Ordinance 2013-25 ii
STATE OF ILLINOIS
COUNTY OF KENDALL
® FILED w
Y 2 1 2013
COUNTY .CLERK
KENDALL COUNTY
I
UNITED CITY OF YORKVILLE
I
KENDALL COUNTY
STATE OF ILLINOIS
I
i
I
ORDINANCE NUMBER 2013-25
i
i
AN ORDINANCE PROVIDING FOR ISSUANCE OF
UNITED CITY OF YORKVILLE, KENDALL COUNTY, ILLINOIS
SPECIAL SERVICE AREA NUMBER 2003 - 100
SPECIAL TAX REFUNDING BONDS , SERIES 2013
(RAINTREE VILLAGE PROJECT)
I
ADOPTED BY THE
CITY COUNCIL
I
I
OF THE
UNITED CITY OF YORKVILLE
KENDALL COUNTY
i
STATE OF ILLINOIS
i
The 23rd day of April, 2013
Published in pamphlet form by authority of the City Council of the United City of Yorkville,
Kendall County, Illinois this 23rd day of April, 2013 .
4842-4466-2803.6
I
STATE OF ILLINOIS
COUNTY OF KENDALL
ORDINANCE NO . 2013m25 m . LED
AN ORDINANCE PROVIDING FOR ISSUANCE OF y
UNITED CITY OF YORKVILLE, ]KENDALL COUNTY, IL IS' COUNTY cTEa�z
SPECIAL SERVICE AREA NUMBER 2003-100 "� � N®ArT COUNTY
SPECIAL TAX REFUNDING BONDS, SERIES 2013
(RAINTREE VILLAGE PROJECT)
i
I
BE IT ORDAINED BY THE CITY COUNCIL OF THE UNITED CITY OF
YORKVILLE, KENDALL COUNTY, ILLINOIS , AS FOLLOWS :
Section 1 . Findings and Declarations . It is found and declared by the City Council of
the United City of Yorkville, Kendall County, Illinois (the "City") as follows :
a. The City has previously established Special Service Area Number 2003 -
100 described more fully in Exhibit A to this Ordinance (the "Special Service Area")
pursuant to Ordinance Number 2003 -54 adopted on August 12, 2003 (the "Bstablishin
Ordinance"), the provisions of the Special Service Area Tax Law, 35 ILCS 200/27-5 et
seq. , as amended (the " Special Service Area Act") and the provisions of Section 7 of
Article VII of the 1970 Constitution of the State of Illinois, and has otherwise complied j
with all other conditions precedent required by the Special Service Area Act.
b . It was deemed necessary and in the best interests of the City to provide
special services benefiting the Special Service Area consisting of the acquisition,
construction and installation of public improvements including, but not limited to,
engineering, soil testing and appurtenant work, mass grading and demolition, storm water
management facilities, storm drainage systems and storm sewers, site clearing and tree j
removal, public water facilities, sanitary sewer facilities, erosion control measures, roads,
streets, curbs, gutters, street lighting, traffic controls, sidewalks, equestrian paths and
related street improvements, and equipment and materials necessary for the maintenance
thereof, landscaping, wetland mitigation and tree installation, costs for land and easement
acquisitions relating to any of the foregoing improvements, required tap-on and related
fees for water or sanitary sewer services and other eligible costs to serve the Special
Service Area (the "Special Services ') . Special Services did not include any annexation j
fees associated with the Special Service Area.
c. The City has previously issued $7, 150,000 in aggregate principle amount
of its Special Service Area Number 2003 - 100, Special Tax Bonds, Series 2003 (Raintree
Village Project) (the "Prior Bonds"), of which $ 6,278 , 000 in principal amount remains
outstanding, to pay and provide funds for a portion of the costs of the Special Services ,
i
d. In order to achieve debt service savings, it is in the best interests of the
City to refund the Prior Bonds .
e. The City does not have sufficient funds on hand or available from other
sources with which to pay the costs associated with the refunding of the Prior Bonds.
