds ") as provided in this Ordinance, to pay or provide funds for a
portion of the Costs of the Improvements.
e. The borrowing of the sum of not to exceed $12,000,000 and the issuance
of the Bonds in that amount are for purposes constituting business district project costs in
the Business District under the Business District Act.
f. After due publication of a notice as required by the Business District Act,
public hearings to consider the establishment of the Business District, the approval of a
business district development plan for the Business District, the imposition of a retailers'
occupation tax and a service occupation tax in the Business District for the planning,
execution, and implementation of the business district plan and for the payment of
business district project costs as set forth in such plan, and the issuance of obligations by
CHI2_659942.2
the City to provide for the payment of business district project costs secured by the
business district tax allocation fund established pursuant to the Business District Act,
were held on October 17, 2006 and October 24, 2006 at 7:00 p.m.
Section 2. Issuance of Bonds. The City shall borrow the sum of not to exceed
$12,000,000 by issuing the Bonds as provided in this Ordinance. The Bonds which shall be
designated "United City of Yorkville, Kendall County, Illinois Sales Tax Revenue Bonds, Series
2007 (Kendall Marketplace Project)," and shall be issued for the purpose of providing a portion
of the funds needed for the Costs of the Improvements. The Bonds shall be issued and secured
pursuant to the powers of the City pursuant to the Business District Act and the Local
Government Debt Reform Act, 30 ILCS 350/1 et SeMc . (the "Debt Act").
Section 3. Annroval of Documents. There have been submitted to the City Council
forms of the following documents relating to the issuance of the Bonds:
a. a form of Trust Indenture (the "Indenture ") between the City and The
Bank of New York Trust Company, N.A., as Trustee, to be dated as of February 1, 2007,
which form of Indenture is attached as Exhibit B to this Ordinance;
b. a form of Bond Purchase Agreement (the "Bond Purchase Agreement ")
among the City, William Blair & Company, L.L.C., as Underwriter (the "Underwriter "),
and Cannonball LLC (the "Developer ") to be dated as of the date the offer of the
Underwriter to purchase the Bonds is accepted by the City, which form of Bond Purchase
Agreement is attached as Exhibit C to this Ordinance;
C. a form of Development Agreement between the Developer and the City,
which form of Development Agreement is attached as Exhibit D to this Ordinance; and
d. a form of the preliminary Limited Offering Memorandum (the "Limited
Offerin? Memorandum ") used by the Underwriter in its initial offering of the Bonds,
which form of Limited Offering Memorandum is attached as Exhibit E to this Ordinance.
Such documents are approved as to form and substance and the Mayor and the City Clerk
of the City are authorized and directed to execute and deliver and/or authorize the use of such
documents on behalf of the City in the forms submitted with such additions, deletions and
completions of the same (including the establishment of the terms of the Bonds within the
parameters set forth in this Ordinance) as the Mayor and the City Clerk deem appropriate; and
when each such document is executed, attested, sealed and delivered on behalf of the City, as
provided herein, each such document will be binding on the City; from and after the execution
and delivery of each such document, the officers, employees and agents of the City are hereby
authorized, empowered and directed to do all such acts and things and to execute all such
additional documents as may be necessary to carry out, comply with and perform the provisions
of each such document as executed; and each such document shall constitute, and hereby is
made, a part of this Ordinance, and a copy of each such document shall be placed in the official
records of the City, and shall be available for public inspection at the office of the City Clerk.
Either the Mayor or the City Clerk is authorized and directed, subject to the terms of the Bond
Purchase Agreement as executed, to execute the final Limited Offering Memorandum in
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CHI2_659942.2
substantially the form of the preliminary Limited Offering Memorandum presented hereto with
such changes, additions or deletions as they deem appropriate to reflect the final terms of the
Bonds, the Indenture and other matters.
Section 4. Bond Terms. The Bonds shall be issued as provided in the Indenture and
not to exceed $12,000,000, shall be dated shall mature ,
shall be issued in the principal amount of o
p p
shall bear interest at the rates (not to exceed in any year seven percent (7 %) per annum) and shall
be subject to redemption at the times and prices as set forth in the Indenture, and shall be sold to
the Underwriter at a purchase price of not less than 98.5% of the principal amount of the Bonds
with an original issue discount of not to exceed 2% of the principal amount of the Bonds, all as
set forth in the Bond Purchase Agreement. The execution and delivery of the Bond Purchase
Agreement by the Mayor and the City Clerk shall evidence their approval of the terms of the
Bonds set forth above.
Section 5. Execution and Delivery of Bonds. The Mayor and the City Clerk are
authorized and directed to execute and deliver the Bonds and, together with other Authorized
Officers (as defined in the Indenture), to take all necessary action with respect to the issuance,
sale and delivery of the Bonds, all in accordance with the terms and procedures specified in this
Ordinance and the Indenture. The Bonds shall be delivered to the Trustee who is directed to
authenticate the Bonds and deliver the Bonds to the Underwriter upon receipt of the purchase
price for the Bonds.
The Bonds shall be in substantially the form set forth in the Indenture. Each Bond shall
be executed by the manual or facsimile signature of the Mayor and the manual or facsimile
signature of the City Clerk and shall have the corporate seal of the City affixed to it (or a
facsimile - of that seal printed on it). The Mayor and the City Clerk (if they have not already done
so) are authorized and directed to file with the Illinois Secretary of State their manual signatures
certified by them pursuant to the Uniform Facsimile Signatures of Public Officials Act, as
amended, which shall authorize the use of their facsimile signatures to execute the Bonds. Each
Bond so executed shall be as effective as if manually executed. In case any officer of the City
whose signature or a facsimile of whose signature shall appear on the Bonds shall cease to be
such officer before authentication and delivery of any of the Bonds, that signature or facsimile
signature shall nevertheless be valid and sufficient for all purposes, the same as if the officer had
remained in office until delivery.
The Bonds shall contain a recital that they are issued pursuant to Section 11- 74.3(14) of
the Business District Act. Such recital shall be conclusive evidence of the validity of the Bonds
and the regularity of their issuance.
No Bond shall be valid for any purpose unless and until a certificate of authentication on
that Bond substantially in the form set forth in the bond form in the Indenture shall have been
duly executed by the Trustee. Execution of that certificate upon any Bond shall be conclusive
evidence that the Bond has been authenticated and delivered under this Ordinance.
Section 6. Bonds are Limited Obligations; Pledged Revenue. The Bonds shall
constitute limited obligations of the City, payable from the Pledged Revenue (as defined below)
generated in the Business District as provided below. The Bonds shall not constitute the general
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CHI2_659942.2
obligations of the City and neither the full faith and credit nor the unlimited taxing power of the
City shall be pledged as security for payment of the Bonds.
Pursuant to the Indenture and in accordance with the Debt Act, the Issuer shall pledge to
the payment of the Bonds the "Pledged Revenue," which is equal to fifty percent (50 %) of the
"Local Sales Taxes," which are the total revenue from taxes, penalties and interest which are
paid to the Issuer from the Local Government Tax Fund as created by 35 ILCS 120/3, as
amended, on sales by retailers and servicemen in the Business District; and all revenues from any
taxes, penalties and interest which are paid to the Issuer from the Local Government Tax Fund
on sales by retailers and servicemen in the Business District which are intended to replace the
current payments to the Issuer, which shall be collected by the Issuer and enforced by Illinois
Department of Revenue.
The Pledged Revenue generated and collected as provided above shall be deposited in the
Business District Tax Allocation Fund previously created by the Issuer and are appropriated to
and are irrevocably pledged to and shall be used only for the purposes set forth in Section 5.3 of
the Indenture.
Section 7. Special Covenants. The City covenants with the holders of the Bonds
from time to time outstanding that it (i) will take all actions which are necessary to be taken (and
avoid any actions which it is necessary to avoid being taken) so that interest on the Bonds will
not be or become included in gross income for federal income tax purposes under existing law,
including without limitation the Internal Revenue Code of 1986, as amended (the " Code "); (ii)
will take all actions reasonably within its power to take which are necessary to be taken (and
avoid taking any actions which are reasonably within its power to avoid taking and which are
necessary to avoid) so that the interest on the Bonds will not be or become included in gross
income for federal income tax purposes under the federal income tax laws as in effect from time
to time; and (iii) will take no action or permit any action in the investment of the proceeds of the
Bonds, amounts held under the Indenture or any other funds of the City which would result in
making interest on the Bonds subject to federal income taxes by reason of causing the Bonds to
be "arbitrage bonds" within the meaning of Section 148 of the Code, or direct or permit any
action inconsistent with the regulations under the Code as promulgated and as amended from
time to time and as applicable to the Bonds. The Mayor, the City Clerk, the City Treasurer and
other Authorized Officers of the City are authorized and directed to take all such actions as are
necessary in order to carry out the issuance and delivery of the Bonds including, without
limitation, to make any representations and certifications they deem proper pertaining to the use
of the proceeds of the Bonds and other moneys held under the Indenture in order to establish that
the Bonds shall not constitute arbitrage bonds as so defined.
The City further covenants with the holders of the Bonds from time to time outstanding
that:
a. it will take all actions, if any, which shall be necessary in order further to
provide for the collection of the Local Sales Taxes imposed by or pursuant to this
Ordinance;
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CH12_659942.2
b. it will not take any action which would adversely affect the imposition and
collection of the Local Sales Taxes; and
C. it will comply with all present and future laws concerning the imposition
and collection of the Local Sales Taxes; in each case so that the City shall be able to pay
the principal of and interest on the Bonds as they come due and replenish the Reserve
Fund to the Reserve Requirement and it will take all actions necessary to assure the
timely collection of the Local Sales Taxes.
Section 8. Additional Authority. The Mayor, the City Clerk and the other officers of
the City are authorized to execute and deliver on behalf of the City such other documents,
agreements and certificates and to do such other things consistent with the terms of this
Ordinance as such officers and employees shall deem necessary or appropriate in order to
effectuate the intent and purposes of this Ordinance, including, without limitation, to make any
representations and certifications they deem proper pertaining to the use of the proceeds of the
Bonds in order to establish that the Bonds shall not constitute arbitrage bonds as defined in
Section 7 above.
Section 9. Severabilitv. If any section, paragraph, clause or provision of this
Ordinance (including any section, paragraph, clause or provision of any exhibit to this
Ordinance) shall be held invalid, the invalidity of such section, paragraph, clause or provision
shall not affect any of the other sections, paragraphs, clauses or provisions of this Ordinance (or
of any of the exhibits to this Ordinance).
Section 10. Repealer: Effect of Ordinance. All ordinances, resolutions and orders or
parts of ordinances, resolutions and orders in conflict with this Ordinance are repealed to the
extent of such conflict. The City Clerk shall cause this Ordinance to be published in pamphlet
form. This Ordinance shall be effective upon its passage and publication as provided by law.
PASSED BY THE CITY COUNCIL OF THE UNITED CITY OF YORKVILLE,
KENDALL COUNTY, ILLINOIS this 23rd day of January, 2007.
VOTING AYE:
VOTING NAY:
ABSENT: _
ABSTAINED:
NOT VOTING:
APPROVED:
Ii i.� .
a
ATTEST:
Ci Cler 0
5
CH 12_659942.2
Exhibit A'
UNITED CITY OF YORKVILLE
KENDALL MARKETPLACE BUSINESS DISTRICT
THAT PART OF THE SOUTHEAST QUARTER OF SECTION 19, PART OF THE SOUTH
HALF OF SECTION 20 AND PART OF THE NORTHWEST QUARTER OF SECTION 29,
TOWNSHIP 37 NORTH, RANGE 7 EAST OF THE THIRD PRINCIPAL MERIDIAN
DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEAST CORNER OF THE
SOUTHEAST QUARTER OF SAID SECTION 19; THENCE NORTH 01 DEGREES 13
MINUTES 53 SECONDS WEST, ALONG THE EAST LINE OF SAID SOUTHEAST
QUARTER 310.20 FEET; THENCE WESTERLY PERPENDICULAR TO SAID EAST LINE
198.00 FEET; THENCE NORTH 16 DEGREES 23 MINUTES 58 SECONDS WEST, 862.81
FEET; THENCE NORTH 46 DEGREES 51 MINUTES 14 SECONDS EAST, 126.15 FEET;
THENCE WESTERLY ALONG A NONTANGENTIAL CURVE TO THE RIGHT WITH A
RADIUS OF 25.00 FEET AND A CHORD BEARING OF .NORTH 86 DEGREES 29
MINUTES 53 SECONDS WEST, AN ARC LENGTH OF 40.71 FEET; THENCE
NORTHWESTERLY ALONG A CURVE TO THE RIGHT WITH A RADIUS OF 950.00
FEET AND A CHORD BEARING OF NORTH 30 DEGREES 00 MINUTES 26 SECONDS
WEST, AN ARC LENGTH OF 326.41 FEET; THENCE NORTH 67 DEGREES 35 MINUTES
57 SECONDS EAST, 243.73 FEET; THENCE SOUTHEASTERLY ALONG A
NONTANGENTIAL CURVE TO THE LEFT WITH A RADIUS OF 500.00 FEET AND A
CHORD BEARING OF SOUTH 31 DEGREES 07 MINUTES 50 SECONDS EAST, AN ARC
LENGTH OF 209.70 FEET; THENCE SOUTH 43 DEGREES 08 MINUTES 45 SECONDS
EAST, 52.80 FEET; THENCE NORTH 46 DEGREES 51 MINUTES 15 SECONDS EAST,
287.40 FEET; THENCE SOUTH 43 DEGREES 08 MINUTES 45 SECONDS EAST, 80.00
FEET; THENCE NORTH 46 DEGREES 51 MINUTES 15 SECONDS EAST, 162.29 FEET;
THENCE NORTH 43 DEGREES 08 MINUTES 45 SECONDS WEST, 7.00 FEET; THENCE
NORTH 46 DEGREES 51 MINUTES 15 SECONDS EAST, 60.76 FEET; THENCE
NORTHEASTERLY ALONG A CURVE TO THE RIGHT WITH A RADIUS OF 367.00 FEET
AND A CHORD BEARING OF NORTH 58 DEGREES 18 MINUTES 15 SECONDS EAST,
AN ARC LENGTH OF 146.68 FEET; THENCE NORTH 69 DEGREES 45 MINUTES 15
SECONDS EAST, 121.97 FEET; THENCE NORTHEASTERLY ALONG A CURVE TO THE
LEFT WITH A RADIUS OF 433.00 FEET AND A CHORD BEARING OF NORTH 37
DEGREES 51 MINUTES 31 SECONDS EAST, AN ARC LENGTH OF 482.09 FEET;
THENCE NORTHEASTERLY ALONG A CURVE TO THE RIGHT WITH A RADIUS OF
25.00 FEET AND A CHORD BEARING OF NORTH 51 DEGREES 23 MINUTES 20
SECONDS EAST, AN ARC LENGTH OF 39.64 FEET; THENCE SOUTH 83 DEGREES 11
MINUTES 08 SECONDS EAST, 763.20 FEET; THENCE SOUTHEASTERLY ALONG A
CURVE TO THE RIGHT WITH A RADIUS OF 367.00 FEET AND A CHORD BEARING OF
SOUTH 57 DEGREES 07 MINUTES 07 SECONDS EAST, AN ARC LENGTH OF 333.94
FEET; THENCE SOUTH 31 DEGREES 03 MINUTES 05 SECONDS EAST, 123.11 FEET;
THENCE SOUTH 58 DEGREES 56 MINUTES 55 SECONDS WEST, 7.00 FEET; THENCE
SOUTHEASTERLY ALONG A NONTANGENTIAL CURVE TO THE LEFT WITH A
RADIUS OF 440.00 FEET AND A CHORD BEARING OF SOUTH 42 DEGREES 20
MINUTES 40 SECONDS EAST, AN ARC LENGTH OF 173.45 FEET; THENCE NORTH 32
CHI2_659942.2
DEGREES 01 MINUTES 21 SECONDS EAST, 80.28 FEET; THENCE SOUTHEASTERLY
ALONG A NONTANGENTIAL CURVE TO THE LEFT WITH A RADIUS OF 360.00 FEET
AND A CHORD BEARING OF SOUTH 60 DEGREES 42 MINUTES 59 SECONDS EAST,
AN ARC LENGTH OF 101.11 FEET; THENCE SOUTH 68 DEGREES 45 MINUTES 32
SECONDS EAST, 784.84 FEET TO THE CENTER LINE OF CANNONBALL TRAIL;
THENCE SOUTH 21 DEGREES 40 MINUTES 31 SECONDS WEST, ALONG SAID
CENTER LINE, 331.43 FEET; THENCE SOUTH 21 DEGREES 14 MINUTES 17 SECONDS
WEST, ALONG SAID CENTER LINE, 1261.58 FEET; THENCE NORTH 68 DEGREES 45
MINUTES 43 SECONDS WEST, 48.00 FEET; THENCE SOUTH 21 DEGREES 14 MINUTES
17 WEST, 470.00 FEET; THENCE SOUTH 57 DEGREES 14 MINUTES 17 SECONDS
WEST, 74.81 FEET TO THE NORTH LINE OF U.S. ROUTE 34; THENCE NORTH 85
DEGREES 32 MINUTES 10 SECONDS WEST ALONG SAID NORTH LINE, 1983.32 FEET
TO THE WEST LINE OF THE NORTHWEST QUARTER OF SAID SECTION 29; THENCE
NORTH 01 DEGREES 14 MINUTES 12 SECONDS WEST ALONG SAID WEST LINE,
378.99 FEET TO THE POINT OF BEGINNING, IN THE UNITED CITY OF YORKVILLE,
KENDALL COUNTY, ILLINOIS, AND CONTAINING 143.40 ACRES OF LAND MORE OR
LESS.
PIN's
02 -19- 400 -003
- - 02 -29 -100 -001 _
O -20- 351 -001
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A -2
CH12_659942.2
F&L DRAFT
01/10/07
TRUST INDENTURE
Between
UNITED CITY OF YORKVILLE, ILLINOIS
and
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
as Trustee
Dated as of February 1, 2007
UNITED CITY OF YORKVILLE, KENDALL COUNTY, ILLINOIS
SALES TAX REVENUE BONDS, SERIES 2007
( KENDALL MARKETPLACE PROJECT)
CHI2_659946.2
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND INTERPRETATIONS .............. ............................... 3
Section1.1 Definitions .................................................................... ............................... 3
Section 1.2 Rules of Construction ................................................ ............................... 12
ARTICLEII THE BONDS ............................................................. ............................... 12
Section 2.1 Authorization of Bonds .......................................... ............................... 12
Section2.2 Terms of Bonds .......................................................... ............................... 13
Section 2.3 Execution; Limited Obligation .................................. ............................... 14
Section 2.4 Authentication ............................................................ ............................... 14
Section2.5 Form of Bonds ........................................................... ............................... 14
Section 2.6 Delivery of Bonds ...................................................... ............................... 15
Section 2.7 Bonds Mutilated, Lost, Destroyed or Stolen .............. ............................... 15
Section 2.8 Registration, Transfer and Exchange of Bonds; Persons Treated as
Owners....................................................................... ............................... 16
Section 2.9 Cancellation of Bonds ................................................ ............................... 16
Section2.10 Temporary Bonds ....................................................... ............................... 17
Section2.11 Additional Bonds ....................................................... ............................... 17
Section 2.12 Book -Entry System .................................................... ............................... 17
Section 2.13 Representation Letter ................................................. ............................... 18
Section 2.14 Transfers Outside Book -Entry System ...................... ............................... 18
Section 2.15 Payments and Notices to the Nominee ...................... ............................... 19
Section 2.16 Initial Depository and Nominee ................................. ............................... 19
ARTICLE III REDEMPTION OF BONDS ..................................... ............................... 19
Section 3.1 Terms of Redemption ................................................ ............................... 19
Section 3.2 Selection of Bonds to be Redeemed .......................... ............................... 20
Section 3.3 Notice of Redemption ................................................ ............................... 21
Section 3.4 Payment of Redeemed Bonds .................................... ............................... 22
Section 3.5 Purchase of Bonds; Tenders ....................................... ............................... 23
ARTICLE IV APPLICATION OF BOND PROCEEDS; PLAN OF FINANCING....... 23
Section 4.1 Initial Deposit of Bond Proceeds ............................... ............................... 23
Section 4.2 Establishment and Application of Improvement Fund ............................. 23
pP p
Section 4.3 Costs of Issuance Fund .............................................. ............................... 24
ARTICLE V REVENUES AND FUNDS ....................................... ............................... 24
Section 5.1 Pledge of Revenues and Assets .................................. ............................... 24
Section 5.2 Establishment of Funds .............................................. ............................... 24
Section 5.3 Application of Revenues ............................................ ............................... 25
Section 5.4 Application of Debt Service Reserve Fund .............................................. 25
Section 5.5 Application of Bond Fund ......................................... ............................... 26
Section5.6 Reserved ..................................................................... ............................... 26
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CHI2 659946.2
Section5.7 Reserved ..................................................................... ............................... 26
Section 5.8 Administrative Expense Fund .................................... ............................... 26
Section 5.9 Investment of Funds ................................................... ............................... 27
Section 5.10 Moneys Held for Particular Bonds ............................ ............................... 28
Section 5.11 Funds Held in Trust ................................................... ............................... 28
Section 5.12 Accounting Records ................................................... ............................... 28
Section 5.13 Amounts Remaining in Funds ................................... ............................... 28
Section5.14 Rebate Fund ............................................................... ............................... 28
ARTICLE VI COVENANTS OF ISSUER ...................................... ............................... 28
Section 6.1 Payment of Bonds ...................................................... ............................... 28
Section 6.2 Payment of Lawful Charges and Priority of Lien ...... ............................... 29
Section 6.3 Tax Covenants ........................................................... ............................... 29
Section 6.4 Compliance with Conditions Precedent ..................... ............................... 29
Section6.5 Reserved ..................................................................... ............................... 29
Section 6.6 Further Assurances ..................................................... ............................... 29
Section 6.7 Powers as to Bonds and Pledge ................................. ............................... 29
Section 6.8 Preservation of Revenues; Amendment of Agreements ........................... 30
Section 6.9 Limitations on Liability ............................................. ............................... 30
Section 6.10 Sales Tax and Other Disclosure ................................. ............................... 31
ARTICLE VII DISCHARGE OF INDENTURE ............................... ............................... 31
Section7.1 Defeasance ....... .......................................................... ............................... 31
Section 7.2 Unclaimed Moneys ............. ........................................ ............................... 32
ARTICLE VIII DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE AND
BONDHOLDERS...................................................... ............................... 33
Section 8.1 Events of Default ....................................................... ............................... 33
Section8.2 Remedies .................................................................... ............................... 33
Section 8.3 Other Remedies; Rights of Bondholders ................... ............................... 34
Section 8.4 Representation of Bondholders by Trustee ................ ............................... 34
Section 8.5 Action by Trustee ....................................................... ............................... 34
Section 8.6 Accounting and Examination of Records After Default ........................... 35
Section 8.7 Restriction on Bondholder Action ............................. ............................... 35
Section 8.8 Application of Moneys After Default ........................ ............................... 35
Section 8.9 Control of Proceedings .............................................. ............................... 36
Section 8.10 Waivers of Event of Default ...................................... ............................... 36
Section8.11 Subordination ............................................................. ............................... 37
Section 8.12 Termination of Proceedings ....................................... ............................... 37
ARTICLEIX THE TRUSTEE ......................................................... ............................... 37
Section 9.1 Acceptance of Trusts .................................................. ............................... 37
Section 9.2 Fees, Charges and Expenses of Trustee ..................... ............................... 40
Section 9.3 Intervention by Trustee .............................................. ............................... 41
Section 9.4 Merger or Consolidation of Trustee ........................... ............................... 41
Section 9.5 Resignation by Trustee .............................................. ............................... 41
Section 9.6 Removal of Trustee .................................................... ............................... 41
CHI2_659946.2
Section 9.7 Appointment of Successor Trustee ............................ ............................... 42
Section 9.8 Transfer of Rights and Property to Successor Trustee .............................. 42
Section 9.9 Successor Trustee as Bond Registrar, Custodian of Funds and
PayingAgent .............................................................. ............................... 42
Section 9.10 Appointment of Co- Trustee ....................................... ............................... 43
Section 9.11 Arbitrage Covenants .................................................. ............................... 43
Section 9.12 Compliance with Section 6. 10 ................................... ............................... 44
ARTICLE X SUPPLEMENTAL INDENTURES .......................... ............................... 44
Section 10.1 Supplemental Indentures Effective Upon Acceptance ............................. 44
Section 10.2 Supplemental Indentures Requiring Consent of Bondholders .................. 45
Section 10.3 Consent of Bondholders ............................................. ............................... 45
Section 10.4 Modification by Unanimous Consent ........................ ............................... 46
Section 10.5 Exclusion of Bonds .................................................... ............................... 46
Section 10.6 Notation on Bonds ..................................................... ............................... 47
Section 10.7 Additional Contracts or Indentures ............................ ............................... 47
Section 10.8 Opinion of Bond Counsel Concerning Supplemental Indentures ............. 47
ARTICLEXI MISCELLANEOUS .................................................. ............................... 47
Section 11.1 Evidence of Signatures of Bondholders and Ownership of Bonds........... 47
Section 11.2 Details of Documents Delivered to Trustee ............... ............................... 48
Section 11.3 Preservation and Inspection of Documents ................ ............................... 48
Section 11.4 No Recourse on Bonds ............................................... ............................... 48
Section11.5 Severability .................................:...:.......................... ............................... 48
Section11.6 Notices ....................................................................... ............................... 49
Section 11.7 Action Required to be Taken on a Non - Business Day ............................. 49
Section 11.8 Parties Interested Herein ....................................... ............................... 49
Section 11.9 Counterparts ............................................................... ............................... 49
Section 11.10 Applicable Provisions of Law .................................... ............................... 49
EXHIBITA — FORM OF BOND ................................................................ ............................... A -1
EXHIBIT B — DESCRIPTION OF BUSINESS DISTRICT ....................... ............................... B -1
EXHIBIT C — REQUEST FOR PAYMENT ............................................... ............................... C -1
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CHI2 659946.2
TRUST INDENTURE
THIS TRUST INDENTURE, made and entered into as of February 1, 2007, by and
between the United City of Yorkville, Kendall County, Illinois (the " Issuer "), a public body
corporate and politic organized and existing under the laws of the State of Illinois, and THE
BANK OF NEW YORK TRUST COMPANY, N.A., a national banking association organized
and existing under the laws of the United States of America and authorized to accept and execute
trusts of the character herein set forth, as trustee (the " Trustee ");
WITNESSETH:
WHEREAS, the Issuer has by Ordinance Number 2006 -_ designated the Kendall
Marketplace Business District (the "Business District "); and
WHEREAS, the Issuer has by Ordinance Number 2007- authorized the issuance of
its Sales Tax Revenue Bonds, Series 2007 (Kendall Marketplace Project) (the " Bonds ") in the
aggregate principal amount of not to exceed $12,000,000 to finance project costs within the
Business District pursuant to the provisions of the Business District Development and
Redevelopment Act, 65 ILCS 5/11 -74.3 et seq. (the "Business District Act") and the Local
Government Debt Reform Act, 30 ILCS 350/1 et. M. (the "Debt Act "); and
WHEREAS, the Issuer has authorized the execution of this Indenture in order to secure
the payment of the principal of, premium, if any, and interest on the Bonds and the observance of
the covenants and conditions herein contained; and
WHEREAS, the Issuer has determined that all things necessary to make the Bonds, when
executed by the Issuer and authenticated by the Trustee and issued as in this Indenture provided,
the valid, binding and legal obligations of the Issuer according to the import thereof, and to
constitute this Indenture a valid assignment and pledge of the Revenues (as hereinafter defined)
and other amounts pledged to the payment of the principal of and interest on the Bonds and a
valid and binding agreement for the uses and purposes herein set forth, have been duly taken, and
the creation, execution and delivery of this Indenture and the creation, execution and delivery of
the Bonds, subject to the terms hereof, have in all respects been duly authorized;
NOW, THEREFORE, THIS TRUST INDENTURE WITNESSETH:
The Issuer, in order to secure the payment of the principal of, premium, if any, and the
interest on all Bonds at any time issued and outstanding under this Indenture, according to their
tenor, and to secure the performance and observance of all the covenants and conditions therein
and herein set forth, and to declare the terms and conditions upon and subject to which the Bonds
are to be issued and received, and in consideration of the premises and of the purchase and
acceptance of the Bonds by the owners thereof, and for other valuable consideration, the receipt
whereof is hereby acknowledged, does hereby grant, bargain, sell, warrant, convey, confirm,
assign, transfer in trust, grant a security interest in, pledge and set over unto the Trustee and to its
successors in the trusts hereby created, all and singular, the property of the Issuer, real and
personal, hereinafter described, for the benefit of the Bondholders, subject only to the provisions
hereof permitting the application thereof for or to the purposes and on the terms and conditions
set forth herein (said property being herein sometimes referred to as the "Trust Estate "):
CHI2 659946.2
GRANTING CLAUSES
All right, title and interest of the Issuer in and to the proceeds of the sale of the Bonds;
All Revenues (as hereinafter defined);
All Funds and Accounts (as hereinafter defined) held by the Trustee under this Indenture
from time to time and earnings thereon (other than moneys held in the Rebate Fund created
under Article V) and subject to application thereof in the manner and for the purposes herein set
forth; and
All other property which by the express provisions of this Indenture is required to be
subject to the lien hereof, and any additional property that, from time to time, by delivery or by
writing of any kind, may be subjected to the lien hereof, by the Issuer or by anyone on its behalf,
and the Trustee is hereby authorized to receive the same at any time as additional security
hereunder;
TO HAVE AND TO HOLD all and singular with all privileges and appurtenances hereby
given, granted, bargained, sold, conveyed, assigned, pledged, mortgaged and transferred or
agreed or intended so to be, whether now owned or hereafter acquired, including any and all
additional property that by virtue of any provision hereof or of any indenture supplemental
hereto shall hereafter become subject to this Indenture and to the trusts hereby created, unto the
Trustee and its successors in trust and assigns forever;
IN TRUST, NEVERTHELESS, upon the terms and trusts herein set forth for the equal
and proportionate benefit, security and protection of the registered owners from time to time of
any of the Bonds authenticated and delivered under this Indenture and issued by the Issuer and
outstanding, without preference, priority or distinction as to lien, or otherwise of any series of
Bonds over any other series of Bonds or any one Bond over any other Bond by reason of priority
in the issue, sale or negotiation thereof, or of any other cause, as herein provided;
PROVIDED, HOWEVER, that if the Issuer, its successors or assigns, shall well and truly
pay, or cause to be paid, the principal of, premium, if any, and interest on the Bonds due or to
become due thereon, at the times and in the manner mentioned in the Bonds according to the true
intent and meaning thereof, or shall provide, as permitted hereby, for the payment thereof by
depositing with the Trustee the entire amount due or to become due thereon, and shall well and
truly keep, perform and observe all the covenants and conditions pursuant to the terms of this
Indenture to be kept, performed and observed by it, and shall pay, cause to be paid or make
provision for payment to the Trustee of all sums of money due or to become due in accordance
with the terms and provisions hereof, then upon such final payment this Indenture and the rights
hereby granted shall cease, determine and be void; otherwise this Indenture shall remain in full
force and effect;
AND IT IS HEREBY COVENANTED that all of the Bonds shall be issued,
authenticated and delivered, and that the Trust Estate shall be held by the Trustee, subject to the
further covenants, conditions, uses and trusts hereinafter set forth, and the Issuer agrees and
covenants with the Trustee and with the registered owners from time to time of the Bonds, as
follows:
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CHI2_659946.2
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
Section 1.1 Definitions. Unless the context otherwise requires, the terms defined in
this Section shall, for all purposes of this Indenture and of any indenture supplemental hereto,
have the following meanings:
"Accounting Date" means December 1 of each year, commencing December 1, 2007.
"Administrative Expenses" means the following actual or reasonably estimated costs
directly related to the administration of the Bonds as determined by the Issuer: the costs of
computing the Revenues and of preparing the annual collection schedules; the costs of collecting
the Revenues (whether by the Issuer or otherwise); the costs of remitting the Revenues to the
Trustee; the costs of the Trustee and any fiscal agent (including its legal counsel) in the discharge
of the duties required of it under this Indenture or any trustee or fiscal agent agreement; the costs
of the Issuer or its designee in complying with disclosure requirements of applicable federal and
state securities laws, including, but not limited to, public inquiries regarding the Revenues; the
costs associated with the release of funds from any escrow account; any termination payments
owed by the Issuer in connection with any guaranteed investment contract, forward purchase
agreement or other investment of funds held under the Indenture; interest on any overdue
amounts (other than overdue payments of principal of, or premium or interest on, the Bonds);
and amounts advanced by the Issuer for any other administrative purposes relating to the Bonds
or the Improvements, including the reasonable fees of legal counsel of the Issuer incurred in
connection with the foregoing.
"Administrative Expense Fund" means the Trust Fund so designated which is described
in Section 5.8.
"Administrative Expense Fund Requirement" means, (1) from the Closing Date through
December 31, 2007, $ , (2) for each calendar year beginning on and after January 1,
2008, the Administrative Expense Fund Requirement on December 31 of the previous year plus
an amount equal to 3% of such Administrative Expense Fund Requirement on December 31 of
the previous year.
"Attestin2 Officer" means the City Clerk of the Issuer, or such other officer or official of
the Issuer who in accordance with the laws of the State, the Issuer or other governing documents
of the Issuer or practice or custom, regularly certifies official acts and records of the Issuer, and
includes any assistant or deputy officer to the principal officer or officers exercising such
responsibilities.
"Authorized Officer" means the Mayor or any other person designated to act on behalf of
the Issuer by a certificate signed by the Mayor and filed with the Issuer and the Trustee.
"Bankruptcy Code" means the Federal Bankruptcy Code, Title 11 of the United States
Code.
"Beneficial Owner" means the purchaser of a beneficial interest in the Bonds.
3
CHI2_659946.2
I
" Bond " means any bond or bonds, as the case may be, authorized under and secured by
this Indenture and issued pursuant to this Indenture.
"Bond Counsel" means an attorney at law or a firm of attorneys of recognized expertise
in the field of federal income tax matters relating to municipal securities selected by the Issuer.
"Bond Fund" means the Fund created and so designated in Section 5.2.
"Bondholder" or " holder " or " owner " of any Bond or any similar term shall mean the
person in whose name any Bond is registered.
"Bond Reidster" means the registration books of the Issuer maintained by the Trustee as
provided in this Indenture on which registration and transfer of the Bonds is to be recorded.
"Bond Year" means the period of 12 consecutive months ending on December 31 of each
year in which Bonds are or will be Outstanding, provided that the first Bond Year shall
commence on the Closing Date and end on December 31, 2007.
"Business Dav" means any day other than a Saturday, a Sunday, a day on which banks in
the city in which the Principal Office of the Trustee is located are authorized or obligated by law
or executive order to close or a day on which the New York Stock Exchange is closed.
"Business District" means the Kendall Marketplace Business District within the Issuer
created pursuant to the Business District Act and legally described on Exhibit B to this Indenture
and incorporated by reference herein.
"Business District Act" means the Business District Development and Redevelopment
Act, 65 ILCS 5/11 -74.3 et M.
"Business District Tax Allocation Fund" means the "Kendall Marketplace Business
District Tax Allocation Fund" created and so designated in Ordinance Number 2006 -_ of the
Issuer adopted on December 12, 2006 pursuant to the Business District Act.
"Closin>7 Date" means the date the Bonds are initially issued and delivered to the original
purchaser or purchasers thereof.
" Code " means the United States Internal Revenue Code of 1986, as amended, and the
Regulations thereunder, or any successor statute, together with corresponding and applicable
final, temporary or proposed regulations and revenue rulings issued or amended with respect
thereto by the Treasury Department or Internal Revenue Service of the United States, except as
the Tax Reform Act of 1986 may make the Internal Revenue Code of 1954, as amended (the
"1954 Code "), prior to the Tax Reform Act of 1986, applicable to the Bonds and the
Improvements.
"Costs of Issuance" means items of expense payable directly or indirectly by or
reimbursable to the Issuer and related to the authorization, sale and issuance of the Bonds,
including, without limitation, printing costs, costs of reproducing documents, filing and
recording fees, fees and charges of the Trustee, fees and expenses of counsel to the Trustee, fees
4
CHI2_659946.2
I
I
and expenses of Bond Counsel, counsel to the Issuer, counsel to the Developer, and counsel to
the Original Purchaser, underwriting, legal and accounting fees and charges, costs of credit
ratings, fees and charges for execution, transportation and safekeeping of Bonds, fees of the
Issuer and other costs, charges and fees in connection with the foregoing.
"Costs of Issuance Fund" means the Fund created and so designated in Section 5.2.
"Counsel's Opinion" means a written opinion, including opinions supplemental thereto,
signed by an attorney or firm of attorneys (who may be counsel for the Issuer, the Borrower or
Fannie Mae) acceptable to the Trustee.
"Debt Service Reserve Fund" means the Fund created and so designated in Section 5.2.
"Debt Service Reserve Fund Requirement" means, on the Closing Date, $ , and
as of any date thereafter, an amount equal to 10% of the original principal amount of Bonds
Outstanding.
"Depositorv" means DTC and its successors and assigns or if (a) the then Depository
resigns from its functions as securities depository of the Bonds, or (b) the Issuer discontinues use
of the Depository pursuant to Section 2.14, any other securities depository which agrees to
follow the procedures required to be followed by a securities depository in connection with the
Bonds and which is selected by the Issuer with the consent of the Trustee.
"Developer" means Cannonball LLC, an Illinois limited liability company, and its
affiliates and their respective successors and assigns.
"Development Agreement" means the Development Agreement dated as of ,
2007, by and between the Issuer and the Developer, as the same may be amended, modified,
amended and restated, and supplemented from time to time.
" means The Depository Trust Company, New York, New York.
"Event of Default" means any occurrence or event specified in Section 8.1.
" Fund " or "Account" means a fund or account created by or pursuant to this Indenture.
"Government Obligations" means (i) direct obligations of or obligations fully and
unconditionally guaranteed by the United States of America, including, but not limited to, United
States Treasury Obligations, Separate Trading of Registered Interest and Principal of Securities
(STRIPS) and Coupons Under Book -Entry Safekeeping (CUBES), provided the underlying
United States Treasury Obligation is not callable prior to maturity, and (ii) obligations of the
Resolution Funding Corporation, including, but not limited to, obligations of the Resolution
Funding Corporation stripped by the Federal Reserve Bank of New York.
"Improvement Fund" means the Fund created and so designated in Sections 4.2 and 5.2.
"Improvements" means landscaping, storm and sanitary sewer facilities, lighting,
parking, and other eligible costs to serve the Business District.
5
CHI2_659946.2
"Indenture" means this Trust Indenture as it may from time to time be amended, modified
or supplemented by Supplemental Indentures.
"Information Services" means Financial Information, Inc. "Daily Called Bond Service,"
30 Montgomery Street, 10th Floor, Jersey City, New Jersey 07302, Attention: Editor; Kenny
Information Services, "Called Bond Service," 55 Broad Street, 28th Floor, New York, New York
10004; Moody's Investors Service "Municipal and Government," 5250 77 Center Drive, Suite
150, Charlotte, North Carolina 28217, Attention: Called Bond Department; and Standard &
Poor's Ratings Services "Called Bond Record," 25 Broadway, New York, New York 10004; or,
in accordance with then current guidelines of the Securities and Exchange Commission, such
other addresses and/or such other services providing information with respect to called bonds, or
any other such services as the Issuer may designate in writing to the Trustee.
"Interest Pavment Date" means January 1 and July 1 and of each year, commencing
July 1, 2007.
"Interest Reauirement" means, as of any particular date of calculation and with respect to
Bonds Outstanding on such date of calculation, an amount of money equal to the sum (without
duplication) of (a) any interest payable currently on the Bonds which is then due and payable but
not yet paid (including, without limitation, to the extent allowed under applicable law, interest on
any overdue payments), plus (b) the interest payable currently on the Bonds which will be due
and payable on each Interest Payment Date to occur in the next Bond Year.
"Investment Obliaation" means, to the extent permitted by then applicable Illinois law,
the following:
(a) bonds, notes, certificates of indebtedness, treasury bills or other securities
which are guaranteed by the full faith and credit of the United States of America as to
principal and interest;
(b) bonds, notes, debentures, or other similar obligations of the United States
of America or its agencies, including (i) federal land banks, federal intermediate credit
banks, banks for cooperative, federal farm credit banks, or any other entity authorized to
issue debt obligations under the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.); (ii) the
federal home loan banks and the federal home loan mortgage corporation; and (iii) any
other agency created by Act of Congress;
(c) interest bearing obligations of any county, township, city, village,
incorporated town, municipal corporation or school district, which obligations are
registered in the name of the Issuer or held under a custodial agreement at a bank, if such
obligations at the time of purchase are in one of the two highest general classifications
established by a rating service of nationally recognized expertise in rating bonds of states
and their political subdivisions;
(d) interest bearing certificates of deposit, interest bearing savings accounts or
money market accounts, interest bearing time deposits, or other investments constituting
direct obligations of any bank as defined by the Illinois Banking Act which are insured
6
CH12_659946.2
by the Federal Deposit Insurance Corporation or which are with a bank rated in the
highest short term rating category established by a nationally recognized rating service;
(e) repurchase agreements of government securities which are subject to the
Government Securities Act of 1986. The government securities, unless registered or
inscribed in the name of the Issuer, shall be purchased through banks or trust companies
authorized to do business in the State of Illinois;
(f) repurchase agreements (other than those described in clause (e) of this
definition of "Investment Obligations ") meeting the following requirements:
(i) the securities, unless registered or inscribed in the name of the
Trustee, are purchased through banks or trust companies authorized to do business
in the State of Illinois;
(ii) an Authorized Officer after ascertaining which firm will give the
most favorable rate of interest, directs the custodial bank to "purchase "' specified
securities from a designated institution. The "custodial bank" is the bank or trust
company, or agency of government, which acts for the Trustee in connection with
repurchase agreements involving the investment of funds by the Trustee. The
State Treasurer may act as custodial bank for the Trustee;
(iii) a custodial bank must be a member bank of the Federal Reserve
System or maintain accounts with member banks. All transfers of book -entry
securities must be accomplished on a Reserve Bank's computer records through a
member bank of the Federal Reserve System. These securities must be credited to
the Trustee on the records of the custodial bank and the transaction must be
confirmed in writing to the Trustee by the custodial bank;
(iv) trading partners shall be limited to banks or trust companies
authorized to do business in the State of Illinois or to registered primary reporting
dealers;
(v) the security interest must be perfected;
(vi) the Trustee must enter into a written master repurchase agreement
which outlines the basic responsibilities and liabilities of both buyer and seller;
(vii) the repurchase agreement shall be for periods of 330 days or less;
(viii) the Authorized Officer must inform the custodial bank in writing
of the maturity details of the repurchase agreement;
(ix) the custodial bank must take delivery of and maintain the securities
in its custody for the account of the Trustee and confirm the transaction in writing
to the Trustee. The custodial undertaking shall provide that the custodian takes
possession of the securities exclusively for the Trustee; that the securities are free
7
CHI2_659946.2
of any claims against the trading partner; and any claims by the custodian are
subordinate to the Trustee's claims to rights to those securities;
(x) the obligations purchased by the Trustee may only be sold or
presented for redemption or payment by the fiscal agent bank or trust company
holding the obligations upon the written instruction of the Trustee or Authorized
Officer; and
(xi) the custodial bank shall be liable to the Trustee for any monetary
loss suffered by the Trustee due to the failure of the custodial bank to take and
maintain possession of such securities;
i
(g) short-term obligations of corporations organized in the United States with
assets exceeding $500,000,000 if (i) such obligations are rated at the time of purchase in
one of the three highest rating categories by at least two standard rating services and
which mature not later than 180 days from the date of purchase, (ii) such purchases do
not exceed 10% of the corporation's outstanding obligations and (iii) no more than one-
third of the Issuer's funds are invested in short-term obligations of such corporation as
evidenced by a certificate from an Authorized Officer; and
(h) money market mutual funds registered under the Investment Company Act
of 1940 as amended invested solely in obligations listed in paragraph (a) and (b) above
and in agreements to repurchase such obligations, including those for which the Trustee
or an affiliafe - performs services for a fee, whether as a custodian, transfer agent,
investment advisor or otherwise;
together with such other investments as shall from time to time be lawful for the investment of
Issuer funds and shall be approved by the holders of fifty -one percent (51 %) of aggregate
principal amount of Bonds outstanding; provided that "Investment Obligations" shall not include
a financial instrument, commonly known as a "derivative," whose performance is derived, at
least in part, from the performance of any underlying asset, including, without limitation, futures,
options on securities, options on futures, forward contracts, swap agreements, structured notes
and participations in pools of mortgages or other assets.
" Issuer " means the United City of Yorkville, Kendall County, Illinois, a municipal
corporation of the State or any successor political subdivision which shall hereafter succeed to
the powers, duties and functions of the Issuer.
"Local Sales Tax Account" means the Account created and so designated in Section 5.2.
"Local Sales Taxes" means the total revenue from taxes, penalties and interest which are
paid to the Issuer from the Local Government Tax Fund as created by 35 ILCS 120/3, as
amended, on sales by retailers and servicemen in the Business District; and all revenues from any
taxes, penalties and interest which are paid to the Issuer from the Local Government Tax Fund
on sales by retailers and servicemen in the Business District which are intended to replace the
current payments to the Issuer, and any tax intended to replace the same as enacted by law or
ordinance of the Issuer or any governmental authority.
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CH 12_659946.2
i t
" Moodv's" means Moody's Investors Service, a Delaware corporation, and its successors
and assigns.
"Nominee" means the nominee of the Depository, which may be the Depository, as
determined from time to time pursuant hereto.
"Notice Address" means:
i
(a) As to the Issuer:
United City of Yorkville
800 Game Farm Road
Yorkville, Illinois 60560
Attention: Mayor
(b) As to the Trustee:
The Bank of New York Trust Company, N.A.
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Attention: Corporate Trust Department
"Officer's Certificate" means a certificate signed by an Authorized Officer or, if such
certificate pertains to official action taken by- the- Issuer or official records of the Issuer, by an
Attesting Officer.
"Original Purchaser" means William Blair & Company, L.L.C. and its successors and
assigns.
"Outstanding" means, when used with reference to the Bonds and as of any particular
date, all Bonds theretofore and thereupon being delivered except (a) any Bond cancelled by the
Trustee or delivered to the Trustee for cancellation; (b) any Bond for the payment or redemption
of which either (i) moneys equal to the principal or Redemption Price thereof, as the case may
be, with interest currently payable on such Bonds to the date of maturity or redemption date, or
(ii) specified types of Investment Obligations or moneys in the amounts, of the maturities and
otherwise as described and required under the provisions of Section 7. 1, shall have theretofore
been deposited with the Trustee in trust (whether upon or prior to maturity or the redemption
date of such Bond) and, except in the case of a Bond to be paid at maturity, as to which a
Redemption Notice shall have been given or provided for in accordance with Section 3.3, and (c)
any Bond in lieu of or in substitution for which another Bond shall have been delivered pursuant
to this Indenture.
"Participant" means a member of, or a participant in, the Depository.
"Pledged Revenue" means fifty percent (50 %) of the Local Sales Taxes.
"Principal Installment" means, as of any particular date, an amount of money equal to the
sum of (a) the principal amount of Outstanding Bonds which mature on such date, reduced by
9
CH12_659946.2
the aggregate principal amount of such Outstanding Bonds which would at or before such date
cease to be Outstanding by reason of the application of Sinking Fund Installments at or before
such date, plus (b) the amount of any Sinking Fund Installment payable on such date.
"Principal Installment Date" means January 1, and each subsequent January 1 of
each year thereafter.
"Principal Office of the Trustee" means the office of the Trustee located at 2 North
LaSalle Street, Suite 1020, Chicago, Illinois 60602, or such other office or offices as the Trustee
may designate from time to time, or the office of any successor Trustee where it principally
conducts its business of serving as trustee under indentures pursuant to which municipal or
governmental obligations are issued.
"Principal Requirement" means, as of any particular date and with respect to the Bonds
Outstanding on such date, an amount of money equal to the sum (without duplication) of (a) any
Principal Installment then due and payable on the Bonds but not yet paid, plus (b) any Principal
Installment to become due on the Bonds on each Principal Installment Date to occur in the next
Bond Year.
"Oualified Financial Institution" means any (a) bank or trust company organized under
the laws of any state of the United States of America, (b) national banking association, (c)
savings bank, savings and loan association or insurance company or association chartered or
organized under the laws of any state of the United States of America, (d) federal branch or
agency pursuant to the International Banking Act of 1978: -or any - successor provisions of law, a
domestic branch or agency of a foreign bank which branch or agency is duly licensed or
authorized to do business under the laws of any state or territory of the United States of America,
(e) government bond dealer reporting to, trading with, and recognized as a primary dealer by, the
Federal Reserve Bank of New York, (f) securities dealer approved in writing by Fannie Mae, the
liquidation of which is subject to the Securities Investors Protection Corporation or other similar
corporation and (g), for purposes of subparagraph (g) of the definition of Investment Obligation
only, any institution that is qualified to do business in each jurisdiction where it conducts
business.
"Rating Aaencv" means S &P or any other nationally recognized securities rating agency
rating the Bonds, or such rating agency's successors or assigns.
"Rebatable Arbitral?e" means the amount (determinable as of the last day of each fifth
Bond Year and upon retirement of the last Bond) of arbitrage profits payable to the United States
at the times and in the amounts specified in Section 148(f) of the Code and any applicable
Regulations.
"Rebate Fund" means the Fund created and so designated in Section 5.2.
"Record Date" means the 15th day of the month prior to an Interest Payment Date.
"Redemption Date" means any date Bonds are redeemed.
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CHI2_659946.2
"Redemption Notice" means the notice of redemption of Bonds required to be mailed by
and described in Section 3.3.
"Redemption Price" when used with respect to a Bond or portion thereof, means the
principal amount of such Bond or portion to be redeemed, plus premium, if any.