4842-4466-2803.6
i
f. It is in the best interests of the City to issue not to exceed $7,300, 000
principal amount of its Special Service Area Number 2003 - 100 Special Tax Refunding
Bonds, Series 2013 (Raintree Village Project) (the "Bonds") as provided in this
Ordinance, to pay or provide funds to refund the Prior Bonds .
g. The City expects that aggregate payments of principal of and interest on
the Bonds will be less than aggregate payments of principal of and interest on the
outstanding Prior Bonds .
h. After due publication of notice as required by the Special Service Area
Act, including without limitation, notice of the issuance of the Prior Bonds in an
aggregate principal amount not to exceed $ 15 ,000, 000, a public hearing to consider the
establishment of the Special Service Area, the issuance of the Prior Bonds for the purpose
of paying the costs of the Special Services and the manner in which the Bonds were
proposed to be retired and the proposed tax levy, was held on July 8 , 2003 at 7 : 00 p .m.
No objection petition was filed with respect to the establishment of the Special Service
Area or the issuance of the Prior Bonds within the period of time allowed pursuant to the
Special Service Area Act.
Section 2 . Issuance of Bonds . The City shall borrow the sum of not to exceed
$75300, 000 by issuing the Bonds as provided in this Ordinance. The Bonds which shall be
designated "United City of Yorkville, Kendall County, Illinois Special Service Area Number
2003 - 100 Special Tax Refunding Bonds, Series 2013 (Raintree Village Project)," and shall be
issued for the purpose of refunding the Prior Bonds . The Bonds shall be issued pursuant to the
powers of the City pursuant to Section 7 of Article VII of the 1970 Constitution of the State of
Illinois ; the Special Service Area Act; and the Local Government Debt Reform Act, 30 ILCS
350/ 1 et seq. (the "Debt Act") .
i
Section 3 . ATproval 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 Mellon Trust Company, N.A. , as Trustee, to be dated as of May 1 ,
2013 , which form of Indenture is attached as Exhibit B to this Ordinance including the
Continuing Disclosure Agreement to be dated the date of issuance of the Bonds in the
form attached to the Indenture;
be a form of Bond Purchase Agreement (the "Bond Purchase Agreement")
between the City and William Blair & Company, L. L. C . , as Underwriter (the
"Underwriter"), 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;
ce a form of the Preliminary Limited Offering Memorandum (the
"Preliminary Limited Offering Memorandum") to be used by the Underwriter in its initial
offering of the Bonds, which form of Preliminary Limited Offering Memorandum is
attached as Exhibit D to this Ordinance;
4842-4466-2803.6 2
d . a form of the Agreement for Administrative Services between David
Taussig & Associates, Inc. ("Taussig") and the City which form of Agreement for
Administration Services 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 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
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
shall be issued in the principal amount of not to exceed $ 7,300,000, shall be dated, shall mature,
shall bear interest at the rates (not to exceed in any year six percent (6 %) 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 % of the principal amount of the Bonds with
an original issue discount or original issue premium of not to exceed 5 % 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
I
4842-4466-2803.6 3
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.
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 • Levy of Special Tax ; Pledge. The Bonds
shall constitute limited obligations of the City, payable from the Special Taxes (as defined
below) to be levied on all taxable real property within the Special Service Area as provided
below. The Bonds shall not constitute the general 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 .
There are hereby levied Special Taxes upon all taxable real property within the Special
Service Area in accordance with the Special Tax Roll and Report (as defined below) sufficient to
pay and discharge the principal of and interest on the Bonds at maturity or mandatory sinking
fund redemption dates and to pay interest on the Bonds for each year at the interest rates to be set
forth in Section 2 .4 of the Indenture and to pay for the Administrative Expenses (as defined in
the Indenture) of the City and Kendall County; if any, for each year and to fund and replenish the
Special Reserve Fund created and established pursuant to the Indenture to an amount equal to the
Special Reserve Fund Requirement, and to fund and replenish the Reserve Fund created and
established pursuant to the Indenture to an amount equal to the Reserve Requirement (as defined
in the Indenture) including specifically the following amounts for the following years (the
" Special Taxes") :
i
An Amount Sufficient j
Year of Levy to Produce the Sum of:
2013 $ 5913955
2014 6005750
2015 609 )730 j
2016 6185975
2017 628 ,220
2018 637,730
2019 6473240
2020 6575015
2021 666,790
2022 676, 830
2023 687,055
2024 6975360
2025 707, 850
i
4842-4466-2803 .6 4
I
An Amount Sufficient
Year of Levy to Produce the Sum of;
2026 $718 ,420
2027 729, 175
2028 7405195
2029 751 ,215
2030 762, 500
2031 773 ,970
Pursuant to the Special Tax Roll established by the Special Tax Roll and Report prepared
for the Special Service Area and established in the Establishing Ordinance (the "Special Tax Roll
and Report"), the Special Taxes shall be computed, extended and collected in accordance with
the Special Tax Roll and Report, and divided among the taxable real property within the Special
Service Area in accordance with the terms of the Establishing Ordinance and the Special Tax
Roll and Report. It shall be the duty of the City and the City hereby covenants, annually on or
before the last Tuesday of December for each of the years 2013 through 2031 to calculate or
cause the Consultant appointed pursuant to the Indenture to calculate the Special Tax
Requirement (as defined in the Special Tax Roll and Report) ; to amend the Special Tax Roll
pursuant to Section VIII of the Special Tax Roll and Report; to adopt an ordinance approving the
amount of the current calendar year' s Special Tax Requirement and to abate the Special Taxes
levied pursuant to this Ordinance to the extent the taxes levied pursuant to this Ordinance exceed
the Special Tax Requirement as calculated by the City pursuant to the Establishing Ordinance
and the Special Tax Roll and Report; and provide the County tax collector of Kendall County the
amended Special Tax Roll . On or before the last Tuesday of January for each of the years 2014
through 2032 the City shall notify the Trustee and the Notice Beneficial Owners (as defined in
the Indenture) of the amount of the Special Tax Requirement and the amount of the Special
Taxes to be abated. The City shall take all actions which shall be necessary to provide for the
levy, extension, collection and application of the taxes levied by this Ordinance, including
enforcement, of such taxes as provided by law but only as set forth in Section 7(a) below.
The Special Taxes levied as provided above shall be deposited in the Bond and Interest
Fund created pursuant to the Indenture and are appropriated to and are irrevocably pledged to
and shall be used only for the purposes set forth in 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 or the Prior Bonds subject to federal income taxes by reason of
4842-4466-2803.6
5
causing the Bonds or the Prior 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, City
Clerk, 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 or the Prior Bonds and other moneys held
under the Indenture in order to establish that the Bonds and the Prior 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 levy, extension, collection and application of the Special Taxes imposed
by or pursuant to this Ordinance or the Establishing Ordinance, including enforcement of
the Special Taxes by providing the County of Kendall with such information as is j
deemed necessary to enable it to include the property subject to the delinquent tax in the
County Collector ' s annual tax sale and in the event the tax lien is forfeited at such tax
sale by instituting foreclosure proceedings all in the manner provided by law; provided,
however, that the obligation to institute any foreclosure action shall only arise in the
event the City makes the determination that the proceeds from each foreclosure action
have a commercially reasonable expectation of exceeding the costs thereof;
i
bo it will not take any action which would adversely affect the levy,
extension, collection and application of the Special Taxes, except to abate the Special
Taxes to the extent permitted by the Special Tax Roll and Report and as provided in this
Ordinance; and
C, it will comply with all present and future laws concerning the levy,
extension and collection of the Special 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
Special Reserve fund to the Special Reserve Fund Requirement and the Reserve Fund to
the Reserve Requirement and it will take all actions necessary to assure the timely
collection of the Special Taxes, including without limitation, the enforcement of any
delinquent Special Taxes as described in paragraph (a) above.
Promptly following the date of issuance of the Bonds, the City shall file an abatement
ordinance abating the Special Taxes levied pursuant to the bond ordinance for the Prior Bonds
(the "Prior Bond Ordinance") for levy years 2013 through 2031 . The City hereby agrees to
deposit with the Trustee for the Bonds any amounts collected from the 2012 levy of Special
Taxes pursuant to the Prior Bond Ordinance for deposit in the Bond and Interest Fund.
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
i
4842-4466-2803 .6
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 and the Prior Bonds shall not constitute arbitrage
bonds as defined in Section 7 above.