"Regulations" means the Income Tax Regulations promulgated or proposed under the
Code by the Department of the Treasury, as the same may hereafter be amended, including
regulations promulgated by the Department of the Treasury to implement the requirements of
Section 148 of the Code.
"Reporting Period" means, with respect to each State Report, the period of time covered
by such report.
"Responsible Officer" means any Vice President or Assistant Vice President of the
Trustee having regular responsibility for corporate trust matters.
"Revenues" means all (a) income derived from the investment of moneys credited to the
Funds and Accounts created hereunder (other than from moneys in the Rebate Fund); and (b) all
Pledged Revenue.
" &P " means Standard & Poor's Ratings Services, a division of The McGraw Hill
Companies, and its successors and assigns.
"Securities Depositories" means The Depository Trust Company, New York, New York,
or, in accordance with the then current guidelines of the Securities and Exchange Commission,
such other addresses and/or such other securities depositories as the Issuer may designate in
writing to the Trustee.
"Sinking Fund Installment" means the amount of money (if any) required by this
Indenture to be paid on any single date toward the retirement of any particular Bonds prior to the
stated maturity date thereof.
"State Reports" means the periodic reports provided by the Illinois Department of
Revenue to the Issuer providing information which can be disclosed to the public relating to the
Local Sales Taxes for the specific period of time described in such reports.
"Supplemental Indenture" means any indenture hereafter duly authorized and entered into
between the Issuer and the Trustee amending or supplementing this Indenture in accordance with
the provisions hereof.
"Tax Agreement" means the Tax Agreement and Certificate executed and delivered by
the Issuer in connection with the Bonds.
"Trust Estate" means all the property, rights, moneys, securities and other amounts
pledged and assigned to the Trustee pursuant to the GRANTING CLAUSES hereof.
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CH 12_659946.2
I
" Trustee " means The Bank of New York Trust Company, N.A., or its successors or any
other corporation or association resulting from or surviving any consolidation or merger to which
it or its successors may be a party and any successor trustee at any time serving as successor
trustee hereunder.
Section 1.2 Rules of Construction.
(a) The singular form of any word used herein, including the terms defined in
Section 1.1, shall include the plural, and vice versa, unless the context otherwise requires. The
use herein of a pronoun of any gender shall include the correlative words of other genders.
(b) All references herein to "Articles," "Sections" and other subdivisions
hereof are to the corresponding Articles, Sections or subdivisions of this Indenture as originally
executed; and the words "herein," "hereof," "hereunder," and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section or subdivision hereof.
(c) The headings or titles of the several Articles and Sections hereof, and any
table of contents appended to copies hereof, shall be solely for convenience of reference and
shall not limit or otherwise affect the meaning, construction or effect of this Indenture or
describe the scope or intent of any provisions hereof.
(d) All accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles as in effect from
time to time. _-
(e) Every "request," "order," "demand," "application," "appointment,"
"notice," "statement," "certificate," "consent" or similar action hereunder by any party shall,
unless the form thereof is specifically provided, be in writing signed by a duly authorized
representative of such party with a duly authorized signature.
(f) The parties hereto acknowledge that each such party and their respective
counsel have participated in the drafting and revision of this Indenture. Accordingly, the parties
agree that any rule of construction which disfavors the drafting party shall not apply in the
interpretation of this Indenture or any amendment or supplement or exhibit hereto or thereto.
ARTICLE II
THE BONDS
Section 2.1 Authorization of Bonds. In order to provide funds to finance the
acquisition, construction, and development of the Improvements, bonds of the Issuer, to be
entitled "United City of Yorkville, Kendall County, Illinois Sales Tax Revenue Bonds, Series
2007 (Kendall Marketplace Project)" are hereby authorized to be issued in an aggregate principal
amount of $ and such Bonds shall be issued subject to the terms, conditions and
limitations established in this Indenture as hereinafter provided. The Bonds may be executed by
or on behalf of the Issuer, authenticated by the Trustee and delivered or caused to be delivered by
the Trustee to the original purchasers thereof upon compliance with the requirements set forth in
this Indenture.
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Section 2.2 Terms of Bonds.
(a) The Bonds shall be dated as of their date of issuance, and shall bear
interest from and including their dated date until maturity or earlier redemption thereof at the
rate(s) per annum set forth in the table below, computed on the basis of a 360 day year consisting
of twelve 30 day months, payable on each Interest Payment Date, and shall mature (subject to
prior redemption as herein set forth) on the dates and in the principal amounts as set forth below:
Maturitv Date Amount Interest Rate
January 1, $ %
January 1, %
(b) The Bonds may be issued only in the form of fully registered Bonds in
minimum denominations of $100,000 and $5,000 increments in excess thereof.
(c) The Bonds shall bear interest from their date of authentication or from the
Interest Payment Date for which interest has been paid or duly provided for, which ever date has
most recently occurred; provided, however, if a Bond is authenticated after a Record Date but
prior to the next Interest Payment Date to which such Record Date relates, such Bond shall bear
interest from such Interest Payment Date provided, however, that if at the time of authentication
of any Bond, interest is in default on such Bond, such Bond shall bear interest from the Interest
Payment Date to which interest has previously been paid or made available for payment.
(d) Payment of the principal of and Redemption Price of any Bond shall be
made to the person appearing on the Bond Register as the registered owner thereof, upon
presentation and surrender thereof by such registered owner at the Principal Office of the Trustee
or at such other office as may be designated by the Trustee, and interest payable currently on any
Bond shall be paid by the Trustee by check mailed by first class mail, postage prepaid, on each
Interest Payment Date to the registered owner as such registered owner's name and address
appears on the register kept by the Trustee as of the close of business on the Record Date
immediately preceding such Interest Payment Date, or upon a written request, received on or
before the Record Date preceding an Interest Payment Date, of a Bondholder of $1,000,000 or
more in aggregate principal amount of Bonds, by wire transfer in immediately available funds to
an account designated by such Bondholder. The principal of, premium, if any, and interest on
the Bonds shall be payable in lawful money of the United States of America. Together with each
payment of principal of, premium or interest, the Trustee shall provide to registered owners a
notice identifying the appropriate dollar amount of such payments for each CUSIP number, but
only if the registered owner owns Bonds with more than one CUSIP number.
(e) The Bonds shall be subject to redemption prior to maturity as provided in
Article III.
(f) All amounts that become due hereunder (including, without limitation, the
principal of, premium, interest, and fees and expenses) that are not paid when due shall, to the
extent allowed under applicable law, bear interest from such due date until paid at the highest
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interest rate then applicable on the Bonds at such interest shall be payable when there is
sufficient funds on deposit in the appropriate funds to make such payment.
Section 2.3 Execution: Limited Obligation. The Bonds shall be executed in the name
of the Issuer by the manual or facsimile signature of an Authorized Officer and its corporate seal
(or a facsimile thereof) shall be thereunto affixed, imprinted, impressed, engraved or otherwise
reproduced and attested to by the manual or facsimile signature of its Attesting Officer, or in
such other manner as may be required by law. In case any one or more of the officers of the
Issuer who shall have signed or sealed any of the Bonds or whose signature appears on any of the
Bonds shall cease to be such officer before the Bonds so signed and sealed shall have been
actually authenticated or delivered or caused to be delivered by the Trustee or issued by the
Issuer, such Bonds may, nevertheless, be authenticated and issued and, upon such authentication,
delivery and issue, shall be as binding upon the Issuer as if the persons who signed or sealed
such Bonds or whose signatures appear on any of the Bonds had not ceased to hold such offices
until such delivery. Any Bond may be signed and sealed on behalf of the Issuer by such persons
as at the actual time of execution of the Bonds shall be duly authorized or hold the proper office
in the Issuer, although at the date of issuance and delivery of the Bonds such persons may not
have been so authorized or have held such office.
The Bonds, together with interest and premium, if any, thereon are not general
obligations of the Issuer but are limited obligations payable solely from the Trust Estate herein
pledged to the payment thereof and shall be a valid claim of the respective holders thereof only
against the Trust Estate so pledged as aforesaid, which Trust Estate is hereby pledged, assigned
and otherwise secured for the equal and ratable payment of the Bonds and shall be used for no
other purpose than to pay the principal and Redemption Price of and interest on the Bonds,
except as may be otherwise expressly authorized in this Indenture. The Bonds and the interest
thereon and all other obligations of the Issuer to pay moneys shall not be deemed to constitute a
general debt, liability or obligation of the Issuer or a debt, liability or obligation of the Issuer, the
State or any political subdivision thereof, or a pledge of the faith and credit of the Issuer, the
State or any political subdivision thereof. The principal of and the interest thereon shall never
constitute an indebtedness, liability, general or moral obligation or a pledge of the faith or loan of
credit of the Issuer, the State or any political subdivision thereof within the meaning of any
constitutional provision or statutory limitation and shall never constitute or give rise to a
pecuniary liability or be a charge against the general credit or taxing powers of such body.
Section 2.4 Authentication. The Bonds shall bear thereon a certificate of
authentication, substantially in the form set forth in Exhibit A hereto and executed by the
Trustee. Only Bonds which bear thereon such executed certificates of authentication shall be
entitled to any right or benefit under the Indenture, and no Bond shall be valid for any purpose
under this Indenture until such certificate of authentication shall have been duly executed by the
Trustee. Such certificate of authentication upon any Bond shall be conclusive evidence that the
Bond so authenticated has been duly issued under this Indenture and that the holder thereof is
entitled to the benefits of this Indenture.
Section 2.5 Form of Bonds. The Bonds issued under this Indenture and the Trustee's
certificate of authentication thereon shall be substantially in the form as set forth in Exhibit A
hereto, in each case with only such variations, omissions and insertions as are permitted or
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CHI2_659946.2
required by this Indenture, and except that provisions indicated in Exhibit A as appearing on
either the face or the reverse of the Bonds may appear on either the face or the reverse of the
Bonds, or the Bonds may be reproduced on one or more pages without a reverse side, all as the
Issuer determines to be appropriate, and the Bonds may have endorsed thereon such legends or
text as may be necessary or appropriate to conform to any applicable rules and regulations of any
governmental authority or any usage or requirement of law with respect thereto.
Section 2.6 Delivery of Bonds. After the execution and delivery of this Indenture, the
Issuer shall execute and deliver to the Trustee, and the Trustee shall authenticate, the Bonds and
deliver them to the original purchaser or purchasers thereof as directed by the Issuer as
hereinafter in this Section provided.
Prior to the delivery by the Trustee of any of the Bonds, there shall be filed with the
Trustee:
(a) a copy,- duly certified by an Attesting Officer of the Issuer, of the
resolution adopted by the governing body of the Issuer authorizing the issuance of the Bonds and
the execution and delivery of this Indenture, the Development Agreement and the Tax
Agreement;
(b) original executed counterparts of this Indenture, the Development
Agreement and the Tax Agreement;
(c) a request and authorization to the Trustee on behalf of the Issuer and
signed by an Authorized Officer of the Issuer to authenticate and deliver the Bonds to the
purchaser or purchasers therein identified, in the denominations and registered in the name or
names therein specified, upon payment to the Trustee, but for the account of the Issuer, of a sum
specified in such request and authorization; the proceeds of such payment to be paid over to the
Trustee to be disbursed as provided in Article IV;
(d) the purchase price of the Bonds;
I
(e) the favorable opinion of Foley & Lardner LLP, bond counsel for the
Issuer.
Section 2.7 Bonds Mutilated, Lost, Destroved or Stolen. If any Bond shall become
mutilated, the Issuer, at the expense of the owner of such Bond shall execute, and the Trustee
shall thereupon authenticate and deliver, a new Bond of like tenor in exchange and substitution
for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated.
Every mutilated Bond so surrendered to the Trustee shall be cancelled by it and delivered to, or
upon the order of, the Issuer. If any Bond shall be lost, destroyed or stolen, evidence of such
loss, destruction or theft may be submitted to the Trustee and, if such evidence shall be
satisfactory to it and indemnity satisfactory to the Trustee shall be given, the Issuer, at the
expense of the owner of such Bond, shall execute, and the Trustee shall thereupon authenticate
and deliver, a new Bond of like tenor. The Trustee may require payment of a sum not exceeding
the actual cost of preparing each new Bond authenticated and delivered under this Section and of
the expenses which may be incurred by the Issuer and the Trustee in the premises. Any Bond
authenticated and delivered under the provisions of this Section in lieu of any Bond alleged to be
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CH12_659946.2
lost, destroyed or stolen shall constitute an original additional contractual obligation on the part
of the Issuer whether or not the Bond so alleged to be lost, destroyed or stolen shall be at any
time enforceable by anyone, and shall be equally and proportionately entitled to the benefits of
this Indenture with all other Bonds secured by this Indenture. If any such Bond shall have
matured, or is about to mature, instead of issuing a new Bond the Trustee may pay the same
without surrender thereof upon receipt of the aforementioned indemnity.
Section 2.8 Registration, Transfer and Exchange of Bonds, Persons Treated as
Owners. The Issuer shall cause registration books for the registration and transfer of the Bonds
as provided herein to be kept by the Trustee. The Trustee is hereby constituted and appointed the
bond registrar and paying agent of the Issuer with respect to the Bonds.
Bonds may be transferred on the Bond Register maintained by the Trustee as bond
registrar upon presentation and surrender thereof at the Principal Office of the Trustee, or at such
other office of the Trustee as the Trustee may designate, for notation of such transfer on the
Bond Register, accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by the Bondholder or his duly authorized attorney, subject to successive
transfers at the option of the Bondholder. At the option of the Bondholder, Bonds may be
exchanged for an equal aggregate principal amount of Bonds of the same interest rate and
maturity and of any authorized denomination, upon surrender thereof at the Principal Office of
the Trustee and upon payment of the charges hereinafter provided. The Issuer shall cause to be
prepared and executed and the Trustee shall authenticate and deliver the Bonds which the
Bondholder making the exchange is entitled to receive, bearing numbers not contemporaneously
then outstanding. Neither the Issuer nor the Trustee shall be required to transfer or exchange
Bonds from the Record Date preceding an Interest Payment Date through and including such
Interest Payment Date or from the fifteenth day next preceding any selection of Bonds to be
redeemed until the first mailing of any Redemption Notice or to transfer or exchange any Bonds
selected for redemption.
The cost of any printing of any new Bond and any services rendered or other expenses
incurred by the Trustee in connection with any exchange or transfer provided for in this Section
shall be paid from the Local Sales Tax Account, or to the extent no amounts are on deposit in the
Local Sales Tax Account for such purpose, shall be charged to the Issuer. No charge shall be
made to any Bondholder for the privilege of registration and transfer as herein provided, but any
Bondholder requesting any such registration or transfer shall pay any tax or other governmental
charge required to be paid with respect thereto.
The person in whose name any Bond shall be registered shall be deemed and regarded as
the absolute owner thereof for all purposes, and payment of or on account of the principal or
Redemption Price of, or interest on, any such Bond shall be made only to or upon the written
order of the Bondholder thereof or his duly authorized attorney, and neither the Issuer nor the
Trustee shall be affected by any notice to the contrary, but such registration may be changed as
hereinabove provided.
Section 2.9 Cancellation of Bonds. Whenever any Outstanding Bond shall be
delivered to the Trustee for cancellation pursuant to this Indenture, upon payment of the
principal amount and interest represented thereby, for replacement pursuant to Section 2.7 or for
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transfer or exchange pursuant to Section 2.8, such Bond shall be canceled and destroyed by the
Trustee and counterparts of a certificate of destruction evidencing such destruction shall be
furnished by the Trustee to the Issuer.
Section 2.10 Temnorary Bonds. The Bonds may be initially issued in temporary form
exchangeable for definitive Bonds when ready for delivery. The temporary Bonds may be
printed, lithographed or typewritten, shall be of such denominations as may be determined by the
Issuer and may contain such reference to any of the provisions of this Indenture as may be
appropriate. Every temporary Bond shall be executed by the Issuer and be authenticated by the
Trustee upon the same conditions and in substantially the same manner as the definitive Bonds.
If the Issuer issues temporary Bonds, it will execute and furnish definitive Bonds without delay
upon the request of the registered owners of said Bonds, and thereupon the temporary Bonds
may be surrendered for cancellation in exchange therefore at the Principal Office of the Trustee,
and the Trustee shall authenticate and deliver in exchange for such temporary Bonds an equal
aggregate principal amount of definitive Bonds of authorized denominations. Until so
exchanged, the temporary Bonds shall be entitled to the same benefits under this Indenture as
definitive Bonds authenticated and delivered hereunder.
Section 2.11 Additional Bonds. No bonds other than the Bonds authorized in
Section 2.1 shall be issued under this Indenture, except as provided in Section 2.7 and Section
2.8.
Section 2.12 Book -Entry Svstem. The Bonds shall be initially issued in the form of a
separate single fully registered Bond (which may be typewritten) for each maturity of the Bonds.
Upon initial execution, authentication and delivery, the ownership of each such global Bond
shall be registered in the Bond Register in the name of the Nominee as nominee of the
Depository. Except as provided in Section 2.14, all of the Outstanding Bonds shall be registered
in the Bond Register kept by the Trustee in the name of the Nominee and the Bonds may be
transferred, in whole but not in part, only to the Depository, to a successor Depository or to
another nominee of the Depository or of a successor Depository. Each global Bond shall bear a
legend substantially to the following effect: "UNLESS THIS BOND IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AS DEFINED IN THE
INDENTURE OF TRUST) TO THE TRUSTEE FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY BOND ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN."
With respect to Bonds registered in the Bond Register in the name of the Nominee, the
Issuer and the Trustee shall have no responsibility or obligation to any Participant or to any
person on behalf of which such a Participant holds a beneficial interest in the Bonds. Without
limiting the immediately preceding sentence, the Issuer and the Trustee shall have no
responsibility or obligation with respect to (a) the accuracy of the records of the Depository, the
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Nominee or any Participant with respect to any beneficial ownership interest in the Bonds, (b)
the delivery to any Participant, Beneficial Owner or any other person, other than the Depository,
of any notice with respect to the Bonds, including any Redemption Notice, (c) the selection by
the Depository and the Participants of the beneficial interests in the Bonds to be redeemed in
part, or (d) the payment to any Participant, Beneficial Owner or any other person, other than the
Depository, of any amount with respect to principal of, premium, if any, or interest on the Bonds.
The Issuer and the Trustee may treat and consider the person in whose name each Bond is
registered in the Bond Register as the holder and absolute owner of such Bond for the purpose of
payment of principal of, premium, if any, and interest on such Bond, for the purpose of giving
Redemption Notices and other notices with respect to such Bond, and for all other purposes
whatsoever, including, without limitation, registering transfers with respect to the Bonds.
The Trustee shall pay all principal of, premium, if any, and interest on the Bonds only to
or upon the order of the respective Bondholders, as shown in the Bond Register kept by the
Trustee, or their respective attorneys duly authorized in writing, and all such payments shall be
valid hereunder with respect to payment of principal of, premium, if any, and interest on the
Bonds to the extent of the sum or sums so paid. No person other than a Bondholder, as shown in
the Bond Register, shall receive a Bond evidencing the obligation to make payments of principal
of, premium, if any, and interest pursuant to this Indenture. Upon delivery by the Depository to
the Trustee and the Issuer of written notice to the effect that the Depository has determined to
substitute a new nominee in place of the Nominee, and subject to the provisions herein with
respect to Record Dates, the word Nominee in this Indenture shall refer to such new nominee of
the Depository.
Section 2.13 Representation Letter. In order to qualify the Bonds for the Depository's
book -entry system, any Authorized Officer is hereby authorized to execute, seal, countersign and
deliver on behalf of the Issuer to such Depository a letter from the Issuer representing such
matters as shall be necessary to so qualify the Bonds (the "Representation Letter "). The
execution and delivery of the Representation Letter shall not in any way limit the provisions of
Section 2.12 or in any other way impose upon the Issuer any obligation whatsoever with respect
to persons having beneficial interests in the Bonds other than the registered owners, as shown in
the Bond Register kept by the Trustee. In the written acceptance by the Trustee of the
Representation Letter, the Trustee shall agree, and hereby agrees, to take all actions necessary for
all representations of the Issuer in the Representation Letter with respect to the Trustee to at all
times be complied with. In addition to the execution and delivery of the Representation Letter,
any Authorized Officer is hereby authorized to take any other actions, not inconsistent with this
Indenture, to qualify the Bonds for the Depository's book -entry program.
Section 2.14 Transfers Outside Book -Entry System. If at any time the Depository
notifies the Issuer and the Trustee that it is unwilling or unable to continue as Depository with
respect to the Bonds or if at any time the Depository shall no longer be registered or in good
standing under the Securities Exchange Act of 1934, as amended, or other applicable statute or
regulation and a successor Depository is not appointed by the Issuer within 90 days after the
Issuer and the Trustee receive notice or become aware of such condition, as the case may be,
Section 2.12 shall no longer be applicable and the Trustee shall execute and deliver bonds
representing the Bonds as provided below. In addition, the Issuer may determine at any time that
the Bonds shall no longer be represented by global bonds and that the provisions of Section 2.12
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shall no longer apply to the Bonds. In any such event, the Issuer shall execute and the Trustee
shall authenticate and deliver bonds representing the Bonds as provided below. Bonds issued in
exchange for global bonds pursuant to this Section shall be registered in such names and
delivered in such authorized denominations as the Depository, pursuant to instructions from the
Participants or otherwise, shall instruct the Issuer and the Trustee. The Trustee shall deliver such
bonds representing the Bonds to the persons in whose names such Bonds are so registered.
If the Issuer determines to replace the Depository with another qualified securities
depository, the Issuer shall prepare or cause to be prepared a new fully- registered global bond for
each of the maturities of Bonds, registered in the name of such successor or substitute securities
depository or its nominee, or make such other arrangements as are acceptable to the Issuer, the
Trustee and such securities depository and not inconsistent with the terms of this Indenture.
Section 2.15 Pavments and Notices to the Nominee. Notwithstanding any other
provision of this Indenture to the contrary, so long as any Bond is registered in the name of the
Nominee, all payments with respect to principal of, premium, if any, and interest on such Bond
and all notices with respect to such Bond shall be made and given, respectively, as provided in
the Representation Letter or as otherwise instructed by the Depository.
Section 2.16 Initial Denository and Nominee. The initial Depository under this
Indenture shall be DTC. The initial Nominee shall be Cede & Co., as nominee of DTC.
ARTICLE III
REDEMPTION OF BONDS
Section 3.1 Terms of Redemption. The Bonds shall be subject to redemption prior to
the stated maturity thereof only as set forth in this Section.
(a) Optional Redemption. The Bonds maturing on and after January 1, 2017
are subject to redemption, in whole or in part, at the option of the Issuer, on any date on or after
January 1, 2016 at the Redemption Prices (expressed as percentages of the principal amount) set
forth in the table below plus accrued and unpaid interest to the Redemption Date.
Redemption Dates (dates inclusive) Redemption Price
January 1, 2016 through December 31, 2016 102%
January 1, 2017 through December 31, 2017 101%
On and after January 1, 2018 100%
(b) Special Mandatory Redemption. The Bonds maturing January 1, are
subject to mandatory redemption, in whole or in part, by lot, from available monies on deposit in
the Improvement Fund on and after January 1, . Any such redemption shall occur on an
Interest Payment Date occurring on or after January 1, when monies transferred to the
Bond Fund from the Improvement Fund are in excess of the amount needed to redeem at least
one Bond at the Redemption Price of 100% of the principal amount plus accrued and unpaid
interest to the Redemption Date. Whenever the Trustee determines that monies in the
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CHI2_659946.2
Improvement Fund transferred to the Bond Fund are sufficient to effect a redemption pursuant to
this Section 3.1(b), the Trustee shall redeem as many Bonds maturing January 1, — as possible
from the monies transferred from the Improvement Fund at the Redemption Price of 100% of the
principal amount plus accrued and unpaid interest to the Redemption Date.
(c) Mandatory Sinkina Fund Redemption. The Bonds maturing on January 1,
are subject to mandatory redemption in part, by lot, from Sinking Fund Installments on
each January 1 commencing on January 1, _, at a Redemption Price equal to the principal
thereof plus, in each case, accrued and unpaid interest to the date fixed for redemption, without
premium, on the respective dates and in the amounts set forth in the following table:
Date Amount to be Redeemed
January 1, $
January 1,
January 1,
January 1,
January 1,
January 1,
January 1, (Maturity)
(d) Mandatory Sinkina Fund Redemption. The Bonds maturing on January 1,
are subject to mandatory redemption in part, by lot, from Sinking Fund Installments on
each January 1 commencing on January 1, , at a Redemption Price equal to the principal
amount thereof plus, in each case, accrued and unpaid interest to the date fixed for redemption,
without premium, on the respective dates and in the amounts set forth in the following table:
Date Amount to be Redeemed
January 1, $
January 1,
January 1,
January 1,
January 1,
January 1,
January 1,
January 1,
January 1, (Maturity)
(e) If any Bonds are redeemed other than from Sinking Fund Installments, the
principal amount of such Bonds that have been redeemed shall be applied to the appropriate
Sinking Fund Installments in inverse order of maturity.
Section 3.2 Selection of Bonds to be Redeemed. Bonds shall be redeemed in inverse
order of maturity and within a maturity beginning with the latest Sinking Fund Installment. If
less than all of the Bonds of a maturity then Outstanding are to be redeemed, the Trustee shall
assign to each Bond of such maturity then Outstanding a distinctive number for each $100,000
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i
and each $5,000 in excess thereof of such maturity and shall select by lot, using such method of
selection as the Trustee shall deem proper in its discretion and from the numbers so assigned to
such registered Bonds, as many numbers as, at $100,000 and $5,000 in excess thereof shall equal
the principal amount of such Bonds of such maturity to be redeemed. The Bonds within such
maturity to be redeemed shall be the Bonds to which were assigned numbers so selected, but
only so much of the principal amount of each such Bond of such maturity of a denomination of
more than $100,000 shall be redeemed as shall equal $5,000 for each number assigned to it and
so selected. For the purposes of this Section, Bonds which have theretofore been selected by lot
for redemption shall not be deemed Outstanding.
Section 3.3 Notice of Redemption. As soon as practicable after (a) receipt by the
Issuer of its election to redeem Bonds pursuant to Section 3.1(a), or (b) at any time after
January 1, there being on deposit moneys in the Improvement Fund sufficient to redeem
Bonds pursuant to Section 3.1(b), the Trustee shall, in accordance with the terms and provisions
of the Bonds and hereof, select the Bonds of such maturity or portions thereof to be redeemed
and shall give written notice at such time, in the name of the Issuer, of the redemption of Bonds
of such maturity, which notice shall specify the complete official name of the Bonds, CUSIP
numbers of all Bonds being redeemed, the date of the notice (i.e. the date of general mailing of
notices to Bondholders and information services), the redemption date, the Redemption Price,
the Trustee's name, principal corporate trust office address, contact person and phone number,
the date of issue, interest rate, maturity date and the place or places where amounts due upon
such redemption will be payable, and, if less than all of the Bonds of a maturity are to be
redeemed, the letters and numbers or other distinguishing marks of such Bonds so to be
redeemed and the amount of each Bond called. Such notice shall further state that (1) any
redemption pursuant to Section 3.1(a) is conditioned upon the deposit of moneys in an amount
equal to the amount necessary to effect the redemption with the Trustee no later than the date
that is five (5) Business Days prior to the redemption date, (2) the Issuer retains the right to
rescind such notice on or prior to the scheduled redemption date, (3) such notice and optional
redemption shall be of no force and effect if such moneys described in clause (1) immediately
above are not so deposited with the Trustee or if the notice is rescinded by the Issuer as described
in clause (2) immediately above, (3) if moneys are deposited in accordance with clause (1)
immediately above and the Issuer does not rescind such notice of redemption, then on such
redemption date there shall become due and payable upon each Bond to be redeemed the
Redemption Price thereof, or the Redemption Price of the portion of the principal amount thereof
to be redeemed in the case of a Bond to be redeemed in part only, together with interest accrued
to such date, only upon physical presentation and surrender of such Bond, and that from and after
such date interest thereon shall cease to accrue and be payable.
Except as otherwise provided in Section 3.2 and below, the Trustee shall mail, by first
class mail, a copy of such Redemption Notice, postage prepaid, not less than 30 days and not
more than 60 days before the date fixed for redemption, to the registered owner of any Bond all
or a portion of which is to be redeemed, at the address appearing upon the Bond Register.
Each Redemption Notice shall also be sent by certified mail, return receipt requested,
overnight delivery service or other secure means, postage prepaid, to any holder of $ 1,000,000
or more in aggregate principal amount of Bonds to be redeemed, to certain municipal registered
Securities Depositories which are known to the Trustee to be holding Bonds and to at least two
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of the national'Information Services that disseminate securities redemption notices, at least ten
days and not more than 45 days, prior to the redemption date, and in the case of the notice to
Securities Depositories, when possible, at least two days prior to the mailing of notices required
by the first paragraph of this Section.
Any registered owner holding at least $1,000,000 in aggregate principal amount of Bonds
of a maturity may request that the Trustee send an additional copy of any notice (default,
redemption or any other correspondence) by first class mail, postage prepaid, to a second address
simultaneously with, and in addition to the regular mailing of such notices to registered owners
recorded on the books of the Trustee.
Failure to give notice by mailing to the holder of any Bond designated for redemption or
to any Securities Depository or Information Service, failure to receive such notice, any defect of
any notice so mailed or the failure to give timely notice of redemption shall not affect the
validity of the proceedings for the redemption of any Bond.
Any optional redemption pursuant to Section 3.1(a) may be'rescinded in whole or in part
by the Issuer at any time prior to the fifth Business Day prior to the redemption date if the Issuer
delivers to the Trustee a notice of such rescission. The Trustee shall give prompt notice of such
rescission to the holders of the Bonds in the same manner as the redemption notice. Any Bonds
that are subject to an optional redemption that has been rescinded shall remain Outstanding, and
the rescission shall not constitute an Event of Default. Further, in the case of an optional
redemption pursuant to Section 3.1(a), the failure of the Issuer to deposit sufficient funds with
the Trustee to cause such redemption (in whole or in part) shall not constitute an Event of
Default, and the Trustee shall give prompt notice to the holders of the Bonds that such
redemption did not occur and that the Bonds called for redemption and not so paid remain
Outstanding in the same manner as the redemption notice was given by the Trustee.
Section 3.4 Payment of Redeemed Bonds. Notice having been given in the manner
provided in Section 3.3, the Bonds or portions thereof called for redemption and specified in said
notice shall become due and payable on the redemption date specified in the Redemption Notice
at the Redemption Prices thereof applicable on such date, plus unpaid interest on such Bonds or
portions thereof accrued to such date, and, upon presentation and surrender thereof at the place
or places specified in said notice, such Bonds or portions thereof shall be paid at the Redemption
Price plus unpaid interest on such Bonds or portions thereof accrued to such date. If there shall
be so called for redemption less than all of a Bond, the Issuer shall execute and cause to be
delivered, upon the surrender of such Bond to the Trustee, without charge by the Issuer or the
Trustee to the owner thereof, for the unredeemed balance of the principal amount of the Bond so
surrendered, a new Bond or Bonds of the same interest rate and maturity of authorized
denominations. If, on such redemption date, moneys for the redemption of all the Bonds or
portions thereof to be redeemed, together with interest thereon accrued and unpaid to such date,
shall be held by or on behalf of the Trustee so as to be available therefore on such date and if a
Redemption Notice therefore shall have been given as aforesaid, then from and after such
redemption date interest on the Bonds or portions thereof so called for redemption shall cease to
accrue and be payable, and said Bonds shall no longer be considered as Outstanding hereunder.
All moneys held by or on behalf of the Trustee for the redemption of particular Bonds shall be
held in trust for the account of the holders of the Bonds so to be redeemed.
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Section 3.5 Purchase of Bonds: Tenders. Unless expressly provided otherwise herein,
if at any time moneys are held in the Bond Fund to be used to redeem Bonds, in lieu of such
redemption, the Issuer may direct the Trustee to use part or all of such moneys to purchase
Bonds of the maturity which would otherwise be subject to redemption from such moneys. The
purchase price of such Bonds, excluding accrued interest, shall not exceed the applicable
Redemption Price of the Bonds of such maturity which would be redeemed but for the operation
of this Section. Any such purchase must be completed prior to the time the Trustee selects
Bonds of such maturity for redemption. All Bonds so purchased shall be canceled by the
Trustee, and the principal amount so purchased shall be applied as a credit against the Issuer's
obligation to redeem such Bonds from such moneys. Savings resulting from the purchase of
Bonds at less than their respective redemption prices shall be used to purchase or redeem
additional Bonds of the same maturity to the extent permitted by the provisions hereof.
The Issuer may direct the Trustee to request the submission of tenders following
published notice requesting such submission prior to making the purchases authorized pursuant
to the preceding paragraph. The Issuer may specify the maximum and minimum period of time
which shall transpire between the date upon which such notice is to be given and the date upon
which such tenders are to be accepted. No tenders shall be considered or accepted at any price
exceeding the price specified in the preceding paragraph for the purchase of such Bonds. The
Issuer (or the Trustee, as the case may be) shall accept bids with the lowest price and in the event
the moneys available for purchase pursuant to such tenders are not sufficient to permit
acceptance of all tenders and if there shall be tenders at an equal price above the amount of
moneys available for purchase, then the Issuer (or the Trustee, as the case may be) shall select by
lot, in such manner as it shall determine in its discretion, the Bonds tendered which shall be
purchased.
ARTICLE IV
APPLICATION OF BOND PROCEEDS; PLAN OF FINANCING
Section 4.1 Initial Deposit of Bond Proceeds. The proceeds of sale of the Bonds shall;
on the Closing Date, be delivered to the Trustee, who shall forthwith deposit $ of such
proceeds into the Costs of Issuance Fund, $ of such proceeds representing capitalized
interest into the Capitalized Interest Account of the Bond Fund, an amount equal to the Debt
Service Reserve Fund Requirement into the Debt Service Reserve Fund, an amount equal to the
Administration Expense Fund Requirement into the Administration Expense Fund and the
balance of such proceeds into the Improvement Fund.
Section 4.2 Establishment and Application of Improvement Fund. The Trustee shall
establish, maintain and hold in trust a separate fund designated as the "Improvement Fund."
Except as otherwise provided herein, moneys in the Improvement Fund shall be used solely to
finance the Improvements.
The Improvement Fund shall consist of the amounts required or permitted to be deposited
therein pursuant to any provision hereof and the proceeds of the Bonds shall be deposited therein
in the amount set out in Section 4.1 hereof. Payments from the Improvement Fund, shall be
made by the Trustee as follows:
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I
(A) Payments from the Improvement Fund shall be made only upon receipt by
the Trustee of a requisition executed by the Issuer in the form of Request for Payment set
forth in Exhibit C.
(B) Upon completion of the Improvements (as evidenced by a certificate of
Issuer delivered to the Trustee), any moneys remaining in the Improvement Fund shall be
transferred to the Bond Fund to redeem Bonds pursuant to Section 3.1(b), unless the
Issuer directs that such moneys be deposited into the Local Sales Tax Account, or applied
to any other use, accompanied in either case by an opinion of Bond Counsel to the effect
that such application will not adversely affect any applicable exemption from federal
income taxation of the interest on the Bonds.
Notwithstanding anything to the contrary herein, to the extent an Event of Default shall
have occurred and be continuing and no other moneys are available under this Indenture to cure
such Event of Default, no moneys on deposit in the Improvement Fund. shall be applied in
accordance with Section 4.2(B). In such event, moneys on deposit in the Improvement Fund
shall be applied by the Trustee in accordance with Article VIII.
Section 4.3 Costs of Issuance Fund. The Issuer shall, on the Closing Date, cause to be
delivered from proceeds of the Bonds, to the Trustee for deposit in the Costs of Issuance Fund,
amounts to pay costs incurred in connection with the issuance of the Bonds. The Trustee shall
use such funds to pay the Costs of Issuance on the Closing Date or as soon as practicable
thereafter in accordance with written instructions to be .given to the Trustee by the Issuer, upon
delivery to the Trustee of appropriate invoices-for such expenses. Any unexpended amounts
attributable to deposits made by the Issuer remaining on deposit in the Costs of Issuance Fund
three months after the Closing Date shall be transferred to the Improvement Fund.
ARTICLE V
REVENUES AND FUNDS
Section 5.1 Pledge of Revenues and Assets,. The pledge and assignment of and the
security interest granted in the Trust Estate pursuant to the Granting Clauses hereof for the
payment of the principal of, premium, if any, and interest on the Bonds, in accordance with their
terms and provisions, and for the payment of all other amounts due hereunder, shall attach, be
perfected and be valid and binding from and after the time of the delivery of the Bonds by the
Trustee or by any person authorized by the Trustee to deliver the Bonds. The Trust Estate so
pledged and then or thereafter received by the Trustee shall immediately be subject to the lien of
such pledge and security interest without any physical delivery thereof or further act, and the lien
of such pledge and security interest shall be valid and binding and prior to the claims of any and
all parties having claims of any kind in tort, contract or otherwise against the Issuer irrespective
of whether such parties have notice thereof.
Section 5.2 Establishment of Funds. In addition to the Improvement Fund established
under Section 4.2, the Trustee shall establish, maintain and hold in trust the following funds and
accounts, each of which shall be disbursed and applied only as herein authorized:
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(a) Local Sales Tax Account of the Business District Tax Allocation Fund;
(b) Debt Service Reserve Fund;
(c) Bond Fund, including a Capitalized Interest Account;
Costs of Issuance Fund;
(d) Co ,
(e) Administrative Expense Fund; and
Rebate Fund.
Section 5.3 Application of Revenues. All Revenues shall be deposited by the Trustee,
promptly upon receipt thereof, to the Local Sales Tax Account. On each date specified below for
each year the Bonds remain Outstanding, the Trustee shall, out of moneys in the Local Sales Tax
Account, make the following transfers and credit the following amounts to the following Funds,
but only to the extent moneys in the Local Sales Tax Account are then available and only within
the limitations hereinafter indicated with respect thereto and only after the Trustee has made the
required payment and transfer within such limitation prior in order as mentioned in the following
enumeration:
First On each Accounting Date, to the Bond Fund, an amount equal to the sum
of the Interest Requirement and the Principal Requirement for the next Bond Year to be
applied as set forth in Section 5.5;
Second On each Accounting Date, to the Administrative Expense Fund, an
amount equal to the difference, if any, between the Administrative Expense Fund
Requirement for the subsequent calendar year and the amount then in the Administrative
Expense Fund, such amounts in such Fund to be applied as set forth in Section 5.8; and
Third On each Accounting Date, to the Debt Service Reserve Fund an amount
equal to the difference, if any, between the Debt Service Reserve Fund Requirement and
the amount then in the Debt Service Reserve Fund to be applied as set forth in Section
5.4.
Any Revenues remaining in the Local Sales Tax Account shall be retained therein
and applied at the direction of the Issuer to any purpose authorized by the Business
District Act.
Section 5.4 Application of Debt Service Reserve Fund. Amounts in the Debt Service
Reserve Fund shall be withdrawn by the Trustee and used solely to pay first, on any Interest
Payment Date or Principal Installment Date an amount sufficient to satisfy any deficiency in the
Bond Fund in accordance with Section 5.5, and second on each Interest Payment Date, any
amount required to be deposited in the Rebate Fund to the extent sufficient funds are not
otherwise made available to the Trustee for such purposes. At such time as the amounts in the
Debt Service Reserve Fund are equal to or greater than the principal of, premium, if any, and
interest due on the Outstanding Bonds, such amounts shall be transferred to the Bond Fund. No
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Service Reserve Fund except as expressly
amount shall be withdrawn from the Debt Se p rovided in p
this Section.
Section 5.5 ADDlication of Bond Fund. The Trustee shall charge the Bond Fund, on
each Interest Payment Date and Principal Installment Date, respectively, an amount equal to the
unpaid interest or principal due on the Bonds on such Interest Payment Date or Principal
Installment Date (including, without limitation, to the extent allowed under applicable law,
interest on any overdue payments of principal, premium, and interest as provided in Section 2.2
(g)), and shall cause the same to be applied to the payment of such interest or principal, when
due. The Trustee, on each Principal Installment Date on which a Sinking Fund Installment is
due, shall also charge the Bond Fund the amount necessary for the purchase or the redemption of
the Bonds with respect to which such Sinking Fund Installment is due.
At the written direction of the Issuer delivered prior to the selection of Bonds for
redemption, the Trustee shall apply any money credited to the Bond Fund which has been set
aside for the payment of a Sinking Fund Installment to the purchase or the redemption of the
Bonds for which such Sinking Fund Installment is due in the manner provided in this paragraph;
provided that no Bonds shall be purchased during the period of 30 days next preceding the date
of a Sinking Fund Installment established for the Bonds. The purchase price paid by the Trustee
(calculated excluding accrued interest but including any brokerage and other charges) for any
Bond purchased pursuant to this paragraph shall not exceed the Redemption Price of such Bond
applicable upon its redemption through application of the money available for such purchase on
the-next date on which such Bonds could be redeemed in accordance with its terms by operation ,
of Sinking Fund Installments. All Bonds so purchased by the Trustee shall be cancelled. Not
less than 30 nor more than 45 days before the date of each Sinking Fund Installment, the Trustee
shall call for redemption Bonds in an aggregate principal amount equal to such Sinking Fund
Installment, reduced by the principal amount of Bonds purchased pursuant to the foregoing
provisions of this paragraph, and on that date such Sinking Fund Installment is due the Trustee
shall apply the money set aside therefore in the Bond Fund to the payment of the Redemption
Price of the Bonds so called for redemption.
Income realized from the investment or deposit of moneys in the Bond Fund shall be
retained in the Bond Fund.
No amount shall be withdrawn from the Bond Fund except as expressly provided in this
Article V.
In the event that the amount credited to the Bond Fund is insufficient to pay interest or a
Principal Installment on the Bonds when due, the Trustee shall credit to the Bond Fund the
amount of such deficiency by charging the following Funds in the following order of priority: (a)
the Local Sales Tax Account; and (b) the Debt Service Reserve Fund.
Section 5.6 Reserved.
Section 5.7 Reserved.
Section 5.8 Administrative Expense Fund. The Administrative Expense Fund shall be
used to pay Administrative Expenses. Moneys on deposit in the Administrative Expense Fund
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shall be applied to the payment of any Administrative Expenses requested by the Issuer to be
paid. All amounts in the Administrative Expense Fund in excess of the Administrative Expense
Fund Requirement shall be transferred to, and deposited in, the Local Sales Tax Account.
Section 5.9 Investment of Funds. The moneys held by the Trustee shall constitute
trust funds for the purposes hereof. Any moneys attributable to each of the Funds hereunder
shall be invested by the Trustee at the written or telephonic direction of the Issuer in Investment
Obligations which mature or are redeemable at par on the earlier of (a) 180 days from the date of
investment, or (b) the date on which such funds are expected to be needed for the purposes for
which they are held. If the Issuer elects to give the Trustee oral investment instructions and the
Trustee in its discretion elects to act upon such oral investment instructions, the Trustee's
understanding of such oral investment instructions shall be deemed controlling. The Trustee
shall not be liable for any losses, costs or expenses arising directly or indirectly from the
Trustee's reliance upon and compliance with such oral investment instructions notwithstanding
such oral investment instructions conflict or are inconsistent with a subsequent written
investment instruction. The Trustee may conclusively rely upon such instructions as to both the
suitability and legality of the directed investments. Notwithstanding the foregoing, if the Trustee
shall have entered into any investment agreement requiring investment of moneys in any Fund or
Account hereunder in accordance with such investment agreement and if such investment
agreement constitutes an Investment Obligation, such moneys shall be invested in accordance
with such requirements. Such investments may be made through or with the investment or
securities department of the Trustee or its affiliates, and the Trustee may charge its ordinary and
customary fees for such trades, including cash sweep account fees.
Investment Obligations representing an investment of moneys attributable to any Fund
shall be deemed at all times to be a part of such Fund, and, except as otherwise may be provided
expressly in other Sections hereof, the interest thereon and any profit arising on the sale thereof
shall be credited to the Local Sales Tax Account, and any loss resulting on the sale thereof shall
be charged against the Local Sales Tax Account. Such investments shall be sold at the best price
reasonably obtainable whenever it shall be necessary to do so in order to provide moneys to
make any transfer, withdrawal, payment or disbursement from such Fund. In the case of any
required transfer of moneys to another such Fund, such investments may be transferred to that
Fund in lieu of the required moneys if permitted hereby as an investment of moneys in that Fund.
All Investment Obligations acquired by the Trustee pursuant hereto shall be purchased in
the name of the Trustee and shall be held for the benefit of the holders of the Bonds pursuant to
the terms of this Indenture. The Trustee shall take such actions as shall be necessary to assure
that such Investment Obligations are held pursuant to the terms of this Indenture and are subject
to the trust and security interest herein created.
The Trustee shall not be liable or responsible for any loss resulting from any investment
made in accordance herewith. The Trustee or its affiliates may act as sponsor, principal or agent
in the acquisition or disposition of investments. The Trustee may commingle investments made
under the Funds and Accounts established hereunder, but shall account for each separately.
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In computing for any purpose hereunder the amount in any Fund'on any date, obligations
so purchased shall be valued at the lower of cost or par exclusive of accrued interest, and may be
so valued as of any time within four days prior to such date.
Although the Issuer recognizes that it may obtain a broker confirmation or written
statement containing comparable information at no additional cost, the Issuer hereby agrees that
confirmations of permitted investments are not required to be issued by the Trustee for each
month in which a monthly statement is rendered. No statement need be rendered for any fund or
account if no activity occurred in such fund or account during such month.
Section 5.10 Moneys Held for Particular Bonds. The amounts held by the Trustee for
the payment of the interest, principal or Redemption Price due on any date with respect to
particular Bonds shall, pending such payment, be set aside and held in trust by it for the holders
of the Bonds entitled thereto, and for the purposes hereof such interest, principal or Redemption
Price, after the due date thereof, shall no longer be considered to be unpaid.
Section 5.11 Funds Held in Trust. All moneys held by the Trustee, as such, at any time
pursuant to the terms of this Indenture shall be and hereby are assigned, transferred and set over
unto the Trustee in trust for the purposes and under the terms and conditions of this Indenture.
Section 5.12 Accounting Records. The Trustee shall maintain accurate books and
records for all Funds and Accounts established hereunder, and shall furnish to the Issuer annual
statements of the activity and assets held in each of the Funds and Accounts established and
maintained hereunder.
Section 5.13 Amounts Remaining in Funds. After full payment of the Bonds (or
provision for payment thereof having been made in accordance with Section 7.1) and full
payment of the Administrative Expenses and other amounts required to be paid hereunder, any
amounts remaining in any Fund hereunder other than the Rebate Fund shall be paid to the Issuer.
Section 5.14 Rebate Fund. The Rebate Fund shall not be subject to the lien or
encumbrance of this Indenture, but shall be held in trust for the benefit of the United States of
America, and shall be subject to claim of no other person, including that of the Trustee and
Bondholders. The interest on any Investment Obligations representing an investment of moneys
in the Rebate Fund and any profit arising from the sale thereof shall be retained in the Rebate
Fund. Any moneys deposited therein in accordance with the provisions of this Indenture shall be
used for no other purpose than to make payments to the United States Treasury, at the time and
in the manner and amount specified in Section 9.11.
ARTICLE VI
COVENANTS OF ISSUER
Section 6.1 Payment of Bonds. Subject to the other provisions of this Indenture, the
Issuer shall duly and punctually pay or cause to be paid from the Revenues the principal of,
premium, if any, and interest on the Bonds, at the dates and places and in the manner described
in the Bonds, according to the true intent and meaning thereof. The Bonds are not a general
obligation of the Issuer, but are payable solely from the Trust Estate.
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Section 6.2 Payment of Lawful Charszes and Priority of Lien. The Issuer shall pay all
taxes and assessments or other municipal or governmental charges, if any, lawfully levied or
assessed upon the Issuer in respect of the financing contemplated hereby or upon any revenue
therefrom, when the same shall become due, and shall duly observe and comply with all valid
requirements of any municipal or governmental authority relative to any part of the financing
contemplated hereby, and shall not create or suffer to be created any lien or charge upon the
Trust Estate hereunder prior to or on a parity with the pledge, security interest and lien created
hereby for the payment of the principal of, premium, if any, and interest on the Bonds.
Section 6.3 Tax Covenants. The Issuer shall not take any action that will cause the
interest paid on the Bonds to be includable in gross income for federal income tax purposes. In
furtherance of the foregoing covenant, the Issuer hereby particularly covenants and agrees with
the holders of the Bonds as follows:
(a) No part of the proceeds of the Bonds or any other funds of the Issuer shall
be used by the Issuer at any time directly or indirectly to acquire securities or obligations, the
acquisition of which, or which in any other manner, would cause any Bond to be an arbitrage
bond as defined in Section 148 of the Code and any applicable regulations promulgated
thereunder.
(b) The Issuer will not take any action or permit or suffer any action to be
taken if the result of the same would be to cause the Bonds to be "federally guaranteed" within
the meaning of Section 149(b) of the Code and any applicable regulations promulgated
thereunder.
(c) At or prior to the Closing Date, the Issuer will enter into the Tax
Agreement.
Section 6.4 Compliance with Conditions Precedent. Upon the Closing Date, all
conditions, acts and things required by law regarding the Issuer to exist, to have happened or to
have been performed precedent to or in the issuance of such Bonds shall exist, shall have
happened and shall have been performed, and such Bonds, together with all other indebtedness
of the Issuer, shall be within every debt and other limit prescribed by law.
Section 6.5 Reserved.
Section 6.6 Further Assurances. At any time and at all times the Issuer shall, so far as
it may be authorized by law, pass, make, do, execute, acknowledge and deliver, all and every
such further resolutions, acts, deeds, conveyances, assignments, transfers and assurances and
enter into such further agreements as may be necessary or desirable for the better assuring,
conveying, granting, assigning or confirming all and singular the rights in, pledge and grant of a
security interest in the Trust Estate hereby pledged or assigned in trust, or intended so to be, or
which the Issuer may hereafter become bound to pledge or assign in trust.
Section 6.7 Powers as to Bonds and Pledge. The Issuer is duly authorized pursuant to
law to authorize and issue the Bonds, to enter into this Indenture and to pledge, assign, transfer
and set over unto the Trustee in trust the Trust Estate herein purported to be so pledged,
assigned, transferred and set over unto the Trustee in trust hereby in the manner and to the extent
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provided herein. The Trust Estate so pledged, assigned, transferred and set over in trust is and
will be free and clear of any pledge, lien, charge or encumbrance thereon with respect thereto
prior to, or of equal rank with, the pledge and assignment in trust created hereby, and all action
on the part of the Issuer to that end has been duly and validly taken. The Bonds and the
provisions hereof are and will be the valid and binding limited obligations of the Issuer in
accordance with their terms and the terms hereof. The Trustee shall at all times, to the extent
permitted by law, defend, preserve and protect the pledge and assignment in trust of the Trust
Estate created hereby and all the rights of the Bondholders hereunder against all claims and
demands of all persons whomsoever. The Bonds and the interest thereon and all other
obligations of the Issuer to pay moneys shall not be deemed to constitute a general debt, liability
or obligation of the Issuer or a debt, liability or obligation of the Issuer, the State or any political
subdivision thereof, or a pledge of the faith and credit of the Issuer, the State or any political
subdivision thereof. The principal and the interest thereon shall never constitute an
indebtedness, liability, general or moral obligation or a pledge of the faith or loan of credit of the
Issuer, the State or any political subdivision thereof within the meaning of any constitutional
provision or statutory limitation and shall never constitute or give rise to a pecuniary liability or
be a charge against the general credit or taxing powers of such body.
Section 6.8 Preservation of Revenues, Amendment of Aereements. The Issuer shall
not take any action to reduce the amount of Local Sales Taxes collected by the Issuer, or to
interfere with or impair the pledge and assignment hereunder of the Trust Estate with the prior
written consent of the owners of the Bonds and the Trustee. The Issuer also agrees to comply
with Section of the Development Agreement entitled "Reporting" and to use its best
efforts to obtain from the Illinois Department of Revenue all publicly available information
necessary for the Trustee and the Issuer to determine the Local Sales Taxes, and, within thirty
(30) days after receipt of each State Report, the Issuer shall deposit all Local Sales Taxes it has
received from the State of Illinois for the period covered by such State Report in the Local Sales
Tax Account.
Section 6.9 Limitations on Liabilitv. Notwithstanding anything in this Indenture or in
the Bonds, the Issuer shall not be required to advance any money derived from any source other
than the Revenues and other assets pledged under this Indenture for any of the purposes of this
Indenture.
No agreements or provisions contained in this Indenture, nor any agreement, covenant or
undertaking by the Issuer contained in any document executed by the Issuer in connection with
the Improvements, or the issuance, sale and delivery of the Bonds shall give rise to any
pecuniary liability of the Issuer or a charge against its general credit, or shall obligate the Issuer
financially in any way except from the application of Revenues or proceeds pledged to the
payment of the Bonds and the proceeds of the Bonds. No failure of the Issuer to comply with
any term, condition, covenant or agreement herein or in any document executed by the Issuer in
connection with the Improvements, or the issuance, sale and delivery of the Bonds shall subject
the Issuer to liability for any claim for damages, costs or other financial and pecuniary charge
except to the extent that the same can be paid or recovered from the Revenues or other assets
pledged to the payment of the Bonds or the proceeds of the Bonds.
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Section 6. 10 Sales Tax and Other Disclosure. The Issuer shall use its best efforts to
obtain from the Illinois Department of Revenue such publicly available information relating to
the Local Sales Taxes as may be deemed necessary by the Trustee or the Original Purchaser and
that, within thirty (30) days after receipt of such information, the Issuer shall deliver the same to
the Trustee and the Original Purchaser.
(a) The Issuer shall provide to the Trustee and the Original Purchaser, within
ten (10) days of the receipt by the Issuer, a copy of each annual audit of the Issuer.
(b) The Issuer shall provide to the Trustee and the Original Purchaser, within
thirty (30) days after receipt thereof, any public information related to the Local Sales Taxes
received by the Issuer from the Illinois Department of Revenue.
(c) The Issuer shall provide to the Trustee and the Original Purchaser, within
thirty (30) days after receipt thereof, any quarterly construction progress reports and any tenant
schedules, including lease expirations received from the Developer.
(d) The Trustee shall make available to the Issuer, the Original Purchaser and
any holder of the Bonds, within ten (10) days of receipt of any request by the Issuer, the Original
Purchaser or any holder of the Bonds, monthly account statements and all information received
by the Trustee under this Section 6.10.
(e) Both the Trustee and the Original Purchaser are hereby authorized to
-
deliver. and provide any information received by it pursuant to this Section 6.10 to any holder or,
holders of the Bonds.
(f) The Original Purchaser shall be deemed a third party beneficiary for
purposes of this Section 6.10.
ARTICLE VII
DISCHARGE OF INDENTURE
Section 7.1 Defeasance. If all Bonds shall be paid and discharged as provided in this
Section, then all obligations of the Trustee and the Issuer under this Indenture with respect to all
Bonds shall cease and terminate, except only (i) the obligation of the Trustee to pay or cause to
be paid to the owners thereof all sums due with respect to the Bonds and to register, transfer and
exchange Bonds pursuant to Section 2.7 and Section 2.8, (ii) the obligation of the Issuer to pay
the amounts owing to the Trustee under Section 9.2, and (iii) the obligation of the Issuer to
comply with Section 6.3 and Section 9.11. Any funds held by the Trustee at the time of such
termination which are not required for payment to Bondholders or for payment to be made by the
Issuer, shall be paid as provided in Section 5.13.
Any Bond or portion thereof in an authorized denomination shall be deemed no longer
Outstanding under this Indenture if paid or discharged in any one or more of the following ways:
(i) by well and truly paying or causing to be paid the principal of and
interest on such Bond which have become due and payable; or
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(ii) by depositing with the Trustee, in trust, cash which, together with
the amounts then on deposit in the Local Sales Tax Account and the Bond Fund
and dedicated to this purpose, is fully sufficient to pay when due all principal of,
and premium, if any, and interest on such Bond to the maturity or earlier
redemption date thereof; or
(iii) by depositing with the Trustee, in trust, any investments listed in
subparagraph (a) under the definition of Investment Obligation in Section 1.1 in
such amount as in the written opinion of a certified public accountant will,
together with the interest to accrue on such Investment Obligation without the
need for reinvestment, be fully sufficient to pay when due all principal of, and
premium, if any, and interest on such Bond to the maturity or earlier redemption
date thereof, notwithstanding that such Bond shall not have been surrendered for
payment.
(b) Notwithstanding the foregoing, no deposit under clauses (ii) and (iii) of
subsection (a) above shall be deemed a payment of such Bond until the earlier to occur of-
(i) if such Bond is by its terms subject to redemption within 45 days,
proper notice of redemption of such Bond shall have been previously given in
accordance with Section 3.3 to the holder thereof or, in the event such Bond is not
by its terms subject to redemption within 45 days of making the deposit under
clauses (ii) and (iii) of subsection (a) above, the Issuer shall have given the
Trustee irrevocable written instructions to mail by first -class mail, postage
prepaid, notice to the holder of such Bond as soon as practicable stating that the
deposit required by clauses (ii) or (iii) of subsection (a) above, as applicable, has
been made with the Trustee and that such Bond is deemed to have been paid and
further stating such redemption date or dates upon which money will be available
for the payment of the principal of and accrued interest thereon; or
(ii) the maturity of such Bond.
(c) The Trustee shall be entitled to receive a report from a nationally
recognized accounting firm to provide for the payment of all Bonds to be defeased pursuant to
this Section.
Section 7.2 Unclaimed Monevs. Anything herein to the contrary notwithstanding, and
subject to applicable escheatment laws of the State, any moneys held by the Trustee in trust for
the payment and discharge of any of the Bonds which remain unclaimed for two years after the
date when such Bonds have become due and payable, either at maturity or by call for
redemption, if such moneys are held by the Trustee at said date, or for two years after the date of
deposit of such moneys if deposited with the Trustee after the date when such Bonds became due
and payable, shall be paid by the Trustee to the Issuer as its absolute property and free from trust,
and the Trustee shall thereupon be released and discharged with respect thereto and the holders
of such Bonds shall look only to the Issuer for the payment thereof; provided, however, that
before being required to make any such payment to the Issuer, the Trustee shall cause to be
mailed to the holders of such Bonds, at their addresses shown on the Bond Register, notice that
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said moneys remain unclaimed and that, after a date named in said notice, which date shall be
not less than 30 nor more than 60 days after the date of mailing such notice, the balance of such
moneys then unclaimed will be paid to the Issuer; and provided further, that the provisions of
this Section shall not apply to the extent disposition of any moneys so held by the Trustee shall
be governed by any laws applicable to the Trustee or the Issuer dealing with the disposition of
such unclaimed property.
ARTICLE VIII
DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE AND BONDHOLDERS
Section 8.1 Events of Default. Each of the following shall constitute an Event of
Default under this Indenture:
(a) Failure to pay the principal of, premium, if any, or interest on any of the
Bonds when due, whether at maturity or upon call for redemption (including Bonds called or to
be called for redemption from Sinking Fund Installments) or upon the maturity thereof by
declaration; or
(b) Default in the observance or performance of any other covenant,
agreement or condition on the part of the Issuer in this Indenture and the continuation of such
default for a period of 90 days after written notice to the Issuer from the Trustee or the registered
owners of at least 25% in aggregate principal amount of the Bonds Outstanding at such time
specifying such default and requiring the- be remedied.
The Trustee will immediately notify the Issuer and the Bondholders after a Responsible
Officer obtains knowledge or receives notice of the occurrence of an Event of Default or an
event which would become an Event of Default with the passage of time or the giving of notice,
or both.
Section 8.2 Remedies. Upon the occurrence of an Event of Default the Trustee may,
and upon the written request of the holders of 25% in aggregate principal amount of Bonds then
Outstanding affected by the Event of Default and upon receipt of indemnity satisfactory to it
shall, proceed to protect and enforce its rights and the rights of the holders of the Bonds by a suit,
action or special proceeding in equity or at law, by mandamus or otherwise, either for the
specific performance of any covenant or agreement contained herein or in aid or execution of
any power herein granted or for any enforcement of any proper legal or equitable remedy as the
Trustee, being advised by counsel, shall deem most effective to protect and enforce the rights
aforesaid.
During the continuance of an Event of Default, all moneys received by the Trustee under
this Indenture from the Issuer or from any other source shall be applied by the Trustee in
accordance with the terms of Section 8.8 hereof.
Any judgment against the Issuer shall be enforceable only against the amounts pledged
pursuant to this Indenture. There shall not be authorized any deficiency judgment against any
assets of, or the general credit of, the Issuer.
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The Bonds shall not be subject to acceleration upon the occurrence of an Event of
Default.
Section 8.3 Other Remedies; Riahts of Bondholders.
No right or remedy by the terms of this Indenture conferred upon or reserved to the
Trustee (or to the Bondholders) is intended to be exclusive of any other right or remedy, but each
and every such right and remedy shall be cumulative and shall be in addition to any other right or
remedy given to the Trustee or to the Bondholders hereunder or now or hereafter existing at law
or in equity; provided, however, that in no event shall the Bonds be subject to acceleration as a
result of the occurrence of an Event of Default.
No delay or omission to exercise any right or power accruing upon any default or Event
of Default shall impair any such right or power or shall be construed to be a waiver of any such
default or Event of Default or acquiescence therein and every such right and power may be
exercised from time to time as often as may be deemed expedient.
No waiver of any default or Event of Default hereunder, whether by the Trustee or by the
Bondholders, shall extend to or shall affect any subsequent default or Event of Default or shall
impair any rights or remedies consequent thereon.
Section 8.4 Representation of Bondholders by Trustee. The Trustee is hereby
irrevocably appointed (and the Bondholders, by accepting and holding their Bonds, shall be
conclusively deemed to have so appointed the Trustee and _to have mutually covenanted and
agreed, each with the other, not to revoke such appointment) the true and lawful attorney in fact
of the Bondholders with power and authority, in addition to any other powers and rights
heretofore granted the Trustee, at any time in its discretion to make and file, in any proceeding
in bankruptcy or judicial proceedings for reorganization or liquidation of the affairs of the Issuer,
either in the respective names of the Bondholders or on behalf of all the Bondholders as a class,
any proof of debt, amendment of proof of debt, petition or other document, to receive payment of
any sums becoming distributable to the Bondholders, and to execute any other papers and
documents and do and perform any and all such acts and things as may be necessary or advisable
in the opinion of the Trustee in order to have the respective claims of the Bondholders against
the Issuer allowed in any bankruptcy or other proceeding.
In the enforcement of any rights and remedies hereunder, the Trustee in its own name and
as trustee of an express trust on behalf of and for the benefit of the holders of all Bonds, shall be
entitled to sue for, enforce payment on and receive any and all amounts then or during any Event
of Default becoming, and at any time remaining, due from the Issuer for principal, premium, if
any, interest or other moneys, under any provision hereof or of the Bonds, and unpaid, with
interest on overdue payments at the rate or rates of interest specified in such Bonds, together
with any and all costs and expenses of collection and of all proceedings hereunder and under
such Bonds, without prejudice to any other right or remedy of the Trustee or of the Bondholders.
Section 8.5 Action by Trustee. All rights of action hereunder or upon any of the
Bonds enforceable by the Trustee may be enforced by the Trustee without the possession of any
of the Bonds, or the production thereof at the trial or other proceedings relative thereto, and any
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such suit, action or proceeding instituted by the Trustee may be brought in its name for the
ratable benefit of the holders of such Bonds subject to the provisions hereof.
In any action, suit or other proceeding by the Trustee, the Trustee shall be paid
Administrative Expenses in accordance with Section 9.2.
Section 8.6 Accountina and Examination of Records After Default. The Issuer
covenants with the Trustee and the Bondholders that, if an Event of Default shall have happened
and shall not have been remedied, the books of record and account of the Issuer relating to the
Bonds and the Improvements shall at all times during normal business hours be subject to the
inspection and use of the Trustee and of its agents and attorneys.
Section 8.7 Restriction on Bondholder Action. No holder of any Bond shall have any
right to institute any suit, action or proceeding in equity or at law for the enforcement of any
provision hereof or for the execution of any trust hereunder or for any other remedy hereunder,
unless (a)(i) such holder previously shall have given to the Issuer and the Trustee written notice
of the Event of Default on account of which such suit, action or proceeding is to be instituted,
and (ii) after the occurrence of such Event of Default, a written request shall have been made of
the Trustee to institute such suit, action or proceeding by the holders of not less than 25% in
aggregate principal amount of the Bonds then Outstanding and there shall have been offered to
the Trustee security and indemnity satisfactory to it against the costs and liabilities to be incurred
therein or thereby, and (iii) the Trustee shall have been enjoined or restrained from complying or
shall have refused or neglected or otherwise failed to comply with such request within a
" reasonable time; or (b)(i) such holder previously shall have obtained the written consent of the
Trustee to the institution of such suit, action or proceeding, and (ii) such suit, action or
proceeding is brought for the ratable benefit of the holders of all Bonds subject to the provisions
hereof.
Nothing in this Article contained shall affect or impair the right of any Bondholder to
enforce the payment of the principal of, premium, if any, and interest on his or her Bonds or the
obligation of the Issuer to pay the principal of, premium, if any, and interest on each Bond to the
holder thereof, at the time and place and from the source expressed in such Bonds and pursuant
to the terms of the Bonds and -this Indenture.
No holder of any Bond shall have any right in any manner whatever by his or her action
to affect, disturb or prejudice the pledge of Revenues or of any other moneys, funds or securities
hereunder, or, except in the manner and on the conditions in this Section provided, to enforce
any right or duty hereunder.
Section 8.8 Application of Monevs After Default. All moneys collected by the
Trustee at any time pursuant to this Article shall, except to the extent, if any, otherwise directed
by a court of competent jurisdiction, be credited by the Trustee to the Local Sales Tax Account.
Such moneys so credited to the Local Sales Tax Account and all other moneys from time to time
credited to the Local Sales Tax Account shall at all times be held, transferred, withdrawn and
applied as prescribed by the provisions of Article V and this Section.
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Subject in all instances to the provisions of Section 8.11, in the event that at any time the
moneys credited to the Bond Fund, or any other funds held by the Issuer or the Trustee available
for the payment of interest or principal then due with respect to the Bonds, shall be insufficient
for such payment, such moneys and funds (other than funds held for the payment or redemption
of particular Bonds as provided in Section 5.9) shall be applied as follows:
(a) Only in the event that there has been -an Event of Default hereunder
pursuant to Section 8.1(a), for payment of all amounts due to the Trustee incurred in
performance of its duties under this Indenture and the other documents executed in connection
therewith, including, without limitation, to the payment of all Administrative Expenses of the
Trustee incurred in exercising any remedies under this Indenture and the other documents
executed in connection herewith.
(b) After payment of the amount requested to be paid under Section 8.8 (a),
First To the payment to the persons entitled thereto of all installments of interest
then due in the order of the maturity of such installments, and, if the amount available is
not sufficient to pay in full any installment, then to the payment thereof ratably,
according to the amounts due on such installment, to the persons entitled thereto, without
any discrimination or preference; and
Second To the payment to the persons entitled thereto of the unpaid principal of
and premium, if any, on any Bonds which shall have become due, whether at maturity or
by call for redemption, in the order in which they became due and payable, and, if the
amount available is not sufficient to pay in full all the principal of and premium, if any,
on the Bonds so due on any date, then to the payment of principal ratably, according to
the amounts due on such date, to the persons entitled thereto, without any discrimination
or preference and then to the payment of any premium due on the Bonds, ratably,
according to the amounts due on such date, to the persons entitled thereto, without any
discrimination or preference.
Section 8.9 Control of Proceedings. In the case of an Event of Default, the holders of
a majority in aggregate principal amount of the Bonds then Outstanding shall have the right,
subject to the provisions of Section 8.7, by an instrument in writing executed and delivered to the
Trustee, to direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon the Trustee; provided,
however, that the Trustee shall have the right to decline to follow any such direction if the
Trustee shall be advised by counsel that the action or proceeding so directed may not be taken
lawfully, or if the Trustee in good faith shall determine that the action or proceeding so directed
would involve the Trustee in personal liability or otherwise adversely affect the Trustee or be
unjustly prejudicial to Bondholders not parties to such direction.
Section 8.10 Waivers of Event of Default. The Trustee shall waive any Event of
Default hereunder and its consequences upon the written request of the holders of a majority in
aggregate principal amount of all Bonds then Outstanding with respect to which there is an Event
of Default; provided, however, that there shall not be waived (a) any default in the payment of
the principal amount of any Bonds at the date of maturity specified therein, at the due date of any
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Sinking Fund Installment or upon proceedings for mandatory redemption, or (b) any default in
the payment when due of the interest or premium, if any, on any such Bonds, unless prior to such
waiver or rescission all arrears of interest, with interest (to the extent permitted by law) at the
rate borne by the Bonds in respect of which such Event of Default shall have occurred on
overdue installments of interest or all arrears of payments of principal of or premium, if any,
when due (whether at the stated maturity thereof, at the due date of any Sinking Fund Installment
or upon proceedings for mandatory redemption) as the case may be, and all expenses of the
Trustee in connection with such monetary default, shall have been paid or provided for, and in
case of any such waiver or rescission, the Issuer, the Trustee and the Bondholders shall be
restored to their former positions and rights hereunder respectively.
No such waiver or rescission shall extend to any subsequent or other default, or impair
any right consequent thereto; and no delay or omission of the Trustee or of any Bondholders to
exercise any right or power accruing upon any Event of Default shall impair any right or power
or shall be construed to be a waiver of any such Event of Default, or acquiescence therein.
Section 8.11 Subordination. No claim for interest on any of the Bonds which claim in
any way at or after maturity shall have been transferred or pledged by the holder thereof separate
and apart from the Bond to which it relates, unless accompanied by such Bond, shall be entitled
in case of an Event of Default hereunder to any benefit by or from this Indenture except after the
prior payment in full of the principal of and premium, if any, on all of the Bonds then due and of
all claims for interest then due not so transferred or pledged.
Section 8.12 Termination of Proceedings. In case any proceeding taken by the Trustee
on account of any Event of Default shall have been discontinued or abandoned for any reason or
determined adversely to the Trustee, then in every such case the Issuer, the Trustee and the
Bondholders shall be restored to their former positions and rights hereunder, respectively, and all
rights, remedies, powers and duties of the Trustee shall continue as though no such proceeding
had been taken.
ARTICLE IX
THE TRUSTEE
Section 9.1 Acceptance of Trusts. The Trustee hereby accepts the trusts imposed upon
it by this Indenture, and agrees to perform said trusts, but only upon and subject to the following
express terms and conditions and no implied covenants or conditions shall be read into this
Indenture against the Trustee:
(a) The Trustee, prior to the occurrence of an Event of Default and after the
curing of all Events of Default which may have occurred, undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture. In case an Event of Default has
occurred (which has not been cured or waived) the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of care and skill in their exercise,
as a reasonable person would exercise or use under the circumstances in the conduct of his or her
own affairs.
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(b) The Trustee may execute any of the trusts or powers hereof and perform
any of its duties by or through attorneys, agents, receivers or employees but shall not be
answerable for the conduct of the same if appointed with reasonable care, and shall be entitled to
advice of counsel concerning all matters of the trusts hereof and the duties hereunder, and may in
all cases pay such reasonable compensation to all such attorneys, agents, receivers and
employees as may reasonably be employed in connection with the trusts hereof. The Trustee
may act upon the opinion or advice of any attorneys (who may be the attorney or attorneys for
the Issuer) approved by the Trustee in the exercise of reasonable care. The Trustee shall not be
responsible for any loss or damage resulting from any action or non action taken in good faith in
reliance upon such opinion or advice.
(c) The Trustee shall not be responsible for any recital herein, or in the Bonds
(except in respect to the certificate of the Trustee endorsed on the Bonds), or for insuring the
Improvements or collecting any insurance moneys, or for the registration, filing or recording or
re registration, refiling or rerecording of this Indenture or any financing statements or
continuations thereof relating hereto or thereto or for the validity of the execution by the Issuer
of this Indenture or of any supplements hereto or instruments of further assurance, or for the
sufficiency of the security for the Bonds issued hereunder or intended to be secured hereby, or
for the value or title of the Improvements or otherwise as to the maintenance of the security
hereof. The Trustee shall not be bound to ascertain or inquire as to the performance or
observance of any covenants, conditions or agreements on the part of the Issuer, except as
hereinafter set forth; but the Trustee may require of the Issuer full information and advice as to
their performance of the covenants, conditions and agreements aforesaid. The Trustee
acknowledges it has assumed certain duties of the Issuer under the Tax Agreement.
(d) The Trustee shall not be accountable for the use of any Bonds
authenticated or delivered hereunder. The Trustee may become the owner of Bonds secured
hereby with the same rights which it would have if not Trustee hereunder. To the extent
permitted by law, the Trustee may act as depository for, and permit any of its officers or
directors to act as a member of, or in any other capacity with respect to, any committee formed to
protect the rights of Bondholders or to effect or aid in any reorganization growing out of the
enforcement of the Bonds or this Indenture, whether or not any such committee shall represent
the holders of a majority in aggregate principal amount of the Bonds Outstanding.
(e) The Trustee shall be protected in acting under any notice, request, consent,
certificate, order, affidavit, letter, facsimile transmission, telegram or other paper or document
believed to be genuine and correct and to have been signed or sent by the proper person or
persons. Any action taken by the Trustee pursuant to this Indenture upon the request, authority
or consent of any person who at the time of making such request or giving such authority or
consent is the owner of any Bond, shall be conclusive and binding upon all future owners of the
same Bond and upon Bonds issued in exchange therefore or in place thereof.
(f) As to the existence or nonexistence of any fact or as to the sufficiency or
validity of any instrument, paper or proceeding, the Trustee shall be entitled to rely (unless other
evidence in respect thereof is herein specifically prescribed) upon an Officer's Certificate as
sufficient evidence of the facts therein contained and prior to the occurrence of an Event of
Default of which the Trustee has been notified as provided in subsection (h) of this Section, or of
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which by said subsection it is deemed to have notice, shall also be at liberty to accept an
Officer's Certificate to the effect that any particular dealing, transaction or action is necessary or
expedient, but may at its discretion secure such further evidence deemed necessary or advisable,
but shall in no case be bound to secure the same. The Trustee may accept a certificate signed by
an Attesting Officer of the Issuer as conclusive evidence that a resolution of the governing body
of the Issuer has been duly adopted and is in full force and effect.
(g) The permissive right of the Trustee to do things enumerated in this
Indenture shall not be construed as a duty and it shall not be answerable for other than its own
negligence or willful misconduct.
(h) The Trustee shall not be required to take notice or be deemed to have
notice of any default or Event of Default hereunder except a default in payment when due of the
principal of, premium, if any, or interest on any Bond or the failure of the Issuer to file with the
Trustee any documents required by this Indenture, to be so filed subsequent to the issuance of the
Bonds unless the Trustee shall be specifically notified in writing of such default or Event of
Default by the Issuer or by the holders of at least 25% in aggregate principal amount of Bonds
then Outstanding and all notices or other instruments required by this Indenture to be delivered
to the Trustee must, in order to be effective, be delivered at the Principal Office of the Trustee,
and in the absence of such notice so delivered the Trustee may conclusively assume there is no
default or Event of Default except as aforesaid.
(i) At any and all reasonable times the Trustee and its duly authorized agents,
attorneys, experts, engineers, accountants and representatives. shall have the right fully to inspect
any and all of the property herein conveyed, including the Improvements and all books, papers
and records of the Issuer pertaining to the Improvements and the Bonds, and to take such
memoranda from and in regard thereto as may be desired, provided that such inspection be made
and any such memoranda be taken and used on a basis that will insure the confidentiality thereof
and of any results thereof.
0) The Trustee shall not be required to give any bond or surety in respect of
the execution of the trusts and powers or otherwise in respect of the premises granted in this
Indenture.
(k) Notwithstanding anything elsewhere in this Indenture contained, the
Trustee shall have the right, but shall not be required, to demand, in respect of the authentication
of any Bonds, the withdrawal of any cash, the release of any property or any action whatsoever
within the purview of this Indenture, any showings, certificates, opinions, appraisals or other
information, or corporate action or evidence thereof, in addition to that by the terms hereof
required as a condition of such action by the Trustee, deemed desirable for the purpose of
establishing the right of the Issuer to the authentication of any Bonds, the withdrawal of any
cash, the release of any property or the taking of any other action by the Trustee, but the
resolutions, opinions, certificates and other instruments provided for in this Indenture may be
accepted by the Trustee as conclusive evidence of the facts and conclusions stated therein and
shall be full warranty, protection and authority to the Trustee for the release of property and the
withdrawal of cash hereunder.
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(1) Before taking any action under Article VIII of this Indenture the Trustee
may require that a satisfactory indemnity bond or other indemnity satisfactory to the Trustee be
furnished for the reimbursement of all expenses to which it may be put and to protect it against
all liability, except liability which is adjudicated to have resulted from its negligence or willful
default by reason of any action so taken.
(m) All moneys received by the Trustee, until used, applied or invested as
herein provided, shall be held in trust for the purposes for which they were received but need not
be segregated from other funds except to the extent required by law.
(n) The immunities extended to the Trustee also extend to its directors,
officers, employees and agents.
(o) The Trustee's rights to immunities and protection from liability hereunder
and its rights to payment of its Administrative Expenses shall survive its resignation or removal
and the final payment or the defeasance of the Bonds (or the discharge of the Bonds or the
defeasance of the lien of this Indenture).
(p) None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur individual financial liability in the
performance of any of its duties or in the exercise of any of its rights or powers.
(q) The Trustee shall have no responsibility, opinion or liability with respect
to any information, statement or recital in any offering memorandum or other disclosure material
prepared or distributed with respect to the issuance of the Bonds.
(r) The Trustee agrees to accept and act upon instructions or directions
pursuant to this Indenture sent by unsecured e-mail, facsimile transmission or other similar
unsecured electronic methods, provided, however, that (a) the Issuer, subsequent to such
transmission of written instructions, shall provide the originally executed instructions or
directions to the Trustee in a timely manner, (b) such originally executed instructions or
directions shall be signed by a person as may be designated and authorized to sign for the Issuer
or in the name of the Issuer, by an authorized representative of the Issuer, and (c) the Issuer shall
provide to the Trustee an incumbency certificate listing such designated persons, which
incumbency certificate shall be amended whenever a person is to be added or deleted from the
listing. If the Issuer elects to give the Trustee e-mail or facsimile instructions (or instructions by
a similar electronic method) and the Trustee in its discretion elects to act upon such instructions,
the Trustee's understanding of such instructions shall be deemed controlling. The Trustee shall
not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee's
reliance upon and compliance with such instructions notwithstanding such instructions conflict
or are inconsistent with a subsequent written instruction. The Issuer agrees to assume all risks
arising out of the use of such electronic methods to submit instructions and directions to the
Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions,
and the risk of interception and misuse by third parties.
Section 9.2 Fees. Charl?es and Expenses of Trustee. Notwithstanding any provision to
the contrary herein, the Trustee shall be entitled to payment and reimbursement for reasonable
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fees for its services rendered hereunder and all advances, counsel fees and other expenses
reasonably made or incurred by the Trustee (including any co Trustee) in connection with such
services which shall be paid from time to time as provided in Section 5.4 from moneys available
therefore. Upon an Event of Default under Section 8.1(a), but only upon such an Event of
Default, the Trustee shall have a lien upon the Trust Estate for extraordinary fees, charges and
expenses incurred by it. The Issuer shall indemnify and save harmless the Trustee against any
liabilities which the Trustee may incur in the exercise and performance of its powers and duties
hereunder, and under the Tax Agreement which are not due to its own negligence or willful
misconduct, and to reimburse the Trustee for any Administrative Expenses of the Trustee to the
extent they exceed funds available under this Indenture for the payment thereof, subject only to
the right of the Issuer to contest the reasonableness of any such fees or the necessity for any such
expenses. The Trustee shall continue to perform its duties and obligation hereunder until such
time as its resignation or removal is effective pursuant to Section 9.5 or Section 9.6, respectively.
Section 9.3 Intervention by Trustee. In any judicial proceeding to which the Issuer is
a party and which in the opinion of the Trustee and its counsel has a substantial bearing on the
interests of owners of the Bonds, the Trustee may intervene on behalf of the Bondholders and
shall do so if requested in writing by the owners of at least 25% in aggregate principal amount of
Bonds then Outstanding, subject to receipt of indemnity as provided in Section 9.1(1). The rights
and obligations of the Trustee under this Section are subject to receipt of any approval of a court
of competent jurisdiction which may be required by law as a condition to such intervention.
Section 9.4 Merger or Consolidation of Trustee. Any corporation or association into
which the Trustee may be converted or merged, or with which it may be consolidated, or to
which it may sell or transfer its corporate trust business and assets as a whole or substantially as
a whole, or any corporation or association resulting from any such conversion, sale, merger,
consolidation or transfer to which it is a party, ipso facto shall be and become successor Trustee
hereunder and vested with all of the title to the Trust Estate and all the trusts, powers, discretions,
immunities, privileges and all other matters as was its predecessor, without the execution or
filing of any instrument or any further act, deed or conveyance on the part of any of the parties
hereto, anything herein to the contrary notwithstanding.
Section 9.5 Resignation by Trustee. The Trustee and any successor Trustee may at
any time resign from the trusts hereby created by giving 30 days' written notice to the Issuer, and
such resignation shall only take effect upon the appointment, pursuant to Section 9.7, of, and
acceptance by, a successor Trustee. The successor Trustee shall give notice of such succession
by first class mail, postage prepaid, to each Bondholder at the address of such Bondholder shown
on the Bond Register.
Section 9.6 Removal of Trustee. The Trustee may be removed at any time by an
instrument or concurrent instruments in writing delivered to the Trustee and signed by the Issuer
(or if an Event of Default shall have occurred and be continuing, by the owners of a majority in
aggregate principal amount of the Bonds then Outstanding, in which event such instrument or
instruments in writing shall also be delivered to the Issuer) provided that such removal shall not
take effect until the appointment of a successor Trustee by the Issuer (or by the Bondholders).
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Section 9.7 Annointment of Successor Trustee. In case at any time the Trustee or any
successor thereto shall resign or shall be removed or shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or if a receiver, liquidator or conservator of such Trustee or of
its property shall be appointed, or if any public officer shall take charge or control of such
Trustee or of its property or affairs, a successor may be appointed by the Issuer or if the Issuer is
in default hereunder, by the holders of a majority in aggregate principal amount of the Bonds
then Outstanding, excluding any Bonds held by or for the account of the Issuer, by an instrument
or concurrent instruments in writing signed by such Bondholders, or their attorneys duly
authorized in writing, and delivered to such successor Trustee, notification thereof being given to
the Issuer and the predecessor Trustee. If in a proper case no appointment of a successor
Trustee shall have been made pursuant to the foregoing provisions of this Section within 45 days
after the Trustee shall have given to the Issuer written notice as provided in Section 9.5 or after
the occurrence of any other event requiring or authorizing such appointment, the Trustee or any
Bondholder may apply to any court of competent jurisdiction to appoint a successor. The court
may thereupon, after such notice, if any, as such court may deem proper and prescribe, appoint a
successor Trustee.
Any Trustee appointed under the provisions of this Section shall be a bank or trust
company or a national banking association, having its principal office within or without the
State, having trust powers, with prior experience as trustee under indentures under which
revenue bonds are issued, and having a capital and surplus acceptable to the Issuer, willing and
able to accept the office on reasonable and customary terms in light of the circumstances under
which the appointment is tendered and authorized by law to perform all the duties imposed upon
it hereby, if there be such an institution meeting such qualifications willing to accept such
appointment.
Section 9.8 Transfer of Rights and Property to Successor Trustee. Any successor
Trustee appointed hereunder shall execute, acknowledge and deliver to its predecessor Trustee,
and also to the Issuer, an instrument accepting such appointment, and thereupon such successor
Trustee, without any further act, deed or conveyance, shall become fully vested with all moneys,
estates, properties, rights, powers, duties and obligations of such predecessor Trustee, with like
effect as if named herein as such Trustee, but the Trustee ceasing to act shall nevertheless, on the
written request of the Issuer, or the successor Trustee, execute, acknowledge and deliver such
instruments of conveyance and further assurance and do such other things as reasonably may be
required for more fully and certainly vesting and confirming in such successor Trustee all the
right, title and interest of the predecessor Trustee in and to any properties held by it under this
Indenture, and shall pay over, assign and deliver to the successor Trustee any money or other
property subject to the trusts and conditions herein set forth. Should any deed, conveyance or
instrument in writing from the Issuer be required by such successor Trustee for more fully and
certainly vesting in and confirming to such successor Trustee any such moneys, estates,
properties, rights, powers and duties, any and all such deeds, conveyances and instruments in
writing, on request, and so far as may be authorized by law, shall be executed, acknowledged and
delivered by the Issuer.
Section 9.9 Successor Trustee as Bond Registrar. Custodian of Funds and Paving
Agent In the event of a change in the Trustee, the Trustee which has resigned or been removed
shall cease to be bond registrar and custodian of the Funds and Accounts created under this
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Indenture and paying agent for the Bonds and the successor Trustee shall become such registrar,
custodian and paying agent.
Section 9.10 Appointment of Co- Trustee.. It is the purpose of this Indenture that there
shall be no violation of any laws of any jurisdiction (including particularly the laws of the State)
denying or restricting the right of banking corporations or associations to transact business as
trustee in such jurisdiction. It is recognized that in case of litigation under this Indenture, and in
particular in case of the enforcement hereof on default, or in case the Trustee deems that by
reason of any present or future law of any jurisdiction it may not exercise any of the powers,
rights or remedies herein granted to the Trustee or hold title to the properties, in trust, as herein
provided, or take any other action which may be desirable or necessary in connection therewith,
it may be necessary that the Trustee appoint an additional individual or institution as a separate
or co trustee. The following provisions of this Section are adopted to these ends.
The Trustee is hereby authorized to appoint an additional individual or institution as a
separate or co trustee hereunder, without the necessity of further authorization or consent, in
which event each and every remedy, power, right, claim, demand, cause of action, immunity,
estate, title, interest and lien expressed or intended by this Indenture or the Tax Agreement to be
exercised by or vested in or conveyed to the Trustee with respect thereto shall be exercisable by
and vest in such separate or co trustee but only to the extent necessary to exercise such powers,
rights and remedies, and every covenant and obligation necessary to the exercise thereof by such
separate or co trustee shall run to and be enforceable by either of them.
Should any instrument in writing from the Issuer be required by the separate trustee or co
trustee appointed by the Trustee for more fully and certainly vesting in and confirming to him or
it such properties, rights, powers, trusts, duties and obligations, any and all such instruments in
writing shall, on request of the Trustee, be executed, acknowledged and delivered by the Issuer.
In case any separate trustee or co Trustee, or a successor to either, shall die, become incapable of
acting, resign or be removed, all the estates, properties, rights, powers, trusts, duties and
obligations of such separate trustee or co trustee, so far as permitted by law, shall vest in and be
exercised by the Trustee until the appointment of a successor to such separate trustee or co
trustee.
Section 9.11 Arbitrage Covenants.
(a) Moneys and securities held by the Trustee in the Rebate Fund are not
pledged or otherwise subject to any security interest in favor of the Trustee to secure the Bonds
or any other payments required to be made hereunder or any other document executed and
delivered in connection with the issuance of the Bonds.
(b) Moneys in the Rebate Fund shall be held separate and apart from all other
Funds and Accounts established under this Indenture and shall be separately invested and
reinvested at the written direction of the Issuer by the Trustee in Investment Obligations. The
interest accruing thereon and any profit realized therefrom shall be credited to the Rebate Fund,
and any loss resulting therefrom shall be charged to the Rebate Fund. The Trustee shall sell and
reduce to cash a sufficient amount of such Investment Obligations whenever the cash balance in
the Rebate Fund is insufficient for its purposes.
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(c) The Issuer hereby covenants to provide for the calculation of and rebate to
the federal government, in accordance with the Code, excess investment earnings to the extent
required by section 148(f) of the Code.
(d) In order to provide for the administration of this Section, the Trustee may
provide for the employment of independent attorneys, accountants and consultants compensated
on such reasonable basis as the Trustee may deem appropriate and in addition and without
limitation of the provisions of Section 9.1, the Trustee may rely conclusively upon and be fully
protected from all liability in relying upon the opinions, determinations, calculations and advice
of such attorneys, accountants and consultants employed hereunder.
(e) The Issuer shall be responsible for any fees and expenses incurred by the
Issuer or the Trustee under or pursuant to this Section.
(f) Withdrawals from the Rebate Fund may be made to the extent the rebate
analyst determines that amounts on deposit therein exceed amounts required to be on deposit
therein pursuant to this Section. All amounts so withdrawn shall be transferred to the Local
Sales Tax Account.
(g) The provisions of this Section may be amended or deleted from this
Indenture upon receipt by the Issuer and the Trustee of an opinion of Bond Counsel that such
amendment or deletion will not adversely affect the exclusion of the interest on the Bonds from
gross income for federal income tax purposes. Any moneys on deposit in the Rebate Fund may
be applied by the Trustee as permitted in such opinion.
Section 9.12 Compliance with Section 6.10.
The Trustee hereby covenants to comply with the requirements contained in Section 6.10.
ARTICLE X
SUPPLEMENTAL INDENTURES
Section 10.1 Supplemental Indentures Effective Upon Acceptance. For any one or
more of the following purposes and at any time or from time to time, the Issuer and the Trustee
may enter into a Supplemental Indenture which, upon the execution and delivery thereof by an
Authorized Officer and by the Trustee, without the necessity of consent of the Bondholders, shall
be fully effective in accordance with its terms:
(a) To add to the covenants or agreements of the Issuer herein contained other
covenants or agreements to be observed by the Issuer or to otherwise revise or amend this
Indenture in a manner which are /is not materially adverse to the interests of the Bondholders;
(b) To add to the limitations or restrictions herein contained other limitations
or restrictions to be observed by the Issuer which are not contrary to or inconsistent with the
provisions hereof as theretofore in effect;
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(c) To surrender any right, power or privilege reserved to or conferred upon
the Issuer herein, provided that the surrender of such right, power or privilege is not contrary to
or inconsistent with the covenants and agreements of the Issuer contained herein and is not
materially adverse to the interests of the Bondholders;
(d) To confirm, as further assurance, any pledge of the Trust Estate hereunder
and the subjection to any lien on or pledge of the Trust Estate created or to be created hereby;
(e) To appoint a co trustee or successor Trustee or co trustee;
(f) To cure any ambiguity, supply any omission or cure or correct any defect
or inconsistent provision herein; and
(g) To insert such provisions clarifying matters or questions arising hereunder
as are necessary or desirable and are not materially adverse to the interests.of the Bondholders.
Section 10.2 Supplemental Indentures Requirinia Consent of Bondholders. In addition
to those amendments to the Indenture which are authorized by Section 10.1, any modification or
amendment of the Indenture, in any particular, may be made by a Supplemental Indenture with
the written consent, given as hereinafter provided in Section 10.3, of the holders of at least two
thirds in aggregate principal amount of the Bonds Outstanding at the time such consent is given;
provided, however, that no such modification or amendment shall (a) permit a change in the
terms of redemption or maturity of the principal of any Outstanding Bond or an extension of the
date for payment of any installment of interest thereon or a reduction in the principal of,
premium, if any, or the rate of interest on any Outstanding Bond without the consent of the
holder of such Bond, (b) reduce the proportion of Bonds the consent of the holders of which is
required to effect any such modification or amendment, (c) permit the creation of a lien on the
Trust Estate pledged under this Indenture prior to or on a parity with the lien of this Indenture,
(d) deprive the holders of the Bonds of the lien created by this Indenture upon the Trust Estate
(except as expressly provided in this Indenture), without (with respect to (b) through (d)) the
consent of the holders of all Bonds then Outstanding, or (e) change or modify any of the rights or
obligations of the Trustee without the written consent thereto of the Trustee.
Section 10.3 Consent of Bondholders. The Issuer and the Trustee may, at any time,
execute and deliver a Supplemental Indenture making a modification or amendment permitted by
the provisions of Section 10.2, to take effect when and as provided in this Section. A copy of
such Supplemental Indenture (or brief summary thereof or reference thereto in a form approved
by the Trustee), together with a request to Bondholders for their consent thereto in form
satisfactory to the Trustee, shall be mailed by the Trustee to the Bondholders. Such
Supplemental Indenture shall not be effective unless there shall have been filed with the Trustee
(a) the written consents of the holders of the proportion of Outstanding Bonds specified in
Section 10.2, and (b) a Counsel's Opinion stating that such Supplemental Indenture has been
duly and lawfully entered into by the Issuer in accordance with the provisions of this Indenture,
is authorized or permitted by the provisions of this Indenture, and, when effective, will be valid
and binding upon the Issuer. Each such consent of the Bondholders shall be effective only if
accompanied by proof of the holding, at the date of such consent, of the Bonds with respect to
which such consent is given, which proof shall be such as is permitted by Section 11.1. A
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i
certificate or certificates by the Trustee that it has examined such proof and that such proof is
sufficient under the provisions of Section 11.1 shall be conclusive that the consents have been
given by the holders of the Bonds described in such certificate or certificates. Any such consent
shall be binding upon the holder of the Bonds giving such consent and upon any subsequent
holder of such Bonds and of any Bonds issued in exchange therefore (whether or not such
subsequent holder thereof has notice thereof). At any time after the holders of the required
proportion of Bonds shall have filed their consents to such Supplemental Indenture, the Trustee
shall make and file with the Issuer a written statement that the holders of such required
proportion of Bonds have filed and given such consents. Such written statement shall be
conclusive that such consents have been so filed and have been given. Within 90 days after
filing such statement, the Trustee shall mail to the Bondholders a notice stating in substance that
such Supplemental Indenture (which may be referred to as a Supplemental Indenture executed by
the Issuer on a stated date, a copy of which is on file with the Trustee) has been consented to by
the holders of the required proportion of Bonds and will be effective as provided in this Section,
but failure to mail such notice shall not prevent such Supplemental Indenture from becoming
effective and binding as in this Section provided. The Trustee shall file with the Issuer proof of
the mailing of such notice to Bondholders. A record, consisting of the papers required or
permitted by this Section to be filed with the Trustee, shall be proof of the matters therein stated. '
Such Supplemental Indenture making such modification or amendment shall be deemed
conclusively binding upon the Issuer, the Trustee and the holders of all Bonds upon the
execution thereof and the filing by the Trustee with the Issuer of the statement that the required
proportion of Bondholders have consented thereto.
The Issuer may conclusively rely upon the Trustee's determination that the requirements
of this Section have been satisfied.
Section 10.4 Modification by Unanimous Consent. Notwithstanding anything
contained in the foregoing provisions of this Article, the terms and provisions hereof and the
rights and obligations of the Issuer and the holders of the Bonds hereunder, in any particular,
may be modified or amended in any respect upon execution and delivery of a Supplemental
Indenture by the Issuer and the Trustee making such modification or amendment and the consent
to such Supplemental Indenture of the holders of all of the Bonds then Outstanding, such consent
to be given and proved as provided in Section 10.3 except that no notice to Bondholders shall be
required; provided, however, that no such modification or amendment shall change or modify
any of the rights or obligations of the Trustee without the written assent thereto of the Trustee, in
addition to the consent of the Bondholders.
Section 10.5 Exclusion of Bonds. Bonds owned or held by or for the account of the
Issuer or the Borrower shall be excluded and shall not be deemed Outstanding for the purpose of
consent or other action or any calculation of Outstanding Bonds provided for in this Article,
unless all of the Bonds are owned or held by or for the account of the Issuer or the Borrower. In
the event that not all of the Bonds are owned or held by or for the account of the Issuer or the
Borrower, then neither the Issuer nor the Borrower, as the case may be, shall be entitled with
respect to such Bonds to give any consent or take any other action provided for in this Article.
At the time of any consent or other action under this Article, in the event that any Bonds (but not
all of the Bonds) are then owned by or for the account of the Issuer, the Issuer shall furnish to the
Trustee an Officer's Certificate, upon which the Trustee may rely, describing all Bonds so to be
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excluded. The Trustee shall be obligated to exclude as aforesaid only such Bonds as are shown
by the Bond Register or are otherwise known by the Trustee to be so owned or held.
Section 10.6 Notation on Bonds. Bonds delivered after the effective date of any action
taken as provided in this Article may, and if the Trustee so determines shall, bear a notation by
endorsement or otherwise in form approved by the Issuer and the Trustee as to such action, and
in that case upon demand of the holder of any Bond Outstanding at such effective date and
presentation of such Bond for such purpose at the Principal Office of the Trustee, suitable
notation shall be made on such Bond by the Trustee as to any such action. If the Issuer or the
Trustee shall so determine, new Bonds notated as in the opinion of the Trustee and the Issuer
may be required to conform to such action shall be prepared and delivered, and upon demand of
the holder of any Bond then Outstanding, shall be exchanged, without cost to such Bondholder,
for Bonds of the same series, designation, maturity and interest rate then Outstanding upon
surrender of such Bonds.
Section 10.7 Additional Contracts or Indentures. The Issuer, so far as it may be
authorized by law, may enter, and if requested by the Trustee, shall enter into additional
contracts or indentures with the Trustee giving effect to any modification or amendment of this
Indenture as provided in this Article.
Section 10.8 Opinion of Bond Counsel Concernina Supplemental Indentures. The
Trustee shall not execute or consent to any Supplemental Indenture unless prior to the execution
and delivery thereof the Trustee shall have received the written opinion of Bond Counsel to the
effect that the modifications or amendments effected by such Supplemental Indenture will not
adversely affect the exclusion of interest on the Bonds from gross income for federal income tax
purposes or adversely affect the exemption of interest of the Bonds from personal income
taxation by the State and are authorized and permitted under the provisions of this Indenture.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Evidence of Sip-natures of Bondholders and Ownership of Bonds. Any
request, consent, revocation of consent or other instrument which this Indenture may require or
permit to be signed and executed by Bondholders may be in one or more instruments of similar
tenor, and shall be signed or executed by such Bondholders in person or by their attorneys duly
authorized in writing. Proof of the execution of any such instrument, or of an instrument
appointing or authorizing any such attorney, or the holding by any person of any Bonds, shall be
sufficient for any purpose hereof if made in the following manner or in any other manner
satisfactory to the Trustee which may nevertheless in its discretion require further or other proof
in cases where it deems the same desirable:
(a) The fact and date of the execution by any Bondholder or his or her
attorney of any such instrument (other than the Bond) may be proved (i) by the certificate of a
notary public or other officer authorized to take acknowledgments of deeds to be recorded in the
state in which he or she purports to act that the person signing such instrument acknowledged to
him or her the execution thereof, or by the affidavit of a witness of such execution, duly sworn to
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before such a notary public or other officer, or (ii) by the certificate, which need not be
acknowledged or verified, of an officer of a bank, trust company or duly licensed securities
broker or dealer satisfactory to the Trustee that the person signing such instrument acknowledged
to such bank, trust company, broker or dealer the execution thereof;
(b) The authority of a person or persons to execute any such instrument on
behalf of a corporate Bondholder may be established without further proof if such instrument is
authorized by a corporate resolution (a copy of which shall be delivered to the Trustee) and
signed by a person purporting to be the president or a vice president of such corporation; and
(c) The holding of Bonds, the amount, numbers and other identification
thereof, and the date of holding the same, shall be proved by the Bond Register.
Any request, consent or other instrument executed by the registered owner of any Bond
shall bind all future owners of such Bond in respect of anything done or suffered to be done
hereunder by the Issuer or the Trustee in accordance herewith in reliance on such request,
consent or other instrument.
Section 11.2 Details of Documents Delivered to Trustee. Matters required to be stated
in any document signed by any Authorized Officer or in any accountant's certificate, Counsel's
Opinion or Officer's Certificate may be stated in separate documents of the required description
or may be included in one or more thereof.