Section 9 . Transfer of Funds *, Redemption of Prior Bonds . All amounts on deposit in
the funds and accounts created for the Prior Bonds shall be transferred to the [Bond and Interest
Fund] created under the Trust Indenture of the City pursuant to which the Prior Bonds were
authorized (the "Prior Indenture") and applied to redeem the Prior Bonds or with respect to the
Bond and Interest Fund or Reserve Fund, may be transferred to the Bond and Interest Fund or the
Reserve Fund created for the Bonds to the extent not needed to fund the redemption price of the
Prior Bonds ,
The Prior Bonds shall be called for redemption on the earliest practicable date on which
notice of redemption may be provided in accordance with the Trust Indenture for the Prior Bonds
(the "Prior Indenture") at a redemption price equal to 102% of the principal amount of the Prior
Bonds to be redeemed, plus accrued interest to the redemption date. Such redemption shall be
conducted in accordance with the provisions of the Prior Indenture.
Section 10 . Filing of Ordinance. The City Clerk is directed to file a certified copy of
this Ordinance, and an accurate map of the Special Service Area, with the County Clerk of
Kendall County.
Section 11 . Severability. 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 12 . 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.
i
I
I
i
I
4842-4466-2803 .6 7
I
PASSED BY THE CITY COUNCIL OF THE UNITED CITY OF YORKVILLE,
KENDALL COUNTY, ILLINOIS this of 3 day of April, 2013 ,
VOTING AYE : Koc+- F Ioz WI t l q:5 5? E --A e5 _ Co Lo51 to O
f unlK +f�tGSEt; IM � �-�Gt� lSK ! f TEEL[ nLCn
VOTING NAY :
ABSENT :
ABSTAINED :
NOT VOTING :
APPR VED :
fiL
Mayor
ATTEST :
City Clerk
i
I
i
i
i
i
i
i
I
i
[Signature page to Bond Ordinance]
Exhibit A
I
i
i
E
i
i
i
I
I
I
i
i
I
i
i
i
4842-4466-2803 .6
I
Exhibit A
• i
SSA NORTH - THE HIGHLANDS
PART OF THE SOUTHWEST QUARTER Of SECTION 3 AND PART OF THE
SOUTH HALF OF SECTION 4 AND PART OF SECTION 9 AND PART OF THE
NORTHWEST QUARTER OF SECTION 10, ALL IN TOWNSHIP 36 NORTH,
i
RANGE 7 EAST OF THE THIRD PRINCIPAL MERIDIAN, DESCR BED 'AS :
FOLLOWS : BEGINNING AT THE INTERSECTION OF.THE CENTERLINE OF '
ILLINOIS STATE ROUTE N0. 71 WITH THE EASTERLY,LINE OF THE j
ABANDONED RIGHT OF WAY OF THE FOX AND ILLINOIS UNION RAILWAY
COMPANY; THENCE SOUTH 12 ' 43' 53 " EAST ALONG SAID EASTERLY LINE,
1102.34 FEET TO A POINT OF CURVATMe THENCE SOUTHERLY ALONG
SAID EASTERLY LINE BEING A CURVE CONCAVE WESTERLY HAVING A.
RADIUS OF 1644091 FEET, AN ARC LENGTH OF 540.21 FEET, A CHORD
BEARING OF SOUTH 03 ' 19 ' 23" EAST AND A CHORD DISTANCE OF 537.78
FEET; THENCE SOUTH 06' 05 ' 07". WEST ALONG SAID EASTERLY LINE, 27.35
• I
FEET TO A POINT OF CURVATURE; THENCE SOUTHERLY ALONG SAID
EASTERLY LINE, BEING A CURVE CONCAVE EASTERLY HAVING A RADIUS
OF 1607.46 FEBT, AN ARC LENGTH OF 131 .61 FEET A: CHORD BEARING OF
i
SOUTH 03' 44' 23" WEST AND A CHORD DISTANCE OF 131 .57 FEET TO A
SOUTHWESTERLY LINE OF "OAK HILL FARM" AS SHOWN ON A PLAT
RECORDED IN PLAT BOOK 5 AT PAGE 16 AND NOW IN CABINET OF PLATS .