Section 11.3 Preservation and - Inspection - of -- Documents. All reports, certificates,
statements and other documents received by the Trustee under the provisions hereof shall be
retained in its possession and shall be available at all reasonable times for the inspection of the
Issuer, or any Bondholder and their agents and representatives, any of whom may make copies
thereof, but any such reports, certificates, statements or other documents may, at the election of
the Trustee, be destroyed or otherwise disposed of at any time six years after such date as the
pledge of the Trust Estate created hereby shall be discharged as provided in Section 7.1.
Section 11.4 No Recourse on Bonds. All covenants, stipulations, promises, agreements
and obligations of the Issuer contained in this Indenture shall be deemed to be the covenants,
stipulations, promises, agreements and obligations of the Issuer and not of any of its officers or
employees or members of its governing body, past, present or future, in his or her individual
capacity, and no recourse shall be had for the payment of the principal of, premium, if any, or
interest on the Bonds or for any claim based thereon or hereunder against any such officer or
employee of the Issuer or member of its governing body or any natural person executing the
Bonds.
Section 11.5 Severabilitv. If any one or more of the provisions, covenants or
agreements in this Indenture on the part of the Issuer or the Trustee to be performed should be
illegal, inoperative, unenforceable or contrary to law, then such provision or provisions, covenant
or covenants, agreement or agreements, shall be deemed severable from the remaining
provisions, covenants and agreements, and shall in no way affect the validity of the other
provisions hereof or of the Bonds.
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Section 11.6 Notices. Any provision in this Indenture relative to the mailing of a notice
or other paper to Bondholders shall be fully complied with if it is mailed, postage prepaid, to the
Trustee and to each registered owner of any Bonds then Outstanding at the address of such
registered owner appearing upon the Bond Register. Whenever in this Indenture the giving of
notice by mail or otherwise is required, the giving of such notice may be waived in writing by
the person entitled to receive such notice and in any such case the giving or receipt of such notice
shall not be a condition precedent to the validity of any action taken in reliance upon such
waiver.
Any notice, request, complaint, demand, communication or other paper to the Issuer or
the Trustee, shall be sufficiently given and shall be deemed given when delivered or mailed by
first class mail, postage prepaid, or sent by telecopy, addressed to the appropriate Notice
Address. Any such person may, by notice given hereunder, designate any further or different
addresses to which subsequent notices, certificates or other communications shall be sent.
Section 11.7 Action Required to be Taken on a Non - Business Day. In any case where
any Interest Payment Date, any other date fixed for the payment of interest on or principal of the
Bonds, any maturity date or any date fixed for redemption of any Bonds, shall be a day other
than a Business Day, then any payment of interest or principal (and premium, if any) required to
be made on such date need not be taken or made on such date but may be taken or made on the
next succeeding Business Day with the same force and effect as if made or taken on the date
herein otherwise provided and, in the case of any payment date, no interest shall accrue for the
period from and after such date.
Section 11.8 Parties Interested Herein. Nothing in this Indenture expressed or implied
is intended or shall be construed to confer upon, or to give to, any person, other than the Issuer,
the Trustee, and the holders of the Bonds, any right, remedy or claim under or by reason hereof,
and any covenants, stipulations, obligations, promises and agreements in this Indenture contained
by and on behalf of the Issuer shall be for the sole and exclusive benefit of the Issuer, the
Trustee, and the holders of the Bonds.
Section 11.9 Counterparts. This Indenture may be simultaneously executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the
same instrument.
Section 11.10 Annlicable Provisions of Law. The laws of the State shall be applicable to
the interpretation and construction of this Indenture, except that if the Principal Office of the
Trustee at any time serving as such under this Indenture shall not be located in the State, then
matters pertaining to the rights, duties and responsibilities of the Trustee, to the extent not
specifically governed by the Act, shall be determined by the laws of the jurisdiction where the
Principal Office of the Trustee is located.
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IN WITNESS WHEREOF, the Issuer has caused this Indenture to be executed on its
behalf by its Authorized Officers and the Trustee, to evidence its acceptance of the trusts created
hereunder, has caused this Indenture to be executed in its name by its duly authorized
signatories, all as of the day and year first above written.
UNITED CITY OF YORKVILLE, KENDALL
COUNTY, ILLINOIS
By:
Its:
(SEAL)
ATTEST:
By:
Title:
THE BANK OF NEW YORK TRUST
COMPANY, N.A., as Trustee
By:
Its:
(SEAL)
ATTEST:
By:
Authorized Signatory
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EXHIBIT A
FORM OF BOND
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EXHIBIT B
DESCRIPTION OF BUSINESS DISTRICT
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EXHIBIT C
REQUEST FOR PAYMENT
TO: The Bank of New York Trust
Company, N.A., Trustee
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
RE: $
United City of Yorkville
Kendall County, Illinois
Sales Tax Revenue Bonds, Series 2007
(Kendall Marketplace Project)
Amount Requested:
Total Disbursements to Date:
1. The United City of Yorkville, Kendall County, Illinois (the " Issuer "), hereby
requests that The Bank of New York Trust Company, N.A., as Trustee (the "Trustee ") under the
Indenture of Trust dated as of February 1, 2007 (the "Indenture "), by and between the Issuer and
the Trustee relating to the Issuer's Sales Tax Revenue Bonds, Series 2007 (Kendall Marketplace
Project), disburse on the Amount Requested above from the
Improvement Fund (as such term is defined in the Indenture; all capitalized terms used herein
and not otherwise defined shall have the meanings given such terms in the Indenture.)
2. In connection with the requested disbursement, the Issuer hereby certifies,
represents and warrants that:
(a) It has received evidence that the Developer has executed and delivered
loan documents providing it with appropriate bank financing.
(b) The Issuer and the Developer have each complied with all requirements
under the Development Agreement relating to the disbursement request.
(c) No portion of the amount being requested to be disbursed was set forth in
any previous request for payment.
By:
Issuer Representative
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UNITED CITY OF YORKVILLE
KENDALL COUNTY, ILLINOIS
Sales Tax Revenue Bonds, Series 2007
(Kendall Marketplace Project)
BOND PURCHASE AGREEMENT
,2007
United City of Yorkville, Illinois Cannonball LLC
800 Game Farm Road do The Harlem Irving Companies, Inc.
Yorkville, Illinois 60560 4104 N. Harlem Avenue, Suite 220
Chicago, IL 60706
Ladies and Gentlemen:
The undersigned, William Blair & Company L.L.C. (the "Original Purchaser "), offers to enter
into the following agreement (this "Contract") with the United City of Yorkville, Kendall County, Illinois
(the "City "), which upon acceptance by the City of this offer, and approval of this Contract by the
Developer (as defined below) will be binding upon each of the City, the Developer and the Original
Purchaser. Capitalized terms used herein and not otherwise defined herein shall have the meanings set
forth in the Indenture (as hereinafter defined) and the Series 2007 Limited Offering Memorandum (as
hereinafter defined).
This offer is made subject to your mutual acceptance on or before 3:00 P.M., Chicago time, on
the date hereof, and, if not so accepted, will be subject to withdrawal by the Original Purchaser upon
notice delivered to the City and the Developer at the addresses set forth above at any time prior to the
acceptance hereof by the City and the Developer. This offer is also subject to the following provisions:
1. Definitions
For purposes of this Contract, the following terms have the meanings specified in this section,
unless another meaning is plainly intended:
(A) "Act" means the Business District Development and Redevelopment Act of the
State of Illinois, as amended.
(B) "Ancillary Agreements" means the Bond Ordinance, the Indenture, the Series
2007 Tax Compliance Certificate and Agreement, the Series 2007 Limited Offering Memorandum, the
Development Agreement, and all other agreements and certificates executed and delivered in connection
with the issuance and sale of the Series 2007 Bonds.
(C) "Bond Ordinance" means Ordinance No. adopted by the corporate
authorities of the City on 2007, authorizing the issuance of the Series 2007 Bonds.
(D) "Business Day" means any day other than a Saturday, Sunday, legal holiday or a
day on which banking institutions are required or authorized by law to be closed in the City of Chicago or
the State of Illinois or a day on which the New York Stock Exchange is closed.
(E) "Business District" means the Kendall Marketplace Business District designated
by Ordinance No. 2007 - of the City generally located at the northwest comer of the intersection of
Illinois Route 34 and Cannonball Trail in the United City of Yorkville.
I
(F) "City" means the United City of Yorkville, Kendall County, Illinois.
(G) "City Information" means the descriptions and information contained in the
Series 2007 Limited Offering Memorandum under the captions "INTRODUCTORY STATEMENT ",
"PLAN OF FINANCE" (excluding information under the subcaptions "— Developer Loans" and
"— Developer Equity "); "THE DEVELOPMENT AGREEMENT"; "THE CITY "; "THE BUSINESS
DISTRICT AND PLEDGED REVENUE"; "CONTINUING INFORMATION —The City"; "NO
LITIGATION —The City"; "NO RATING ", "AUTHORIZATION" and "MISCELLANEOUS."
(H) "Closing" means the Closing as defined in Section 2(B) herein held on the
Closing Date.
(I) "Closing Date" means , 2007, or such earlier or later date as the City,
the Developer and the Original Purchaser shall mutually agree upon and refers to the date on which the
City causes the Trustee to deliver the Series 2007 Bonds to the Original Purchaser and the Series 2007
Bonds are paid for by the Original Purchaser pursuant to this Contract.
(J) "Code" means the Internal Revenue Code of 1986, as amended.
(K) "Contract" means this Bond Purchase Agreement.
(L) "Designating Ordinance" means Ordinance No. 2006- _ adopted by the
corporate authorities of the City on , 2006, designating the United City of Yorkville Kendall
Marketplace Business District.
(M) "Developer" means Cannonball LLC, an Illinois limited liability company.
(N) "Development Agreement" means the Development Agreement dated ,
2007 between the City and the Developer.
(0) "Developer Information" means the descriptions and information in the Series
2007 Limited Offering Memorandum under the captions "INTRODUCTORY STATEMENT ", except the
penultimate and ultimate paragraphs therein, "ESTIMATED SOURCES AND USES OF FUNDS";
"PLAN OF FINANCE"; "THE DEVELOPMENT AGREEMENT"; "SUMMARY OF THE PROJECT";
"THE DEVELOPER"; "RISK FACTORS;" "CONTINUING INFORMATION —The Developer"; and
"NO LITIGATION —The Developer."
(P) "Governmental Body" means any federal, state, municipal, or other
governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign.
(Q) "Indenture" means the Trust Indenture dated as of 1, 2007 between
the City and the Trustee pursuant to which the Series 2007 Bonds will be issued.
(R) "Notice Beneficial Holders" has the meaning given in the Indenture.
(S) "Original Purchaser" means William Blair & Company, L.L.C.
(T) "Plans" means the plans and specifications pursuant to which the Project will be
constructed.
(U) "Pledged Revenue" shall have the meaning set forth in the Indenture.
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I
(V) "Preliminary Series 2007 Limited Offering Memorandum" means the
Preliminary Series 2007 Limited Offering Memorandum of the City (including any Appendix thereto)
relating to the Series 2007 Bonds dated , 2007.
(V) "Project" means the project development as defined in the Series 2007 Limited
Offering Memorandum.
(X) "Series 2007 Bonds" means the United City of Yorkville Sales Tax Revenue
Bonds, Series 2007 (Kendall Marketplace Project).
(Y) "Series 2007 Limited Offering Memorandum" means the Series 2007 Limited
Offering Memorandum of the City (including each Appendix thereto) relating to the Series 2007 Bonds
dated , 2007.
(Z) "Series 2007 Tax Compliance Certificate and Agreement" means the Tax
Compliance Certificate and Agreement dated the Closing Date, executed by the City and the Trustee in
connection with the Series 2007 Bonds.
(AA) "Trustee" means The Bank of New York Trust Company, N.A., as Trustee under
the Indenture.
2. Purchase and Sale of the Bonds.
(A) Sale of Bonds. Upon the terms and conditions and upon the basis of the
representations, warranties and agreements herein, the Original Purchaser hereby agrees to purchase from
the City for a limited offering, and the City hereby agrees to sell to the Original Purchaser for such
purpose, all, but not less than all, of the Series 2007 Bonds for a purchase price of $ , which
reflects an underwriters' discount of $ . The Series 2007 Bonds shall be due and shall
bear interest as set forth on Exhibit A hereto. The Series 2007 Bonds shall be issued pursuant to the Bond
Ordinance. The Series 2007 Bonds shall be dated, shall mature on such dates and in such amounts, shall
bear interest at such rates, shall be offered at the initial offering prices and shall be subject to such other
terms and conditions, all as described in the Series 2007 Limited Offering Memorandum, the Bond
Ordinance and the Indenture.
(B) Closing. The purchase and sale of the Series 2007 Bonds shall take place on or
before 12:00 p.m. CST on the Closing Date at the offices of Foley & Lardner LLP, Chicago, Illinois. At
the Closing, as defined below, the Original Purchaser will accept the delivery of the Series 2007 Bonds
duly executed by the City, together with other documents herein mentioned, and will make payment
therefor as provided herein by immediately available funds payable to the order of the Trustee for the
account of the City.
The payment for the Series 2007 Bonds and delivery of the Series 2007 Bonds, as herein
described, is herein called the "Closing."
3. Citv's Pre - Closina Deliveries.
(A) Prior to the Closing Date, the City shall have delivered or caused to be delivered
to the Original Purchaser an executed copy of the Series 2007 Limited Offering Memorandum, executed
on behalf of the City by its Mayor.
(B) Prior to the Closing Date, the City shall have delivered or caused to be delivered
to the Original Purchaser a certified copy of the Bond Ordinance and such other ordinances of the City
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which shall include the authorization of the execution, delivery and performance of this Contract, the
Series 2007 Bonds and the other Ancillary Agreements to which the City is a party, among other things,
together with such reasonable number of copies of each of the foregoing as the Original Purchaser shall
request.
(C) The City hereby authorizes any and all of the material described above in
Subsections A and B of this Section 3 and the Ancillary Agreements, the information contained in the
Series 2007 Limited Offering Memorandum (and the Preliminary Series 2007 Limited Offering
Memorandum) and the Bond Ordinance and all other instruments, documents and agreements delivered
pursuant to Section 8 of this Contract or in connection with the transactions contemplated hereby, for use
in connection with the offering and sale of the Series 2007 Bonds. The City hereby ratifies, approves, and
consents to the use and distribution by the Original Purchaser, prior to or after the date hereof, of the
Series 2007 Limited Offering Memorandum (and the Preliminary Series 2007 Limited Offering
Memorandum) in connection with the offering of the Series 2007 Bonds. The City hereby agrees to
furnish such information, execute such instruments and take such other action at the expense of and in
cooperation with the Original Purchaser as the Original Purchaser may deem reasonably necessary in
order to qualify the Series 2007 Bonds for offering and sale under the "Blue Sky" or other securities laws
and regulations of such states and other jurisdictions of the United States as the Original Purchaser may
designate; provided, however, that the City shall not be required to execute a special or general consent to
service of process or qualify as a foreign corporation in connection with any such qualification in any
jurisdiction.
4. Representations and Warranties of the Citv.
The City represents and warrants to and agrees with the Original Purchaser that:
(A) Cam. The City is a non -home rule unit and a municipal corporation duly
organized, validly existing and in good standing under the laws and the Constitution of the State of
Illinois. The City is authorized and empowered by the Act and the Bond Ordinance and such other
ordinances of the City as have been duly adopted by the City, to enter into the transactions contemplated
by this Contract, each of the Bond Ordinance and Designating Ordinance, the Series 2007 Limited
Offering Memorandum, and the Ancillary Agreements to which the City is or is to be a party. The
adoption of the Bond Ordinance and the execution, delivery and performance by the City of this Contract,
the Ancillary Agreements to which the City is or is to be a party and the issuance of the Series 2007
Bonds are within the legal right, power and authority of the City, have been duly and validly authorized
by all necessary proceedings of the City, and such execution, delivery and performance by the City as of
the date of this Contract and as of the Closing Date do not and will not contravene, or constitute a breach
of or default (with due notice or the passage of time or both) under, any provision of law, ordinance or
regulation applicable to the City, or any provision of the municipal code or other rules and procedures of
the City, or any judgment, order, decree, agreement or instrument binding on it or, except as described in
the Series 2007 Limited Offering Memorandum, result in the creation of any lien or other encumbrance
on any asset of the City. This Contract and the Bond Ordinance each constitutes, and the Ancillary
Agreements to which the City is or is to be a party, when executed and delivered by the City and any
other parties thereto, will constitute valid and binding agreements of the City enforceable against the City
in accordance with their respective terms, except to the extent limited by bankruptcy, reorganization, or
other similar laws affecting creditors' rights generally and by the availability of equitable remedies, and
the Series 2007 Bonds, when issued and delivered by the City in accordance with this Contract and the
Bond Ordinance will have been duly authorized and issued and will constitute valid and binding
obligations of the City enforceable against the City in accordance with their terms, except to the extent
limited by bankruptcy, reorganization, or other similar laws affecting the enforcement of creditors' rights
generally and by the availability of equitable remedies. When delivered to and paid for by the Original
Purchaser at the Closing in accordance with the provisions of this Contract, the Series 2007 Bonds will
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conform in all material respects to the description thereof contained in the Series 2007 Limited Offering
Memorandum.
(B) Use of Proceeds. The City will not take or omit to take any action which will in
any way cause or result in the proceeds from the sale of the Series 2007 Bonds being applied other than as
provided in the Bond Ordinance, the Indenture and as described in the Series 2007 Limited Offering
Memorandum. Such proceeds will not be used by the City in a manner that would cause the Series 2007
Bonds to be "arbitrage bonds" within the meaning of the Code, or any successor thereto, and the
applicable regulations promulgated or proposed thereunder.
(C) Governmental Authorization. All authorizations, consents and approvals of any
Governmental Body required in connection with the execution and delivery by the City of, or in
connection with the performance by the City of its obligations under, the Series 2007 Bonds, the Bond
Ordinance, this Contract, or the Ancillary Agreements to which the City is or is to be a party, have been
obtained and are in full force and effect, or will be obtained prior to Closing and will be in full force and
effect as of the Closing Date. To the best knowledge of the City, all authorizations, consents and
approvals of any Governmental Body required in connection with the construction or operation of the
Project by the City have been obtained and are in full force and effect as of the Closing Date.
(D) Limited Offerine Memorandum. The City Information is, and as of the date of
the Closing, will be, true and correct in all material respects and such descriptions and information in the
Series 2007 Limited Offering Memorandum, as of its date and as of the Closing Date will not contain an
untrue, incorrect or misleading statement of a material fact; and such descriptions and information in the
Series 2007 Limited Offering Memorandum do not, as of its date and as of the Closing Date will not omit
to state a material fact necessary to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.
(E) No Liens or Encumbrances. Other than as specifically set forth in the Series
2007 Limited Offering Memorandum, there are no existing liens, claims, charges or encumbrances on or
rights to any funds, revenues or interests pledged pursuant to the Bond Ordinance which are senior to, or
on a parity with, the claims of the holders of the Series 2007 Bonds. Other than as specifically disclosed
in the Series 2007 Limited Offering Memorandum, the City has not entered into any contract or
arrangement of any kind, and there is no existing, pending, threatened, or anticipated event or
circumstance that might give rise to any lien, claim, charge or encumbrance on or right to the assets,
properties, funds, or interests pledged pursuant to the Bond Ordinance which would be prior to, or on a
parity with, the claims of the holders of the Series 2007 Bonds. The City is lawfully entitled to receive,
pledge and assign all amounts or revenues which have been pledged or assigned as security for the
payment of the principal of and interest on the Series 2007 Bonds.
(F) No Litieation. Except as described in the Series 2007 Limited Offering
Memorandum, as of the date of this Contract and as of the Closing Date (i) there is no action, suit,
proceeding or investigation, at law or in equity, before or by any court or any governmental agency or
public board or body, pending against the City or, to the knowledge of the City, threatened against the
City, to restrain or enjoin, or threatening or seeking to restrain or enjoin, the issuance, sale or delivery of
the Series 2007 Bonds or the delivery by the City of any of the Ancillary Agreements to which the City is
a party, or the collection of the Pledged Revenue, or in any way contesting or affecting the validity of the
Series 2007 Bonds, or any of the Ancillary Agreements to which the City is a party, or in any way
questioning or affecting (w) the proceedings under which the Series 2007 Bonds are to be issued, (x) the
validity or enforceability of any provision of the Series 2007 Bonds, the Bond Ordinance, the Designating
Ordinance or this Contract, (y) the authority of the City to collect the Pledged Revenue, or to perform its
obligations hereunder or with respect to the Series 2007 Bonds, or to consummate any of the transactions
set forth in the Ancillary Agreements to which it is or is to be a party as contemplated hereby or by the
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Bond Ordinance, or the Series 2007 Limited Offering Memorandum, (z) the legal existence of the City, or
the title of its Board of Trustees or officers to their offices, and (ii) there is no action, suit, proceeding or
investigation, at law or in equity, before or by any court or any governmental agency or public board or
body, pending against the City or, to the knowledge of the City, threatened against the City, involving any
of the property or assets within the City which may result in any material adverse change in the Pledged
Revenue, assets or the financial condition of the City or the proposed construction or operation of the
Project by the Developer pursuant to the Development Agreement.
(G) Certificates. Any certificate signed by an authorized officer of the City and
delivered to the Original Purchaser and/or the Trustee shall be deemed a representation and covenant by
the City to the Original Purchaser and/or the Trustee as to the statements made therein.
(II) The Ordinances. Each of the Bond Ordinance and the Designating Ordinance is
in full force and effect, and has not been amended, modified, revoked or repealed.
5. Representations and Warranties of the Developer.
The Developer represents and warrants to and agrees with the Original Purchaser and the City
that:
(A) Organization and Power. The Developer is a duly organized and validly existing
limited liability company and is in good standing under the laws of the State of Illinois, and has all
powers and authority and all governmental licenses, authorizations, consents and approvals required to
carry on its business as now conducted and to enter into and perform its obligations under this Contract,
and all Ancillary Agreements to which it is or is to be a party.
(B) Authorization of Agreements. Etc. This Contract and the Ancillary Agreements
to which the Developer is a party have each been duly authorized, executed and delivered by the
Developer and constitute the legal, valid and binding agreement of the Developer enforceable against the
Developer in accordance with their respective terms; provided that the enforceability of such Agreements
may be limited by bankruptcy, reorganization, insolvency and similar laws affecting the enforcement of
creditors' rights and remedies generally, as applied in the event of bankruptcy, reorganization or
insolvency of the Developer and to equitable remedies. The Developer has duly authorized all necessary
action to be taken by it for (i) approval of the Developer Information and (ii) the execution and delivery
of this Contract and the Ancillary Agreements to which the Developer is or is to be a party, and any and
all other agreements and documents as may be required to be executed or delivered by the Developer in
order to effectuate the transactions contemplated herein and therein.
(C) Development Agreement. Any and all of the conditions precedent to the
obligations of the Developer arising under the Development Agreement have been satisfied or waived by
the City.
(D) No Material Change. Other than as disclosed in the Series 2007 Limited
Offering Memorandum or except as previously disclosed to the Original Purchaser, (i) the Developer has
not incurred any material liabilities or entered into any material transactions other than in the ordinary
course of business and (ii) there has been no material adverse change in the business, financial position,
prospects or results of operations of the Developer, which would affect the Developer's ability to perform
its obligations pursuant to this Contract or the Ancillary Agreements, to the extent to which the Developer
is or is to be a party to such agreement.
(E) Noncontravention. The execution, delivery and performance by the Developer of
its obligations under this Contract and the Ancillary Agreements to which the Developer is a party do not,
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and to the Developer's knowledge, will not contravene, or constitute a default under, any provision of
applicable law or regulation or organizational documents of the Developer or of any agreement,
judgment, injunction, order, decree or other instrument binding upon the Developer, and will not result in
the creation of any lien or other encumbrance upon any asset of the Developer except as set forth in the
Series 2007 Limited Offering Memorandum.
(F) Governmental or Cora_ orate Consents. No consent or approval -is required to be
obtained from, and no action need be taken by, or document filed with, any Governmental Body or
corporate entity in connection with the execution or delivery by the Developer of this Contract or any
Ancillary Agreement to which the Developer is or is to be a party, or, if any such action is required, the
same has been duly taken, is in full force and effect and constitutes valid and sufficient consent or
approval therefor, except for those which are customarily obtained during construction of the Project.
The Developer has no reason to believe any such consent or approval will not be obtained in due course.
(G) No Litisation. Except as described in the Series 2007 Limited Offering
Memorandum, there is no action, suit, proceeding or investigation, at law or in equity, before or by any
court or any governmental agency or public board or body, pending against the Developer, in which the
Developer is a party or, to the knowledge of the Developer overtly threatened in writing against the
Developer, (i) contesting or in any way relating to (a) the construction and development of the Project,
(b) the generation of Pledged Revenue or the transactions contemplated by the issuance of the Series 2007
Bonds or as otherwise described in the Series 2007 Limited Offering Memorandum or (ii) which in any
way contests the existence or power of the Developer or the validity or enforceability of the Series 2007
Bonds, the Ancillary Agreements, this Contract or the Series 2007 Limited Offering Memorandum or
which if adversely determined could have a material adverse effect on the Developer.
(H) Limited Offering Memorandum. The Developer Information contained in the
Series 2007 Limited Offering Memorandum is true and correct in all material respects as of the date
hereof and as of the date hereof does not contain any untrue statements of a material fact or omit to state a
material fact necessary to be stated therein in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(1) Use of Proceeds. The Developer will not take or omit to take any action which
will in any way cause or result in the proceeds of the sale of the Series 2007 Bonds being applied in a
manner other than as provided in the Bond Ordinance and the Indenture and as described in the Series
2007 Limited Offering Memorandum. Such proceeds will not be used by the Developer in a manner that
would cause the Series 2007 Bonds to be "arbitrage bonds" within the meaning of the Code, or any
successor thereto, and the applicable regulations promulgated or proposed thereunder.
(J) No Default. No default or event of default on the part of the Developer has
occurred and is continuing, and no event has occurred and is continuing which with the lapse of time or
the giving of notice, or both, would constitute a default or an event of default on the part of the Developer
under this Contract, the Ancillary Agreements to which the Developer is a party, or any other material
agreement or material instrument to which the Developer is a party or by which the Developer is or may
be bound.
(K) Anurovals. The Developer has received and is in good standing with respect to
any applicable certificates, licenses, inspections, franchises, consents, immunities, permits, authorizations
and approvals, governmental or otherwise, necessary to conduct and to continue to conduct its business as
heretofore conducted by it and to own or lease and operate its properties as now owned or leased by it.
Except as set forth in the Limited Offering Memorandum, the Developer has obtained any applicable
certificates, licenses, inspections, franchises, consents, immunities, permits, authorizations and approvals,
governmental or otherwise, necessary to construct the Project, except for final platting and engineering to
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be completed as part of the Project, and those the nature of which cannot be given until construction of
the Improvements are sufficiently underway.
(L) Certificates. Any certificate signed by an authorized representative of the
Developer and delivered to the City or the Original Purchaser shall be deemed a representation and
warranty by the Developer to the City and the Original Purchaser as to the statements made by Developer
therein.
(M) Environmental Representation. To the best of the Developer's knowledge, no
toxic or hazardous substances, including without limitation, asbestos, and the group of organic
compounds known as polychlorinated biphenyls, have been generated, treated, stored or disposed of, or
otherwise deposited in or located on the site which includes the Business District and no activity has been
undertaken at the site which includes the Business District which could:
(i) cause the Project or any part thereof to become a hazardous waste treatment,
storage or disposal facility within the meaning of, or otherwise bring such property within the ambit of,
the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. ( "RCRA "), or any other
similar state law or local ordinance;
(ii) cause a release or threatened release of hazardous materials, wastes or substances
from the site or any part thereof within the meaning of, or otherwise bring such property or any part
thereof within the ambit of, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C., Sections 9601 -9657 ( "CERCLA "), or any similar state law or ordinance or any
other environmental law;
(iii) cause the discharge of pollutants or effluents into any water source or system, or
the discharge into the air of any emissions, which would require a permit under the Federal Water
Pollution Control Act, 33 U.S.C., Section 1251 et seq., or the Clean Air Act, 41 U.S.C., Section 7401 et
seq., or any similar state law or local ordinance; or
(iv) support a claim or cause of action under RCRA, CERCLA or any other federal,
state or local environmental statutes, regulations, ordinances or other environmental regulatory
requirements.
(1) No Challenaes. The Developer agrees that it will not bring any suit, action or
proceeding which challenges the designation of the Business District, the imposition and collection of the
Local Sales Taxes, the validity of the Series 2007 Bonds or the proceedings relating to the Series 2007
Bonds.
(0) Development Status. To Developer's knowledge, the legal description and
boundaries of the Business District have not changed from those reflected in the Designation Ordinance.
The Developer has obtained approval from the City for, and intends to develop or cause to be developed
in the Business District a shopping center with approximately 820,000 square feet of gross building area.
(P) Completion of Construction. The Developer has sufficient financial resources
together with the proceeds of the Series 2007 Bonds, including cash, marketable securities, outside equity
or bank loans to complete the Project, as proposed in the Series 2007 Limited Offering Memorandum.
(Q) Form of Bond and Indenture. The Developer approves the form and terms of the
Bonds and the Indenture and agrees that the issuance of such Bonds satisfies the terms and conditions of
the Development Agreement relating to the City's obligation to issue the Bonds.
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6. Representations and Warranties and Agreements of the Original Purchaser.
(A) Limited Offering. The Original Purchaser agrees to make a limited offering of
the Series 2007 Bonds to a limited number of institutional investors at a price or prices (or yield or yields)
not in excess of the offering price or prices (or not lower than the yield or yields) set forth on the cover
page of the Series 2007 Limited Offering Memorandum.
(B) Limited Offerine Memorandum. The descriptions and information contained in
the Series 2007 Limited Offering Memorandum under the captions "UNDERWRITING" and the first two
grammatical sentences under the caption "LIMITED OFFERING" are, and as of the date of the Closing
will be, true and correct in all material respects and such descriptions and information in the Series 2007
Limited Offering Memorandum, as of its date and as of the Closing Date will not contain an untrue,
incorrect or misleading statement of a material fact; and such descriptions and information in the Series
2007 Limited Offering Memorandum do not, as of its date and as of the Closing Date will not omit to
state a material fact necessary to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.
7. Termination of the Purchase Contract.
The Original Purchaser shall have the right to cancel its obligation to purchase the Series 2007
Bonds, if, between the date hereof and the date of Closing, (i) legislation shall be enacted, or actively
considered for enactment, by the Congress or recommended by the President of the United States to the
Congress for passage, or favorably reported for passage to either House of the Congress by any
committee of such House to which such legislation has been referred for consideration, a decision by a
court of the United States or the United States Tax Court shall be rendered, or a ruling, regulation or
official statement by or on behalf of the Treasury Department of the United States, the Internal Revenue
Service or other agency or department of the United States shall be made or proposed to be made which
has the purpose or effect, directly or indirectly, of imposing federal income taxes upon interest on the
Series 2007 Bonds; (ii) any other action or event shall have transpired which has the purpose or effect,
directly or indirectly, of materially adversely affecting the federal income tax consequences of any of the
transactions contemplated in connection herewith or contemplated by the Series 2007 Limited Offering
Memorandum, or, in the reasonable opinion of the Original Purchaser, such action or event pertaining to
the federal income tax consequences referenced above materially adversely affects the market for the
Series 2007 Bonds or the sale, at the contemplated offering price or prices (or yield or yields), by the
Original Purchaser of the Series 2007 Bonds; (iii) legislation shall be enacted, or actively considered for
enactment by the Congress, with an effective date on or prior to the date of Closing, or a decision by a
court of the United States shall be rendered, or a ruling or regulation by the Securities and Exchange
Commission or other governmental agency having jurisdiction over the subject matter shall be made, the
effect of which is that (A) the Series 2007 Bonds are not exempt from the registration, qualification or
other requirements of the Securities Act of 1933, as amended and as then in effect, or the Securities
Exchange Act of 1934, as amended and as then in effect, or (B) the Indenture is not exempt from the
registration, qualification or other requirements of the Trust Indenture Act of 1939, as amended and as
then in effect; (iv) a stop order, ruling or regulation by the Securities and Exchange Commission shall be
issued or made, the effect of which is that the issuance, offering or sale of the Series 2007 Bonds, as
contemplated herein and in the Series 2007 Limited Offering Memorandum, is in violation of any
provision of the Securities Act of 1933, as amended and as then in effect, the Securities Exchange Act of
1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and as then in
effect; (v) there shall occur any event which in the reasonable judgment of the Original Purchaser either
(A) makes untrue, incorrect or misleading in any material respect any statement or information contained
in the Series 2007 Limited Offering Memorandum or (B) is not reflected in the Series 2007 Limited
Offering Memorandum but should be reflected therein in order to make the statements and information
contained therein not misleading in any material respect and, in either such event, the City or the
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Developer refuse to permit the Series 2007 Limited Offering Memorandum to be supplemented to correct
or supply such statement or information, or the effect of the Series 2007 Limited Offering Memorandum
as so corrected or supplemented is such as, in the reasonable judgment of the Original Purchaser, would
materially adversely affect the market for the Series 2007 Bonds or the sale, at the contemplated offering
price or prices (or yield or yields), by the Original Purchaser of the Series 2007 Bonds; (vi) there shall
occur any outbreak of hostilities or any regional, national or international calamity or crisis or a financial
crisis and the effect is such as, in the reasonable judgment of the Original Purchaser, would materially
adversely affect the market for or the marketability of the Series 2007 Bonds or obligations of the general
character of the Series 2007 Bonds; (vii) a general suspension of trading on the New York Stock
Exchange is in force; (viii) a general banking moratorium is declared by federal or state authorities;
(ix) there occurs any material adverse change in the affairs, operations or financial conditions of the City,
except as set forth or contemplated in the Series 2007 Limited Offering Memorandum or in the affairs,
operations or financial condition of the Developer; (x) the Series 2007 Limited Offering Memorandum is
not executed, approved and delivered in accordance with Section 3 above; (xi) in the reasonable judgment
of the Original Purchaser, the market price of the Series 2007 Bonds, or the market price generally of
obligations of the general character of the Series 2007 Bonds, might be adversely affected because:
(A) additional material restrictions not in force as of the date hereof shall have been imposed upon trading
in securities generally by any governmental authority or by any national securities exchange, or (B) the
New York Stock Exchange or other national securities exchange, or any governmental authority, shall
impose, as to the Series 2007 Bonds or similar obligations, any material restrictions not now in force, or
increase materially those now in force, with respect to the extension of credit by, or the charge to the net
capital requirements of, underwriters; (xii) a war involving the United States of America shall have been
declared, or any conflict involving the armed forces of any country shall have escalated, or any other
international, national or regional emergency relating to or affecting the effective operation of
government or the financial community shall have occurred, which, in the reasonable judgment of the
Original Purchaser, materially adversely affects the market for the Series 2007 Bonds or of obligations of
the general character of the Series 2007 Bonds; (xiii) any litigation shall be instituted, pending or
threatened to restrain or enjoin the issuance, sale or delivery of the Series 2007 Bonds or in any way
protesting or affecting any authority for or the validity of the Series 2007 Bonds, the Bond Ordinance, the
existence or powers of the City, or any event described or contemplated by the Series 2007 Limited
Offering Memorandum; (xiv) there shall have occurred a default with respect to the debt obligations of, or
the institution of proceedings under any federal bankruptcy laws by or against, any state of the United
States or any city or political subdivision of any state, the effect of which, in the reasonable judgment of
the Original Purchaser, would materially adversely affect the ability of the Original Purchaser to market
the Bonds.
8. Conditions of Closing.
The Original Purchaser' obligation to purchase the Series 2007 Bonds under this Contract is
subject to the performance by the City and the Developer of their respective obligations hereunder at and
prior to the Closing Date, to the accuracy in all material respects of the representations and warranties of
the City and the Developer contained herein as of the Closing Date, and to the following conditions,
including the delivery of such documents as are enumerated herein in form and substance satisfactory to
the Original Purchaser and its counsel as of the Closing Date:
(A) Ordinances in Effect and Citv in Comuliance Therewith. At the time of the
Closing (i) each of the Bond Ordinance and the Designating Ordinance shall be in full force and effect,
and shall not have been amended, modified or supplemented since the date hereof, except as may have
been agreed to in writing by the Original Purchaser, and the City shall have duly adopted and there shall
be in full force and effect such additional ordinances or agreements as shall be, in the opinion of Bond
Counsel, necessary in connection with the transactions contemplated hereby and (ii) the City shall
perform or have performed all of its obligations required under or specified in this Contract with regard to
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I
the Series 2007 Bonds or the Bond Ordinance to be performed at simultaneously with or prior to the
Closing.
(B) Opinion of Bond Counsel. The Original Purchaser shall have received an
unqualified approving legal opinion dated the Closing Date as to the Series 2007 Bonds, addressed to the
Original Purchaser, the Developer, the City and the Trustee, from Foley & Lardner LLP, Bond Counsel,
satisfactory in form and substance to the Original Purchaser.
(C) Opinion of Original Purchaser's Counsel. The Original Purchaser shall have
received a favorable opinion dated the Closing Date, addressed to the Original Purchaser, from
Sonnenschein Nath & Rosenthal LLP, satisfactory in form and-substance to the Original Purchaser.
I
(D) Opinion of Counsel to the City. The Original Purchaser shall have received a
favorable opinion dated the Closing Date, addressed to the Original Purchaser, Bond Counsel, the
Developer and the Trustee, from John Wyeth, Esq., counsel to the City, satisfactory in form and substance
to the Original Purchaser.
(E) Opinions of Counsel to the Developer. The Original Purchaser shall have
received favorable opinions dated the Closing Date, addressed to the Original Purchaser, the
City, the Trustee and Bond Counsel from the [Developer's general counsel and] from Polsky &
Associates Ltd., special counsel to the Developer, satisfactory in form and substance to the
Original Purchaser.
(F) Performance. No Default. Each of the City and the Developer shall have
performed and complied with all agreements and conditions herein required to be performed or complied
with by each of them prior to or on the Closing Date, and at the time of the Closing no event of default or
default shall have occurred and be continuing with respect to the Ancillary Agreements or the Series 2007
Bonds.
(G) Ancillary Agreements. At the Closing Date, (i) all of the Ancillary Agreements
shall be in full force and effect, shall have been duly executed and copies delivered to the Original
Purchaser by, and shall constitute valid and binding agreements of, the parties thereto, shall not have been
amended, modified or supplemented except as may have been agreed to in writing by the Original
Purchaser and there shall be no defaults or events of default thereunder and (ii) the proceeds of the sale of
the Series 2007 Bonds shall be applied or deposited with the Trustee for application as described in the
Bond Ordinance and the Series 2007 Limited Offering Memorandum.
(IT) Closing Certificate of Mayor of the City. The City shall have delivered to the
Original Purchaser a certificate dated the Closing Date, addressed to the Original Purchaser and the
Trustee signed by the Mayor of the City in form and substance reasonably satisfactory to the Original
Purchaser.
(I) Officer's Certificate of the Developer. The Developer shall have delivered to the
Original Purchaser a certificate dated the Closing Date, addressed to the Original Purchaser signed by an
authorized officer of the Developer and of the manager of the Developer in form and substance
satisfactory to the Original Purchaser.
(J) The Series 2007 Bonds. The Series 2007 Bonds shall have been duly authorized,
executed, authenticated, delivered, and the proceeds from the sale thereof applied, in accordance with the
provisions of the Bond Ordinance.
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I
(K) Trustee's Certificate. The Original Purchaser shall have received a certificate
dated the Closing Date of an authorized officer of the Trustee, addressed to the Original Purchaser in form
and substance satisfactory to the Original Purchaser.
(L) Form 8038 -G. The Original Purchaser shall have received a copy of the
completed Form 8038 -G of the Internal Revenue Service executed by the City.
(M) Officers' Certificates. The Original Purchaser shall have received any and all
certificates required to be furnished by the provisions of any Ancillary Agreement to be obtained or
furnished by the City and the Developer at or prior to Closing.
(N) Sn_ ecimen Bonds. The Original Purchaser shall have received specimen Series
2007 Bonds.
(0) Certified Conies of Ordinances. The Original Purchaser shall have received
certified copies of the Bond Ordinance, the Designating Ordinance. The Bond Ordinance shall include
authorization for execution and delivery of this Contract.
(P) Financing. The Developer shall have delivered evidence, upon the request of and
satisfactory to the Original Purchaser, which may be in the form of financial statements, equity
commitments, or loan commitments, demonstrating that the Developer has cash, marketable securities,
outside equity or bank financing to complete the Project.
(Q) Additional Opinions, Certificates, etc.. The Original Purchaser shall have
received such additional legal opinions, certificates, proceedings, instruments and other documents as the
Original Purchaser, the City or their respective counsel may deem reasonably necessary or desirable. .
All of the opinions, letters, certificates, instruments and other documents mentioned in this
Contract shall be deemed to be in compliance with the provisions of this Contract only if they are
satisfactory in form and substance to the Original Purchaser.
If there shall be a failure to satisfy the conditions of the Original Purchaser' obligations contained
in this Contract or if the Original Purchaser's obligations to purchase the Series 2007 Bonds shall be
terminated for any reason permitted by this Contract, this Contract shall terminate, and the Original
Purchaser, the City and the Developer shall not have any further obligations hereunder.
9. Chances Affectine the Limited Offering Memorandum.
At any time prior to the Closing, the City and the Developer agree to supplement or amend the
Series 2007 Limited Offering Memorandum whenever requested by the Original Purchaser when, in the
reasonable judgment of the Original Purchaser and the City, such supplement or amendment is required.
No amendment or supplement to the Series 2007 Limited Offering Memorandum shall be made without
the approval of the Original Purchaser. After the Closing and so long as the Original Purchaser or any
participating dealer shall be offering Series 2007 Bonds, but not later than 90 days after the date of this
Contract if any event shall occur as a result of which it is necessary to amend or supplement the Series
2007 Limited Offering Memorandum in order to make the statements therein, in light of the
circumstances under which they are made, not misleading, the City will so advise the Original Purchaser.
In any such case, the City and the Developer shall cooperate in the preparation, execution and delivery of
either amendments to the Series 2007 Limited Offering Memorandum or supplemental information so
that the statements in the Series 2007 Limited Offering Memorandum, as so amended or supplemented
will not, in light of the circumstances under which such statements were made, be misleading. The cost
of providing such amendments or supplements shall be paid by the City.
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10. Pavment of Expenses.
The Original Purchaser shall be under no obligation to pay any expenses incident to the issuance
of the Series 2007 Bonds. All fees, costs and expenses associated with the issuance of the Series 2007
Bonds, including without limitation, the fees and disbursements of legal counsel, professional fees,
printing and the costs associated with the CUSIP number for the Series 2007 Bonds shall be disbursed
and paid by the Trustee from the proceeds of the Series 2007 Bonds.
11. Notices
Except as otherwise provided in this Contract, whenever notice is required to be given pursuant to
the provisions of this Contract, such notice shall be in writing and shall be mailed by first class mail
postage prepaid.
12. Law Governing.
This Contract shall be construed in accordance with and governed by the laws of the State of
Illinois.
I
13. Headings.
The headings of the paragraphs and subparagraphs of this Contract are inserted for convenience
only and shall not be deemed to constitute a part of this Contract.
14. Counterparts.
This Contract may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same instrument.
15. Parties and Interests.
This Contract is made solely for the benefit of the City, the Original Purchaser and the Developer,
including the successors and assigns of the Original Purchaser, and no other person, partnership,
association or corporation shall acquire or have any rights hereunder or by virtue hereof.
16. Indemnification.
(a) The City agrees to indemnify and hold harmless the Original Purchaser, each director,
trustee, member, officer, partner, employee or agent of the Original Purchaser and each person, if any,
who has the power, directly or indirectly, to direct or cause the direction of the management and policies
of the Original Purchaser, pursuant to the Original Purchaser's regulations or Bylaws, or who controls the
Original Purchaser within the meaning of Section 20 of the Exchange Act or Section 15 of the Securities
Act, from and against any and all losses, claims, damages, liabilities or expenses whatsoever caused by
any untrue or misleading, or allegedly untrue or misleading, statement of a material fact contained in that
portion of the Series 2007 Limited Offering Memorandum constituting the City Information, or in any
amendment or supplement thereto with regard to that portion of the Series 2007 Limited Offering
Memorandum, or caused by any omission or alleged omission to state in that portion of the Series 2007
Limited Offering Memorandum constituting the City Information a material fact necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading; the City
shall not be liable under this paragraph if the person asserting any such loss, claim, damage or liability
purchased Series 2007 Bonds from the Original Purchaser, if delivery to such person of the Series 2007
Limited Offering Memorandum, or any amendment or supplement thereto, would have been a valid
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defense to the action from which such loss, claim, damage or liability arose and if the Series 2007 Limited
Offering Memorandum, amendment of or supplement was not delivered to such person by or on behalf of
the Original Purchaser.
In case any proceeding (including any governmental investigation) shall be instituted involving
any person in respect of which indemnity may be sought pursuant to the preceding paragraph, such person
(the "indemnified party") shall promptly notify the City in writing, and the City shall promptly assume
the defense thereof, including the employment of counsel chosen by the City and approved by the
Original Purchaser and shall pay the reasonable fees and disbursements of such counsel related to such
proceeding. If any of the indemnified parties is advised by counsel that there may be legal defenses
available to such indemnified party which are adverse to or in conflict with those available to the City or
another indemnified party, the City shall not have the right to assume the defense of such indemnified
party, but the City shall be responsible for the reasonable fees and expenses of counsel retained by such
indemnified party in assuming its own defense, and provided also that if the City shall have failed to
assume the defense of such action or to retain counsel satisfactory to the Original Purchaser within a
reasonable time after notice of the commencement of such action, the reasonable fees and expenses of
counsel retained by the indemnified parties shall be paid by the City. Notwithstanding, and in addition to,
any of the foregoing, any one or more of the indemnified parties shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party
unless the City and the indemnified party shall have mutually agreed to the retention of such counsel.
Such firm shall be designated in writing by the indemnified party. The City shall not be liable for any
settlement of any proceeding effected without its written consent, but, if settled with such written consent
of the City or if there shall be a final judgment for the plaintiff, the City agrees to indemnify the
indemnified parry from and against any loss, damage, cost, expense or liability by reason of such
settlement or judgment.
(b) The Developer agrees to indemnify, defend and hold harmless (a) the Original Purchaser,
each director, trustee, member, officer, agent or employee and each person, if any, who has the power,
directly or indirectly, to direct or cause the direction of the management and policies of the Original
Purchaser, pursuant to the Original Purchaser's regulations or Bylaws, or who controls the Original
Purchaser within the meaning of Section 20 of the Exchange Act or Section 15 of the Securities Act, by
contract or otherwise, and (b) the City, each director, trustee, member, officer, agent or employee and
each person, if any, who has the power, directly or indirectly, to direct or cause the direction of the
management and policies of the City (collectively called the "Section 16(b) Indemnified Parties "), from
and against any and all losses, claims, damages, liabilities or expenses to the extent caused by or arising
out of any untrue statement or misleading statement or alleged untrue statement or alleged misleading
statement of a material fact (unless such allegation is (i) made by the Original Purchaser or the City, as
the case may be, and (ii) such allegation is proven or otherwise determined to be false) contained in any
of the Developer Information, or caused by any omission or alleged omission to state in the Developer
Information a material fact required to be stated in the Developer Information or necessary to make the
statements in the Developer Information, in the light of the circumstances under which they were made,
not misleading.
In case any claim shall be made or any action shall be brought against one or more of the Section
16(b) Indemnified Parties desiring to seek indemnification pursuant to this Section 16(b), the Section
16(b) Indemnified Parties seeking indemnity shall promptly notify the Developer in writing, and the
Developer shall promptly assume the defense thereof, including the employment of counsel chosen by the
Developer and approved by the Original Purchaser and the City, which approval will not be unreasonably
withheld, and the payment of all expenses and disbursements of such counsel related to such defense. If
any of the Section 16(b) Indemnified Parties is advised by counsel that there may be legal defenses
available to it which are adverse to or in conflict with those available to the Developer or any other
Section 16(b) Indemnified Party, or that the defense of such Section 16(b) Indemnified Party should be
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handled by separate counsel, the Developer shall not have the right to assume the defense of such Section
16(b) Indemnified Party, but shall be responsible for the reasonable fees and expenses of counsel retained
by such Section 16(b) Indemnified Parry in assuming its own defense, and provided also that if the
Developer shall have failed to assume the defense of such action or to retain counsel satisfactory to the
Original Purchaser and the City within a reasonable time after notice of the commencement of such
the Section 16 b Indemnified Parties shall be aid by
action the fees and expenses of counsel retained by () p
p
the Developer. Notwithstanding, and in addition to, any of the foregoing, and subject to the approval of
the Developer, which approval will not be unreasonably withheld, any one or more of the Section 16(b)
Indemnified Parties shall have the right to employ separate counsel in any such action and to participate
in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Section
16(b) Indemnified Parry or Parties unless the employment of such counsel has been specifically
authorized, in writing, by the Developer, or unless such retention is specifically authorized herein. The
Developer shall not be liable for any settlement of any proceeding effected without its written consent,
but, if settled with such written consent or if there shall be a final judgment for the plaintiff, the
Developer agree to indemnify the Section 16(b) Indemnified Parties from and against any loss, damage,
cost, expense or liability by reason of such settlement or judgment.
(c) In order to provide for just and equitable contribution in circumstances in which the
indemnification provided for in this Section 16 is due in accordance with its terms but is for any reason
held by a court to be unavailable to the Original Purchaser, the City or the Developer or unenforceable on
grounds of policy or otherwise, the Developer and the Original Purchaser shall contribute to the aggregate
losses, claims, damages, fines and liabilities (including any investigation, legal and other expenses
reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting any contribution received by the Developer or the
Original Purchaser from persons other than the Developer or the Original Purchaser who may be liable for
contribution, such parties hereby agreeing to seek contribution from such persons) to which the Developer
and the Original Purchaser may be subject in such proportion so that the Original Purchaser is responsible
for that portion represented by the percentage that the underwriting fee bears -to the offering price
appearing on the cover page of the Series 2007 Limited Offering Memorandum, and the Developer is
responsible for the balance; provided, however, in no case shall the Original Purchaser be responsible for
any amount in excess of the amount of said underwriting fee received to such date and provided, further,
that no person found guilty of fraudulent misrepresentation, error or omission shall be entitled to
contribution (or costs of defense) from any person who was not found guilty of fraudulent
misrepresentation, error or omission. For purposes of this Subsection 16(c), each partner, member,
associate and employee of the Original Purchaser or the Developer and each person who controls the
Original Purchaser or the Developer shall have the same rights to contribution as the Original Purchaser
or the Developer subject to the provisions in the preceding sentence relating to fraudulent
misrepresentations. Any party entitled to contribution will promptly after receipt of notice of
commencement of any action, threatened action, suit or proceeding against such party or parties under
this Subsection 16(c), notify such party or parties from whom contribution may be sought, but the
omission to so notify such party or parties shall not relieve the party or parties from whom contribution
may be sought from any other obligation it or they may have otherwise under this Subsection 16(c). Any
notice given pursuant to Subsections 16(a) or (b) hereof shall be deemed to include notice under this
Subsection 16(c).
17. Further Reports.
(a) The City agrees to provide the financial reports and information described in the
Indenture and the Development Agreement which it has covenanted to provide to the Trustee, to the
Original Purchaser and any Bondholder upon written request.
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(b) During construction of the Project, the Developer agrees to provide on a quarterly basis,
an updated report showing all tenants within the portions of the Business District owned by the Developer
or an affiliate of the Developer that have signed leases. Such report shall include each tenant's name, the
amount of square feet under lease, and the lease expiration date. In addition, such report shall provide the
aggregate amount of square footage for which there are signed letters of intent and leases that have been
sent out to tenants for execution, as well as a notification of any sale of any property within the Business
District that is owned by the Developer or its affiliates.
(c) The Developer agrees that for so long as the Series 2007 Bonds are outstanding, it will
include and incorporate into any agreement of conveyance or lease for any portion of the Business
District, the obligation of any purchaser or lessee thereunder to complete, execute and deliver to the City
the Release Form (attached as Exhibit G to the Development Agreement).
18. Amendment or Assignment.
This Contract may not be amended except through the written consent of all of the parties hereto
and is not assignable.
19. Survival of Representations, Warranties, Agreements and Obligations.
Each respective representation, warranty and agreement of the City, the Developer and the
Original Purchaser shall remain operative and in full force and effect, regardless of any investigations
made by or on behalf of the Original Purchaser, the Developer, and the City and shall survive the Closing.
This Section 19, the obligations of the City under Sections 9, 10, 16 and 17 hereof, the obligations of the
Original Purchaser under Section 16 hereof and the obligations of the Developer under Sections 16 and 17
hereof shall survive any termination of this Contract pursuant to its terms.
20. Severabilitv.
If any provision of this Contract shall be held or deemed to be or shall, in fact, be inoperative or
unenforceable as applied in any particular case in any jurisdiction or jurisdictions, or in all cases because
it conflicts with any other provision or provisions or any constitution or statute or rule of public policy, or
for any other reason, such circumstances shall not have the effect of rendering the provision in question
inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or
provisions herein contained invalid, inoperative, or unenforceable to any.extent whatever. The invalidity
of any one or more phrases, sentences, clauses or sections in this Contract shall not affect the validity of
the remaining portions of this Contract, or any part hereof.
[SIGNATURES FOLLOW]
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Very truly yours,
WILLIAM BLAIR & COMPANY, L.L.C.
By:
Its:
Accepted and agreed to by the undersigned as
of the date first above written.
CANNONBALL, LLC
an Illinois limited liability company
By: THE HARLEM IRVING COMPANIES
By:
Its:
UNITED CITY OF YORKVILLE
By:
Its: Mayor
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Exhibit A
MATURITY SCHEDULE
Maturitv Principal Amount Interest Rate
I
A -1
Ti
DEVELOPMENT AGREEMENT
KENDALL MARKET PLACE
Between the
UNITED CITY OF YORKVILLE, II1�INOI
and
CANNONBALL LLC
Dated as of
2006
KENDALL MARKETPLAC PRO ENT PROJECT
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TABLE OF CONTENTS
ARTICLEI - DEFINITIONS ......................................................... ............................... 2
ARTICLE II - DESIGNATION OF DEVELOPER ........................... ............................... 5
ARTICLE III - CONSTRUCTION OF DEVELOPMENT PROJECT ............................... 5
3.1 Construction Schedule ........................................................... ............................... 5
3.2 Developer to Construct the Project ......................................... ............................... 6
3.3 Kendall Marketplace Project ................... ............................... .�..:......................... 6
3.4 Construction Contracts; Insurance .................................... y. .....:......................... 6
3.5 Governmental Approvals ................. ............................... . ............................... 6
3.6 Concept Site Plan ...................... ............................... _ ............................ 7
3.7 Construction Plans ..................... ............................... ........... ......................... 7
3.8 Certificate of Substantial Completion .......................... ............. 1._....................... 7
3.9 Fees ........................................................ ............................... .......... 7
3.10 Quarterly /Annual Reporting .............................. ............................. ............. 8
ARTICLE IV - PAYMENT OF DEVELOPER COSTS .... ............................... ............... 8
4.1 City's Obligation to Pay Developer .......................................... ............................... 8
4.2 Reimbursements Limited to Kendall Marketplace Costs; Developer's Right to
Substitute .............................................................................. ............................... 8
ARTICLE V - BUSINESS DISTRICT A, NUE BONDS .............. ............................... 8
5.1 Bond Ordinances: Pledged Taxes.. ............................. ............................... 9
5.2 Application of Revenues ................ ...... H ........................ ............................... 9
5.3 Issuance of Bonds ........................... ..... ........... ............................... 9
5.4 Conditions of Issuance ............. ............. .............. ............................... 9
5.5 City's Bond Expens ...... ........... ................................ ............................... 9
5.6 Disbursements to > �:eveloper ............. .............................. ............................... 9
5.6.1 Initial Ce _ ..ate ........ ................ . ......................... ............................... 9
5.6.2 Subsequ n lca _ - of Kend arketplace Costs ............................... 10
5.7 Maturity of Bonds ... . ..... - . .............................. ............................... 10
5.8 Cooperation in the Iss c e of Bon s .................................. ............................... 10
ARTICLE VI - COLLECTIO D USE OF REVENUE .............. ............................... 11
6.1 Creation of Fund ................ .......................................... ............................... 11
6.2 Cooperation in Dete . enues .................................. ............................... 11
6.3 Reporting of Sales ................................................................ ............................... 11
6.4 Confidential Information ...................................................... ............................... 11
6.5 Obligation to Report Pledged Revenues ................................. ............................... 12
ARTICLE VII - GENERAL PROVISIONS .................................... ............................... 12
7.1 Successors and Assigns ....................................................... ............................... 12
7.1.1 Binding Affect ............................................................. ............................... 12
7.1.2 Assignment or Sale ..................................................... ............................... 12
7.2 Remedies .............................................................................. ............................... 13
7.3 Force Majeure ...................................................................... ............................... 14
7.4 Notices .............................................................................. ............................... 14
7.5 Insurance; Damage or Destruction of Project ....................... ............................... 15
7.6 Inspection ............................................................................ ............................... 17
7.7 Choice of Law ....................................................................... ............................... 17
7.8 Entire Agreement; Amendment ............................................. ............................... 17
7.9 Counterparts ........................................................................ ............................... 17
7.10 Severability ........................................................................ ............................... 17
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7. 11 Representatives Not Personally Liable ................................ ............................... 17
7.12 Indemnification .................................................................. ............................... 17
7.12.1 Invalidity ................................................................... ............................... 17
7.12.2 Damage or Injury ...................................................... ............................... 18
7.12.3 Personal Liability ...................................................... ............................... 18
7.13 Survival .............................................................................. ............................... 18
7.14 Legal Opinion ..................................................................... ............................... 18
7.15 Term .............................................................................. ............................... 18
7.16 Conflict .............................................................................. ............................... 1 8
ARTICLE VIII - REPRESENTATIONS OF THE PARTIES .......... ............................... 18
8.1 Representations of the City .................................................. ............................... 19
8.2 Representations of the Developer ......................................... ............................... 19
4
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EXHIBITS
EXHIBIT A Legal Description of the Property
EXHIBIT B Legal Description of the Business District
EXHIBIT C Kendall Marketplace Project Costs to be paid with Sales Tax Bond
Proceeds
EXHIBIT D Form of Certificate of Substantial Completion
EXHIBIT E Form of Certificate of Kendall Marketplace Project Costs
EXHIBIT F Concept Site Plan
EXHIBIT G Form of Power of Attorney
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DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT is made and entered into as of this
day of , 2006, by and between the UNITED CITY OF YORSVILLE, Kendall
County, Illinois, an Illinois Municipal Corporation duly organized and existing as a
non -home rule unit of government under Section 7, Article VII of the 1970
Constitution of the State of Illinois, and CANNONBALL LLC, an Illinois limited liability
company. Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed to them in Article I of this Agreement.
RECITALS
A. As a non -home rule unit of government duly organized under Section 7,
Article VII of the 1970 Constitution of the State of Illinois, the City has the power to
regulate for the protection of the public health, - e% morals and welfare of its
inhabitants, and pursuant thereto, has the powe = _ enrage private development in
order to enhance the local tax base, create em I . en o portunities and to enter into
contractual agreements with private parties ' = or er to a ` 'eve these goals.
B. As a non -home rule unit of governments the onstitution of the State
of Illinois, and under the provisions of the Bus mss District Development and
Redevelopment Act, 65 ILCS 5/11-7 - etsea. and the overnment Debt Reform
Act, 30 ILCS 350/1 et sea.. the Ci . e authori o- cause the creation of a
business district, to borrow funds, issiN bo = d pledg other revenue to facilitate
the financing of a business district proj -t, a= _ - ice with the district plan.
C. The Developer proposes to co T truct an approximately 800,000 square
foot mix of retail stores, restaurants and o T ce space and in support thereof and on
behalf of the City to modify the existing sto , . a age system, construct and connect
a sanitary sewer system; and to construct o = r improvements at the intersection of
Illinois Route 34 and Cannonball Trail in the City as described on the Concept Site
Plan.
n order t uce the Developer to undertake the Project and the Kendall
Mar ace Project, ity has caused the creation of a business district pursuant
to e = - iness Districtvelopment and Redevelopment Act and, pursuant thereto,
desires t e the Sale ax Revenue Bonds, to pledge a portion of the Village's share
of the Sale -_ Revenu generated within the Business District to the retirement of
the Sales Tax nu onds, and to expend the proceeds from the sale of such Bonds
to facilitate the - - g of the Kendall Marketplace Improvement Project.
E. On December 12, 2006, the Corporate Authorities adopted Ordinance No.
2006- "An Ordinance Designating United City of Yorkville Kendall
Marketplace Business District and Imposing a Retailer's Occupation Tax and Service
Occupation Tax Therein," making all of the findings required under the Business
District Act to cause the creation of the Business District, and approving the District
Plan, and on . 2007 in furtherance of the District Plan adopted
Ordinance No. 2007- "An Ordinance Providing For Issuance Of United City of
Yorkville, Kendall County, Illinois Sales Tax Revenue Bonds, Series 2007 (Kendall
Marketplace Project), and pledging a portion of the Village's share of the Sales Tax
Revenue to the retirement of such Bonds.
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Now, therefore, in consideration of the premises and promises contained herein and
other good and valuable consideration, the adequacy and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, including the Recitals hereto whichgby this reference are
DAM
incorporated herein, the following words and terms shall have owing meanings:
"Act" means the Business District Act.
"Agreement" means this Development Agreemen - as the e may be from
time to time modified, amended or supplemented in writing by the parF% hereto.
"Bond Counser means Foley & Lardner LLP, or an attorney at la r a firm of
attorneys acceptable to the City of nationally recognized standin in matters
pertaining to the tax- exempt nature of interest on obligations issued by states and
their political subdivisions duly admitted to the practice of law before the highest court
of any state of the United State of 'ca or the District of Columbia.
"Bonds" means the United Cit of 53 e, Kendall County, Illinois Sales Tax
Revenue Bonds, Series 2007 (Kendall arketp
"Bond Ordinance" means Or ce No. 007- "An Ordinance
Providing for Issuance of United City of rkville, Kendall County, Illinois Sales Tax
Revenue Bonds, Series 2007 (Kendall Marke - , ace Project).
"Bond Proceeds" means the gross cash proceeds from the sale of the Bonds
before payment of Issuance Costs, together with any interest earned thereon.
" siness ct" means a district within the City created pursuant to the
Bus* s District Ac d legally described on Exhibit B attached hereto and
in ated by referen erein whose boundaries are coterminous with the Property.
"B st .ess Dist Act" means the Business District Development and
Redevelopmeri-- - ct, 65 = S 5/11-74.3 et seq
"Business strict Plan" means the United City of Yorkville Kendall
Marketplace Bus'- ess District Development Plan dated October 12, 2006 and revised
November 21, 2006, prepared by Ehlers & Associates, Inc.
"Business District Ordinance" means Ordinance No. 2006- "An
Ordinance Designating United City of Yorkville Kendall Marketplace Business District
and Imposing a Retailer's Occupation Tax and Service Occupation Tax Therein,"
making all of the findings required under the Business District Act to cause the
creation of the Business District, and approving the District Plan.
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i
"Certificate of Kendall Marketplace Costs" means a document substantially
in the form of Exhibit E attached hereto and incorporated herein provided by the
Developer to the City in accordance with this Agreement and evidencing Kendall
Marketplace Improvement Costs incurred or to be incurred by the Developer and
eligible for payment under the terms of this Agreement and the Business District Act.
"Certificate of Substantial Completion" means a do T er. substantially in
the form of Exhibit D, attached hereto and incorporated here., by reference, issued by
the Developer to the City in accordance with this A etnn and evidencing the
Developer's substantial satisfaction of all material o gatio _and covenants to
construct the Kendall Marketplace Project as set forth in : f e Concep- ite Plan.
"City" means the United City of Yorkville, Kendall County, Illln Illinois
Municipal Corporation and a non -home rule unit of government duly or ized and
existing under the 1970 Constitution of the State of Illinois.
"City Attorney" means John Wyeth, or an attorney at law or a firm of attorneys
acceptable to the City of recogn' -= = standing in matters of municipal law duly
admitted to the practice of law befor hest court of the State of Illinois.
"Closing Date," means _ 200 s ch earlier date as the City, the
Developer and the Underwriter of the Bra shal in. ally agree upon and refers to
the transaction in which the Bonds are e ivered b e City to the Underwriter, the
proceeds are available to be paid to th Developer, and this Agreement is fully
executed.
"Concept Site Plan" means, collectively, those documents set forth in Exhibit
F, attached hereto and incorporated herein by reference, depicting the conceptual
program for construction of the Project, as modified by the Developer from time to
time.
"Construction Plans" means plans, drawings, specifications and related
documents, and construction schedules for the construction of the Project, together
with all supplements, amendments or corrections, submitted by the Developer and
approved by the City in accordance with and as required by this Agreement.
"Corporate Authorities" means the City Council of the City.
"Developer" means CANNONBALL LLC, an Illinois limited liability company, or
its permitted successors or assigns in interest.
"Governmental Approvals'' means all plat approvals, re- zoning or other zoning
changes, the PUD Ordinance, IDOT approvals, site plan approvals, conditional use
permits, variances, building permits, or other subdivision, zoning, or similar approvals
required for the implementation of the contemplated Project and consistent with the
Concept Site Plan and this Agreement.
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"Issuance Costs" means all costs reasonably incurred by the City in
furtherance of the issuance of the Bonds, including without limitation the fees and
expenses of financial advisors and consultants, the City's attorneys (including issuer's
counsel and Bond Counsel), the City's administrative fees and expenses (including
fees and costs of planning consultants), underwriters' discounts and fees, the costs of
printing any Bonds and any official statements relating thereto, the costs of credit
enhancement, if any, capitalized interest, debt service reservest--and the fees of any
rating agency rating any Bonds.
"Indenture" means the Sales Tax Revenue Bond I
"Kendall Marketplace Improvements " means se imp-, - : ements listed on
Exhibit C hereto constituting the improvements e -> d for fro e proceeds of
the Bonds and benefiting the Business District. -
"Kendall Marketplace Project" m the = 0nstruction of the Kendall
Marketplace Improvements including all work ne e ` - .. . cidental thereto.
"Local Government Debt Reform Act" mean - e Local Government Debt
Reform Act, 30 ILCS 350/1 et se g.
"Net Proceeds" means the proceeds derived from ' e issuance of the Bonds,
net of any Issuance Costs.
"Pledged Reve e" mean _-fifty percent (50 %) of the Sales Tax Revenue.
"Project" me a cons ction of approximately 800,000 square feet of retail
space, restaurants, an of€ic cue z ork necessary to prepare the Property for
the contemplated Project describe Agreement as approved or amended by
the Concept Site Plan, and er work reasonably necessary to effectuate the intent
of this Agreement.
"Property" means appr , ximately One Hundred Forty (140) acres of real
property (including without limitation all options held by third parties, fee interests,
leasehold interests, tenant -in- common interests and such other like or similar
interests) and existing improvements necessary for the implementation of the
contemplated Project as legally described on Exhibit A hereto by this reference
incorporated herein.
"PUD Ordinance" means Ordinance No. passed by the Corporate
Authorities of the City granting a special use for planned unit development for the
Property and related matters.
"Request For Payment" means the document attached to the Indenture as
Exhibit by which the City shall request a payment of Bond Proceeds from the
Trustee in order to reimburse the Developer for the Kendall Marketplace Improvement
Costs.
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"Sales Tax Revenue" means the total revenue from taxes, penalties and
interest which are paid to the City from the Local Government Tax Fund as created by
an Act of the Illinois General Assembly, 35 ILCS 120/3, as amended, on sales by
retailers and servicemen on the Property; and all revenues from any taxes, penalties
and interest which are paid to the City from the Local Government Tax Fund on sales
by retailers and servicemen on the Property which are intended to replace the current
payments to the City, as enacted by law of ordinance of the City and of any
governmental authority during the Term of this Agreement.
"Sales Tax Revenue Bond Indenture" means the Trust Indenture dated as of
2007, by and between the City and the Sales Tax Revenue Bond Trustee
pursuant to which the Sales Tax Revenue Bonds wer sued.
"Sales Tax Revenue Bond Trustee" ans The Bank of New York Trust
Company, N. A., and its successors and assign _ as trustee for the Sales Tax Revenue
Bonds.
"Sales Tax Revenue Bonds" means any otions secured by the Sales Tax
Revenues and authorized and issued by the City to fun A or a portion of the Kendall
Marketplace Improvement costs in accordance with tY1 >_ttiness District Act, the
Local Government Reform Act and this Agreement.
"Trustee" means the S es Tax Revenue Bond Trustee.
"Underwriter" -7 eans 311iam Blair & Company, L.L.C. or any firm of
nationally recognized -; nderwrit er chosen by the City.
T -LE II
IGNATYO OF DEVELOPER
The City hereby acknowledge a nstruction of the Project by the Developer and
selects the Developer to co T ct or cause the construction of the Kendall
Marketplace Improvements in a cordance with the Concept Site Plan, this Agreement
and all Governmental Approvals. Provided that the Bonds have first been issued and
sold, the Developer hereby accepts such designation and agrees to cause the
completion of the Project and the Kendall Marketplace Improvements in accordance
with the terms and conditions hereof.
ARTICLE III
CONSTRUCTION OF DEVELOPMENT PROJECT
3.1 Construction Schedule. The Developer shall commence construction of
the Project within One Hundred Twenty (120) days of the later to occur of (a) Developer
obtaining all necessary permits and Governmental Approvals; or (b) six (6) months
after execution of this Agreement, and shall substantially complete construction of the
following approximate square feet of retail, restaurant and commercial space
comprising the Project as follows:
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November, 2007 90,000 square feet of anchor space;
August, 2008 475,000 square feet (including approximately 280,000
square feet of anchor space);
October, 2008 45,000 square feet;
March, 2009 160,000 square feet; and
October, 2009 30,000 square feet, all subject to force majeure as set forth
in Section 7.3 below.
3.2 Developer to Construct the Project. The Developer shall commence or
cause the commencement of the construction of the Project in accordance with the
terms of this Agreement and the Concept Site Plan. To the extent of any inconsistency
among the foregoing, the parties agree that the Conce t Site Plan shall govern so long
as performance in accordance therewith does n ate Governmental Approvals.
The Developer shall complete or cause the comp etion of the Project in accordance
with the terms of and the schedule set forth' ection' 31 of this Agreement.
3.3 Kendall Marketplace Project. T _ e .e open, on behalf of the City,
shall cause the Kendall Marketplace Improvements a constructed for the benefit of
the Business District, in accordance with the to - this Agreement. The City
acknowledges that by a supermajority vote of the Corp o .at uthonties, it does not
intend to design, bid or construct the Kendall Marketplac - mprovements. The City
agrees that since the Kendall Marketplace Improvements a to be paid for by the Net
Proceeds of the Bonds, that the Developer shall construct the Kendall Marketplace
Improvements on behalf of the City using subcontractors and materialmen selected
from time to time by the Developer, in its sole discretion, without advertising for bids
as permitted by the provisions of 65 ILCS 5/8 -9 -1 of the Illinois Municipal Code. The
City, by entering into this Agreement agrees to waive the requirement to bid any
contracts entered into between the Developer and subcontractors for installation of the
Kendall Market lace Improvements. All Kendall Marketplace Improvements to be
construct r shall be constructed in substantial accordance with any fmal
plans a owed by ity. Such Kendall Marketplace Improvements shall be all as
approve by the City an accordance with all applicable laws, ordinances, rules and
re ns. The Kend arketplace Improvements shall be constructed in a good,
workm - - 1 e and comme j Tally reasonable manner.
3.4 nstructr n Contracts; Insurance. The Developer may enter into or
cause to be en o one or more construction contracts to complete the Project
and the Kendall " etplace Project. Prior to the commencement of construction of
any portion of ei er Project, the Developer shall obtain or shall require that any of its
contractors obtains workers' compensation, comprehensive public liability and
builder's risk insurance coverage in commercially reasonable amounts and shall
deliver evidence of such insurance to the City.
3.5 Governmental Approvals. The City agrees to employ reasonable and
good faith efforts to cooperate with the Developer and to process and timely consider
and respond to all applications for the Governmental Approvals as received, all in
accordance with the applicable City ordinances and laws of the State of Illinois.
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3.6 Concept Site Plan. The Concept Site Plan is hereby approved in
accordance with applicable City ordinances and codes.
3.7 Construction Plans. The Construction Plans for the Project and the
Kendall Marketplace Project shall be prepared by a professional engineer or architect
licensed to practice in the State of Illinois and the Construction Plans and all
construction practices and procedures with respect to the Pro' ct and the Kendall
Marketplace Project shall be in substantial conformity with : *cable state and
local laws, ordinances and regulations. In conjunction # obtaining a building
permit for the commencement of construction of th et and the Kendall
Marketplace Project, the Developer shall submit Cons'. , - tion s for approval by
the City in sufficient completeness and detail to show at cons_ ction will be in
conformance with the Concept Site Plan and this Agreemen .
3.8 Certificate of Substantial Completion. Promptly afte substantial
completion of the Kendall Marketplace Project, the Developer shall furnis to the City
a Certificate of Substantial Completion. The City shall, within thirty (30) days
following delivery of the Certificate of Substantial Completion, carry out such
inspections as it deems necessary to rify to its reasonable satisfaction the accuracy
of the certifications contained in certificate of Substantial Completion. The
Certificate of Substantial Completion h _b eemed accepted by the City unless,
within thirty (30) days following delive , of &.. J. cate of Substantial Completion,
the City furnishes the Developer with s __ e ' c W;i e : - Qbjections to the status of the
Kendall Marketplace Improvements, des rlbing su - - objections and the measures
required to correct such objections in re onable detail. Upon acceptance of the
Certificate of Substantial Completion by th ' = . or upon the lapse of thirty (30) days
after delivery thereof to the City without an tten objections thereto, the Developer
may record the Certificate of Substanti Completion with the Kendall County
Recorder of Deeds, and the same shall constitute evidence of the satisfaction of the
Developer'_ is with regard to construction of the Kendall Marketplace
Improve .. ts. 'ficate of Substantial Completion shall be in substantially the
form ached as i % D, attached hereto and incorporated by reference herein.
Th cknowledges agrees that it shall not deliver the certificate referred to in
Section - B) of the S es Tax Revenue Bond Indenture certifying that the Kendall
Marketpla reject is c . pleted until the Developer has delivered the Certificate of
Substantial o , letio _ d such Certificate has been accepted by the City.
3.9 Fee ther than customary tap fees, no fee or charge of any description
including, witho , limitation, building permits, plan review, inspection fees, or other
regulatory fees or charges, shall be imposed on Developer or on the development and
use of the Property unless, as of the date of this Agreement, such fee or charge is an
existence and being collected by the City on a uniform basis from all owners, users,
and petitioners of property within the City. The City shall not increase the amount of
any fee or utility fees, application fees, or user fees during the Term of this Agreement
unless such increases are (i) made generally applicable to all owners and users of
property within the City and (ii) reasonably related to increased costs incurred by the
City in providing the services for which such fee is assessed.
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l
i
3.10 Quarterly/ Annual Reporting. During construction of the Project, the
Developer shall deliver quarterly construction progress reports to the Trustee and the
Underwriter. After the Certificate of Substantial Completion is accepted, the Developer
shall deliver to the Trustee and the Underwriter, annual schedules of tenants and
lease expiration dates for the Project.
ARTICLE N
PAYMENT OF DEVELOPER COSTS
4.1 City's Obligation to Pay Developer. The C ees to pay Developer
for the verified Kendall Marketplace Improvement cost the punt as set forth on
Exhibit C, attached hereto and by this reference inc orate ein, as may be
adjusted pursuant to this Article IV. Subject to the terms of the Bo rdinance, the
Indenture and this Agreement, the City agrees to issue the Bonds t6 pay the
Developer for verified Kendall Marketplace Improvement Costs pursuari o Section
3.3 above, from Net Proceeds from the Bonds in an amount equal to even Million
Three Hundred Thirty Seven Thousand One Hundred Eighty Nine Dollars ($7,337,189)
for verified Kendall Marketplace Improvement costs as provided in Article V of this
Agreement.
4.2 Reimbursements Limited o endall Marketplace Improvement
Costs; Developer's Right to Substitute No - . Agreement shall obligate the
City to issue Bonds to pay Developer fo ax: Ken ' ° L14arketplace Improvement cost
that does not qualify for payment unde the Busi 1, ss- District Act. The Developer
shall, at the City's request, provide itemized construction loan draws, invoices, or
receipts or, in the case of the acquisitionf land, evidence that the Developer has
acquired fee title to such land and evidence $ 5 te total acquisition price of such land,
reasonably requested by the City to confirm that any such cost is so incurred and
does so quay Each such request shall be in the form of a Certificate of Kendall
Marketpl c ent Costs and accompanied by a certification by the Developer
that su F : cost is e for payment or reimbursement under the Business District
Act. = parties agre t each of the categories of costs set forth in Exhibit C shall
corgi a Kendall Mar lace Improvement costs which are eligible for payment or
reimbu ent in accor F ce with the Business District Act and this Agreement. If
the City eer dete - = ines that any cost identified as a Kendall Marketplace
Improvemen st is n - a reimbursable cost under the Act, the City shall so notify
the Developer g within thirty (30) days as provided in Section 5.6 of this
Agreement, iden g the ineligible cost and the basis for dete the cost to be
ineligible, where u on the Developer shall have the right to contest such determination
and /or identify and substitute other Kendall Marketplace Improvement costs with a
supplemental application for payment.
ARTICLE V
SALES TAX REVENUE BONDS
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5.1 Bond Ordinance: Pledged Taxes. The City has adopted the
BondOrdinance for the Sales Tax Revenue Bonds, subject to the provisions of Section
5.3, and has provided for the designation of a Trustee. The Sales Tax Revenue Bonds
shall be secured by a pledge of the Pledged Revenue. The Indenture provides for the
segregation and deposit of the Pledged Revenue.
5.2 Application of Revenues. The Pledged Revenue shall first be applied to
the retirement of the Sales Tax Revenue Bonds and then, to extern, there is any excess
Pledged Revenue, in accordance with the Bond Ordinance and _ eri nture.
5.3 Issuance of Bonds. The City agrees to issu nds pursuant to the
Business District Act and the Local Government Debt rm Ac an amount to be
determined by the Underwriter based on the amount of p edged =e - , nue projected to
be deposited in the various funds and accounts as provide for In the o
d Ordinance
and the Indenture; provided, however, in no event shall the aggregate - . gi- ceeds of
the Sales Tax Revenue Bonds initially deposited in the Improvement Fu • as defined
in the Indenture, equal an amount less than Seven Million Three H ndred Thirty
Seven Thousand One Hundred Eighty Nine Dollars ($7,337,189) from the Sales Tax
Revenue Bonds. In addition to such Net Proceeds for Kendall Marketplace
Improvement costs, the amount of the Bonds shall be sufficient to pay for all Issuance
Costs associated with issuing the Bonds as provided in the Bond Ordinance. The
Bonds shall not be general obligations of the City and shall be secured solely by the
Pledged Revenue. Neither this Agreement nor the Bonds shall constitute a full faith
and credit obligation of the Ci
5.4 Condition of Issuance. The City's obligation to issue the Bonds
described in Seetio 5.3 is ex ressly contingent on a bond opinion from Bond
Counsel opining a the Bon are being issued in accordance with the Business
District Act and the Loc G ..erxl eb. Reform Act, and that the interest thereon
is exempt from federal tax lion.
5.5 City's Bond Ex pe sesh The administration of the Bonds has resulted
and will result in expenses for , City. Any Trustee's fees or legal fees for a legal
opinion to be relied on by the bo d holders, due and owing as of the Closing Date shall
be paid from Bond proceeds.
5.6 Disbursements to Developer.
5.6.1. Initial Certificate. Ten (10) days prior to the Closing Date, the
Developer may deliver to the City a Certificate of Kendall Marketplace
Improvement Costs covering eligible Kendall Marketplace Improvement costs
incurred by the Developer prior to the Closing Date and to be paid to the
Developer on the Closing Date. The City shall accept or reject such Certificate
within three (3) business days after receipt thereof and shall, on the Closing
Date, submit a Request For Payment to the Trustee for the Bonds with
instructions to reimburse the Developer, or the party designated by the
Developer in the amount set forth therein upon receipt. The City's acceptance
or rejection of the initial Certificate shall be in writing, and in the case of a
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rejection, shall specifically state the reasons for such rejection. If the City
rejects all or any portion of the initial Certificate of Kendall Marketplace
Improvement Costs, Developer shall have the right to identify and substitute
eligible Kendall Marketplace Improvement costs. If the City fails to accept or
reject the Certificate of Kendall Marketplace Improvement Costs within such
three (3) day period after submission by Developer, the initial Certificate shall
be deemed to have been accepted by the City and payment shall be made by the
Trustee to the Developer.
Subsequent Certificates of Kendall Improvement
Marketplace Im
5.6.2. Subse P P
4
Costs. Thereafter, the City shall, within ten (10) days after acceptance by the
City of each Certificate of Kendall Marketplace Improvement Costs, submit a
Request For Payment to the Trustee for , -,e Bonds with instructions to
reimburse the Developer, or the party desi t tiee' by the Developer, for such
construction advances in the 'amount - forth therein (a "Construction
Payment'j. The City shall accept o reject' ach Certificate of Kendall
Marketplace Improvement Costs subm ' e .: De. _elp e within thirty (30) days
after submission by the Developer. Such a c . c rejection by the City of
each Certificate shall be in writing, and =the case of a rejection, shall
specifically state the reasons for such rejec If the City rejects any
Certificate of Kendall Marketplace Improvement C _s ubmitted by Developer,
Developer shall have the right to identify and = stitute eligible Kendall
Marketplace Improvement costs. If the City fails to accept or reject the
Certificate of Kendall Marketplace Improvement Costs within thirty (30) days
after submission per, the resulting Construction Payment(s) shall be
deemed to have een ac , e; ted by the City on the thirty -first (31St) day after
submission o A" e Certific e of Kendall Marketplace Improvement Costs by the
Developer. 3 brstructio ayments shall be issued no more than once every
month until all c as are required by this Agreement
have been paid. Th ty covenan g ments
pay or cause to be paid to Developer, or
its designee, all amok received by the City from the Trustee pursuant to
each Request For Pa elating to a Certificate of Kendall Marketplace
Improvement Costs sub d by the Developer upon receipt thereof.
5.7 Maturity of Bonds. The final maturity of the Bonds shall not exceed the
maximum term permissible under the Business District Act. The Bonds shall bear
interest at such rates, shall be subject to redemption and shall have such terms as the
City shall determine in its sole discretion.
5.8 Cooperation in the Issuance of Bonds. The Developer covenants to
cooperate and take all reasonable actions necessary to assist the City and Bond
Counsel, the Underwriter and the City's financial advisor in the preparation of offering
statements, private placement memorandum or other disclosure documents and all
other documents necessary to market and sell the Bonds.
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ARTICLE VI
COLLECTION AND USE OF REVENUE
6.1 Creation of Funds. The City agrees to cause its Director of Finance or
other financial officer to maintain the funds required by the Bond Ordinance, the
Business District Ordinance and the Indenture including such further accounts or
sub - accounts as are required therein, by this Agreement or as the Director of Finance
of the City may deem appropriate in connection with the administration of the funds
pursuant to this Agreement. Subject to the requirements of the Business District Act
and the Local Government Debt Reform Act, the City will promptly upon receipt
thereof deposit all Pledged Revenue in the funds or in such other accounts as required
under the Bond Ordinance and Indenture.
6.2 Cooperation in Determining Revues: ` he City and the Developer
agree to cooperate and take all reasonable actions necessary to cause the Pledged
Revenue to be paid into the funds and accoui s as DA 'ded in the Bond Ordinance
and Indenture, including the City's enforcemen _ d c ction of all such payments
through all reasonable and ordinary legal means o t4nfo - -
6.3 Reporting of Sales. To further assist the in calculating the Pledged
Revenue, the Developer or its successor(s) in interest as r r owner(s) of the
Property shall, so long as any Bonds are outstanding, use easonable efforts to
cause businesses operating on the Property, to properly co ect and report any Sales
Tax Revenue. The Develope hall satisfy this requirement by making a good faith
effort to cause the fee titles l f the Property to include the obligation to execute a
power of attorney auth ation elease sales tax information to the City in the form
of Exhibit G within, . 71 deed cor% •eying a portion of the Property and into any lease
entered into with M ant. T: e City shall file the reporting forms within seven (7)
days after receipt there d ` ` W partm ent of Revenue. Except as provided
in this Article, the Develope hall have bligation to enforce or collect the payment
of Sales T - by an ailer or servicemen."
.4 Confide �_ 1 Info tion. The City acknowledges and agrees that
info . on to be prod by a owners and lessees hereunder is proprietary and
valuab ormation an at any disclosure or unauthorized use thereof will cause
irreparab to the ers and lessees, and to the extent permitted by state or
federal law tiding t not limited to Section 7(1)(g) of the Illinois Freedom of
Information Ac ity agrees to hold in confidence all sales figures and other
information prov y the State of Illinois, or any owner or lessee of a portion of the
Property, or obt ' , ed from any such owner's or lessee's records in connection with this
Agreement, and in connection therewith, the City shall not copy any such information
except as necessary for dissemination to the City's agents or employees as permitted
hereinafter. The City shall be permitted to disclose such information (i) to its agents
or employees who are reasonably deemed by the City to have a need to know such
information for purposes of this Agreement; provided, that such agents and employees
shall hold in confidence such information to the extent required of the City hereunder
or (ii) to the extent required by order of court or by state or federal law. The
confidentiality requirements of this Agreement shall survive any expiration,
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termination or cancellation of this Agreement and shall continue to bind the City, its
successors, assigns and legal representatives for a period of five (5) years from the
termination, expiration or cancellation of this Agreement. The City shall promptly
notify Developer and any affected owner or lessee as to a Freedom of Information Act
request and the commencement of any legal action in regard thereto such that
Developer and /or any such owner or lessee shall have a meaningful opportunity to
object to the release of any such confidential information and to take such action as
such owner or lessee deems necessary in order to protect against the release of such
confidential information.
6.5 Obligation to Report Pledged Revenue. Any purchaser or transferee of
the Property, and any lessee or other user of the Property, shall use all reasonable
efforts to timely furnish to the City such documentation as is required by Section 6.3
hereof. So long as any Bond is outstanding, such obligation shall be a covenant
running with the land and shall be enforceable as if such purchaser, transferee, lessee
or other user of such real property were originally a party to and bound by this
Agreement.
ARTICLE VII
GENERAL PROVISIONS
7.1 Successors and Assign
7.1.1 Binding Affect. T = .:;greemeliall be binding on and shall
inure to the benefit of the parties named h ein and their respective heirs,
administrators, executors, personal resentatives, successors and assigns.
7.1.2 Assignment or Sale. -, 4 or any part of the Property or any
interest therein may be sold, transferred, encumbered, leased, or otherwise
disposed of at any time, and the rights of the Developer named herein or any
suc so = ` s' terest under this Agreement or any part hereof may be assigned
a y time e, during or after redevelopment of the contemplated Project,
ereupon th disposing of its interest in the Property or assigning its
erest under Agreement shall be thereafter released from further
o' °gation under Agreement (although any such Property so disposed of or
to ch such Brest pertains shall remain subject to the terms and
conch = ons of thi - greement), provided that until substantial completion of the
contemp d�ect, the rights, duties and obligations of the Developer under
this Agreem� : shall not be assigned in whole or in part without the prior
written ap.. oval of the City, which approval shall not be unreasonably
withheld, conditioned or delayed upon a reasonable demonstration by the
Developer of the proposed transferee's or assignee's experience and financial
capability to undertake and complete such portions of the Project and perform
the Developer's obligations under this Agreement, all in accordance with this
Agreement. Notwithstanding anything herein to the contrary, the City hereby
approves, and no prior consent shall be required in connection with: (a) the
right of the Developer to encumber or collaterally assign its interest in the
Property or any portion thereof to secure loans, advances or extensions of credit
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to finance or from time to time refinance all or any part of the Project costs, or
the right of the holder of any such encumbrance or transferee of any such
collateral assignment (or trustee or agent on its behalf) to transfer such interest
by foreclosure or transfer in lieu of foreclosure under such encumbrance or
collateral assignment; or (b) the right of Developer to assign the Developer's
rights, duties and obligations under this Agreement to any party related to the
Developer by one of the relationships described in Section 267(b) of the United
States Internal Revenue Code of 1986, as amended; provided that in each such
event (i) the Developer named herein (Cannonball L ( -s _ gall remain liable
: hereunder for the substantial completion of the conte plated Project and shall
be released from such liability hereunder only u , sutantial completion of
the contemplated Project and (ii) the Developer provides the City thirty (30)
VA
days' advance written notice of the proposed assign= : ent or : fer.
7.2 Remedies. Except as otherwise provided in this Agreemen arrd subject
to the Developer's and the City's respective rights of termination, in the =vent of any
default in or breach of any term or conditions of this Agreement by eithe party, or any
successor, the defaulting or breaching party (or successor) shall, upon written notice
from the other party specifying such default or breach, proceed immediately to cure or
remedy such default or breach, an all, in any event, within thirty (30) days after
receipt of notice, commence to cure -m dy such default or breach. In the event
that the defaulting or breaching p ( cessor) diligently and in good faith
commences to cure or remedy such de cult o ra a- - blt is unable to cure or remedy
such default or breach within thirty (30 ays afte -ceipt of notice, the defaulting or
breaching party (or successor) shall, prio o the en such thirty (30) days, provide
notice to the other party that it has in goo faith commenced to cure or remedy such
default or breach, whereupon the defaul ' o breaching party (or successor) shall
have an additional ninety (90) days to cure o- emedy such default or breach. In case
such cure or remedy is not taken or not diligently pursued, or the default or breach
shall not be cured or remedied prior to the end of the additional ninety (90) day period,
the remed, eved party shall be as set forth below:
If the De I er is in breach of this Agreement, the City's remedy, at law
in equity, slz be to suspend payments to the Developer under this
ment until Developer has cured or substantially cured such breach, at
whip tim paym s to the Developer under this Agreement shall resume. If,
ho ve - the D. - eloper is in breach for failure to complete the Kendall
Market p c . h , rovements and if the Developer shall not cure or remedy such
breach wi , -;- the time period stated above and such time period has not been
extended such breach excused due to force majuere, then the City shall be
entitled, upon written notice to the Developer, to complete, or to cause the
completion of, the Kendall Marketplace Improvements.
(ii) If the City is in breach of this Agreement, the Developer may pursue any
and all legal and equitable remedies available to it as a result of such breach,
including without limitation termination of this Agreement or proceedings to
compel specific performance.
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7.3 Force Majeure. Neither the City nor the Developer nor any successor in
interest shall be considered in breach or default of their respective obligations under
this Agreement, and times for performance of obligations hereunder shall be extended
in the event of any delay caused by force majeure, including without limitation,
damage or destruction by fire or casualty; strike; lockout; civil disorder; war;
restrictive government regulations; lack of issuance of any permits and /or legal
authorization by the governmental entity necessary for the Developer to proceed with
construction of the work or any portion thereof; delay in commencement or completion
of any and all work to be performed by others that affect = eveloper's ability to
commence or complete the Project; shortage or delay in shipment of material or fuel;
acts of God; unusually adverse weather or wet soil con ` 12� s ff or other like causes
beyond the parties' reasonable control, including without liffaf on any litigation,
court order or judgment resulting from any litigation , ecting validity of the
Business District Plan, the contemplated Kendall Mar kelip"ce Impro�re _; ent Project or
the Bonds, the PUD Ordinance, this Agreement, or eminent domain ac yonsrprovided
that such event of force majeure shall not be deemed to exist as to any ma e initiated
or sustained by either party to this Agreement in bad faith,, and further provided that
the party claiming the benefits of this Section 7.3 notifies the other in writing within
thirty (30) days of the commencement of such claimed event of force majeure.
7.4 Notices. Any notice, d r other communication required by this
Agreement to be given by either partyr er Q e other shall be in writing and shall
be sufficiently given or delivered if (i) ' patch certified United States first class
mail, postage prepaid, (ii) --a t by a n I n y recQ zed overnight courier, or (iii)
delivered personally:
(i) In the .-- e of the Developer, to
annonball- � C
em Irving Companies, Inc.
Attn: aging Director of Real Estate
4104 North Harlem Avenue
'dge, IL 60706
With a copy to: Cannonball LLC
c/o The Harlem Irving Companies, Inc.
Attn: General Counsel
4104 North Harlem Avenue
Norridge, IL 60706
With a copy to: Polsky & Associates, Ltd.
205 N. Michigan Avenue
41st Floor
Chicago, IL 60601
(ii) In the case of the City, to:
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United City of Yorkville, Illinois
Office of the Mayor
800 Game Farm Road
Yorkville, Illinois 60560
City And
United of Yorkville Illinois
Office of the Treasurer
800 Game Farm Road
Yorkville, Illinois 60560
With a copy to: Foley & Lardner LL
Attn: Christopher s • light
321 N. Clark S . eet
Suite 2800
Chicago, Illirioi :60610
or to such other address(es) with respect to either p s that party may, from time
to time, designate in writing and forward to the other as d d in this paragraph.
7.5 Insurance; Damage or Destruction of Project. The Developer shall
provide -and maintain, or cans to be provided and maintained, at the Developer's own
expense, during the Te ; e Agreement (or as otherwise specified below), the
insurance coverages require ents specified below, insuring all operations related
to the Agreement.
I
(a) Throughout the Te A _ e n.
(i) Commer General Liabilitv Insurance (Primary and Umbrella)
Commercial neral Liability Insurance or equivalent with limits
of not less an $1,000,000 per occurrence for bodily injury,
personal injury, and property damage liability. Coverages shall
include the following: All premises and operations,
products/ completed operations, independent contractors,
separation of insureds, defense, and contractual liability (with no
limitation endorsement). The City is to be named as an additional
insured on a primary, non - contributory basis for any liability
arising directly or indirectly from the work.
(b) Construction
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(i) Commercial General Liabilitv Insurance (Primary and Umbrella)
Commercial General Liability Insurance or equivalent with limits
of not less than $2,000,000 per occurrence for bodily injury,
personal injury, and property damage liability. Coverages shall
include the following: All premises and operations,
products/ completed operations (for a minimum of two (2) years
following project completion), explosion, collapse, underground,
independent contractors, separation of insureds, defense, and
contractual liability (with no limitation endorsement). The City is
to be named as an additional insured on a primary, non-
contributory basis for any liability arising directly or indirectly
from the work.
(ii) Builders Risk Insurance
When the Developer o is can actor undertakes any
construction, including imp . e. n betterments, and /or
repairs, the Developer shall pro. e, or cause to be provided All
Risk Builders Risk Insurance at r =- : acement cost for materials,
supplies, equipment, machinery an - -�tres that are or will be
part of the permanent facility. Coverag1 _ shall include but are not
limited to the following: collapse, boiler and machinery if
applic ble The City shall be named as an additional insured and
loss =.ayee
(c) Post Constructio -
(i) Po s co �.� re -ghout the Term of the Agreement, All Risk
Prope nsurance, eluding improvements and betterments in
the am of full replacement value of the Property. Coverage
extension elude business interruption/ loss of rents, flood
and boiler machinery, if applicable. The City is to be named
an addition insured on a primary, non - contributory basis.
(d) Other Reauirements
The Developer will furnish the City original Certificates of Insurance evidencing
the required coverage to be in force on the date of this Agreement, and Renewal
Certificates of Insurance, or such similar evidence, if the coverages have an expiration
or renewal date occurring during the Term of this Agreement. The receipt of any
certificate does not constitute agreement by the City that the insurance requirements
in the Agreement have been fully met or that the insurance policies indicated on the
certificate are in compliance with all Agreement requirements.
The insurance shall provide for 60 days prior written notice to be given to the City in
the event coverage is substantially changed, canceled, or non - renewed.
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Any and all deductibles or self insured retentions on referenced insurance coverages
shall be borne by the Developer.
The Developer shall require the general contractor, and all subcontractors to provide
the insurance required herein.
7.6 Inspection. The City may conduct such periodic inspections of the
construction of the Project as may be generally provided in the building code of the
City. The Developer shall not unreasonably deny the City and its officers, employees,
agents and independent contractors the right to inspect, upon request, all
architectural, engineering, demolition, construction and other contracts and
documents pertaining to the construction of the Project as the City determines is
reasonable and necessary to verify the Developer's cam fiance with the terms of this
Agreement.
7.7 Choice of - Law. This Agreeme - shall b _ deemed to have been fully
executed, made by the parties in, and govc e y th, ` ws of the State of Illinois
without regard to its conflicts of laws provisions o o es and intents.
7.8 Entire Agreement; ndment. The s agree that this Agreement
constitutes the entire agreement be : e _the parties an = a, o other agreements or
representations other than those con - eR e s Agreeme have been made by the
parties. This Agreement shall be amended o.,` sn writing and effective when signed
by the authorized agents of the parties.
7.9 Counterparts. This Agreement is executed in multiple counterparts,
each of which shall constitute one and the s • instrument.
7.10 Severability. In the event any term or provision of this Agreement is held
to be unenforceable by a court of competent jurisdiction, the remainder shall continue
in full for ect, to the extent the remainder can be given effect without the
invalid Sion.
1 Represen ves Not Personally Liable. No elected or appointed
official, ant, employee representative of the City shall be personally liable to the
Developer • . - e event o y default or breach by any party under this Agreement, or
for any amo which ay become due to any party or on any obligations under the
terms of this I t. This provision shall not apply to the opinion to be given by
the City Attorney.
7.12 Indemnification. The indemnifications and covenants contained in this
Section shall survive termination or expiration of this Agreement.
7.12.1 Invalidity. Except for the opinion of the City Attorney as
provided for in Section 7.14 of this Agreement, the City and its governing body
members, officers, agents, employees and independent contractors shall not be
liable to the Developer for damages or otherwise in the event that all or any part
of the Business District Act, or any ordinance adopted in connection with
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either the Law or the Act, this Agreement or the Business District Plan, is
declared invalid or unconstitutional in whole or in part by the final (as to which
all rights of appeal have expired or have been exhausted) judgment of any court
of competent jurisdiction, and by reason thereof either the City is prevented
from performing any of the covenants and agreements herein or the Developer
is prevented from enjoying the rights and privileges hereof.
7.12.2 Damage or Injury. The City and its governing body
members, officers, agents, employees and independent co13 actors shall not be
liable for any damage or injury to the persons or prop . _ A . of the Developer or its
officers, agents, employees, independent contractor -=o - other persons who
may be about the Property or the Project except ma arising out of the
gross negligence or willful misconduct of they an d overning body
members, officers, agents, attorneys, employees an depen r ontractors.
7.12.3 Personal Liability. All covenants, stipulation ' promises,
agreements and obligations of the City contained herein shall be eemed to be
the covenants, stipulations, promises, agreements and obligations of the City
and not of any of its governing body members, officers, agents, employees or
independent contractors in th = dividual capacities.
7.13 Survival. Notwithstan ' g iration or termination or breach of
this Agreement by either party, the agreeme - =containe
, d in Sections 7.7, 7.8, 7.9,
7.10, 7.13, and 7.16 and Article VII f . is Agr L er' nt shall, except as otherwise
expressly set forth herein, survive sue expirati n or early termination of this
Agreement by either party.
7.14 Legal Opinion. As of the -7 ective date of the City's ordinance
authorizing the execution of this Agreement, the City Attorney shall provide the
Developer, Developer's Counsel and the City's Bond Counsel with an opinion in a form
mutually - - -_ , each of them. If the Business District has not been formed as of
the dat - the Ci rney's opinion, then the City Attorney shall also issue one or
more U Sequent op' s, in a form acceptable to Developer's Counsel and the City's
Boni nsel regardin a Business District.