AT SLOT 303; THENCE SOUTH 76' 53 ' 04" EAST ALONG SAID
SOUTHWESTERLY LINE, 599. 82 FEET TO AN ANGLE POINT IN SAID..
i
I
SOUTHWESTERLY LINE; THENCE SOUTH 52' 55131 " EAST ALONG A
SOUTHWESTERLY LINE OF SAID "OAK HILL FARM", 947.27 FEET; THENCE
NORTH 47' 04 ' 29" EAST, 33900 FEET; THENCE NORTH 42 ' 55 ' 3 I " WEST, 90900
FEET TO A POINT OF CURVATURE; THENCE NORTHWESTERLY AND
NORTHERLY ALONG A CURVE CONCAVE NORTHEASTERLY HAVING A
RADIUS OF 370.00 FEET, AN ARC LENGTH OF 277. 19 FEET, A CHORD
BEARING OF NORTH 21 ' .27' 45" WEST, AND A CHORD DISTANCE OF 270.76
FEET; THENCE NORTH 00' 00 ' 00" WEST, 73 .86 FEET; THENCE NORTH 90' 00'
i
00" EAST; 135 .00 FEET; THENCE NORTH" 50' 53 ' S5" EAST, 90.20 FEET; THENCE
NORTH 90' 00 ' 00" EAST, 11 .39 FEET TO A POINT OF CURVATURE; THENCE
NORTHEASTERLY ALONG A CURVE CONCAVE NORTHWESTERLY HAVING
A RADIUS OF 67 .00 FEET, AN ARC LENGTH OF 61 . 89 FEET, A CHORD
BEARING OF NORTH 63 ' 32' 15" EAST, AND A CHORD DISTANCE OF 59.71
FEET$ THENCE NORTH 37' 04 ' 29" EAST, 566988 FEET TO A POINT OF
CURVATURE; THENCE NORTHEASTERLY, EASTERLY AND
SOUTHEASTERLY ALONG A CURVE CONCAVE SOUTHERLY HAVING A
RADIUS OF 158.00 FEET, AN ARC LENGTH OF 2464-22 FEET, A CHORD
BEARING OF NORTH 81 ' 43' 09" EAST AND A CHORD DISTANCE OF 222.05
FEET; THENCE NORTH 36' 21149" EAST, 125. 19 FEET, THENCE NORTH 89' 45 '
42" EAST, 284. 11 FEET; THENCE NORTH 00' 14' 18" WEST, 80600 FEET; THENCE
SOUTH 89' 45 ' 42" WEST, 135 . 00 FEET; THENCE NORTH 00' 14 ' 18" WEST,
106 .00 FEET; THENCE NORTH 89' 45 ' 42" EAST, 201 .00 FEET; THENCE NORTH
00' 14' 18" WEST, 58.58 FEET TO A POINT OF CURVATURE; THENCE
2
i
i
i
I
NORTHERLY ALONG A CURVE CONCAVE WESTERLY HAVING A RADIUS OF
33100 FEET, AN ARC LENGTH OF 100.21 FEET, A CHORD BEARING OF NORTH
I
08' 51 ' 33 " WEST, AND A CHORD DISTANCE OF 99 .83 FEET; THENCE NORTH
17' 2814711 WESTo 22.02 FEET TO A POINT ON A CURVE THROUGH WHICH A
RADIAL LINE BEARS NORTH 15' 26' 2T' WEST; THENCE EASTERLY ALONG A
CURVE CONCAVE SOUTHERLY HAVING A RADIUS OF 127100 FEET, AN ARC
LENGTH OF 317. 92 FEET, A CHORD BEARING OF NORTH 81 ' 43 ' 10" EAST
AND A CHORD DISTANCE OF 317.09 FEET; THENCE NORTH 88' 52 ' 46" EAST, j
i
313 .55 FEET; THENCE SOUTH 00' 14' 18" EAST, 324. 16 FEET; THENCE SOUTH
89' 45 ' 42" WEST, 270600 FEET; THENCE SOUTH 71 ' 50' 06" WEST, 6937 FEET;
THENCE SOUTH 89' 45 ' 42" WEST, 270.00 FEET; THENCE SOUTH 00' 14' 18"
EAST, 80.00 FEET; THENCE NORTH 89' 45 ' 42" EAST, 270.00 FEET; THENCE
I
NORTH 71 ' 50' 06" EAST, 69.37 FEET; THENCE NORTH 89' 45' 42" EAST, 336.00
FEET, THENCE NORTH 00' 14' 18" WEST. 57. 13 FEET; THENCE NORTH 88 ' 52 '