7.1 erm. Th arm of this Agreement shall commence on the Closing Date
and shall terminate u n the retirement of the Bonds, unless earlier terminated
pursuant to th od ns of this Agreement.
7.16 Conflict. In the event of any inconsistency or conflict between the terms
of this Agreement and the Bond Ordinance, the terms of the Bond Ordinance shall
control.
ARTICLE VIII
REPRESENTATIONS OF THE PARTIES
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8.1 Representations of the City. The City hereby represents and warrants
that (i) it has full constitutional and lawful right, power and authority, under current
applicable law, to execute and deliver and perform the terms and obligations of this
Agreement, and the Indenture, including without limitation the right, power and
authority to issue and sell the Bonds, (ii) all of the foregoing have been or will be,
upon adoption of the ordinances authorizing the issuance of the Bonds, duly and
validly authorized and approved by all necessary City proceedings, findings and
actions, (iii) this Agreement constitutes the legal, valid and binding obligation of the
City, enforceable in accordance with its terms, and (iv) it will p y of 1e Developer, or
its designee, all amounts received from the Trustee pursu t to each Request For
Payment in accordance with the terms of this Agreement
8.2 Representations of the Developer. The - eveloper reby represents
and warrants it has full power to execute and deliver d perfo e terms and
obligations of this Agreement and all of the foregoing has been d � d validly
authorized by all necessary proceedings. This Agreement constitutes egal, valid
and binding obligation of the Developer, enforceable in accordance with its terms.
(The remainder of -` _ age intentionally left blank.)
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IN WITNESS WHEREOF, the City and the Developer have caused this
Agreement to be executed in their respective names and the City has caused its seal to
be affixed thereto, and attested as to the date first above written.
"CITY" UNITED CITY OF YORKVILLE, ILLINOIS
By:
Mayor
(SEAL)
Attest:
I I
City Clerk
"DEVELOPER" DEVELOPER CANNONBALL LLC, an I]]lnoi =" ted liability company
By: The Harlem Irving Comp es, Inc.
y:
itle.
[SIGNATURE PAGE TO DEVELOPMENT AGREEMENT]
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STATE OF ILLINOIS )
)SS
COUNTY OF KENDALL ) On this _ day of , 200_, before me
appeared , to me personally known, who, being by me duly sworn, did say
that he is the Mayor of the UNITED CITY OF YORKVILLE, ILLINOIS, a political
subdivision of the State of Illinois, and that the seal affixed to the foregoing instrument
is the seal of said City, and said instrument was signed and sealed in behalf of said
City by authority of its City Council, and said acknowledged said
instrument to be the free act and deed of said City.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official
seal in the County and State aforesaid, the day and year first above written.
Public
(SEAL)
My Commission Expires:
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STATE OF )
)SS
COUNTY OF )
On this _ day of , 200_, before me appeared , to me
personally known, who, being by me duly sworn, did say that he is the of
THE HARLEM IRVING COMPANIES, an Illinois corporation, and a of
CANNONBALL LLC, an Illinois limited liability company and that he is authorized to
sign the instrument on behalf of said company, and acknowledged to me that he
executed the within instrument as said company's free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official
seal in the County and State aforesaid, the day and year first above written.
Mary Polk
(SEAL)
My Commission Expires:
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EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
THAT PART OF THE SOUTHEAST QUARTER OF SECTION 19, PART OF THE SOUTH HALF OF
SECTION 20 AND PART OF THE NORTHWEST QUARTER OF SECTION 29, TOWNSHIP 37
NORTH, RANGE 7 EAST OF THE THIRD PRINCIPAL MERIDIAN DESCRIBED AS FOLLOWS:
BEGINNING AT THE SOUTHEAST CORNER OF THE SOUTHEAST QU 1ER OF SAID
SECTION 19; THENCE NORTH 01 DEGREES 13 MINUTES 53 SECON. , ALONG THE
EAST LINE OF SAID SOUTHEAST QUARTER 310.20 FEET; THEN G STERLY
PERPENDICULAR TO SAID EAST LINE 198.00 FEET; THENCE flR = H' DEGREES 23
MINUTES 58 SECONDS WEST, 862.81 FEET; THENCE NORTH A DEG > - 51 MINUTES 14
SECONDS EAST, 126.15 FEET; THENCE WESTERLY ALONG A= ONT TIAL CURVE TO
THE RIGHT WITH A RADIUS OF 25.00 FEET AND A CHORD BE ° G OF N"',]486
DEGREES 29 MINUTES 53 SECONDS WEST, AN ARC LENGTH OF 40.71 FEET; S CE
NORTHWESTERLY ALONG A CURVE TO THE RIGHT WITH A RADIUS OF 950.0 ET AND
A CHORD BEARING OF NORTH 30 DEGREES 00 MINUTES 26 SECONDS WEST, ARC
LENGTH OF 326.41 FEET; THENCE NORTH 67 DEGREES 35 MINUTES 57 SECONDS EAST,
243.73 FEET; THENCE SOUTHEASTERLY ALONG A NONTANGENTIAL CURVE TO THE LEFT
WITH A RADIUS OF 500.00 FEET AND A&HORD BEARING OF SOUTH 31 DEGREES 07
MINUTES 50 SECONDS EAST, AN ARC OF 209.70 FEET; THENCE SOUTH 43
DEGREES 08 MINUTES 45 SECONDS EA 52 8. ET; THENCE NORTH 46 DEGREES 51
MINUTES 15 SECONDS EAST, 287.40 FEE HE IA-3 DEGREES 08 MINUTES 45
SECONDS EAST, 80.00 FEET; THENCE NO > EG MINUTES 15 SECONDS EAST,
162.29 FEET; THENCE NORTH 43 DEGREES 0 TES SECONDS WEST, 7.00 FEET;
THENCE NORTH 46 DEGREES 51 MINUTES 15 CONDS EAST, 60.76 FEET; THENCE
NORTHEASTERLY ALONG A CURVE TO THE ' C WITH A RADIUS OF 367.00 FEET AND A
CHORD BEARING OF NORTH 58 DEGREES 18 S 15 SECONDS EAST, AN ARC
LENGTH OF 146.68 FEET; THENCE NORTH 69 D GREES 45 MINUTES 15 SECONDS EAST,
121.97 FEET; THENCE NORTHEASTERLY ALONG A CURVE TO THE LEFT WITH A RADIUS
OF 433.00 FE, CHORD BEARING OF NORTH 37 DEGREES 51 MINUTES 31 SECONDS
EAST, AN C LE F 482.09 FEET; THENCE NORTHEASTERLY ALONG A CURVE TO
THE T WITH A OF 25.00 FEET AND A CHORD BEARING OF NORTH 51
DEG ry - 23 MINUTES 2 - CONDS EAST, AN ARC LENGTH OF 39.64 FEET; THENCE
SO - 11 EGREES 11 TES 08 SECONDS EAST, 763.20 FEET; THENCE
SOUTHE Y ALON CURVE TO THE RIGHT WITH A RADIUS OF 367.00 FEET AND A
CHORD BE OF SO 57 DEGREES 07 MINUTES 07 SECONDS EAST, AN ARC
LENGTH OF 3 E HENCE SOUTH 31 DEGREES 03 MINUTES 05 SECONDS EAST,
123.11 FEET; T UTH 58 DEGREES 56 MINUTES 55 SECONDS WEST, 7.00 FEET;
THENCE SOUTHE .. RLY ALONG A NONTANGENTIAL CURVE TO THE LEFT WITH A
RADIUS OF 440.00 EET AND A CHORD BEARING OF SOUTH 42 DEGREES 20 MINUTES 40
SECONDS EAST, AN ARC LENGTH OF 173.45 FEET; THENCE NORTH 32 DEGREES 01
MINUTES 21 SECONDS EAST, 80.28 FEET; THENCE SOUTHEASTERLY ALONG A
NONTANGENTIAL CURVE TO THE LEFT WITH A RADIUS OF 360.00 FEET AND A CHORD
BEARING OF SOUTH 60 DEGREES 42 MINUTES 59 SECONDS EAST, AN ARC LENGTH OF
101.11 FEET; THENCE SOUTH 68 DEGREES 45 MINUTES 32 SECONDS EAST, 784.84 FEET TO
THE CENTER LINE OF CANNONBALL TRAIL; THENCE SOUTH 21 DEGREES 40 MINUTES 31
SECONDS WEST, ALONG SAID CENTER LINE, 331.43 FEET; THENCE SOUTH 21 DEGREES 14
MINUTES 17 SECONDS WEST, ALONG SAID CENTER LINE, 1261.58 FEET; THENCE NORTH
68 DEGREES 45 MINUTES 43 SECONDS WEST, 48.00 FEET; THENCE SOUTH 21 DEGREES 14
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� MINUTES 17 WEST,
470.00 FEET; THENCE SOUTH 57 DEGREES 14 MINUTES 17 SECONDS
WEST, 74.81 FEET TO THE NORTH LINE OF U.S. ROUTE 34; THENCE NORTH 85 DEGREES 32
MINUTES 10 SECONDS WEST ALONG SAID NORTH LINE, 1983.32 FEET TO THE WEST LINE
OF THE NORTHWEST QUARTER OF SAID SECTION 29; THENCE NORTH 0l DEGREES 14
MINUTES 12 SECONDS WEST ALONG SAID WEST LINE, 378.99 FEET TO THE POINT OF
BEGINNING, IN THE UNITED CITY OF YORKVILLE, KENDALL COUNTY, ILLINOIS, AND
CONTAINING 143.40 ACRES
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EXHIBIT B
LEGAL DESCRIPTION OF THE BUSINESS DISTRICT
THAT PART OF THE SOUTHEAST QUARTER OF SECTION 19, PART OF THE SOUTH HALF OF
SECTION 20 AND PART OF THE NORTHWEST QUARTER OF SECTION 29, TOWNSHIP 37
NORTH, RANGE 7 EAST OF THE THIRD PRINCIPAL MERIDIAN DESCRIBED AS FOLLOWS:
BEGINNING AT THE SOUTHEAST CORNER OF THE SOUTHEAST QUARTER OF SAID
SECTION 19; THENCE NORTH 01 DEGREES 13 MINUTES 53 SECONDS ST, ALONG THE
EAST LINE OF SAID SOUTHEAST QUARTER 310.20 FEET; THENCE S'F y Y
PERPENDICULAR TO SAID EAST LINE 198.00 FEET; THENCE N 16 DEGREES 23
MINUTES 58 SECONDS WEST, 862.81 FEET; THENCE NORTH 4 ES 51 MINUTES 14
SECONDS EAST, 126.15 FEET; THENCE WESTERLY ALONG .' ON ENTIAL CURVE TO
THE RIGHT WITH A RADIUS OF 25.00 FEET AND A CHORD B G O' = RTH 86
DEGREES 29 MINUTES 53 SECONDS WEST, AN ARC LENGTH O' 40.71 FE HENCE
NORTHWESTERLY ALONG A CURVE TO THE RIGHT WITH A RADIUS OF 9 0- _ E T AND
A CHORD BEARING OF NORTH 30 DEGREES 00 MINUTES 26 SECONDS WEST, ` ARC
LENGTH OF 326.41 FEET; THENCE NORTH 67 DEGREES 35 MINUTES 57 SEC T" S EAST,
243.73 FEET; THENCE SOUTHEASTERLY ALONG A NONTANGENTIAL CURVE TO THE LEFT
WITH A RADIUS OF 500.00 FEET AND A CHORD BEARING OF SOUTH 31 DEGREES 07
MINUTES 50 SECONDS EAST, AN ARC LENGTH OF 209.70 FEET; THENCE SOUTH 43
DEGREES 08 MINUTES 45 SECONDS EAST, 52.80 FEET; THENCE NORTH 46 DEGREES 51
MINUTES 15 SECONDS EAST, 287.40 FEET; THENCE SOUTH 43 DEGREES 08 MINUTES 45
SECONDS EAST, 80.00 FEET; THENCE NORTH 46 DEGREES 51 MINUTES 15 SECONDS EAST,
162.29 FEET; THENCE NORTH 3 DEGREES 08 MINUTES 45 SECONDS WEST, 7.00 FEET;
THENCE NORTH 46 DEGRE _ TES 15 SECONDS EAST, 60.76 FEET; THENCE
NORTHEASTERLY AL O " C TO THE RIGHT WITH A RADIUS OF 367.00 FEET AND A
CHORD BEARING OF - RTH 58 D °BEES 18 MINUTES 15 SECONDS EAST, AN ARC
LENGTH OF 146.68 THENC - ° ORTH 69 DEGREES 45 MINUTES 15 SECONDS EAST,
121.97 FEET; THENCE - G A CURVE TO THE LEFT WITH A RADIUS
OF 433.00 FEET AND A CH ° == E N ' Ct URTH 37 DEGREES 51 MINUTES 31 SECONDS
EAST, AN ARC LENGTH OF 4 FEET; THENCE NORTHEASTERLY ALONG A CURVE TO
THE RIGHT WITH A RADIUS O 0 FEET AND A CHORD BEARING OF NORTH 51
DEGREES 23 MINUTES 20 SECOND ST, AN ARC LENGTH OF 39.64 FEET; THENCE
SOUTH 83 DEGREES 11 MINUTES ECONDS EAST, 763.20 FEET; THENCE
SOUTHEASTERLY ALONG A CURVE TO THE RIGHT WITH A RADIUS OF 367.00 FEET AND A
CHORD BEARING OF SOUTH 57 DEGREES 07 MINUTES 07 SECONDS EAST, AN ARC
LENGTH OF 333.94 FEET; THENCE SOUTH 31 DEGREES 03 MINUTES 05 SECONDS EAST,
123.11 FEET; THENCE SOUTH 58 DEGREES 56 MINUTES 55 SECONDS WEST, 7.00 FEET;
THENCE SOUTHEASTERLY ALONG A NONTANGENTIAL CURVE TO THE LEFT WITH A
RADIUS OF 440.00 FEET AND A CHORD BEARING OF SOUTH 42 DEGREES 20 MINUTES 40
SECONDS EAST, AN ARC LENGTH OF 173.45 FEET; THENCE NORTH 32 DEGREES 01
MINUTES 21 SECONDS EAST, 80.28 FEET; THENCE SOUTHEASTERLY ALONG A
NONTANGENTIAL CURVE TO THE LEFT WITH A RADIUS OF 360.00 FEET AND A CHORD
BEARING OF SOUTH 60 DEGREES 42 MINUTES 59 SECONDS EAST, AN ARC LENGTH OF
101.11 FEET; THENCE SOUTH 68 DEGREES 45 MINUTES 32 SECONDS EAST, 784.84 FEET TO
THE CENTER LINE OF CANNONBALL TRAIL; THENCE SOUTH 21 DEGREES 40 MINUTES 31
SECONDS WEST, ALONG SAID CENTER LINE, 331.43 FEET; THENCE SOUTH 21 DEGREES 14
MINUTES 17 SECONDS WEST, ALONG SAID CENTER LINE, 1261.58 FEET; THENCE NORTH
68 DEGREES 45 MINUTES 43 SECONDS WEST, 48.00 FEET; THENCE SOUTH 21 DEGREES 14
MINUTES 17 WEST, 470.00 FEET; THENCE SOUTH 57 DEGREES 14 MINUTES 17 SECONDS
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WEST, 74.81 FEET TO THE NORTH LINE OF U.S. ROUTE 34; THENCE NORTH 85 DEGREES 32
MINUTES 10 SECONDS WEST ALONG SAID NORTH LINE, 1983.32 FEET TO THE WEST LINE
OF THE NORTHWEST QUARTER OF SAID SECTION 29; THENCE NORTH 01 DEGREES 14
MINUTES 12 SECONDS WEST ALONG SAID WEST LINE, 378.99 FEET TO THE POINT OF
BEGINNING, IN THE UNITED CITY OF YORKVILLE, KENDALL COUNTY, ILLINOIS, AND
CONTAINING 143.40 ACRES
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EXHIBIT C
KENDALL MARKETPLACE IMPROVEMENT COSTS TO BE PAID FROM SALES TAX
REVENUE BOND PROCEEDS
ESTIMATED C� T GOR - �- - ���
Kendall Marketplace Project improvements include, but are
not limited to: (i) on-site landscaping, decorative fencing,
and decorative lighting; (ii) site, parking lot, and stre
lighting; (iii) topsoil preparation; (iv) cutting and
the site for building pads and sidewalks; • (v) relo - a on and
modification of the existing storm drainage s , (vi)
construction and connection of a sanitary se I er tem;
and (vii) the gas service sleeves and the conduit
transformer pads associated with such improvemen
$9,112,087
Total Eligible Project Costs
Total Funded Project C $ 7.337.189
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EXHIBIT D
CERTIFICATE OF SUBSTANTIAL COMPLETION
The undersigned, CANNONBALL, LLC, an Illinois limited liability company
(the "Developer"), pursuant to that certain Development Agreement dated as of
2006, between the UNITED CITY OF YORKVILLE, Illinois (the "City'l and
the Developer (the "Agreement"), hereby certifies to the City as follows:
1. That as of the construction of the Kendall Marketplace
Project (as that term is defined in the Agreement) has been substantially
completed in accordance with the Agreement.
2. The work has been performed in accordance with the Construction Plans
(as those terms are defined in the Agreement).
3. The Developer is issuing this Certificate of Substantial Completion to the
City in accordance with the Agreement to evidence the Developer's satisfaction
of all material obligations and covenants with respect to such Project.
4. The acceptance or the e of the City to object in writing to this
Certificate within thirty date of delivery of this Certificate to the
City (which written objection, ' . y e delivered to the Developer prior to
the end of such thirty (30) days) all , _ ; end • th satisfaction of the
Developer's agreements and cove to pe the work and complete the
Kendall Marketplace Project.
Upon such acceptance by the City, th eloper may record this Certificate in
the office of the Kendall County Recorder of eds. This Certificate is given without
prejudice to any rights against third parties which exist as of the date hereof or which
may subsequ come into being. Terms not otherwise defined herein shall have the
meaning uch terms in the Agreement.
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IN WITNESS WHEREOF, the undersigned has hereunto set his /her hand this
_day of
CANNONBALL LLC, an Illinois limited liability company
By: THE HARLEM IRVING COMPANIES
BY:
Title:
ACCEPTED:
UNITED CITY OF YORKVILLE, ILLINOIS
By:
Name:
Title:
(Insert Notary d s) and Legal Description)
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EXHIBIT E
CERTIFICATE OF KENDALL MARKET PLACE IMPROVEMENT COSTS
TO:
United City of Yorkville, Illinois
Office of Treasurer
Yorkville, Illinois
Attention:
Re:
Terms not otherwise defined herein shall have the ,e aning a w ed to such
terms in the Development Agreement dated as of , 2006 (th A reement'j,
between the City and CANNONBALL LLC, an Illinois limited liability co , (the
'Developer'l. In connection with said Agreement, the undersigned hereb, ates and
certifies that:
1. Each item listed on Schedule 1 hereto is a reimbursable Kendall
Marketplace Improvement cos an was incurred in connection with the
construction of the Kendall M t Project.
2. These Kendall Marketplac - = vem.= , 1. is have been paid by the
Developer and are `_ sable undo the Bulness District Act, the Bond
Ordinance and - ' grew -nt.
3. Each r - listed o chedule 1= _ a not previously been paid or
reimbursed o one e. ve from e Fund or any money derived from any
fund established p an ` >nd Ordinance, and no part thereof has
been included' an er certificate previously filed with the City.
4. There has not bee -- with or served upon the Developer any notice of
any lien, right of lien or chment upon or claim affecting the right of any
person, firm or corporation to receive payment of the amounts stated in this
request, except to the extent any such lien is being contested in good faith.
5. All work for which payment or reimbursement is requested has been
performed in accordance with the Concept Site Plan and the Agreement.
6. If any cost item to be reimbursed under this Certificate is deemed not to
constitute a reimbursable Kendall Marketplace Improvement cost within the
meaning of the Business District Act, the Developer shall have the right to
substitute other eligible Kendall Marketplace Improvement costs for payment
hereunder as are eligible under the application statutory authority.
7. The Developer is not in default or breach of any material term or
condition of the Agreement beyond the applicable cure period, if any.
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Agreement Local Sales Tax V3.doc
Dated this day of
By: CANNONBALL LLC, an Illinois limited liability company
By: THE HARLEM IRVING COMPANIES
Name:
Title:
Approved for Payment this day of
UNITED CITY OF YORKVILLE, ILLINOIS
By:
Name:
Title:
9
2
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Agreement Local Sales Tax V3.doc
January 11, 2007
SCHEDULEI
KENDALL MARKETPLACE IMPROVEMENT COSTS
I
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EXHIBIT G
AUTHORIZATION TO RELEASE SALES TAX INFORMATION
The undersigned Taxpayer hereby authorizes the Illinois Department of Revenue
( "IDOW) to disclose to the designated city, the amount of the local government's share
of sales tax received on behalf of the taxpayer. Reporting for a period beginning with
tax collected by the department during , ,
(be ' : _month/ year)
and ending with tax collected by the department in
(endin W / year)
Provided, however, that only taxes for the store identifie h to " =ma. be disclosed and
not receipts from the Taxpayer's other locations, if any.
This information is to be released to the United City of Yorkville, attn: ale k, - inance
Officer,
BUSINESS INFORMATION:
(Illinois Business Tax Number)
4 9�
(Taxpayer /Business Name) }
(Address)
(City, Town, Village or County)
TAXP =- : R: The un ersigned is an owner /authorized officer of this business.
By: _
(Si e)
(Print NamW
(Title)
(Telephone Number)
Note: All requests must have a beginning and ending date. Incomplete requests will be
returned to the local government.
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Agreement Local Sales Tax V3.doc
�.X�-1• l� l T u �. I� '
PRELIMINARY LI IITED OFFERING MEMORANDUM DATED , 2007
NEW ISSUE BOOK-ENTRY ONLY NOT RATED
In the opinion of Foley & Lardner LLP, Bond Counsel, based upon an analysis of existing laws, regulations, rulings and court decisions
-5 and, assuming among other matters, compliance with certain covenants, interest on the Bonds is excluded from gross income for federal income tax
° `y pui poses under Section 103 of the Internal Revenue Code of 1986, as amended. In the opinion of Bond Counsel, interest on the Bonds is not a
specific t preference item or purposes o the federal individual or c alternative minimum taxes, although a o P fPf f P P f h such interest is included in f P g
adjusted current earnings when calculating corporate alternative minimum taxable income. Interest on the Bonds is not exempt from present State
D , N of Illinois income taxes. Bond Counsel expresses no opinion regarding any other tax consequences related to the ownership or disposition of, or
n ° T the accrual or receipt of interest on, the Bonds. See the heading "TAXMMTTERS. "
g o ,�
o : y $9,470,000`
UNITED CITY OF YORKVILLE
- Kendall County, Illinois
Sales Tax Revenue Bonds, Series 2007
y d
(Kendall Marketplace Project)
c o Dated: Date of Issuance Due: As shown below
y = This Limited Offering Memorandum is being furnished solely for consideration by prospective sophisticated purchasers of the United
City of Yorkville, Kendall County, Illinois, Sales Tax Revenue Bonds, Series 2007 (Kendall Marketplace Project) (the "Series 2007 Bonds ") with
m° o substantial financial resources and the experience and financial expertise to understand and evaluate the high degree of risk inherent in this
o ° investment. Purchase of the Series 2007 Bonds will constitute an investment secured solely by a pledge of the Revenues (as defined herein) and
N c �'', certain other amounts held in funds established pursuant to the Trust Indenture (as defined herein). The purchase of the Series 2007 Bonds is an
investment subject to a high degree of risk, including the risk of non payment of principal and interest. See "Risk Factors" herein.
_ o The Series 2007 Bonds are issuable only as fully registered bonds without coupons and, when issued, will be registered in the name of
E" J� • o Cede & Co., as nominee of The Depository Trust Company, New York, New York ( "DTC "). Individual purchases will be made in book entry form
O a only, in principal amounts of $100,000 or integral multiples of $5,000 in excess thereof. Beneficial Owners of the Series 2007 Bonds will not
y w receive physical certificates representing their interest in the Series 2007 Bonds purchased. Principal of, premium, if any, and interest (payable on
8 .E3 ' January 1 and July 1 of each year, commencing July 1, 2007) on the Series 2007 Bonds are payable by The Bank of New York Trust Company,
mium, if any, and interest to DTC's Participants, who in turn will be responsible for
N.A., as Trustee, to DTC, which will remit such principal, pre
Y a remitting such payments to the Beneficial Owners of the Series 2007 Bonds, as described herein.
E 3
3 The Series 2007 Bonds are subject to optional, mandatory and special mandatory redemption prior to maturity as set forth
O herein.
a ° THE SERIES 2007 BONDS ARE BEING ISSUED PURSUANT TO THE BUSINESS DISTRICT DEVELOPMENT AND
-4 3 ° REDEVELOPMENT ACT AND THE LOCAL GOVERNMENT DEBT REFORM ACT OF THE STATE OF ILLINOIS AND IN THE OPINION
OF FOLEY & LARDNER LLP, CHICAGO, ILLINOIS, BOND COUNSEL, THE SERIES 2007 BONDS WILL BE THE VALID AND
'o BINDING LIMITED OBLIGATIONS OF THE CITY IN ACCORDANCE WITH THEIR TERMS AND THE TERMS OF THE INDENTURE.
__ THE SERIES 2007 BONDS AND THE INTEREST THEREON AND ALL OTHER OBLIGATIONS OF THE CITY TO PAY MONEYS SHALL
It NOT BE DEEMED TO CONSTITUTE A GENERAL DEBT, LIABILITY OR OBLIGATION OF THE CITY OR A DEBT, LIABILITY OR
.a OBLIGATION OF THE CITY, THE STATE OR ANY POLITICAL SUBDMSION THEREOF, OR A PLEDGE OF THE FAITH AND CREDIT
a y OF THE CITY, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF. THE PRINCIPAL AND THE INTEREST THEREON SHALL
.w ; NEVER CONSTITUTE AN INDEBTEDNESS, LIABILITY, GENERAL OR MORAL OBLIGATION OR A PLEDGE OF THE FAITH OR
` C: .3 LOAN OF CREDIT OF THE CITY, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY
o . e • g CONSTITUTIONAL PROVISION OR STATUTORY LIMITATION AND SHALL NEVER CONSTITUTE OR GIVE RISE TO A
b PECUNIARY LIABILITY OR BE A CHARGE AGAINST THE GENERAL CREDIT OR TAXING POWERS OF SUCH BODY.
� � o
b J
%Term Bonds Due January 1, 2026 Price:
j $ % Term Bonds Due January 1, 2027 Price: %
b A
N
j O •
The Series 2007 Bonds are offered when, as and if issued, subject to prior sale, withdrawal or modification of the offer without notice,
N ? the approving legal opinion of Foley & Lardner LLP, Chicago, Illinois, Bond Counsel, and certain other conditions. See "TAX MATTERS" herein
.� and Appendix D hereto. Certain legal matters will be passed upon for the Underwriter by Sonnenschein Nath & Rosenthal LLP, Chicago, Illinois,
w 5 for the Developer by Polsky & Associates Ltd., Chicago, Illinois, and for the City by John Wyeth, Esq., Yorkville, Illinois. It is expected that the
b 0 Bonds will be available for delivery to DTC in New York, New York on or about 2007.
° °' '9
N
y The date of this Limited Offering Memorandum is .2007.
Preliminary; subject to change.
LD41TED OFFERING MEMORANDUM
This Limited Offering Memorandum is being furnished by the United City of Yorkville, Kendall
County, Illinois (the "City ") to a limited number (35 or less) of sophisticated investors or registered
investment companies under the Investment Company Act of 1940 solely for the purpose of each
investor's consideration of the purchase of the Series 2007 Bonds described herein, and is not to be used
for any other purpose or made available to anyone not directly concerned with the decision regarding such
purchase. This Limited Offering Memorandum does not constitute an offer to sell or the solicitation of an
offer to buy, nor shall there be any sale of the Series 2007 Bonds by any person, in any jurisdiction in
which it is unlawful for such person to make such an offer, solicitation or sale. Interested investors are
being provided the opportunity to ask such questions and examine such documents and records as they
may desire, and are advised to contact the Underwriter to secure further information concerning the Series
2007 Bonds.
No dealer, broker, salesman or other person has been authorized to give any information or to
make any representation other than as contained in this Limited Offering Memorandum in connection
with the limited offering described herein, and, if given or made, such information or representation must
not be relied upon as having been authorized. In accordance with, and as part of, its responsibilities to
investors under the federal securities laws, as applied to the facts and circumstances of this transaction,
the Underwriters have reviewed the information in this Limited Offering Memorandum, but does not
guarantee the accuracy or completeness of such information. Neither the delivery of this Limited
Offering Memorandum nor the sale of any of the Series 2007 Bonds shall imply that the information
herein is correct as of any time subsequent to the date hereof.
This Limited Offering Memorandum should be considered in its entirety and no one factor should
be considered more or less important than - any other by reason of its position in this Limited Offering
Memorandum. Where statutes, reports, agreements or other documents are referred to herein, reference
should be made to such statutes, reports, agreements or other documents for more complete information
regarding the rights and obligations of parties thereto, facts and opinions contained therein and the subject
matter thereof.
The Series 2007 Bonds have not been registered under the Securities Act of 1933, as amended, in
reliance upon exemptions contained in such act. The registration or qualification of the Series 2007
Bonds in accordance with the applicable provisions of securities laws of the states in which the Series
2007 Bonds have been registered or qualified and the exemption from registration or qualification in other
states cannot be regarded as a recommendation thereof. Neither these states nor any of their agencies
have passed upon the merits of the Series 2007 Bonds or the accuracy or completeness of this Limited
Offering Memorandum. Any representation to the contrary may be a criminal offense.
THE SERIES 2007 BONDS HAVE RISK CHARACTERISTICS WHICH REQUIRE
CAREFUL ANALYSIS AND CONSIDERATION BEFORE A DECISION TO PURCHASE IS MADE.
THE SERIES 2007 BONDS SHOULD BE PURCHASED BY INVESTORS WHO HAVE ADEQUATE
EXPERIENCE TO EVALUATE THE MERITS AND RISKS OF THE SERIES 2007 BONDS.
PROSPECTIVE INVESTORS ARE NOT TO CONSTRUE THE CONTENTS OF THIS LIMITED
OFFERING MEMORANDUM OR ANY PRIOR OR SUBSEQUENT COMMUNICATION FROM
THE UNDERWRITERS, THEIR AFFILIATES, OFFICERS AND EMPLOYEES OR ANY
PROFESSIONAL ASSOCIATED WITH THIS OFFERING AS INVESTMENT OR LEGAL ADVICE.
EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITS OWN COUNSEL, ACCOUNTANT
AND OTHER ADVISORS AS TO FINANCIAL, LEGAL AND RELATED MATTERS CONCERNING
THE INVESTMENT DESCRIBED HEREIN.
14525396\V -2
UNITED CITY OF YORKVILLE, ILLINOIS
MAYOR
Arthur F. Prochaska, Jr.
CITY ALDERMEN
Joseph Besco Jason Leslie
Jim Bock Marry Munns
Valerie Burd Rose Spears
Paul James Dean Wolfer
TREASURER
William Powell
CITY ADMINISTRATOR
John Crois
DIRECTOR OF PUBLIC WORKS
Eric -Dhuse
FINANCE DIRECTOR
Susan Mika
CITY CLERK
Jacquelyn Milschewski
PROFESSIONAL SERVICES
BOND COUNSEL FINANCIAL ADVISOR
Foley & Lardner LLP Speer Financial, Inc.
Chicago, Illinois Chicago, Illinois
TRUSTEE
The Bank of New York Trust Company, N.A.
Chicago, Illinois
CITY'S COUNSEL
John Justin Wyeth, Esq.
Yorkville, Illinois
14525396\V -2
TABLE OF CONTENTS
INTRODUCTORYSTATEMENT ................................................................................. ..............................I
THESERIES 2007 BONDS ........................................................................................... ..............................2
General Description of the Series 2007 Bonds ........................................................... ..............................2
NoAdditional Bonds .................................................................................................. ..............................2
Redemption................................................................................................................. ..............................2
Book - Entry-Only System ............................................................................................ ..............................5
ESTIMATED SOURCES AND USES OF FUNDS ....................................................... ..............................8
PLANOF FINANCE ..................................................................................................... ............................... 8
DEBTSERVICE REQUIREMENTS ............................................................................. ..............................9
SECURITY AND SOURCE OF PAYMENT FOR THE SERIES 2007 BONDS ......... ..............................9
General....................................................................................................................... ............................... 9
PledgedFunds ............................................................................................................ .............................10
Covenantsof the City ................................................................................................. .............................12
Investmentof Funds ................................................................................................... .............................14
THEDEVELOPMENT AGREEMENT ........................................................................ .............................14
General....................................................................................................................... .............................
Fees............................................................................................................................ .............................
Annual and Quarterly Reporting ........15
Paymentof Developer Costs ...................................................................................... .............................15
Bondsand Pledged Revenue ...................................................................................... .............................15
Revenues.................................................................................................................... .............................15
Assignment or Sale of Property ................................................................................. .............................16
SUMMARYOF THE PROJECT ................................................................................... .............................17
General....................................................................................................................... .............................
SiteImprovements ...................................................................................................... ............................1 -7
Kendall Marketplace Improvements .......................................................................... .............................18
Zoning........................................................................................................................ .............................
Construction............................................................................................................... .............................
Mechanical................................................................................................................. .............................
Interior....................................................................................................................... .............................
RetailInline Properties .............................................................................................. .............................18
LandSales .................................................................................................................. .............................19
LeaseTenants ............................................................................................................. .............................19
Small -shop Boutique Boulevard ................................................................................ .............................20
ConstructionManager ................................................................................................ .............................20
PropertyManagement ................................................................................................ .............................20
Environmental Site Assessment ................................................................................. .............................21
ProjectFinancing ....................................................................................................... .............................21
SitePlan ..................................................................................................................... .............................
THEDEVELOPER ........................................................................................................ .............................23
THECITY ...................................................................................................................... .............................
CityGovernment and Services .................................................................................. .............................25
Transportation............................................................................................................ .............................
YorkvillePublic Library ............................................................................................ .............................26
CommunityLife ......................................................................................................... .............................26
Education................................................................................................................... .............................
SocioeconomicInformation ....................................................................................... .............................27
Housing...................................................................................................................... .............................28
Income....................................................................................................................... .............................29
i
14525396\V -2
i
I
I
WealthIndicators ....................................................................................................... .............................
RetailActivity ............................................................................................................ .............................
THE BUSINESS DISTRICT AND LOCAL SALES TAXES ...................................... .............................33
TheBusiness District Act .......................................................................................... .............................3
Designation of the Business District .......................................................................... .............................33
LocalSales Taxes ...................................................................................................... .............................
Collection of Local Sales Taxes ................................................................................. .............................34
RISKFACTORS ............................................................................................................ .............................
LimitedSource of Funds ............................................................................................ .............................35
Failure to Sell or Lease Property to Retailers ............................................................ .............................35
InformationNot Verified ........................................................................................... .............................3
Failureto Develop Properties .................................................................................... .............................35
Riskof Construction .................................................................................................. .............................
Riskof Occupancy ..................................................................................................... .............................
Risk of Changes in Market Conditions, Economic Conditions, Future Competition and Tax Rates .....36
Riskof Natural Disaster ............................................................................................. .............................
Risk of Anchor Purchase Agreement Terminations or Discontinued Operations ..... .............................36
Failure to Achieve Pledged Revenue Projections ...................................................... .............................36
Local, State and Federal Land Use Regulations ......................................................... ............................37'
LandDevelopment Costs ........................................................................................... .............................3
Zoning Approvals and Building Permits ................................................................... .............................37
TaxRevenues ............................................................................................................. .............................
Bankruptcy .............................38
Limitation on Remedies; No Acceleration ................................................................. .............................38
- Limited Secondary Market ........................................................................................ .............................3
SecondaryMarket and Prices ..................................................................................... .............................39
Lossof Tax Exemption .............................................................................................. .............................
Risk of Legislative and Judicial Changes .................................................................. .............................39
ReportingRequirements ............................................................................................ .............................
PROJECTIONS..............:............................................................................................. ............................... 3 9
UNDERWRITING......................................................................................................... .............................
LIMITEDOFFERING ................................................................................................... .............................
LEGALOPINIONS ....................................................................................................... .............................
TAXEXEMPTION ........................................................................................................ .............................
CONTINUINGINFORMATION .................................................................................. .............................
TheCity ..................................................................................................................... .............................
TheDeveloper ............................................................................................................ .............................
FINANCIALADVISOR ................................................................................................ .............................
LIMITEDOFFERING ................................................................................................... .............................
NOLITIGATION .......................................................................................................... .............................
TheCity ..................................................................................................................... .............................
TheDeveloper ............................................................................................................ .............................
NoRating ....................................................................................................................... .............................
Miscellaneous................................................................................................................. .............................
Authorization.................................................................................................................. .............................
ii
APPENDICES
APPENDIX A - Trust Indenture
APPENDIX B - Development Agreement
APPENDIX C - Pledged Revenue Projections
APPENDIX D - Bond Opinion
iii
$9,470,000
UNITED CITY OF YORKVILLE
Kendall County, Illinois
Sales Tax Revenue Bonds, Series 2007
(Kendall Marketplace Project)
INTRODUCTORY STATEMENT
This Limited Offering Memorandum, which includes the cover page and Appendices attached
hereto, is provided to furnish information in connection with the issuance and sale by the United City of
Yorkville, Kendall County, Illinois (the "City ") of $9,470,000' aggregate principal amount of Sales Tax
Revenue Bonds, Series 2007 (Kendall Marketplace Project) (the "Series 2007 Bonds "). The Series 2007
Bonds will be issued by the City pursuant to (i) the Business District Development and Redevelopment
Act of the State of Illinois, 65 ILCS 5/11 -74.3 et sec . (the "Business District Act "); (ii) the Local
Government Debt Reform Act, 30 ILCS 350/1 et seq. (the "Debt Act "); (iii) Ordinance Number 2007-_
of the City adopted on . 2007 (the "Bond Ordinance ") providing for the issuance of the Series
2007 Bonds; and (iv) the Trust Indenture dated as of February 1, 2007 (the "Trust Indenture ") between
the City and The Bank of New York Trust Company, N.A., as trustee (the "Trustee "). The Series 2007
Bonds will be issued as fully registered bonds without coupons in book -entry only form in denominations
of $100,000 or any integral multiple of $5,000 in excess thereof. Capitalized terms used but not defined
herein shall have the meanings given such terms in the Trust Indenture. See "APPENDIX A — Trust
Indenture."
The proceeds of the Series 2007 Bonds will be used by the City to: (i) make a deposit to the Debt
Service Reserve Fund for the Series 2007 Bonds in an amount equal to 10% of the principal amount of
the Series 2007 Bonds (the "Debt Service Reserve Fund Requirement"); (ii) make a deposit to the
Administrative Expense Fund; (iii) pay capitalized interest on the Series 2007 Bonds through July 1,
2009, (iv) fund certain costs of issuing the Series 2007 Bonds; and (v) deposit the balance of the proceeds
of the Series 2007 Bonds to the Improvement Fund. See "THE SERIES 2007 BONDS." The amount
deposited into the Improvement Fund, together with the interest earnings thereon, will be used to pay
qualifying costs under the Business District Act incurred by Cannonball, LLC, an Illinois limited liability
company (the "Developer ") on behalf of the City, for improvements benefiting the Kendall Marketplace
Business District (the "Business District "). The Business District was designated by the City pursuant to
Ordinance No. 2006 - of the City adopted on December 2006. See "THE BUSINESS DISTRICT"
and "SUMMARY OF PROJECT — Business District Improvements."
The Business District is situated on the northwest corner of the intersection of Illinois Route 34
and Cannonball Trail in the City. The Developer proposes to develop a mix of retail stores, restaurants
and office space within the Business District called Kendall Marketplace (the "Project "). The Project
consists of approximately 143 acres of land with 800,000 square feet of gross leasable area. See "THE
DEVELOPER" and "SUMMARY OF THE PROJECT."
The Series 2007 Bonds will be secured solely by (i) the Pledged Revenue generated in the
Business District, (ii) the amounts held in the funds and accounts under the Trust Indenture, including the
Debt Service Reserve Fund, and (iii) the investment income interest, profits and other income derived
from the investment thereof. See "SECURITY AND SOURCE OF PAYMENT FOR THE SERIES 2007
BONDS — Pledged Revenue."
Preliminary; subject to change.
14525396 \V -2
i
i
THE SERIES 2007 BONDS ARE BEING ISSUED PURSUANT TO THE BUSINESS
DISTRICT ACT AND THE DEBT ACT AND IN THE OPINION OF FOLEY & LARDNER LLP,
CHICAGO, ILLINOIS, BOND COUNSEL, THE SERIES 2007 BONDS WILL BE THE VALID AND
BINDING LIMITED OBLIGATIONS OF THE CITY IN ACCORDANCE WITH THEIR TERMS AND
THE TERMS OF THE INDENTURE. THE SERIES 2007 BONDS AND THE INTEREST THEREON
AND ALL OTHER OBLIGATIONS OF THE CITY TO PAY MONEYS SHALL NOT BE DEEMED
TO CONSTITUTE A GENERAL DEBT, LIABILITY OR OBLIGATION OF THE CITY OR A DEBT,
LIABILITY OR OBLIGATION OF THE CITY, THE STATE OR ANY POLITICAL SUBDIVISION
THEREOF, OR A PLEDGE OF THE FAITH AND CREDIT OF THE CITY, THE STATE OR ANY
POLITICAL SUBDIVISION THEREOF. THE PRINCIPAL AND THE INTEREST THEREON
SHALL NEVER CONSTITUTE AN INDEBTEDNESS, LIABILITY, GENERAL OR MORAL
OBLIGATION OR A PLEDGE OF THE FAITH OR LOAN OF CREDIT OF THE CITY, THE STATE
OR ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY
CONSTITUTIONAL PROVISION OR STATUTORY LIMITATION AND SHALL NEVER
CONSTITUTE OR GIVE RISE TO A PECUNIARY LIABILITY OR BE A CHARGE AGAINST THE
GENERAL CREDIT OR TAXING POWERS OF SUCH BODY.
A copy of any document or agreement referred to herein maybe obtained upon request from
William Blair & Company, L.L.C. (the "Underwriter ").
THE SERIES 2007 BONDS
General Description of the Series 2007 Bonds
The Series 2007 Bonds will be dated as of their date of issuance, and shall bear interest from and
including their dated date until maturity or earlier redemption thereof at the rate(s) per annum set forth on
the cover page of this Limited Offering Memorandum payable on each January 1 and July 1, commencing
July 1, 2007 (each, an "Interest Payment Date "), and shall mature (subject to prior redemption) on the
dates and in the principal amounts as set forth on the cover page hereof. The Series 2007 Bonds will be
issued only as fully registered bonds without coupons in book -entry form, initially in authorized
denominations of $100,000 or any integral multiple of $5,000 in excess thereof.
The Depository Trust Company, New York, New York ( "DTC "), will act as securities depository
for the Series 2007 Bonds. Principal of, premium, if any, and interest on the Series 2007 Bonds will be
paid by the Trustee directly to DTC, which will remit such principal, premium, if any, and interest to
DTC's Participants, who, in turn will be responsible for remitting such payments to the Beneficial
Owners of the Series 2007 Bonds. See "THE SERIES 2007 BONDS — Book -Entry-Only System."
Interest on the Series 2007 Bonds will be compounded or paid in lawful money of the United
States of America and calculated on the basis of a 360 -day year composed of twelve 30 -day months.
No Additional Bonds
No additional bonds other than those described herein and in the Trust Indenture shall be issued.
Redemption
The Series 2007 Bonds will be subject to redemption prior to their stated maturity as set forth in
the Trust Indenture as generally described in this Limited Offering Memorandum.
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Optional Redemption. The Series 2007 Bonds maturing on and after January 1, 20_ are subject
to optional redemption prior to maturity at the option of the City, in whole or in part, on any date on or
after January 1, 2017, at a redemption price (expressed as a percentage of the principal amount of the
Series 2007 Bonds to be redeemed), as set forth below, plus accrued and unpaid interest to the date of
redemption
Redemption Dates Redemption Prices
January 1, 2017 through December 31, 2017 102%
January 1, 2018 through December 31, 2018 101%
January 1, 2019 and thereafter 100%
Special Mandatory Redemption. The Series 2007 Bonds are subject to mandatory redemption, in
whole or in part, by lot, from available monies on deposit in the Improvement Fund on and after January
1, 20_. Any such redemption shall occur on an Interest Payment Date occurring on or after January 1,
20 when monies transferred to the Bond Fund from the Improvement Fund are in excess of the amount
needed to redeem at least one Series 2007 Bond at the redemption price of 100% of the principal amount
of the Series 2007 Bonds to be redeemed plus accrued and unpaid interest to the Redemption Date.
Whenever the Trustee determines that monies in the Improvement Fund transferred to the Bond Fund are
sufficient to effect a special mandatory redemption, the Trustee will redeem as many Series 2007 Bonds
as possible from the monies transferred from the Improvement Fund.
Mandatory Sinking Fund Redemption, January 1, 2026 Bonds. The Series 2007 Bonds maturing
on January 1, 2026 are subject to mandatory redemption in part, by lot, from Sinking Fund Installments
on each January 1 commencing on January 1, 20 at a redemption price equal to the principal amount of
the Series 2007 Bonds maturing on January 1, 2026 to be redeemed plus accrued and unpaid interest to
the date fixed for redemption, without premium, on the respective dates and in the amounts set forth in the
following table:
Redemption Date Principal Amount to be
(January 1) Redeemed
*Maturity
If any Series 2007 Bonds maturing on January 1, 2026 are redeemed other than from Sinking
Fund Installments, the principal amount of such Series 2007 Bonds that have been redeemed will be
applied to the appropriate Sinking Fund Installments in inverse order of maturity.
Selection of Series 2007 Bonds to be Redeemed
The Series 2007 Bonds will be redeemed in inverse order of maturity and within a maturity
beginning with the latest Sinking Fund Installment. If less than all of Series 2007 Bonds of a maturity
then outstanding are to be redeemed, the Trustee will assign to each Series 2007 Bond of such maturity
then outstanding a distinctive number for each $100,000 and each $5,000 in excess thereof of the
principal amount of such Series 2007 Bond of such maturity and shall select by lot, using a method of
selection that the Trustee has deemed proper and from the numbers assigned to the registered Series 2007
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Bonds, as many numbers as, at $100,000 and $5,000 in excess thereof of the principal amount for each
number, that equal the principal amount of the Series 2007 Bonds of a maturity that is to be redeemed.
Redemption Provisions; Notice of Redemption
As soon as practicable after (a) receipt by the City of its election to redeem Bonds pursuant to the
Optional Redemption or at any time after January 1, 20_ there being on deposit moneys in the
Improvement Fund sufficient to redeem Bonds pursuant to "Special Mandatory Redemption," the Trustee
will, in accordance with the terms and provisions of the Series 2007 Bonds and the Trust Indenture, select
the Series 2007 Bonds of such maturity or portions thereof to be redeemed and will give written notice at
such time, in the name of the City, of the redemption of Series 2007 Bonds of such maturity, which notice
shall specify the complete official name of the Series 2007 Bonds, CUSIP numbers of all Series 2007
Bonds being redeemed, the date of the notice (i.e. the date of general mailing of notices to Bondholders
and information services), the redemption date, the Redemption Price (as defined in the Trust Indenture),
the Trustee's name, principal corporate trust office address, contact person and phone number, the date of
issue, interest rate, maturity date and the place or places where amounts due upon such redemption will be
payable, and, if less than all of the Series 2007 Bonds of a maturity are to be redeemed, the letters and
numbers or other distinguishing marks of such Series 2007 Bonds so to be redeemed and the amount of
each Series 2007 Bond called. Such notice shall further state that (1) any redemption pursuant to the
paragraph entitled "Optional Redemption" herein is conditioned upon the deposit of moneys in an amount
equal to the amount necessary to effect the redemption with the Trustee no later than the date that is five
(5) Business Days prior to the redemption date, (2) the City retains the right to rescind such notice on or
prior to the scheduled redemption date, (3) such notice and optional redemption shall be of no force and
effect if such moneys described in clause (1) immediately above are not so deposited with the Trustee or
if the notice is rescinded by the City as described in ' clause (2) immediately above, (3) if moneys are
deposited in accordance with clause (1) immediately above and the City does not rescind such notice of
redemption, then on such redemption date there shall become due and payable upon each Bond to be
redeemed the Redemption Price thereof, or the Redemption Price of the portion of the principal amount of
the Series 2007 Bonds to be redeemed in the case of a Series 2007 Bond to be redeemed in part only,
together with interest accrued to such date, only upon physical presentation and surrender of such Bond,
and that from and after such date interest thereon shall cease to accrue and be payable.
Except as otherwise provided in the Trust Indenture, the Trustee will mail, by first -class mail, a
copy of such redemption notice, postage prepaid, not less than 30 days and not more than 60 days before
the date fixed for redemption, to the registered owner of any Series 2007 Bond all or a portion of which is
to be redeemed, at the address appearing upon the Bond Register.
Each redemption notice will also be sent by certified mail, return receipt requested, overnight
delivery service or other secure means, postage prepaid, to any holder of $1,000,000 or more in aggregate
principal amount of Series 2007 Bonds to be redeemed, to certain municipal registered Securities
Depositories which are known to the Trustee to be holding Bonds and to at least two of the national
Information Services that disseminate securities redemption notices, at least ten days and not more than
45 days, prior to the redemption date, and in the case of the notice to Securities Depositories, when
possible, at least two days prior to the mailing of notices required by the first paragraph of this Section.
Any registered owner holding at least $1,000,000 in principal amount of Bonds of a maturity may
request that the Trustee send an additional copy of any notice (default, redemption or any other
correspondence) by first class mail, postage prepaid, to a second address simultaneously with, and in
addition to the regular mailing of such notices to registered owners recorded on the books of the Trustee.
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Failure to give notice by mailing to the holder of any Series 2007 Bond designated for redemption
or to any Securities Depository or Information Service, failure to receive such notice, any defect of any
notice so mailed or the failure to give timely notice of redemption shall not affect the validity of the
proceedings for the redemption of any Bond.
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Any optional redemption pursuant to the paragraph entitled "Optional Redemption" above may
be rescinded in whole or in part by the City at any time prior to the fifth Business Day prior to the
redemption date if the City delivers to the Trustee a notice of such rescission. The Trustee shall give
prompt notice of such rescission to the holders of the Bonds in the same manner as the redemption notice.
Any Bonds that are subject to an optional redemption that has been rescinded shall remain Outstanding,
and the rescission shall not constitute an Event of Default. Further, in the case of an optional redemption
pursuant to entitled "Optional Redemption" above, the failure of the City to deposit sufficient funds with
the Trustee to cause such redemption (in whole or in part) shall not constitute an Event of Default, and the
Trustee shall give prompt notice to the holders of the Bonds that such redemption did not occur and that
the Bonds called for redemption and not so paid remain Outstanding in the same manner as the
redemption notice was given by the Trustee.
Purchase in Lieu of Redemption
If at any time moneys are held in the Bond Fund to be used to redeem Series 2007 Bonds, in lieu
of such redemption, the City may direct the Trustee to use part or all of such moneys to purchase Series
2007 Bonds of the maturity which would otherwise be subject to redemption from such moneys. The
purchase price of such Series 2007 Bonds, excluding accrued interest, shall not exceed the applicable
Redemption Price of the Series 2007 Bonds of such maturity which would be redeemed but for the
operation of this paragraph. Any such purchase must be completed prior to the time the Trustee selects
Series 2007 Bonds of such maturity for redemption. All Series 2007 Bonds so purchased shall be
canceled by the Trustee, and the principal amount so purchased shall be applied as a credit against the
City's obligation to redeem such Series 2007 Bonds from such moneys. Savings resulting from the
purchase of Series 2007 Bonds at less than their respective redemption prices shall be used to purchase or
redeem additional Series 2007 Bonds of the same maturity to the extent permitted by the provisions
hereof.
Book-Entry-Only System
THE INFORMATION IN THIS SECTION HAS BEEN FURNISHED BY THE DEPOSITORY
TRUST COMPANY. NO REPRESENTATION IS MADE BY THE UNDERWRITERS, THE CITY OR
THE DEVELOPER AS TO THE COMPLETENESS OR ACCURACY OF SUCH INFORMATION OR
AS TO THE ABSENCE OF MATERIAL ADVERSE CHANGES IN SUCH INFORMATION
SUBSEQUENT TO THE DATE HEREOF. NO ATTEMPT HAS BEEN MADE BY THE
UNDERWRITERS, THE CITY OR THE DEVELOPER TO DETERMINE WHETHER DTC IS OR
WILL BE FINANCIALLY OR OTHERWISE CAPABLE OF FULFILLING ITS OBLIGATIONS.
NEITHER THE CITY NOR THE TRUSTEE WILL HAVE ANY RESPONSIBILITY OR
OBLIGATION TO DTC PARTICIPANTS, INDIRECT PARTICIPANTS OR THE PERSONS FOR
WHICH THEY ACT AS NOMINEES WITH RESPECT TO THE SERIES 2007 BONDS, OR FOR
ANY PRINCIPAL, PREMIUM, IF ANY, OR INTEREST PAYMENT THEREOF.
The Depository Trust Company ( "DTC "), New York, New York, will act as securities depository
for the Series 2007 Bonds. The Series 2007 Bonds will be issued as fully- registered securities registered
in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an
authorized representative of DTC. One fully- registered Bond certificate will be issued for the Series 2007
Bonds, in the aggregate principal amount of such issue, and will be deposited with DTC.
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DTC, the world's largest depository, is a limited - purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A
of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 2.2 million
issues of U.S. and non -U.S_ equity issues, corporate and municipal debt issues, and money market
instruments from over 100 countries that DTC's participants ( "Direct Participants ") deposit with DTC.
DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities
transactions in deposited securities, through electronic computerized book -entry transfers and pledges
between Direct Participants' accounts. This eliminates the need for physical movement of securities
certificates. Direct Participants include both U.S. and non -U.S. securities brokers and dealers, banks,
trust companies, clearing corporations, and certain other organizations. DTC is a wholly -owned
subsidiary of The Depository Trust & Clearing Corporation ( "DTCC "). DTCC, in turn, is owned by a
number of Direct Participants of DTC and Members of the National Securities Clearing Corporation,
Fixed Income Clearing Corporation, and Emerging Markets Clearing Corporation, (NSCC, FICC, and
EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American
Stock Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system
is also available to others such as both U.S. and non -U.S. securities brokers and dealers, banks, trust
companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct
Participant, either directly or indirectly ( "Indirect Participants "). DTC has Standard & Poor's highest
rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange
Commission. More information about DTC can be found at www.dtcc.com.
Purchases of Series 2007 Bonds under the DTC system must be made by or through Direct
Participants, which will receive a credit for the Series 2007 Bonds on DTC's records. The ownership
interest of each actual purchaser of each Bond (`Beneficial Owner ") is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from
DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their holdings, from the Direct or
Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of
ownership interests in the Series 2007 Bonds are to be accomplished by entries made on the books of
Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not
receive certificates representing their ownership interests in Series 2007 Bonds, except in the event that
use of the book -entry system for the Series 2007 Bonds is discontinued.
To facilitate subsequent transfers, all Series 2007 Bonds deposited by Direct Participants with
DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may
be requested by an authorized representative of DTC. The deposit of Series 2007 Bonds with DTC and
their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in
beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2007 Bonds;
DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2007
Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants
will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct
Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial
Owners will be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time. Beneficial Owners of Series 2007 Bonds may wish to
take certain steps to augment transmission to them of notices of significant events with respect to the
Series 2007 Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond
documents. For example, Beneficial Owners of Series 2007 Bonds may wish to ascertain that the
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nominee holding the Series 2007 Bonds for their benefit has agreed to obtain and transmit notices to
Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses
to the registrar and request that copies of notices be provided directly to them.
Redemption notices shall be sent to DTC. If less than all of the Series 2007 Bonds within an
issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct
Participant in such issue to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to
Series 2007 Bonds unless authorized by a Direct Participant in accordance with DTC's Procedures.
Under its usual procedures, DTC mails an Omnibus Proxy to City as soon as possible after the record
date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to
whose accounts the Series 2007 Bonds are credited on the record date (identified in a listing attached to
the Omnibus Proxy).
Redemption proceeds, distributions, and dividend payments on the Series 2007 Bonds will be
made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC.
DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding
detailed information from City or Trustee, on payable date in accordance with their respective holdings
shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with securities held for the accounts of customers in
bearer form or registered in "street name," and will be the responsibility of such Participant and not of
DTC nor its nominee, Trustee, or City, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede
& Co. (or such other nominee as may be requested by an authorized representative of DTC) is the
responsibility of the City or the Trustee, disbursement of such payments to Direct Participants will be the
responsibility of DTC, and disbursement of such payments to Beneficial Owners will be the responsibility
of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository with respect to the Series
2007 Bonds at any time by giving reasonable notice to the City or the Trustee. Under such circumstances,
in the event that a successor securities depository is not obtained, Bond certificates are required to be
printed and delivered.
The City may decide to discontinue use of the system of book -entry transfers through DTC (or a
successor securities depository). In that event, Bond certificates will be printed and delivered.
The information in this section concerning DTC and DTC's book -entry system has been obtained
from sources that the City believes to be reliable, but City takes no responsibility for the accuracy thereof.
The City may decide to discontinue use of the system of book -entry transfers through DTC (or a
successor securities depository). In that event, the Bond certificates will be printed and delivered.
THE TRUSTEE, THE DEVELOPER AND THE CITY WILL NOT HAVE ANY
RESPONSIBILITY OR OBLIGATION TO ANY PARTICIPANT, ANY PERSON CLAIMING A
BENEFICIAL OWNERSHIP INTEREST IN ANY SERIES 2007 BOND UNDER OR THROUGH
DTC OR ANY PARTICIPANT, OR ANY OTHER PERSON THAT IS NOT SHOWN ON THE
REGISTRATION BOOKS OF THE TRUSTEE AS BEING A BONDOWNER, WITH RESPECT
TO THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY PARTICIPANT,
THE PAYMENT BY DTC OR ANY PARTICIPANT OF ANY AMOUNT IN RESPECT OF
PRINCIPAL OF OR PREMIUM, IF ANY, OR INTEREST ON ANY SERIES 2007 BOND, ANY
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NOTICE THAT IS REQUIRED TO BE GIVEN TO BONDOWNERS UNDER THE BOND
ORDINANCE (EXCEPT IN CONNECTION WITH CERTAIN NOTICES OF DEFAULT AND
REDEMPTION AND ANY NOTICES REQUIRED IN CONNECTION WITH CONTINUING
DISCLOSURE REQUIREMENTS, IF APPLICABLE), THE SELECTION BY DTC OR ANY
PARTICIPANT OF ANY PERSON TO RECEIVE PAYMENT IN THE EVENT OF A PARTIAL
REDEMPTION OF THE SERIES 2007 BONDS, OR ANY CONSENT GIVEN OR OTHER
ACTION TAKEN BY DTC OR ITS NOMINEE AS THE REGISTERED OWNER OF THE
SERIES 2007 BONDS.
ESTIMATED SOURCES AND USES OF FUNDS
Sources:
Bond Proceeds
Interest Earnings
Total
Uses:
Land Acquisition
Public Improvements
On -site Improvements
Off -site Improvements
Other Developer Costs
Capitalized Interest
Debt Service Reserve
Administrative Expense Fund
Costs of Issuance
Total
Interest earnings are calculated assuming earnings of 3% on the Reserve Fund and 1% on the
Improvement Fund.
PLAN OF FINANCE
The proceeds of the Series 2007 Bonds will be used by the City to: (i) make a deposit to the Debt
Service Reserve Fund for the Series 2007 Bonds in an amount equal to the Debt Service Reserve Fund
Requirement; (ii) make deposit to the Administrative Expense Fund; (iii) pay capitalized interest on the
Series 2007 Bonds through July 1, 2009, (iv) fund certain costs of issuing the Series 2007 Bonds; and
(v) deposit the balance of the proceeds of the Series 2007 Bonds to the Improvement Fund. The amount
deposited into the Improvement Fund, together with the interest earnings thereon, will be used to pay
qualifying costs under the Business District Act incurred by the Developer on behalf of the City for
improvements benefiting the Business District. See "SLTMMARY OF THE PROJECT— Kendall
Marketplace Improvements."
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DEBT SERVICE REQUIREMENTS
The following table sets forth the debt service schedule for the Series 2007 Bonds based on the
maturity and interest rate set forth on the cover of this Limited Offering Memorandum, assuming no
redemptions other than mandatory sinking fund redemptions are made:
Debt Service Requirements
Bond
Year
Ending Principal Interest Annual
2007
2008
2008
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
SECURITY AND SOURCE OF PAYMENT FOR THE SERIES 2007 BONDS
General
The Series 2007 Bonds and the interest thereon are limited obligations of the City secured and
payable solely from the Revenues. "Revenues" include (i) income derived from the investment of
moneys credited to the Funds and Accounts created under the Indenture (other than from moneys in the
Rebate Fund); and (b) the Pledged Revenue.
"Pledged Revenue" constitute fifty percent (50 %) of Local Sales Taxes. "Local Sales Taxes" are
the total revenue from taxes, penalties and interest which are paid to the City from the Local Government
Tax Fund as created by 35 ILCS 120/3, as amended, on sales by retailers and servicemen in the Business
District; and all revenues from any taxes, penalties and interest which are paid to the City from the Local
Government Tax Fund on sales by retailers and servicemen in the Business District which are intended to
replace the current payments to the City, and any tax intended to replace the same as enacted by law or
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ordinance of the City or any governmental authority. See "THE BUSINESS DISTRICT AND
PLEDGED REVENUE" and "APPENDIX C — Pledged Revenue Projections."
Pledged Funds
In addition to the Improvement Fund, the Trustee will establish the following funds and accounts:
Local Sales Tax Account of the Business District Tax Allocation Fund; Debt Service Reserve Fund; Bond
Fund, including a Capitalized Interest Account; Costs of Issuance Fund; Administrative Expense Fund;
and Rebate Fund.
Application of Revenues. All Revenues will be deposited by the Trustee into the Local Sales Tax
Account. On each date specified below for each year Series 2007 Bonds remain Outstanding, the Trustee
will, out of moneys in the Local Sales Tax Account, make the following transfers and credit the following
amounts to the following Funds, but only to the extent moneys in the Local Sales Tax Account are then
available and only within the limitations hereinafter indicated with respect thereto and only after the
Trustee has made the required payment and transfer within such limitation prior in order as mentioned in
the following enumeration:
First On each Accounting Date ( "Accounting Date" means December 1
of each year, commencing December 1, 2007), to the Bond Fund, an
amount equal to the sum of the Interest Requirement and the Principal
Requirement (as such terms are defined in the Trust Indenture) for the
next Bond Year to be applied as set forth in the Trust Indenture;
Second On each Accounting Date, to the Administrative Expense Fund,
an amount equal to the difference, if any, between the Administrative
Expense Fund Requirement for the subsequent calendar year and the
amount then in the Administrative Expense Fund, such amounts in such
Fund to be applied as set forth in the Trust Indenture; and
Third On each Accounting Date, to the Debt Service Reserve Fund an
amount equal to the difference, if any, between the Debt Service Reserve
Fund Requirement and the amount then in the Debt Service Reserve
Fund to be applied as set forth below.
Any Revenues remaining in the Local Sales Tax Account shall be retained
therein and applied at the direction of the Issuer to any purpose authorized by the
Business District Act.
Application of Debt Service Reserve Fund. Amounts in the Debt Service Reserve Fund will be
withdrawn by the Trustee and used solely to pay first, on any Interest Payment Date or Principal
Installment Date an amount sufficient to satisfy any deficiency in the Bond Fund, and second on each
Interest Payment Date, any amount required to be deposited in the Rebate Fund to the extent sufficient
funds are not otherwise made available to the Trustee for such purposes. At such time as the amounts in
the Debt Service Reserve Fund are equal to or greater than the principal of, premium, if any, and interest
due on the Outstanding Bonds, such amounts shall be transferred to the Bond Fund. No amount will be
withdrawn from the Debt Service Reserve Fund except as expressly provided in the Trust Indenture.
Application of Bond Fund. The Trustee will charge the Bond Fund, on each Interest Payment
Date and Principal Installment Date, respectively, an amount equal to the unpaid interest or principal due
on the Series 2007 Bonds on such Interest Payment Date or Principal Installment Date (including, without
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limitation, to the extent allowed under applicable law, interest on overdue payments of principal,
premium, and interest to the extent provided in the Trust Indenture), and shall cause the same to be
applied to the payment of such interest or principal, when due. The Trustee, on each Principal Installment
Date on which a Sinking Fund Installment is due, will also charge the Bond Fund the amount necessary
for the purchase or the redemption of the Series 2007 Bonds with respect to which such Sinking Fund
Installment is due.
At the written direction of the City delivered prior to the selection of Series 2007 Bonds for
redemption, the Trustee shall apply any money credited to the Bond Fund which has been set aside for the
payment of a Sinking Fund Installment to the purchase or the redemption of the Series 2007 Bonds for
which such Sinking Fund Installment is due in the manner provided in this paragraph; provided that no
Series 2007 Bonds shall be purchased during the period of 30 days next preceding the date of a Sinking
Fund Installment established for the Series 2007 Bonds. The purchase price paid by the Trustee
(calculated excluding accrued interest but including any brokerage and other charges) for any Series 2007
Bond purchased pursuant to this paragraph shall not exceed the Redemption Price of such Series 2007
Bond applicable upon its redemption through application of the money available for such purchase on the
next date on which such Series' 2007 Bonds could be redeemed in accordance with its terms by operation
of Sinking Fund Installments. All Series 2007 Bonds so purchased by the Trustee shall be cancelled. Not
less than 30 nor more than 45 days before the date of each Sinking Fund Installment, the Trustee will call
for redemption Bonds in an aggregate principal amount equal to such Sinking Fund Installment, reduced
by the principal amount of Bonds purchased pursuant to the foregoing provisions of this paragraph, and
on that date such Sinking Fund Installment is due the Trustee shall apply the money set aside therefore in
the Bond Fund to the payment of the Redemption Price of the Series 2007 Bonds so called for
redemption.
Income realized from the investment or deposit of moneys in the Bond Fund shall be retained in
the Bond Fund. No amount will be withdrawn from the Bond Fund except as expressly provided in the
Trust Indenture. In the event that the amount credited to the Bond Fund is insufficient to pay interest or a
Principal Installment on the Series 2007 Bonds when due, the Trustee shall credit to the Bond Fund the
amount of such deficiency by charging the following Funds in the following order of priority: (a) the
Local Sales Tax Account; and (b) the Debt Service Reserve Fund.
Improvement Fund. The Trustee shall establish, maintain and hold in trust a separate fund
designated as the "Improvement Fund." Except as otherwise provided in the Trust Indenture, moneys in
the Improvement Fund shall be used solely to finance the Kendall Marketplace Improvements.
The Improvement Fund shall consist of the amounts required or permitted to be deposited therein
pursuant to any provision of the Trust Indenture and the proceeds of the Bonds shall be deposited therein
in the amount set out in the Trust Indenture. Payments from the Improvement Fund shall be made by the
Trustee as follows:
(a) Payments from the Improvement Fund shall be made only upon receipt by the Trustee of
a requisition executed by the City in the form of Request for Payment set forth in Exhibit B to the Trust
Indenture;
(b) Upon completion of the Kendall Marketplace Improvements (as evidenced by a
certificate of Issuer delivered to the Trustee), any moneys remaining in the Improvement Fund shall be
transferred to the Bond Fund to redeem Series 2007 Bonds pursuant to the Trust Indenture, unless the
City directs that such moneys be deposited into the Local Sales Tax Account, or applied to any other use,
accompanied in either case by an opinion of Bond Counsel to the effect that such application will not
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adversely affect any applicable exemption from federal income taxation of the interest on the Series 2007
Bonds.
Administrative Expense Fund. The Administrative Expense Fund shall be used to pay
Administrative Expenses. Moneys on deposit in the Administrative Expense Fund shall be applied to the
payment of any Administrative Expenses requested by the Issuer to be paid. All amounts in the
Administrative Expense Fund in excess of the Administrative Expense Fund Requirement shall be
transferred to, and deposited in, the Local Sales Tax Account.
Cost of Issuance Fund. The City will, on the Closing Date, cause to be delivered from funds
proceeds of the Series 2007 Bonds, to the Trustee for deposit in the Costs of Issuance Fund, amounts to
pay costs incurred in connection with the issuance of the Series 2007 Bonds. The Trustee shall use such
funds to pay the Costs of Issuance on the Closing Date or as soon as practicable thereafter in accordance
with written instructions to be given to the Trustee by the City, upon delivery to the Trustee of
appropriate invoices for such expenses. Any unexpended amounts attributable to deposits made by the
City remaining on deposit in the Costs of Issuance Fund three months after the Closing Date shall be
transferred to the Improvement Fund.
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Rebate Fund. The Rebate Fund shall not be subject to the lien or encumbrance of the Trust
Indenture, but shall be held in trust for the benefit of the United States of America, and shall be subject to
the claim of no other person. The interest on any Investment Obligations representing an investment of
moneys in the Rebate Fund and any profit arising from the sale thereof shall be retained in the Rebate
Fund. Any moneys deposited therein in accordance with the provisions of the Trust Indenture shall be
used for no other purpose than to make payments to the United States Treasury, at the time and in the
manner and amount specified in the Trust Indenture.
Moneys Held for Particular Bonds. The amounts held by the Trustee for the payment of the
interest, principal or Redemption Price due on any date with respect to particular Series 2007 Bonds will,
pending such payment, be set aside and held in trust by it for the holders of the Series 2007 Bonds entitled
thereto, and for the purposes hereof such interest, principal or Redemption Price, after the due date
thereof, shall no longer be considered to be unpaid.
Amounts Remaining in Funds. After full payment of the Series 2007 Bonds (or provision for
payment thereof having been made in accordance with the Trust Indenture) and full payment of the
Administrative Expenses and other amounts required to be paid under the Trust Indenture, any amounts
remaining in any Fund under the Trust Indenture other than the Rebate Fund shall be paid to the City.
Covenants of the City
Pursuant to the Trust Indenture, the City has covenanted for the benefit of the owners of the
Series 2007 Bonds (the `Bondowners ") that:
Payment of Bonds. Subject to the provisions of the Trust Indenture, the City will pay or cause to
be paid from the Revenues the principal of, premium, if any, and interest on the Series 2007 Bonds, at the
dates and places and in the manner described in the Series 2007 Bonds, according to the true intent and
meaning thereof. The Series 2007 Bonds are not a general obligation of the City, but are payable solely
from the Trust Estate. The "Trust Estate" means all the property, rights, moneys, securities and other
amounts pledged and assigned to the Trustee pursuant to the Trust Indenture.
Payment of Lawful Charges and Priority of Lien. The City will pay all taxes and assessments or
other municipal or governmental charges, if any, lawfully levied or assessed upon the City in respect of
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the financing contemplated hereby or upon any revenue therefrom, when the same shall become due, and
shall duly observe and comply with all valid requirements of any municipal or governmental authority
relative to any part of the financing contemplated in the Trust Indenture, and shall not create or suffer to
be created any lien or charge upon the Trust Estate prior to or on a parity with the pledge, security interest
and lien created in the Trust Indenture for the payment of the principal of, premium, if any, and interest
on the Series 2007 Bonds.
Tax Covenants. The City shall not take any action that will cause the interest paid on the Series
2007 Bonds to be includable in gross income for federal income tax purposes.
No part of the proceeds of the Series 2007 Bonds or any other funds of the City shall be used by
the City at any time directly or indirectly to acquire securities or obligations, the acquisition of which, or
which in any other manner, would cause any Series 2007 Bond to be an arbitrage bond as defined in
Section 148 of the Code and any applicable regulations promulgated thereunder.
The City will not take any action or permit or suffer any action to be taken if the result of the
same would be to cause the Series 2007 Bonds to be "federally guaranteed" within the meaning of
Section 149(b) of the Code and any applicable regulations promulgated thereunder.
At or prior to the Closing Date, the City will execute and deliver a tax agreement.
Preservation of Revenues. The City will not take any action to reduce the amount of Pledged
Revenue collected by the City, or to interfere with or impair the pledge and assignment under the Trust
Indenture of the Trust Estate with the prior written consent of the Bondholders and the Trustee. The City
also agrees to comply with its reporting obligations under the Development Agreement and to use its best
efforts to obtain from the Illinois Department of Revenue all publicly available information necessary for
the Trustee and the City to determine the Pledged Revenue, and, within thirty (30) days after receipt of
each state report, the City shall deposit all Pledged Revenue it has received from the State of Illinois for
the period covered by such state report with the Trustee and promptly upon receipt by the Trustee, the
Trustee shall deposit all such Pledged Revenue in the Local Sales Tax Account.
Pledged Revenue Disclosure.
a) The City will use its best efforts to obtain from the Illinois Department of
Revenue such publicly available information relating to the Pledged Revenue as may be deemed
necessary by the Trustee or the Underwriter and that, within thirty (30) days after receipt of such
information, the City shall deliver the same to the Trustee and the Underwriter.
b) The City shall provide to the Trustee and the Underwriter, within ten (10) days of
receipt by the City, a copy of each annual audit of the City.
C) The City shall provide to the Trustee and the Underwriter, within thirty (30) days
after receipt thereof, any public information relating to the Local Sales Taxes received by the City
from the Illinois Department of Revenue.
d) The City shall provide to the Trustee and the Underwriter, within thirty days (30)
after receipt thereof, any quarterly construction progress reports and any tenant schedules,
including lease expirations received from the Developer.
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e) The Trustee shall make available to the City, the Underwriter and any
Bondholder, within ten (10) days of receipt of any request by the City, the Underwriter or any
Bondholder, monthly account statements and all information received by the Trustee.
f) Both the Trustee and the Underwriter are authorized pursuant to the Trust
Indenture to deliver and provide any information received pursuant to the Trust Indenture to the
Bondholders.
Investment of Funds
Moneys on deposit in the various Funds and Accounts established under the Trust Indenture shall
be invested from time to time in Investment Obligations pursuant to and solely at the direction of the City
to the Trustee, either by written, telephonic, or oral investment instructions from the City, all of which
shall be deemed controlling. If the Trustee shall have entered into any investment agreement requiring
the investment of monies in any Fund or Account established under the Trust Indenture in accordance
with such investment agreement and if such investment agreement constitutes an Investment Obligation,
such monies shall be invested in accordance with such requirements. Such investments may be made
through or with the investment or securities department of the Trustee or its affiliates, and the Trustee
may charge its ordinary and customary fee for such trades, including cash sweep account fees. See
"APPENDIX B — Trust Indenture," for the definition of "Investment Obligations."
THE DEVELOPMENT AGREEMENT
Set forth below is a description of certain of the terms of Development Agreement between the
City and the Developer. Such description of any such terms does not purport to be comprehensive or
definitive and is qualified in its entirety by reference to the complete form of the Development Agreement
included as APPENDIX B to this Limited Offering Memorandum. Capitalized terms that are used but not
defined in this section "THE DEVELOPMENT AGREEMENT" have the meanings set forth in the
Development Agreement included as APPENDIX B to this Limited Offering Memorandum.
General
The Developer is required to commence construction of the Project within 120 days of the later to
occur of (a) Developer obtaining all necessary permits and Governmental Approvals; or (b) 6 months
after execution of the Development Agreement, and is obligated to substantially complete construction of
the following approximate square feet of retail, restaurant and commercial space comprising the Project
as follows:
November, 2007 90,000 square feet of anchor space
August, 2008 475,000 square feet (including approximately 280,000
square feet of anchor space)
October, 2008 45,000 square feet
March, 2009 160,000 square feet
October, 2009 30,000 square feet
The Project is to be constructed in accordance with the terms of the Development Agreement and
the Concept Site Plan included as part of the Development Agreement. The Developer may enter into or
cause to be entered into one or more construction contracts to complete the Project.
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Fees
Other than customary tap fees, no fee or charge of any description including, without limitation,
building permits, plan review, inspection fees, or other regulatory fees or charges, will be imposed on the
Developer or on the development and use of the Property unless, as of the date of the Development
Agreement, such fee or charge is in existence and being collected by the City on a uniform basis from all
owners, users, and petitioners of property within the City. The City will not increase the amount of any
fee or utility fees, application fees, or user fees during the term of the Development Agreement unless
such increases are (i) made generally applicable to all owners and users of property within the City and
(ii) reasonably related to increased costs incurred by the City in providing the services for which such fee
is assessed.
Annual and Quarterly Reporting
The Developer agrees to deliver quarterly construction progress reports to the Trustee and the
Underwriter. The Developer will also deliver to the Trustee and the Underwriter annual schedules of
tenants and lease expiration dates for the Project.
Payment of Developer Costs
The City agrees to pay the Developer for the verified Kendall Marketplace Improvement costs in
the amount set forth in the Development Agreement. Subject to the terms of the Bond Ordinances, the
Development Agreement and the Indenture, the City agrees to issue the Series 2007 Bonds and to pay the
Developer net proceeds in an estimated amount equal to $7,337,189 for verified Kendall Marketplace
Improvement costs as provided the Development Agreement. Nothing in the Development Agreement
will obligate the City to issue Bonds to pay the Developer for any Kendall Marketplace Improvement cost
that does not qualify for payment under the Business District Act. The Developer will, at the City's
request, provide itemized construction loan draws, invoices, or receipts or, in the case of the acquisition of
land, evidence that the Developer has acquired fee title to such land and evidence of the total acquisition
price of such land, reasonably requested by the City to confirm that any such cost is so incurred and does
so qualify.
Bonds and Pledged Revenue
The Series 2007 Bonds will be secured by a pledge of the Pledged Revenue. The Indenture
provides for the segregation and deposit of the Pledged Revenue. The Pledged Revenue will first be
applied to the retirement of the Series 2007 Bonds and then, to extent there are any excess Pledged
Revenue, in accordance with the Bond Ordinance and the Indenture.
Revenues
The City agrees to cause its Director of Finance or other financial officer to maintain the funds
required by the Bond Ordinances and Indenture including such further accounts or sub - accounts as are
required in the Development Agreement, by the Development Agreement or as the Director of Finance of
the City may deem appropriate in connection with the administration of the fund pursuant to the
Development Agreement. Subject to the requirements of the Act, the City will promptly upon receipt
thereof deposit all Pledged Revenue in the fund or in such other accounts as required under the Bond
Ordinances and Indenture.
The City and the Developer agree to cooperate and take all reasonable actions necessary to cause
the Pledged Revenue to be paid into the funds and accounts as provided in the Bond Ordinance, including
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the City's enforcement and collection of all such payments through all reasonable and ordinary legal
means of enforcement.
To further assist the City in calculating the Pledged Revenue, the Developer (or its successor(s) in
interest as owner or owner(s) of the Property will, so long as any Bonds are outstanding, use all
reasonable efforts to cause businesses operating on the Property, to properly collect and report any Sales
Tax Revenue. The Developer will satisfy this requirement by making a good faith effort to cause the fee
title holder of the Property to include the obligation to execute a power of attorney authorization to
release Pledged Revenue information to the City within any deed conveying a portion of the Property an d
into any lease entered into with any tenant. The City will file the reporting forms within seven (7) days
after receipt thereof with the Illinois Department of Revenue. The Developer generally will have no
obligation to enforce or collect the payment of Pledged Revenue by any "retailer or servicemen."
Any purchaser or transferee of the Property, and any lessee or other user of the Property, will use
all reasonable efforts to timely furnish to the City such documentation as is required by the Development
Agreement. So long as any Bond is outstanding, such obligation will be a covenant running with the land
and will be enforceable as if such purchaser, transferee, lessee or other user of such real property were
originally a party to and bound by the Development Agreement.
Assignment or Sale of Property
All or any part of the Property or any interest in the Development Agreement may be sold,
transferred, encumbered, leased, or otherwise disposed of at any time, and the rights of the Developer or
any successors in interest under the Development Agreement may be assigned at any time before, during
or after redevelopment of the Project, whereupon the party disposing of its interest in the Property or
assigning its interest under the Development Agreement will be released from further obligation under the
Development Agreement (although any such Properly so disposed of or to which such interest pertains
will remain subject to the terms and conditions of the Development Agreement), provided that until
substantial completion of the Project, the rights, duties and obligations of the Developer under the
Development Agreement cannot be assigned in whole or in part without the prior written approval of the
City, which approval will not be unreasonably withheld, conditioned or delayed upon a reasonable
demonstration by the Developer of the proposed transferee's or assignee's experience and financial
capability to undertake and complete such portions of the Project and perform the Developer's obligations
under the Development Agreement, all in accordance with the Development Agreement. Notwithstanding
anything above to the contrary, no prior consent will be required in connection with: (a) the right of the
Developer to encumber or collaterally assign its interest in the Property or any portion thereof to secure
loans, advances or extensions of credit to finance or from time to time refinance all or any part of the
Project costs, or the right of the holder of any such encumbrance or transferee of any such collateral
assignment (or trustee or agent on its behalf) to transfer such interest by foreclosure or transfer in lieu of
foreclosure under such encumbrance or collateral assignment; or (b) the right of Developer to assign the
Developer's rights, duties and obligations under the Development Agreement to certain related parties;
provided that in each such event (i) the Developer will remain liable for the substantial completion of the
Project and will be released from such liability hereunder only upon substantial completion of the Project
and (ii) the Developer provides to the City 30 days' advance written notice of the proposed assignment or
transfer.
Any purchaser or transferee of the Project, and any lessee or other user of the Project is required
to use all reasonable efforts to timely furnish to the City such documentation as is required by the
Development Agreement. So long as any Series 2007 Bond is outstanding, such obligation will be a
covenant running with the land and will be enforceable as if such purchaser, transferee, lessee or other
user of such real property were originally a party to and bound by the Development Agreement.
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SUMMARY OF THE PROJECT
The information provided in this section "SUMMARY OF THE PROJECT" has been included
because it may be considered relevant to an informed evaluation and analysis of the Series 2007 Bonds.
No assurance can be given that the development of the Project will occur as described below. No
assurance can be given that the development of the Project will be completed or that it will occur in a
timely manner or in the configuration described herein. The Series 2007 Bonds and Revenues are not
personal obligations of any land owners or the Developer. The Series 2007 Bonds are secured solely by
the Revenues and certain other amounts on deposit with the Trustee. See "SECURITY AND SOURCE
OF PAYMENT FOR THE SERIES 2007 BONDS." The Series 2007 Bonds will finance a portion of the
construction of the Kendall Marketplace Improvements necessary for the Project.
General
The Project will be located at the northwest corner of Route 34 (Veterans Parkway) and
Cannonball Trail in Yorkville, Illinois. The site is generally rectangular in shape and consists of
approximately 190 acres or 8,276,400 square -feet. Kendall Marketplace is the commercial component of
the Project that will contain an approximately 800,000 square -foot regional shopping center, which is part
of the larger mixed -use commercial and residential site. The residential portion of the proposed
development will consist of single family homes and town homes on approximately 33 acres of land.
Overall, the topography of the subject property is level and at grade with the surrounding
roadways. The soil is or will be of sufficient load bearing capacity to support the proposed structures.
Existing drainage of the site is to the east and currently no public utilities are available to the site.
The Illinois Department of Transportation has announced plans to construct the Prairie
Parkway —a state highway connecting I -88 to I -80. The Prairie Parkway will have a future interchange
west of the Marketplace at Route 34. Traffic patterns suggest that the intersection of Route 34 and Route
47 is the busiest intersection in Kendall County with 64,850 vehicles per day. As a result, access is
considered good.
Site Improvements
Kendall Marketplace shopping center is expected to accommodate more than 60 commercial
users including fashion retailers, specialty shops, a bookstore, an electronics store, and a sporting goods
store, in addition to three national anchors. The shopping center will also offer a variety of fast -food and
sit -down restaurants.
Site improvements will include the re- construction and widening of Cannonball Trail to include
turning lanes and deceleration lanes; the widening of Route US 34, new traffic signalization, the
relocation of water and sanitary and storm sewers; the construction of Beecher Road, including grading,
paving, striping, new traffic signalization and the relocation of water, storm and sanitary sewers and
electrical service. Land will also be developed for civic and park use, water and fire protection services
for the shopping center, and detention, including retaining walls and railings.
Kendall Marketplace will also include approximately 3,650 parking spaces, excluding spaces
included on the outlots, with a combination of in -line, lifestyle center and outlot retail properties. Outlot
space will include both fast -food and sit -down restaurants located along Route 34 and Cannonball Trail
and a variety of retail and service uses.
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The Developer is currently in negotiations with two sit -down restaurants for two of the outlots.
Significant interest has been received from other restaurants and banks for the outlot space and from a
number of retailers for the inline space.
Kendall Marketplace Improvements
The Developer will be paid from the amounts deposited into the Improvement Fund under the
Indenture from the proceeds of the Series 2007 Bonds for the construction of certain costs benefiting the
Business District, including: (i) on -site landscaping, decorative fencing and decorative lighting; (ii) site,
parking lot and street lighting; (iii) topsoil preparation; (iv) cutting and filling of the site for the building
pads and sidewalks; (v) relocation and modification of the existing storm drainage system;
(vi) construction and connection of a sanitary sewer system; and (vii) the gas service sleeves and the
conduit and transformer pads associated with such improvements (the "Kendall Marketplace
Improvements ").
Zoning
On October 24, 2006, the Village adopted Ordinance No. 2006 - _ granting approval of the PUD
Plan, special use, site plan, and appearance approval for the development of the Project and surrounding
retail uses. The underlying new zoning is B -3, Business District.
Construction
Site development for the Kendall Marketplace began in October 2006. The Kohl's store is
projected to open in November 2007. Most retailers project an opening in the spring or fall of 2008 and
restaurant facilities anticipate openings between the spring 2008 and the fall of 2009.
The fagade of the center will be constructed of masonry and exterior finish system. The average
building height will be one story. The main center will have concrete footings and steel joist beams. The
marketplace buildings will have steel columns. Floors will be concrete. The exterior walls will be
masonry and exterior finish system. The buildings that make up Kendall Marketplace will have a flat
membrane roof system. The window system will be an aluminum window wall system. The Developer
will sell and deliver anchor pads and some outlot pads. It is anticipated that outlot parcels will be both
sold and/or leased.
Mechanical
The Kendall Marketplace will have a roof top air handling unit systems. Electrical service will be
provided by Commonwealth Edison and is assumed to be adequate. There will be hardwired smoke
detectors in the buildings. The Marketplace will be fully sprinklered. Emergency lighting will be located
throughout the Project.
Interior
The Kendall Marketplace buildings will have concrete flooring. As proposed, the ceilings will be
drywall or lay -in ceiling tiles. It is anticipated that there will be a combination of lighting throughout the
Kendall Marketplace.
Retail Inline Properties
Kendall Marketplace will be anchored by Super Target, Home Depot, and a Kohl's store. These
anchors will comprise approximately 370,000 square -feet. Several mid -size retailers, such as Michaels,
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Petsmart and T.J. Maxx, are expected to be tenants of the shopping center. Additional retail tenants are
expected to include an office supply store, fashion retailers, specialty shops, a bookstore, an electronics
store, a sporting goods store and several restaurants. Building plans have not yet been completed, but the
facades will be more decorative than a typical community or neighborhood shopping center.
Each retail building will be constructed to the anchor specifications. For in -line space,
construction will range from 60 to 250 feet in depth and width, per end - users' needs. Beecher Road,
Route 34, and Cannonball Trail will provide access to Kendall Marketplace and the outlots.
Land Sales
Land sales will be made to the three large anchors: SuperTarget, Home Depot, and Kohl's. These
land sales will occur in early 2007, with these anchors projected to open in fall 2007 and spring or
summer of 2008. The Developer has entered in signed letters of intent with each of SuperTarget, Home
Depot and Kohl's and is negotiating definitive sale agreements with each.
SuperTarget will occupy an approximately 178,000 square -foot store within Kendall
Marketplace. Target Corporation operates more than 1,300 Target stores in 47 states, including
over 140 SuperTarget stores that include an upscale grocery shopping experience. In addition to
the photo processing, pharmacy and restaurants found in almost every Target, SuperTarget
includes in -store bakery, deli, meat and produce sections.
Home Depot will occupy an approximately 103,000 square -foot store within Kendall
Marketplace. Today, on average, Home Depot offers 40,000 home and industrial improvement
products and is a nationally recognized retailer with more than 2,000 stores throughout the United
States, Canada and Mexico. Home Depot also owns EXPO Design Center, an upscale home
remodeling supply and design store, and The Home Depot Supply, which provides services for
commercial use.
Kohl's will occupy an approximately 90,000 square -foot store within Kendall
Marketplace. Kohl's is a retail department store that sells apparel, shoes & accessories for
women, children and men, plus home products such as small appliances, bedding, luggage and
more. Kohl's Department Stores operate over 800 stores throughout the United States.
Lease Tenants
The base lease term varies by tenant with mid -size retailers generally signing initial leases for ten
years (typically with two -four 5 year extension options), smaller retailers generally signing leases for 5
years, and restaurant leases generally lasting between 15 and 20 years. The annual rent typically would
remain the same for five to ten years and would escalate 5% to 10% every 5 years as extension options
are exercised.
The Developer has signed letters of intent with a number of prospective tenants for leased space.
These include:
Petsmart will occupy an approximately 20,000 square -foot store within Kendall
Marketplace. PetSmart, Inc. is the largest specialty retailer of services and solutions for the
lifetime needs of pets. The company operates more than 860 pet stores in the United States and
Canada.
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Payless ShoeSource will occupy an approximately 3,000 square -foot store within
Kendall Marketplace. Payless ShoeSource is the largest specialty family footwear retailer in the
Western Hemisphere. The Company sold more than 182 million pairs of shoes in fiscal 2005,
generating $2.7 billion in net sales. Payless ShoeSource operates stores in all 50 U.S. states and
has stores in Asia and across South America.
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The Developer expects to attract a variety of other potential retailers to Kendall Marketplace,
including craft supply stores, cosmetic stores, shoe stores, salons, fashion retailers, and fast food outlets.
Potential retailers range in size from 1,200 square -feet to approximately 22,000 square -feet per store.
Small -shop Boutique Boulevard
The small -shop boutique boulevard portion of Kendall Marketplace will resemble a lifestyle
center and include approximately 165,000 square -feet of retail, electronics bookstore and restaurant
space. The retail spaces range in size from 6,000 square -feet to 30,000 square -feet.
Approximately three sit -down restaurants are expected to be located in the lifestyle portion with
each approximately 6,000 square -feet in size. In addition, proposed stores include a sporting goods store
of 15,000 square -feet, an electronics store of approximately 30,000 square -feet, a bookstore of
approximately 20,000 square -feet, and various retail, cafe and spa vendors.
The boutique boulevard will also include 'a water feature, grassy promenade, and an appropriate
number of parking spaces.
Potential tenants of Kendall - -Marketplace's lifestyle center include national electronic and media
retailers as well as a coffee chain, spa, and jewelry store. Potential retailers range in size from 1,200
square -feet to approximately 30,000 square -feet per store. The lifestyle center will also include various
fast food restaurants and casual, sit down dining restaurants, which will offer a variety of family oriented
menus and atmospheres, and.
Outlot Properties
There are 17 outlots proposed for Kendall Marketplace totaling approximately 70,000 square -feet
of developable building area. The lots range in size from 1 acre to 2.65 acres with proposed users
developing 3,000 to 6,500 square foot buildings per lot.
Up to three of the outlots will be developed into 5,000 square -foot sites for bank use.
Approximately 50,000 square -feet will be developed for sit -down and fast food restaurants that will cater
to retail shoppers and the surrounding community.
Construction Manager
The Developer will be the construction manager for the Project. The Developer expects to retain
one or more qualified construction contractors to construct the Storm Water/ Water Improvements.
Additional construction contractors will be engaged to provide other construction services with respect to
various aspects of the Project.
Property Management
The Harlem Irving Companies, Inc, will be the property manager for the Project. Harlem Irving
currently manages 15 properties, encompassing more than 2.5 million square feet of retail space. In
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addition to Kendall Marketplace, the company is currently developing approximately 400,000 square feet
of retail space, which it intends to manage upon completion of construction. The company consists of a
seasoned team of professionals with more than 200 years of combined experience in developing, leasing,
managing and marketing properties. See "THE DEVELOPER."
Environmental Site Assessment
A Phase I Environmental Site Assessment dated December 7, 2005 for the area comprising the
Business District was prepared for The Harlem Irving Companies, Inc., by Pioneer Engineering &
Environmental Services, Inc. No recognized environmental conditions were identified in the report in
connection with the subject property.
Project Financing
The total cost of the Project is estimated to be approximately $132 million. The Developer will
enter in a three -year loan agreement with one or more lenders for up to approximately $69.1 million in
loans to fund the construction and development of the Project. The construction and development loans
will be used primarily to acquire land and construct the Project. The Developer will obtain additional
funding for the Project from the sale of outlots, land sales to anchor tenants and the residential developer
and site work reimbursement from anchor tenants and the residential developer.
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Site Plan
[TO BE INSERTED]
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THE DEVELOPER
Cannonball LLC ( "Cannonball ") is an Illinois limited liability company established for
the purpose of developing and owning Kendall Marketplace. Cannonball has three managers: MidAm
Yorkville LLC, which is managed by principals of Mid - America Development Partners, LLC; The
Harlem Irving Companies, Inc., of which Michael Marchese is President; and NF6 LLC, which is
managed by New Frontier Developments Co.
MidAm Yorkville LLC managed by Mid - America Development Partners LLC
j MidAm Yorkville LLC, is managed by Mid - America Development Partners, LLC ("Mid -
America"). Mid - America is a real estate development firm headquartered in Oak Brook, Illinois
employing 25 real estate professionals. The firm was founded in 2001 by David P. Bossy and Michael D.
Firsel. The firm is committed to creating functional, attractive developments that enhance their
communities and deliver an exceptional level of tangible value to both the partners and municipalities
they serve. Currently, Mid -Am has more than 30 projects in various stages of development, including
retail, hospitality and mixed -use projects that span more than seven million combined square -feet. Mid -
Am generally is involved in the complete development of a project, beginning with the acquisition of land
through the entitlement process and completion of construction.
David Bossy was the President and co- founded Mid - America Real Estate Corporation in 1984.
Since 1977, he has provided leadership and strategic direction for commercial/retail brokerage and asset
management operations as well as the acquisition, development and construction of approximately 35
million square -feet of shopping centers throughout the Midwest. In 1997 The Chicago Sun -Times named
Mr. Bossy its Retail Broker of the Year. He has also assisted third party retail clients in developing and
executing expansion plans of several nation chains such as Office Max, Comp USA, Old Country Buffet,
Famous Footwear and Golfsmith. Additionally, he has been involved in the marketing and property
disposition for several national retail chains including the Home Depot, TJX and New York Carpet
World.
Michael Firsel was a practicing attorney from 1973 to 1999, having formed his own firm in
1982. During that time, he concentrated on all types of real estate transactions, representing numerous
developers in varying capacities and becoming especially familiar with tax increment financing issues and
other areas of municipal finance. He acted as special counsel to several municipalities including the
Village of Palatine, and the Village of La- Grange during their respective redevelopment projects. In
1999, he left the full time practice of law to become a developer, founding Firson Investment and
Development Company, LLC with Gerald W. Fogelson. From 1999 to 2001, Firson worked on the
development of several projects including the Central Station project in downtown Chicago, Illinois as
well as co- developing the LaGrange Triangle redevelopment project. Additionally, Mr. Firsel previously
acted as Special Consultant in Downtown Redevelopment for the Village of Palatine. In 2001, Mr. Firsel
came together with David Bossy to form Mid - America Development Partners, LLC which is currently
involved in numerous developments.
The Harlem Irving Companies, Inc.
The Harlem Irving Companies, Inc. ( "Harlem Irving ") brings more than 50 years of Chicago -area
retail development, management and leasing experience to the proposed Kendall Marketplace. Harlem
Irving is the 79 member of the International Council of Shopping Centers, established in 1957, which
currently has over 61,000 members. Harlem Irving's experience in facility planning and market
repositioning is best illustrated by its completed retail and residential projects including Harlem Irving
Plaza shopping center, one of Chicago's first major shopping centers.
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The Harlem Irving Companies' keen vision and effective management has enabled Harlem Irving
Plaza to be developed into over 650,000 square -feet of gross leasable facilities consisting of
approximately 125 tenants on its 21 -acre site. Other Chicago area developments Harlem Irving lists to its
credit are as follows:
Mixed Use
Lincoln Park Commons Chicago, IL
University Village * Chicago, IL
The Emerald ** Chicago, IL
Residential
The Cascades Condominiums Norridge, IL
Glenlake Condominiums Chicago, IL
Merrimac Square Condominiums Chicago, IL
River's Edge Condominiums Chicago, IL
Retail — Shovvina Centers
Dunning Square Chicago, IL
Ninth & North Avenue Melrose Park, IL
Twin Ponds Crystal Lake, IL
Northlake Commons Northlake, IL
Washington Square Chicago, IL
Patriot Marketplace Glenview, IL
Sutton Park Streamwood, IL
Charter Oaks Peoria, IL
Deerfield Depot Deerfield, IL
Hickory Creek Marketplace Frankfort, IL
Willowbrook Town Center ** Willowbrook, IL
119 & Cicero ** Alsip, II.,
* In 2002, the Chicago Sun Times honored University Village with the "City Development of the
Year" award.
** Currently being developed.
Harlem Irving currently manages 15 properties, including stand -alone outparcels, that encompass
approximately than 2.4 million square -feet of retail space. In addition to Kendall Marketplace, the
Company is currently developing approximately 400,000 square -feet of retail space in several other
shopping center developments, which it intends to manage upon completion of construction. Harlem
Irving has forged relationships with national and regional retailers such as Home Depot, Jewel/Osco,
Target, Kohl's, The Limited, Carson Pirie Scott, T.J. Maxx and Best Buy.
Michael Marchese is the Chief Executive Officer and President of The Harlem Irving
Companies, Inc., a company his father founded in 1954, which remains wholly owned by Mr. Marchese's
family today. In Mr. Marchese's 36 years of dedication to Harlem Irving, he has been instrumental in
formulating and implementing the company's growth and holdings. Current responsibilities as President
include actively managing all financial, leasing, development, marketing and operations efforts. Mr.
Marchese's involvement in various projects has been vital to the growth of Harlem Irving and the overall
success of the company.
Rick Filler is the Executive Vice President and Chief Operating Officer of the Harlem Irving
Companies. In this role, Mr. Filler oversees the entire development process and its staff. His scope of
24
I I
responsibility includes land purchase, negotiations of anchor tenant leases, financing and construction.
Over the past 23 years, Mr. Filler has cultivated a solid real estate background through his involvement in
various aspects of development including office space, enclosed retail centers, strip shopping centers,
high -end residential developments and golf course communities. Before arriving at The Harlem Irving
Companies, Mr. Filler held the title of Property Manager for RKKK Management, Lowry Development
Company and HSW Investments, Inc.
NF6 LLC managed by New Frontier Developments Co.
NF6 LLC is managed by New Frontier Developments Co. ( "New Frontier "). New Frontier is a
co- developer of retail centers in the Chicago area with The Harlem Irving Companies. Founded in 1975
by William F. Cellini and Lawrence Haddad, New Frontier plans and develops residential and
commercial real estate projects. New Frontier - related companies have constructed and currently manage
approximately two million square -feet of single and multi -tenant commercial properties for nationally
recognized businesses, agencies and institutions, including Ameritech and PacificCorp. The New
Frontier group of companies has twenty years of experience managing a portfolio of 17,500 residential
units, such as multi - family developments, luxury high -rise condominiums, and conventionally financed
housing, located throughout the United States.