46" EAST, 510.04 FEET; THENCE SOUTH 01 ' 07' 14" EAST, 626499 FEET;
THENCE NORTH 88' 52' 46" EAST, 508. 12 FEET; THENCE NORTH 01 ' 07' 14"
WEST, 626.99 FEET; THENCE NORTH 88' 52 ' 46" EAST, 399.03 FEET TO A
POINT OF CURVATURE; THENCE EASTERLY AND NORTHEASTERLY ALONG
A CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 390. 00 FEET,
AN ARC LENGTH OF 341 .45 FEET, A CHORD BEARING OF NORTH 63' 47' 52"
i
EAST, AND A CHORD DISTANCE OF 330.65 FEET; THENCE NORTH 38' 42' 59"
EAST, 1716v64 FEET TO A POINT ON THE CENTERLINE OF ILLINOIS ROUTE
126 THROUGH WHICH A RADIAL LINE BEARS NORTH 39' 23 ' 36" EAST;
j
i
3
I
THENCE NORTHWESTERLY ALONG SAID CENTERLINE, BEING A CURVE
CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 6875 .55 FEET, AN ARC
LENGTH OF 134. 09 FEET, A CHORD BEARING OF NORTH 51 ' 09' 55" WEST
AND A CHORD DISTANCE OF 134.09 FEET; THENCE NORTH 51 ' 47' 55" WEST
ALONG SAID CENTERLINE. 345.70 FEET TO A POINT OF CURVATURE
THROUGH WHICH A RADIAL LINE BEARS NORTH 38' 01 36" EAST; THENCE
NORTHWESTERLY ALONG SAID CENTERLINE, BEING A CURVE CONCAVE
SOUTHWESTERLY HAVING A RADIUS OF 2292635 FEET, AN ARC LENGTH OF
338. 16 FEET, . A CHORD BEARING OF NORTH 56' 11 ' 58" WEST, AND A CHORD
E
DISTANCE OF 337.86 FEET; THENCE SOUTH 33 ' 30' 34" WEST, 542927 FEET;
THENCE SOUTH 62' 39' 08" WEST, 853.57 FEET; THENCE SOUTH 59' 51 ' 04"
WEST, 355 .65 FEET; THENCE NORTH 59 ' 30' 15" WEST, 256.51 FEET; THENCE
NORTH 0.1 ' 47 ' 11 " EAST, 402. 10 FEET TO AN OLD CLAIM LINE; THENCE
SOUTH 57' 54' 44" WEST ALONG SAID OLD CLAIM LINE, 299900 FEET TO THE
WEST LINE OF THE SOUTHWEST QUARTER OF SAID SECTION 3 , ALSO BEING
A POINT ON THE SOUTHEASTERLY LINE OF COUNTRY HILLS SUBDIVISION "
PHASE ONE TO THE CITY OF YORKVMLE, ILLINOIS; THENCE SOUTH SS ' 21 '
32" WEST, ALONG SAID SOUTHEASTERLY LINE AND ITS WESTERLY
EXTENSION, 1408.23 FEET TO THE SOUTH LINE OF THE SOUTHEAST ,
QUARTER OF SAID SECTION 4; THENCE SOUTH 55 ' 44' 12" WEST, 911 ,49
FEET; THENCE NORTH 23' 49' 34" WEST, ALONG THE EXTENSION OF AND
THE SOUTHWESTERLY LINE OF SAID COUNTRY HILLS SUBDMSION,
1785 .26 FEET TO THE CENTERLINE OF ILLINOIS STATE ROUTE N0. 71 ;
4 j
i
II
i
THENCE SOUTH 72 ' 02 ' 59" WEST ALONG SAID CENTERLINE, 428659 FEET TO
THE NORTHEASTERLY CORNER OF THE GREENAWALT TRACT DESCRIBED
IN A QUIT CLAIM DEED RECORDED AS DOCUMENT N0. 9507730 ON
SEPTEMBER 25, 1995 ; THENCE SOUTH 23' 55 ' 01 " EAST ALONG THE
EASTERLY LINE OF SAID GREENAWALT TRACT. 440. 80 FEET$ THENCE
SOUTH 72' 02 ' 59" WEST ALONG THE SOUTHERLY LINE OF SAID