THE CITY
The United City of Yorkville (the "City") was established in 1834, and has been the county seat
of Kendall County since 1859. It is located in northeastern Illinois on the Fox River approximately 45
miles southwest of Chicago. Nearby communities include Oswego, Bristol, Plano, Millbrook, Helmar,
Newark, Plattville, Montgomery, Sugar Grove and Plainfield. According to the 2000 Census, the City
had a population of 6,189. A special census in December of 2003 resulted in a population total of more
than 8,500. Subsequently, a special census completed in May of 2006 showed an increase in that total of
31.8% when the population increased to 11,204.
City Government and Services
The City follows a Mayor /City Council form of government in which the Mayor, Aldermen, City
Clerk and City Treasurer are each elected to a four -year term. The City Council is comprised of the
Mayor and eight Alderman (two Alderman elected from each of the City's four wards).
The City is served by the Bristol/Kendall Fire Protection District which carries a Protection Class
6. It maintains a 24 hour paramedics unit and is a member of the Mutual Aid Box Alarm System. The
Police Department employs twenty full -time officers, and emergency medical service is available 24
hours a day.
Transportation
The City is approximately 15 miles west of Interstate 55 (I -55); almost 20 miles north of
Interstate 80 (I -80); and nearly 12 miles south of Interstate 88 (I -88). Illinois Routes 47 and 34 intersect
the City.
O'Hare International Airport is approximately 40 miles northeast of the City and Midway Airport
is about 40 miles to the east in Chicago. Aurora Municipal Airport, approximately ten miles to the north
provides lighted runways and aircraft tiedowns, hangar, power plant repair, air frame repair and navigator
aids. Additionally it offers freight, charter and helicopter services.
The Burlington Northern Sante Fe Railroad in nearby Aurora provides commuter rail service.
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Yorkville Public Library
Yorkville Public Library (the "Library") serves the residents of the City and is a member of the
Heritage Trail Library System. The Library began as a "Reading Room" in the 1800's and was actively
used by the Yorkville Women's Club who in 1915 formally established it as a library. In 1965, the
Library was turned over to the City of Yorkville. Over the years, it has occupied three locations and has
had its growth funded through state programs, monetary gifts from businesses as well as individuals, and
volunteer labor. It has recently undergone improvements with the addition of a CD -ROM full -text
magazine index, and a referendum was passed in 2004 to authorize the sale of bonds to expand the
facility.
In addition to its extensive collection of books, Library resources include dial -a -story, local
history, newspapers, sheet music, audio books, large print books, paperbacks, magazines, and videos and
DVD's. Services available to the community are homebound service, interlibrary loan, kit for brothers
and sisters of new babies, kits for sick kids, loft meeting area, photocopier, computers, tax forms, talking
books, typewriter and voter registration. The Library offers the following online resources: animals and
the environment; arts and crafts; children's book and screen characters; children's books and stories
online; educational resources; exploration and museums; history and geography; holidays and
celebrations; literature online; math and science; music and poetry; reference tools and homework help;
space; and sports and recreation.
Community Life
The City contains approximately 60 acres of parks with picnic areas, a gazebo and recreational
fields. Programs offered include aerobics, basketball; bus trips, bowling, Country/Westem dance, crafts,
dance, fishing, golf, soccer, sports club, street hockey, tee ball, tennis and tumbling. Residents also enjoy
a golf course and forest preserves which are nearby but outside the City boundaries.
Medical services are available at Rush/Copley Medical Center and Provena -Mercy Center, both
located in Aurora. Additional facilities are provided by Sandwich Community Hospital in Sandwich,
Illinois. These institutions are about fifteen miles from the City.
Education
Community Unit School District Number 115 (the "District") meets the elementary and
secondary educational requirements of the City with two elementary schools, one junior high school and
one high school. The District has a staff of approximately 200 teachers and administrators and
approximately 3,200 students. The District has implemented a new computer curriculum, innovative
interdisciplinary projects and advanced team building and support programs for students and staff.
Higher education opportunities are offered by Aurora University in nearby Aurora and Northern Illinois
University in DeKalb.
In addition, Waubonsee Community College District No. 516 (the "College ") offers a wide
variety of transfer, vocational, continuing and community education, children's and corporate
development and training classes. It has 24 programs designed for transfer to senior institutions, and also
offers occupational- oriented programs ranging in length from one semester to two years. The College
recently opened a state -of -the -art academic computing center that houses eight classrooms and a 120
personal computer work station open lab.
26
Socioeconomic Information
Following are lists of large employers located in the City and in the surrounding area.
Major City Employers(l)
Approximate
Name Product/Service Employment
Wrigley Manufacturing Co., LLC Sugar Confections, Bubble Gum, & Candy 400
XPAC Tractor Radiators and Engines 150
Newly Weds Foods Food Seasonings, Cures and Binders 115
Brenart Eye Clinic Eyeglasses 50
Cascade Water Works Mfg. Co., Inc. Sewer & Piping Systems Repair Products 40
C.J. Insulation, Inc. Insulation Installation 40
Alpha Precision, Inc. Photographic Equipment & Supplies 28
G.H. Haws & Assocs. Plastic Molding arts 25
Meadowvale, Inc. Ice Cream, Custard, Soft Serve and Shake Mixes 20
Note: (1) Source: 2006 Illinois Manufacturers Directory, 2006 Illinois Services Directory and a selective
telephone survey.
Major Area Employers(l)
Approximate
Location Name Business or Product Employment
Sugar Grove Waubonsee Community College #516 Education 750
Oswego Coldwell Banker Primus Realty Residential Real Estate 550
Montgomery Lyons Workspace Products, LLC Steel Storage Equipment 400
Plainfield CB &I Constructors, Inc. Elevated Water Storage Tanks, Pressure Vessels 400
Montgomery Eby -Brown Co. Wholesale Tobacco & Confectionery 400
Montgomery The Dial Corp. Soap, Glycerin, & Fatty Acids 400
Montgomery Fox River Foods Inc. Wholesale Food 340
Plainfield CB &I Constructors, Inc. Storage Tank Insulation Equipment _ 300
Montgomery Processed Plastic Co. Plastic Toys 300
Plain Van Drunen & Sons. Inc. R.J. Corporate Headquarter, Freeze -Dried Herbs 200
Plainfield Diageo North American, Inc. Gin & Vodka Distilling 200
Plainfield R.A. Bright Construction, Inc. Concrete, Excavating, Underground Utilities 200
Plainfield Flexi -Mat Corp. Foam Rubber & Sponge Pillows 180
Plainfield Fox Valley Press Newspaper Printing 170
Plano Fox Valley Molding, Inc. Compression Transfer & Injection Molding 150
Plano Plano Molding Co. Plastic Injection Molding Headquarters 150
Oswego Radiac Abrasives, Inc. Diamond Grinding Wheels 150
Montgomery Weyerhaeuser Co. Corrugated Cartons 150
Note: (1) Source: 2006 Illinois Manufacturers Directory, 2006 Illinois Services Directory and a
selective telephone survey.
The following tables show employment by industry and by occupation for the City, Kendall
County (the "County ") and the State of Illinois (the "State ") as reported by the 2000 Census.
27
Employment By Industry(])
The City The Countv The State
Classification Number Percent Number Percent Number Percent
Agriculture, Forestry, Fishing, Hunting, and Mining........... 47 1.45% 380 1.32% 66,481 1.14%
Construction .......................................... ............................... 332 10.23% 2,586 8.97% 334,176 5.73%
Manufacturing ....................................... ............................... 564 17.38% 5,337 18.50% 931,162 15.96%
Wholesale Trade .................................... ............................... 145 4.47% 1,187 4.12% 222,990 3.82%
Retail Trade ........................................... ............................... 434 13.37% 3,416 11.84% 643,472 11.03%
Transportation and Warehousing, and Utilities .................... 201 6.19% 1,657 5.75% 352,193 6.04%
Information ............................................ ............................... 67 2.06% 774 2.68% 172,629 2.96%
Finance, Insurance, Real Estate, and Rental and Leasing .... 216 6.65% 2,463 8.54% 462,169 7.92%
Professional, Scientific, Management, Administrative,
and Waste Management Services ......... ............................... 287 8.84% 2,369 8.21% 590,913 10.13%
Educational Health and Social Services .............................. 443 13.65% 4,691 16.26% 1,131,987 19.41%
Entertainment and Recreation Services, Accommodation
and Food Services ................................ ............................... 244 7.52% 1,740 6.03% 417,406 7.16%
Other Services (except Public Administration) .................... 118 3.64% 1,246 4.32% 275,901 4.73%
Public Administration ............................ ............................... 148 4.56% 996 3.45% 231.706 3.97%
Total .......................... ............................... ..........................3,246 100.00% 28,842 100.00% 5,833,185 100.00%
Note: (1) Source: U. S. Bureau of the Census.
Employment By Occupation(])
The Citv The County The State
Classification Number Percent Number Percent Number Percent
Management and Professional ............... ............................... 1,140 35.12% 9,817 34.04% 1,993,671 34.18%
Service Occupations .............................. ............................... 416 12.82% 3,216 11.15% 813,479 13.95%
Sales and Office Occupations ................ ............................... 858 26.43% 8,310 28.81% 1,609,939 27.60%
Farming, Forestry and Fishing .............. ............................... 0 0.00% 66 0.23% 17,862 0.31%
Construction, Extraction, and Maintenance .......................... 300 9.24% 2,997 10.39% - 480,41$- 8.24%
Production, Transportation, and Material Moving ............... 532 16.39% 4.436 15.38% 917.816 15.73%
Total .......................... ............................... ..........................3,246 100.00% 28,842 100.00% 5,833,185 100.00%
Note: (1) Source: U.S. Bureau of the Census.
Annual Average Unemployment Rates(l)
Calendar The The The
Year 9!Y_ Coun State
1996 .....................5.9% 3.9% 5.3%
1997 .....................4.7% 3.1% 4.7%
1998. * ................... 4.3% 2.9% 4.5%
1999.....................4.1% 2.8% 4.3%
2000 .....................2.1% 2.8% 4.4%
2001. .............. 2.8% 4.0% 5.4%
2002.* ... *** ............. 3.6% 5.6% 7.1%
2003.** .... ** ............ 3.6% 6.0% 6.7%
2004.***** ............. 3.4% 5.0% 6.2%
2005 .....................3.2% 5.2% 5.7%
2006(2) ................ N/A 4.1% 5.0%
Notes: (1) Illinois Department of
Employment Security.
(2) Preliminary rates for the month
of April 2006.
Housing
The 2000 Census reported that the median value of the City's owner - occupied homes was
$157,700, which compares with $154,900 for the County and $130,800 for the State. The 2000 market
28
value of specified owner - occupied units for the City, the County and the State was as follows:
Specified Owner - Occupied Units(1)
The Citv The Countv The State
Value Number Percent Number Percent Number Percent
Less than $50,000 ............. 0 0.00% 93 0.65% 230,049 9.31%
$50,000 to $99,999 ........... 150 9.35% 1,137 7.90 /0 651,605 26.38%
0 0 i
$100,000 to $149,999....... 520 32.40% 5,485 38.12% 583,409 23.62%
$150,000 to $199,999 ....... 657 40.93% 4,168 28.97% 429,311 17.38%
$200,000 to $299,999 ....... 260 16.20% 2,873 19.97% 344,651 13.95%
$300,000 to $499,999 ....... 18 1.12% 492 3.42% 163,254 6.61%
$500,000 to $999,999 ....... 0 0.00% 128 0.89% 55,673 2.25%
$1,000,000 or more........... 0 0.00% 12 0.08% 12,386 0.50%
Total ...... ..........................1,605 100.00% 14,388 100.00% 2,470,338 100.00%
Note: (1) Source: U.S. Bureau of the Census.
Income
Per Capita Personal Income
for the Ten Highest Income Counties in the State(1)
Rank 2000
1 ........................ ...........................Lake County ......................... $32,102
2 .......................... .........................DuPage County .................... 31,315
3 :......................... ....:....................McHenry County ................. 26
4 ........................... ........................Kendall County.................. 25,188
5 .................... ............................... Will County .......................... 24,613
6 ....................... ............................Kane County ........................ 24,315
7 ........................ ...........................Cook County ........................ 23,227
8 .................... ............................... Sangamon County ................ 23,173
9 .......................... .........................Monroe County .................... 22,954
10 ........................ .........................Grundy County .................... 22,591
Note: (1) Source: U.S. Bureau of the Census.
29
The following shows a ranking of median family income for the Chicago metropolitan area
among 102 Illinois counties from the 2000 Census.
Ranking of Median Family Income ffl
Ill. Family Ill.
Coun Income Rank
DuPage County ................ $79,314 1
Lake County ..................... 76,424 2
McHenry County .............. 71,553 3
Will County ...................... 69,608 4
Kendall County .............. 69,383 5
Kane County .................... 66,558 6
Cook County .................... 53,784 14
Note: (1) Source: U.S.
Bureau of the Census.
According to the 2000 Census, the City had a median family income of $67,521. This compares
to $69,383 for the County and $55,545 for the State. The following table represents the distribution of
family incomes for the City, the County and the State at the time of the 2000 Census.
Median Family Income(1)
The Citv The Countv The State
Income Number Percent Number Percent Number Percent
Under $10,000 .................. 7 0.42% 117 0.78% 156,205 5.00%
$10,000 to $14,999 ........... 0 0.00% 169 1.13% 105,747 3.38%
$15,000 to $24,999 ........... 79 4.79% 609 4.07% 273,712 8.76%
$25,000 to $34,999 ........... 131 7.94% 966 6.45% 331,907 10.62%
$35,000 to $49,999 ........... 284 17.21% 2,226 14.86% 506,429 16.20%
$50,000 to $74,999 ........... 536 32.48% 4,492 29.99% 736,897 23.58%
$75,000 to $99,999 ........... 328 19.88% 3,215 21.46% 445,390 14.25%
$100,000 to $149,999....... 206 12.48% 2,372 15.84% 356,068 11.39%
$150,000 to $199,999....... 35 2.12% 506 3.38% 101,955 3.26%
$200,000 or more .............. 44 2.67% 306 2.04% 111.008 3.55%
Total . ............................... 1,650 100.00% 14,978 100.00% 3,125,318 100.00%
Note: (1) Source: U.S. Bureau of the Census.
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According to the 2000 Census, the City had a median household income of $60,391. This
compares to $64,625 for the County and $46,590 for the State. The following table represents the
distribution of household incomes for the City, the County and the State at the time of the 2000 Census.
Median Household Income(])
The Citv The County The State
Income Number Percent Number Percent Number Percent
Under $10,000 .................. 70 3.10% 435 2.32% 383,299 8.35%
$10,000 to $14,999 ........... 54 2.39% 378 2.01% 252,485 5.50%
$15,000 to $24,999 ........... 175 7.76% 1,308 6.96% 517,812 11.27%
$25,000 to $34,999 ........... 193 8.55% 1,553 8.27% 545,962 11.89%
$35,000 to $49,999 ........... 405 17.95% 2,771 14.75% 745,180 16.23%
$50,000 to $74,999 ........... 652 28.90% 5,234 27.86% 952,940 20.75%
$75,000 to $99,999 ........... 382 16.93% 3,635 19.35% 531,760 11.58%
$100,000 to $149,999 ....... 246 10.90% 2,567 13.66% 415,348 9.04%
$150,000 to $199,999 ....... 35 1.55% 563 3.00% 119,056 2.59%
$200,000 or more .............. 44 1.95% 345 1.84% 128.898 2.81%
Total ...... ..........................2,256 100.00% 18,789 .100.00% 4,592,740 100.00%
Note: (1) Source: U.S. Bureau of the Census.
Wealth Indicators
The private publication "Sales & Marketing Management" has developed a wealth indicator
termed "effective buying income" (EBI) defined as money income less personal tax and non -tax
payments, which is considered by the publication to be a bulk measurement of market potential. At
December 31, 2004 (the latest data available), the County reportedly had a total EBI of $1,603,723,000
and a median household EBI of $55,275. The trend in median household EBI relative to the State and
Kendall County, is shown below. Data for the City is not available.
Effective Buying Income(])
2000 2001 2002 2003 2004
Kendall County $53,508 $52,516 $55,183 $55,290 $55,275
State of Illinois 45,381 41.976 40,780 41,216 42,182
County as Percent of State 117.91% 125.11% 135.32% 134.15% 131.04%
Note: (1) Source: "Sales & Marketing Management'.
31
Retail Activity
Following is a summary of the City's sales tax receipts as collected and disbursed by the State.
Retailers' Occupation, Service Occupation and Use Tax(1)
State Fiscal Year State Sales Tax Annual Percent
Ending June 30 Distributi6ns(2) Change + ( -)
1996 $ 472,289 6.58 %(3)
1997 453,818 (3.91 %)
1998 850,072 87.32%
1999 936,217 10.13%
2000 1,024,813 9.46%
2001 1,003,021 (2.13 %)
2002 1,203,279 19.98%
2003 1,558,831 29.55%
2004 1,982,218 27.16%
2005 2,320,546 17.07%
2006 2,649,888 14.19%
Growth from 1996 to 2005 423.66%
Notes: (1) Source: Illinois Department of Revenue.
(2) Tax distributions are based on records of the Illinois
Department of Revenue relating to the 1% municipal
portion of the Retailers' Occupation, Service Occupation
and Use Tax, collected on behalf of the City; less a State
administration fee. The municipal 1% includes tax
receipts from the sale of food and drugs which are not
taxed by the State.
(3) The 1996 percentage is based on a 1995 sales tax of $443,140.
I
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32
IC I
THE BUSINESS DISTRICT AND LOCAL SALES TAXES
The Business District Act
The Illinois Business District Act, 65 ILCS 5/11- 74.3 -1 et seq., permits an Illinois municipality to
create and maintain business districts to provide opportunities for development or redevelopment and to
attract sound and stable commercial development. The corporate authorities of a municipality may
designate an area of the municipality as a business district. The business district should conform with a
comprehensive plan of the municipality and a specific plan for business districts officially approved by
the corporate authorities of the municipality after public hearings.
In carrying out a business district development or redevelopment plan, the corporate authorities of
a municipality has the power, among other things, to borrow funds as it may be deemed necessary for the
purpose of business district development and redevelopment, and issue such obligation or revenue bonds
as it deems necessary, subject to applicable statutory limitations. A municipality may issue obligations in
one or more series bearing interest at rates determined by the corporate authorities of the municipality by
ordinance and secured by the business district tax allocation fund created under the Business District Act
for the business district to provide for the payment of business district project costs.
Obligations issued pursuant to the Business District Act shall be retired in the manner provided in
the ordinance authorizing the issuance of those obligations by amounts held in the business district tax
allocation fund as authorized in the Business District Act. The ordinance shall pledge all of the amounts
in and to be deposited in the business district tax allocation fund to the payment of business district
project costs and obligations. Obligations issued pursuant to the Business District Act may be sold at
public or private sale at a price determined by the corporate authorities of the municipality and no
referendum approval of the electors shall be required as a condition to the issuance of those obligations.
The corporate authorities of the municipality may also issue its obligations to refund, in whole or in part,
obligations previously issued by the municipality, whether at or prior to maturity. All obligations issued
pursuant to the Business District Act shall not be regarded as indebtedness of the municipality issuing the
obligations for the purpose of any limitation imposed by law.
When business district costs have been paid, any surplus funds then remaining in the Business
District Tax Allocation Fund shall be distributed to the municipal treasurer for deposit into the municipal
general corporate fund.
The Series 2007 Bonds have been authorized by the City under the Business District Act and the
City has pledged under the Debt Act the Pledged Revenues to pay principal of and interest on the Series
2007 Bonds. In accordance with the Business District Act, the City has agreed to deposit the Pledged
Revenue in the Local Sales Tax Account of the Business District Tax Allocation Fund for purposes of
paying principal of and interest on the Series 2007 Bonds.
Designation of the Business District
Pursuant to a notice published in the Aurora Beacon News and the Kendall Countv Record on
September 30, 2006, and October 5, 2006, respectively, public hearings were held on October 17, 2006,
and October 24, 2006 to consider the designation of the Business District. On 2006, the City
Board adopted Ordinance No. 2006 -_ (the "Designating Ordinance "), which designated the Business
District and approved the plan for the development of the Business District prepared by Elhers &
Associates, Inc. The City will file the Designating Ordinance with the Illinois Department of Revenue on
or before April 1, 2007.
33
Local Sales Taxes
The Series 2007 Bonds will be secured and payable solely from the Revenues, which will be
principally made up of the Pledged Revenue. The Pledged Revenue consist of Local Sales Taxes, which
are 50% of the City's allocated share of the retailers' and service occupation sales taxes described below
(collectively, the "State Sales Taxes "):
Illinois Retailers' Occupation Tax. This tax is imposed by the State at the rate of 6.25 percent on
the sale of most items of nontitled tangible personal property by retailers, other than grocery food, drugs
and medical appliances. The City will receive 16 percent of the net receipts of this tax attributable to
sales occurring in the Business District. The City will receive 100 percent of the net receipts of this tax
imposed by the State at the rate of one percent on the sale of grocery food, drugs and medical appliances
by retailers in the Business District.
Illinois Service Occupation Tax. This tax is imposed by the State at the rate of 6.25 percent on
the sale of most items of nontitled tangible personal property by service providers, other than grocery
good, drugs and medical appliances. The City will receive 16 percent of the net receipts of this tax
attributable to sales occurring in the Business District. The City receives 100 percent of the net receipts
of this tax imposed by the State at the rate of one percent on the sale of grocery food, drugs and medical
appliances by service providers in the City.
The City will receive the Local Sale Taxes without annual appropriation by the Illinois General
Assembly. Any change in the tax rate or amount of net tax receipts allocated by the City constituting the
Local Sales Taxes would require the enactment of legislation by the Illinois General Assembly. See
"RISK FACTORS — Risk of Legislative and Judicial Changes."
Collection of Local Sales Taxes
The Local Sales Taxes, and all civil penalties that may be assessed as an incident thereof, are
collected and enforced by the Illinois Department of Revenue. The Department of Revenue has full
power to collect all Local Sales Taxes and penalties due within the Business District. The Department
shall immediately pay over to the State Treasurer, ex officio, as trustee, all Local Sales Taxes, penalties,
and interest collected within the Business District for deposit into the Local Government Tax Fund. On or
before the 25th day of each calendar month, the Department shall prepare and certify to the Comptroller
the disbursement of stated sums of money to named municipalities from the Local Government Tax Fund,
the municipalities to be those from which retailers have paid sales taxes or penalties to the Department
during the second preceding calendar month. The amount to be paid to each municipality shall be the
amount (not including credit memoranda) collected during the second preceding calendar month by the
Department. The proceeds of the sales taxes paid to municipalities shall be deposited into funds
maintained by or on behalf of the municipality.
RISK FACTORS
Investment in the Series 2007 Bonds involves risks which may not be appropriate for certain
investors. The following is a discussion of certain risk factors which should be considered, in addition to
other matters set forth in this Limited Offering Memorandum, in evaluating the Series 2007 Bonds which
are not rated by a recognized rating agency. This discussion does not purport to be comprehensive or
definitive. The occurrence of one or more of the events discussed herein could adversely affect the ability
to generate sufficient Pledged Revenue to make full and punctual payments of debt service on the Series
34
2007 Bonds. In addition, the occurrence of one or more of the events discussed herein could adversely
affect the value of the property in the Business District.
Limited Source of Funds
The Series 2007 Bonds, together with the interest thereon, are limited obligations of the City,
payable solely from the Revenues and the amounts on deposit in the various funds and accounts
established and maintained under the Trust Indenture, all as more fully set forth therein. The Series 2007
Bonds are not general obligations of the City and do not constitute an indebtedness of the City within the
meaning of any constitutional or statutory limitation. No holder of the Series 2007 Bonds shall have the
right to compel the exercise of any taxing power of the City for payment of principal thereof or interest or
premium, if any, thereon (other than the pledge of the Pledged Revenue and as provided in the Bond
Ordinance and the Trust Indenture). See "SECURITY AND SOURCE OF PAYMENT FOR THE
SERIES 2007 BONDS — General" herein.
Failure to Sell or Lease Properly to Retailers
The Developer currently intends to develop the Project as set forth in this Limited Offering
Memorandum and expects to enter into land sales or leases with a variety of retailers prior to completion
of the Project. A slowdown or stoppage in the continued development and sale or leasing of the Project by
the Developer could reduce the amount of Pledged Revenue generated in the Business. Such reduction
could result in the reduction of Revenues, leading to a default in payments of the principal of, and interest
on, the Series 2007 Bonds. See "THE PROJECT."
Information Not Verified
Information concerning the Project and the proposed development has been obtained from the
City, the Developer and other sources believed to be reliable, but much of that information involves
predictions of future events, such as leasing and development activity; such information is, by its nature,
not subject to verification.
Failure to Develop Properties
Development of land is subject to economic considerations affecting the Developer and
prospective purchasers of developed property including interest rates and the general economic climate of
the region surrounding the Business District. The failure to complete development of the required
infrastructure or substantial delays in the completion of the Project due to litigation or the inability to
obtain required funding may affect the completion of the Project. See "SUMMARY OF THE PROJECT."
The City may terminate the Development Agreement if the Developer does not comply with its terms and
provisions. There can be no assurance that the Developer will comply with the terms of the Development
Agreement or that the City will not terminate such agreement if the Developer fails to comply with its
terms. See "SUMMARY OF THE DEVELOPMENT AGREEMENT."
Risk of Construction
The generation of Local Sales Taxes is dependant upon the completion of the Project. Delays in
the construction of the retail stores and the delay in opening the retail stores could adversely affect the
generation of Local Sales Taxes. Construction delays could occur for reasons outside the control of the
Developer such as material or labor shortages.
35
Risk of Occupancy
There is no assurance that sale or leasing of the retail space within the Business District will
achieve or maintain the projected occupancy as set forth in the Sales Tax Revenue Projections included as
APPENDIX C. There are anticipated to be numerous small tenants in the Business District with various
lease terms and various provisions in their leases, and there can be no assurance that, when a lease expires
or is terminated for any reason, the lease will be extended or that the tenant's space will be re- leased. A
failure to re -lease space could adversely affect the Local Sales Taxes generated from the Business
District.
Risk of Changes in Market Conditions, Economic Conditions, Future Competition and Tax Rates
Sales by the stores in the Business District, and the subsequent generation of Local Sales Taxes,
could be significantly impaired as a result of changes in market conditions, changes in general economic
conditions and competition from existing facilities or facilities developed in the future.
Increases in sales tax rates in the City or Business District may create incentives for certain
purchases to be made in jurisdictions with lower overall sales tax rates. As a result, increasing sales tax
rates may not result in a corresponding percentage increase in revenues, and may prompt certain
commercial and industrial activities to relocate to jurisdictions with lower sales tax rates.
Risk of Natural Disaster
In the event of a natural disaster severely damaging the facilities in the Business District, there
can be no assurance that such facilities will be rebuilt. In such case, generation of Local Sales Taxes
would be adversely affected.
Risk of Anchor Purchase Agreement Terminations or Discontinued Operations
The generation of Local Sales Taxes could be significantly impaired if any one or more of the
anchor tenants within the Business District terminates its purchase agreement and is not replaced by a
comparable tenant. Certain leases grant certain mid -size retail tenants the right to terminate their
respective leases under a number of different conditions. In addition, tenants may have the right to
terminate their respective leases in the event of fire or other casualty, condemnation, a breach by the
landlord of its obligations under the lease, or .the existence of hazardous wastes not caused by the tenant.
The bankruptcy or insolvency of any tenant may also result in the termination of such tenant's lease.
There can be no assurance that any of the circumstances under which any one or more of the leases will or
may be terminated will not occur.
No assurance can be given that Target, Home Depot, and Kohl's or other owners of retail
property within the Business District will open or continue to operate viable retail stores in the Business
District or be viable businesses. In such case, the availability of Pledged Revenue could be negatively
affected.
Failure to Achieve Pledged Revenue Projections
The Pledged Revenue Projections prepared by Ehlers & Associates, Inc, attached as APPENDIX
C, are based upon certain information provided by the Developer and market trends in the area around the
City. While Ehlers & Associates believed that the assumptions with respect to market conditions were
accurate, there can be no assurances that such a level of performance can be obtained. No representation
or warranty is or can be made about the amount or timing of any future income, loss, occupancy,
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valuation, increased assessment or revenues, or that actual results will be consistent with the Ehlers &
Associates' report or with the forecasts contained therein. There is no assurance that actual events will
correspond with the projections or the assumptions, estimates and/or the opinions on which they are
based. See "PROJECTIONS" and "APPENDIX C — Sales Taxes Revenue Projections — Conditions of
Findings & Potential Risks."
Local, State and Federal Land Use Regulations
There can be no assurance that land development operations within the Business District will not
be adversely affected by future government policies, including, but not limited to, governmental policies
which directly or indirectly restrict or control development. The Development Agreement cannot limit the
application of state or federal laws and regulations which have preemptive effect on local land use
regulations. During the past several years, state and federal regulatory agencies have significantly
expanded their involvement in local land use matters through increased regulatory enforcement of various
environmental laws, including the Endangered Species Act, the Clean Water Act and the Clean Air Act,
among others. Such regulations can substantially impair the rate and amount of development without
requiring just compensation unless the effect of the regulation is to deny all economic use of the affected
property. Bond owners should assume that any event that significantly impairs the ability to develop land
in the Business District could cause a substantial reduction in the amount of the Pledged Revenue
generated within the Business District and could reduce the Revenues available to pay principal and
interest on the Series 2007 Bonds. See "RISK FACTORS - Failure to Develop Properties" herein.
Land Development Costs
Development of land within the Business District is contingent upon construction or acquisition
of major Project such as arterial streets, water distribution facilities, sewage collection and transmission
facilities, drainage and flood protection facilities, gas, telephone, other communication and electrical
facilities, and lighting, as well as local in -tract improvements and on -site grading and related
improvements. There can be no assurance that the Project will be constructed or will be constructed in
time for development to proceed as currently expected. See "SUMMARY OF THE PROJECT."
Zoning Approvals and Building Permits
Pursuant to the City Zoning Ordinance, any outstanding approvals within the Business District
involve, to a certain degree, the exercise of discretion on the part of the City.
The Developer has not received or applied for all building permits necessary to construct the
Project. Failure to obtain the necessary permits on a timely basis could adversely affect the completion of
the Project. For example, the Developer has not received approval from the Illinois Department of
Transportation ( "IDOT ") to develop the proposed access roads to the Project. Failure to receive IDOT
approval on timely basis, if at all, could adversely effect traffic flow to the Project and negatively impact
the success of the retail operations within the Project.
Tax Revenues
Local Sales Taxes are contingent upon and the amount generated will be affected by a variety of
factors, including the following: economic conditions within the City and the Chicago metropolitan area;
suitability of the Project for the local market; completion of the Project; availability of access to roadway
transportation; and interruption or termination of operation of the Project as a result of fire, natural
disaster, strikes or similar events, among many other factors. As a result, it is not possible to predict with
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any amount of certainty the amount of Revenues which will be available in each Bond Year to pay the
scheduled principal and interest on the Series 2007 Bonds and for any optional or mandatory redemption.
The retail sales industry is highly competitive. Retail business outside of the Project, which is
currently existing or which is developed after the date of this Limited Offering Memorandum will be
competitive with business in the Project and could have an adverse impact on the available amount of
Revenues generated within the Project. In future years, it is expected that increasing numbers of sales
transactions will take place over the Internet. If these Internet sales are not treated, for sales tax purposes,
comparably to, or if they displace, the types of transactions where sales taxes currently are collected, tax
collections may be adversely affected.
State Sales Taxes are imposed on sales of tangible personal property for use or consumption.
Tangible personal property does not include real estate, stocks, bonds, or other "paper" assets
representing an interest. Certain businesses, such as banks and finance companies, do not collect State
Sales Taxes. To the extent the Developer leases or sells retail sites in Project to these types of businesses,
the amount of Local Sales Taxes would be less than if the sites were occupied by seller of tangible
personal property for use or consumption.
Bankruptcy
The various legal opinions to be delivered concurrently with the delivery of the Series 2007
Bonds (including Bond Counsel's approving legal opinion) will be qualified, as to the enforceability of
the various legal instruments, by moratorium, bankruptcy, reorganization, insolvency, fraudulent transfer
or conveyance, or other similar laws affecting the rights of creditors generally.
Limitation on Remedies; No Acceleration
Remedies available to holders of the Series 2007 Bonds may be limited by a variety of factors
and may be inadequate to assure the timely payment of principal of and interest on the Series 2007 Bonds,
or to preserve the tax- exempt status of the Series 2007 Bonds. Bond Counsel has limited its opinions to
the extent that enforceability may be limited by moratorium, bankruptcy, reorganization, insolvency,
fraudulent transfer and conveyance, or other similar laws affecting the rights of creditors generally.
Additionally, the Series 2007 Bonds are not subject to acceleration in the event of the breach of any
covenant or duty under the Trust Indenture, including payment default. Lack of remedies may entail risks
of delay, limitation, or modification of the rights of the holders of the Series 2007 Bonds. Judicial
remedies, such as foreclosure and enforcement of covenants, are subject to exercise of judicial discretion.
Limited Secondary Market
There can be no guarantee that there will be a secondary market for the Series 2007 Bonds or, if a
secondary market exists, that such Series 2007 Bonds can be sold for any particular price. The City and
the Developer have committed to provide limited financial and/or operating information on a going
forward basis other than as described under "CONTINUING INFORMATION." Occasionally, because of
general market conditions, lack of current information, the absence of a credit rating for the Series 2007
Bonds or because of adverse history or economic prospects connected with a particular issue, secondary
marketing practices in connection with a particular issue are suspended or terminated. In addition, prices
of issues for which a market is being made will depend on then prevailing circumstances. Such prices
could be substantially different from the original purchase price.
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Secondary Market and Prices
The Underwriter presently does not intend to engage in secondary market trading of the Series
2007 Bonds. The Underwriter is not obligated to engage in secondary trading or to repurchase any of the
Series 2007 Bonds at the request of the owners thereof. No assurance can be given that a secondary
market for any of the Series 2007 Bonds will be available and no assurance can be given that the initial
offering prices for the Series 2007 Bonds will continue for any period of time.
Loss of Tax Exemption
Interest on the Series 2007 Bonds could become includible in gross income for federal income tax
purposes retroactive to the date of issuance of the Series 2007 Bonds as a result of a failure of the City to
comply with certain provisions of the Code. Should such an event of taxability occur, the Series 2007
Bonds are not subject to early redemption and will remain outstanding to maturity or until redeemed
under the optional redemption or mandatory redemption provisions of the Trust Indenture.
Risk of Legislative and Judicial Changes
The Illinois General Assembly has the authority to amend the provisions of State law governing
State Sales Taxes. Changes to the tax base and exemptions could adversely affect the amount of Local
Sales Taxes received by the City. Changes in the rates and allocation formula of the State Sales Taxes
could also adversely affect the amount of Local Sales Taxes received by the City.
If the State changes its real property tax system or its method of funding public education, it is
possible that revisions could be made to the rates and allocation of State Sales Taxes. It is not possible to
predict whether or in what form any such revisions will be enacted or if any such revisions would result in
a reduction in the Local Sales Taxes.
Future legislation, regulations, governmental or judicial interpretation of regulations or legislation
or practices and procedures related to business districts or State Sales Tax assessment, application,
collections, reporting or distribution could have a material effect on the calculation or availability of the
Pledged Revenue. There is no assurance that legislation will not be considered or enacted in the future
that may repeal or otherwise adversely affect the Pledged Revenue received by the City, and unless
provision is made in such legislation, the generation of the Pledged Revenue could be materially
adversely affected. There can be no assurance that business districts or the current system of reporting,
collection and distribution of Pledged Revenue will not be changed by any competent authority having
jurisdiction to do so, including, without limitation, the State, the City, the courts or the voters.
Reporting Requirements
The collection of the Local Sales Taxes is dependent upon reports from third parties, such as
businesses within the Business District and the Department of Revenue of the State of Illinois. While the
City and the Developer have undertaken certain reporting requirements pursuant to the Development
Agreement, no assurances can be made that third parties will provide Pledged Revenue reports to the City
in an accurate and timely manner.
PROJECTIONS
The Pledged Revenue Projections prepared with respect to the Project by Ehlers & Associates,
Inc., are attached to this Limited Offering Memorandum as APPENDIX C. The report sets forth Ehlers'
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projections of the Pledged Revenue to be available for payment of principal of and interest on the Bonds,
as well as the assumptions upon which the projections are based. The report also includes a number of
limiting conditions and potential risks associated with those projections. No assurance can be given that
the projections, or the assumptions upon which they are based, will be prove accurate.
The projections included in the Ehlers' report are forward- looking statements and predictions and
are not guarantees of result or performance. These statements are based on beliefs and assumptions,
which in turn are based on currently available information. These beliefs and assumptions could prove
inaccurate. Accordingly, actual outcomes could differ materially from those contained in Ehlers' report.
None of the Village, the Developer or the Underwriter has independently verified the projections
or tested the assumptions contained in Ehlers' report.
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UNDERWRITING
The Underwriter has agreed, subject to certain customary conditions precedent to closing, to use
its best efforts to offer for sale and to sell at par all, but not less than all, of the Series 2007 Bonds. The
Underwriter will receive an Underwriter's discount equal to _% of the issued amount of the Series
2007 Bonds ($ ) in consideration of their services. The Series 2007 Bonds may be offered
and sold to certain dealers and others at prices lower than the initial public offering price, and such public
offering price may be changed, from time to time, without notice by the Underwriters.
LEUITED OFFERING
The Bonds are being offered only to a limited number (35 or less) of sophisticated investors.
Each prospective purchaser of the Bonds is being furnished a copy of this Limited Offering
Memorandum, together with any supplements to this Limited Offering Memorandum. In addition, each
prospective purchaser is hereby offered the opportunity, prior to purchasing any Bonds and at any time
the Bonds are outstanding, to ask questions of, and receive answers from the Underwriter, the City and
the Developer concerning the terms and conditions of the offering, and to obtain any additional relevant
information, to the extent either possesses the same or can acquire it without unreasonable effort or
expense. Inquiries concerning additional information should be directed in writing to the Underwriter at
William Blair & Company, L.L.C., 222 W. Adams St., Chicago, Illinois 60606, Attention: Municipal
Bond Department.
LEGAL OPINIONS
Legal matters incident to the authorization, issuance and sale of the Series 2007 Bonds are subject
to the approving legal opinion of Foley & Lardner LLP, Chicago, Illinois, Bond Counsel. The proposed
form of the opinion of Bond Counsel is included herein as Appendix D. Certain legal matters will be
passed upon for the Underwriter by its counsel, Sonnenschein Nath & Rosenthal LLP, Chicago, Illinois;
for the City, by its counsel, John Wyeth Esq., Yorkville, Illinois, and for the Developer by its special
counsel, Polsky & Associates Ltd., Chicago, Illinois.
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TAX EXEMPTION
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In the opinion of Foley & Lardner LLP, Bond Counsel, based upon an analysis of existing laws,
regulations, rulings and court decisions, and assuming, among other matters, compliance with certain
covenants, interest on the Series 2007 Bonds is excluded from gross income for federal income tax
purposes under the Code and is not a specific preference item for purposes of determining an individual's
or corporation's federal alternative minimum taxable income. However, Bond Counsel observes that
interest on the Series 2007 Bonds is included in adjusted current earnings in calculating federal corporate
alternative minimum taxable income. Interest on the Series 2007 Bonds is not exempt from State of
Illinois income taxes.
Series 2007 Bonds purchased, whether at original issuance or otherwise, for an amount greater
than their principal amount payable at maturity (or, in some cases, at their earlier call date) ( "Premium
Bonds ") will be treated as having amortizable bond premium. No deduction is allowable for the
amortizable bond premium in the case of bonds, like the Premium Bonds, the interest on which is
excluded from gross income for federal income tax purposes. However, the amount of tax exempt
interest received, and a purchaser's basis in a Premium Bond, will be reduced by the amount of
amortizable bond premium properly allocable to such purchaser. Thus, the amortization of Bond
premium may have an effect on a bondholder's recognition of gain or loss when a Premium Bond is sold
or paid off. Beneficial Owners of Premium Bonds should consult their own tax advisors with respect to
the proper treatment of amortizable bond premium in their particular circumstances.
To the extent the issue price of any maturity of the Series 2007 Bonds is less than the amount to
be paid at maturity of such Series 2007 Bonds (excluding amounts stated to be interest and payable at
least annually over the term of such Series 2007 Bonds), the difference constitutes "original issue
discount," the accrual of which, to the extent properly allocable to each Bondholder, is treated as interest
on the Series 2007 Bonds which is excluded from gross income for federal income tax purposes. For this
purpose, the issue price of a particular maturity of the Series 2007 Bonds is the first price at which a
substantial amount of such maturity of the Series 2007 Bonds is sold to the public (excluding bond'
houses, brokers, or persons or organizations acting in the capacity of underwriters, placement agents or
wholesalers). The original issue discount with respect to any maturity of the Series 2007 Bonds accrues
daily over the term to maturity of such Series 2007 Bond on the basis of a constant interest rate
compounded semiannually (with straight -line interpolations between compounding dates). The accruing
original issue discount is added to the adjusted basis of such Series 2007 Bond to determine taxable gain
or loss upon disposition (including sale, redemption, or payment on maturity) of Series 2007 Bonds.
Beneficial Owners of the Series 2007 Bonds should consult their own tax advisors with respect to the tax
consequence of ownership of Series 2007 Bonds with original issue discount, including the treatment of
purchasers who do not purchase such Series 2007 Bonds in the original offering to the public at the first
price at which a substantial amount of such Series 2007 Bond was sold to the public.
Section 103 of the Code imposes various restrictions, conditions and requirements relating to
exclusion from gross income for federal income tax purposes of interest on obligations such as the Series
2007 Bonds. The City has covenanted to comply with certain restrictions designed to insure that interest
on the Series 2007 Bonds will not be included in a bondholder's gross income for federal income tax
purposes. Failure to comply with these covenants may result in interest on the Series 2007 Bonds being
included in gross income for federal income tax purposes, possibly from the original issue date of the
Series 2007 Bonds. The opinion of Foley & Lardner LLP assumes compliance with these covenants.
Foley & Lardner LLP has not undertaken to determine (or to inform any person) whether any actions
taken (or not taken) or events occurring (or not occurring) after the date of issuance of the Series 2007
Bonds may adversely affect the value of or the tax- exempt status of interest on the Series 2007 Bonds.
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Further, Foley & Lardner LLP does not give assurance that pending or further legislation or amendments
to the Code, if enacted into law, will not adversely affect the value of or the tax exempt status of interest
on the Series 2007 Bonds. Beneficial Owners are encouraged to consult their own tax advisors with
respect to proposals to restructure the federal income tax.
Certain requirements and procedures contained or referred to in the Indenture, the Bond
Ordinance, the Tax Agreement and other relevant documents may be changed and certain actions
(including, without limitation, defeasance of the Series 2007 Bonds) may be taken or omitted under the
circumstance subject to the terms and conditions set forth in such documents. Foley & Lardner LLP
expresses no opinion as to any Series 2007 Bond or the interest thereon if any such change occurs or
action is taken or omitted upon advice or approval of bond counsel other than Foley & Lardner LLP.
Although Foley & Lardner LLP is of the opinion that interest on the Series 2007 Bonds is
excluded from gross income for federal income tax purposes, the ownership or disposition of, or the
accrual or receipt of interest on, the Series 2007 Bonds may otherwise affect a Beneficial Owner's federal
or state tax liability. The nature and extent of these other tax consequences will depend upon the
particular tax status of the Beneficial Owner or the Beneficial Owner's other items of income or
deduction. Foley & Lardner LLP expresses no opinion regarding any such other tax consequences.
No assurance can be given that any future legislation or clarifications or amendments to the Code,
if enacted into law, will not cause the interest on the Series 2007 Bonds to be subject, directly or
indirectly, to federal or state income taxation, or otherwise prevent the Bondholders from realizing the
full current benefit of the tax status of the interest thereon. Further, no assurance can be given that any
such future legislation, or any actions of the IRS, including, but not limited to, selection of the Series
2007 Bonds for audit examination, or the course or result of any examination of the Series 2007 Bonds, or
other bonds which present similar tax issues, will not affect the market price for the Series 2007 Bonds.
CONTINUING INFORMATION
The Series 2007 Bonds are being initially issued in authorized denominations of $100,000 and
integral multiples of $5,000 in excess thereof and are being offered to less than thirty -five (35)
institutional investors. Accordingly, the Series 2007 Bonds will be exempt from the continuing
disclosure requirements of Rule 15c2 12 adopted by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended. Notwithstanding the City and the Developer have agreed
to provide certain continuing information described below.
The City
The City has covenanted in the Indenture to furnish to the Trustee and Underwriter, within ten
(10) days of receipt by the City, a copy of each annual audit of the City, the schedule of tenants and lease
expiration dates therefor provided to the City by the Developer, and any information received from the
Illinois Department of Revenue of the Pledged Revenue. The City agrees that for so long as the Series
2007 Bonds and the Business District Bonds are outstanding it shall request from the Illinois Department
of Revenue such information of the Pledged Revenue as may be deemed necessary by the Trustee and the
Underwriter and that within ten (10) days of receiving such information, it shall deliver the same to the
Trustee and the Underwriter. The City agrees that, as a condition of issuing a business license to any
business proposing to operate within the Business District, it shall use its best efforts to require said
business to deliver to the City a completed Authorization To Release Pledged Revenue Information
( "Reporting Form "), which completed form the City agrees to file within seven (7) days after receipt
thereof with the Illinois Department of Revenue.
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The Developer
At the time of delivery of and payment for the Series 2007 Bonds, the Developer will certify that
there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court,
government agency, public board or body, pending or threatened by or against the Developer: (i) in any
way questioning the due formation and valid existence of the Developer; (ii) in any way questioning or
affecting the validity of the Development Agreement or the consummation of the transactions
contemplated thereby; (iii) in any way questioning or contesting the validity of any governmental
approval of the Project or any aspect thereof; or (iv) which would have a material adverse effect upon the
financial condition of the Developer or the ability of the Developer to develop the Project.
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FINANCIAL ADVISOR
Speer Financial, Inc., Chicago, Illinois ( "Speer Financial'), is serving as financial advisor to the
Issuer with respect to the sale of the Series 2007 Bonds. Speer Financial provides certain other financial
and economic development consulting services to the City.
LDMED OFFERING
The Series 2007 Bonds are being offered only to sophisticated investors. Each prospective
purchaser of the Series 2007 Bonds is being furnished a copy of this Limited Offering Memorandum,
together with any supplements to this Limited Offering Memorandum. In addition, each prospective
purchaser- is, hereby offered the opportunity, prior to purchasing any Series 2007 Bonds and at any time
the 2007 Bonds are outstanding, to ask questions of, and receive answers from the Underwriter, the
City and the Developer concerning the terms and conditions of the offering, and to obtain any additional
relevant information, to the extent either possesses the same or can acquire it without unreasonable effort
or expense. Inquiries concerning additional information should be directed in writing to the Underwriter
at William Blair & Company, 222 West Adams Street, Chicago, Illinois 60606, Attention: Municipal
Bond Department.
NO LITIGATION
The City
At the time of delivery of and payment for the Series 2007 Bonds, the City will certify that there
is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court,
regulatory agency, public board or body, pending with respect to which the City has been served with
process or is otherwise aware, or, to the knowledge of the officer of the City executing such certificate,
threatened against the City affecting the existence of the City, the Business District or the titles of its
officers to their respective offices or seeking to restrain or to enjoin the sale or delivery of the Series 2007
Bonds, the application of the proceeds thereof in accordance with the Bond Ordinance and/or the Trust
Indenture, or the collection or application of the Pledged Revenue, or in any way contesting or affecting
the validity or enforceability of the Series 2007 Bonds, the Bond Ordinance, the Trust Indenture, the
Development Agreement, or any action of the City contemplated by any of the said documents, or the
collection or application of the Pledged Revenue, or in any way contesting the completeness or accuracy
of the Bond Ordinance, the Trust Indenture or any amendments or supplements hereto, or contesting the
powers of the City contemplated by any of said documents, nor, to the knowledge of the officer of the
City executing such certificate, is there any basis therefor.
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The Developer
At the time of delivery of and payment for the Series 2007 Bonds, the Developer will certify that
there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court,
government agency, public board or body, pending or threatened by or against the Developer: (i) in any
way questioning the due formation and valid existence of the Developer; (ii) in any way questioning or
affecting the validity of the Development Agreement or the consummation of the transactions
contemplated thereby; (iii) in any way questioning or contesting the validity of any governmental
approval of the Project or any aspect thereof; or (iv) which would have a material adverse effect upon the
financial condition of the Developer or the ability of the Developer to develop the Project.
NO RATING
The City has not made, and does not currently contemplate making, an application to any rating
agency for the assignment of a rating to the Bonds.
MISCELLANEOUS
The references, excerpts, and summaries of documents and statutes contained in this Limited
Offering Memorandum do not purport to be complete statements of the provisions of such documents and
statutes, and reference is made to all such documents and statutes for full and complete statements of their
terms and provisions.
The estimates, assumptions, statistical and financial information, and all other information
contained in this Limited Offering Memorandum have been compiled from official and other sources
believed by the underwriter to be reliable; however, none of such estimates, assumptions, or information
is guaranteed by the City, the Developer or the Underwriter as to completeness or accuracy.
Any statement made in this Limited Offering Memorandum involving matters of opinion or of
estimates, whether or not so expressly stated, is set forth as such and not as a representation of fact; no
representation is made that any of the estimates contained herein will be realized. The information and
expressions of opinion contained herein are subject to change without notice, and neither the delivery of
this Limited Offering Memorandum nor any offer or sale made hereunder shall, under any circumstances,
create any implication that there has been no change in the affairs of the City-or the Project since the date
hereof.
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AUTHORIZATION
Both the City and the Developer have authorized the execution and distribution of this Limited
Offering Memorandum.
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UNITED CITY OF YORKVILLE,
an Illinois municipal corporation
By:
Arthur Prochaska, Mayor
THE HARLEM IRVING COMPANIES, INC.
By:
Michael Marchese, President
MIDAMERICA DEVELOPMENT
PARTNERSLLC
By:
Michael D. Firsel, President
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APPENDIX A
Trust Indenture
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APPENDIX B
Development Agreement
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APPENDIX C
Pledged Revenue Projections
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APPENDIX C
Bond Opinion
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