GREENAWALT TRACT, 644.00 FEET; THENCE NORTH 23 ' 55 ' O1 " WEST
ALONG THE WES'TWESTERLY LINE OF SAID GREENAWALT TRACT, 440.80 FEET j
TO SAID CENTERLINE OF ILLINOIS STATE ROUTE N0. 71 ; THENCE SOUTH
72' 02' 59" WEST ALONG SAID CENTERLINE, 46.36 FEET TO THE POINT OF
BEGINNING► IN KENDALL TOWNSHIP► KENDALL COUNTY* ILLINOIS
(CONTAINING 162.625 t ACRES)
' I
i
5
i
Exhibit B
Form of Indenture
i
i
i
i
i
I
I
i
i
I
i
i
i
4842-4466-2803.6
i
I
Exhibit B
I
I
TRUST INDENTURE
Between
UNITED CITY OF YORKVILLE, ILLINOIS
and
i
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
as Trustee
Dated as of May 1, 2013
$
UNITED CITY OF YORKVILLE, KENDALL COUNTY, ILLINOIS
SPECIAL SERVICE AREA NUMBER 2003400
SPECIAL TAX REFUNDING BONDS, SERIES 2013
(RAINTREE VILLAGE PROJECT)
i
i
I
I
I
4812-8086-2739.6
Table of Contents
Page
i
I
i
ARTICLE I STATUTORY AUTHORITY AND DEFINITIONS . . . , . . , . go * , , to . . . a ' , a ' , 0 a ' $ * ' so * I ' llooll ' al * * # a 3
Section 1 . 1 Authority for this Indenture, . . . . * 1 # 1 1141 , 94 be@@@ too sea 0000 @ * Islas . . . 6 . . . . 3
Section 1 .2 Agreement for Benefit of Owners of Bonds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . 3
Section1 . 3 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II BOND DETAILS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2 . 1 Purpose of Issuance; Amount of Bonds, If Rate tattoo , 01 , 11 , 11 , 11 , 10400 * 0 so & 11
Section 2 .2 Form; Denominations; Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . l l
Section 2 . 3 Date of Bonds; CUSIP Identification Numbers' . . . . . else 0001011110111 $ 11601 9 0 11
Section 2 .4 Maturities; Interest Rates.
Section2. 5 Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2.6 Form of Bonds; Execution; Authentication, 12
Section 2 .7 Payment of Bonds , * 4 0 000001 , 0000 000 s0 * 669 * 8884 " Rate . . . . * , 000 * " Ioo . . . . 12
Section 2 . 8 Appointment of Trustee. 011 , 000 , 010 , 00 Rate , , I ' Ile 12
Section 2 . 9 Registration of Bonds ; Persons Treated as Owners. . . . . . . . . . . . . . . . . . . 12
. . . . . . . . . . . . . . .
Section 2 . 10 Global Form; Securities Depository,
Section 2 . 11 Mutilated, Lost, Stolen or Destroyed Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 2. 12 Cancellation of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
i
ARTICLE III NO ADDITIONAL BONDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE IV REDEMPTION OF BONDS
Section 4. 1 Mandatory Sinking Fund Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a . . . . . . . . . . . . . . . . . 15
Section 4.2 Optional Redemption.
Section 4. 3 Mandatory Redemption Upon Condemnation; Amounts
Transferred from the Special Reserve Fund. . . . . as . . . 16
Section 4.4 Special Mandatory Redemption from Optional Prepayment of
Special Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 4 . 5 Redemption Provisions; Notice of Redemption. a 1 11 1 0 1 1 1 1 1 1 1 11 a 14 0 . . . . . . . . . . . . . . . . . . 1 17
Section 4. 6 Purchase in Lieu of Redemption, * 01 * Ile " too , , , I too " , * a & 18
ARTICLE V APPLICATION OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 5 . 1 Application of Proceeds. . . . voodoo . . . . . 0 18
ARTICLE VI SECURITY FOR THE BONDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 . . . . . . . . . . . . . . . . . . . . . . . . . 104 . . 19
Section 6. 1 Limited Obligations. . . . 00 00 * 0 10 0101011all " , I ' ll , , 61 , 1114 , " lee $ * 004 * 000 0 ago * @ , 19
Section 6 .2 Levy of Special Taxes. , , . . . , . . . . . . . . . . . 0 * 00 * 00 * 4 * 40 . 0 a * @moo @Woos 0600 0 * 10 , 00 19
ARTICLE VII FUNDS AND ACCOUNTS . . . . . . . . . . . . . . . 0 9 . . . . . . . . I 1 0 1 1 1 1 1 1 1 1 1 0 4 1 1 0 0 1 0 4 4 1 0 1 1 11 1 1 1 1 1 1 1 1 1 1 1 0 1 1 1 11 1 1 1 1 & a 20
Section 7 . 1 Bond and Interest Fund. . 040 of so @ & * @stages to . . . . . 0 . . . . . . . . . . . . . . . . . . 00000 20
Section 7.2 Reserve Fund. . . . . . . . . Rate . . . 111111014010 # 111 22
Section 7. 3 Special Reserve Fund and Cost of Issuance Fund, 60 , * 0 22
i
4812-8086-2739.6
i�
i
I
i
Section 7.4 Administrative Expense Fund, . 1 1 1 1 0 0 a 4 0 w 4 0 a a 0 a 0 a a 0 6 1 a 0 9 0 0 1 1 0 0 1 a 1 0 . . . 23
Section 7. 5 Rebate Fund. . . . . . . . . 23
Section 7.6 Investment of Funds. . 1 1 1 1 0 a 0 6 6 0 0 0 4 0 9 0 6 24
ARTICLE VIII COVENANTS AND AGREEMENTS OF THE CITY . 24
Section 8 . 1 Tax Covenants, oaf a , 1 011 , 19 000610 a a o4 * * Oaa * 9evo * o 0 # 00 . . . . . . . . . 24
Section 8 .2 Levy and Collection of Taxes, 0 too 0 & at@ 0 * , * * * of 1 , 26
Section 8 . 3 Proper Books and Records. . . . . . 640 , 0 , 0 0 a ' , 101, 0 0 0 0 1 1 0 0 0 1 0 0 9 6 11 11 1 1 0 1 0 a 6 a 0 0 1 1 0 9 0 1 1 1 a 6 0 26
Section 8 .4 Against Encumbrances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 8 . 5 Continuing Disclosure Agreement. . , 27
ARTICLE IX DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 9. 1 Events of Default, . . . 0 04 000010 01 , 11111 , 0 9 I ' ll 27
Section 9.2 Remedies. . . . . . . . . . . . . . . . * * * at * 0 " * 0 , 01011111161 96464 PIP 28
Section 9 . 3 Notice of Default. . . 6 1 1 11 1 11 1 1 1 1 a , a " 0 . . . . . . . . a 0 1 a , veto 1 00 , 119 , fall 14 , 100000000 If * , " , too 28
Section 9.4 Termination of Proceedings by Trustee, . 119 , 11 , 111 . * # 101 * 111 , 41 , 1101 , 6 * 28
Section 9. 5 Right of Bondholders to Control Proceedings, 1116100116 1 , ' , , 0611111111 " o , 29
Section 9 .6 Right of Bondholders to Institute Suit. 29
Section9.7 Suits by Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 9 . 8 Remedies Cumulative. 0 " , , 111 all * 1111161 " I ' le $ to Ile 10 29
Section 9. 9 Waiver of Default, . . . . . . . a 0 9 a a a 0 0 0 0 0 4 0 a a . . . . . . . . 6 . . . . 00 , 000 . . . . . 30
Section 9. 10 Application of Moneys After Default. " , a all 00 , a , * " I ' ll 1111011111011 . 0 ease @sees * $ * 30
ARTICLEX TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . :& . . . . . . 31
Section 10. 1 Appointment of the Trustee. . . . 1 0 Ole @face $ * * a 31
Section 10.2 Performance of Duties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 10. 3 Instruments Upon Which Trustee May Rely. . 33
Section 10.4 Trustee not Responsible for Recitals and Other Matters, 34
Section 10. 5 Trustee May Acquire Bonds . . . . . . . . . . . * . * a 00 , 11 , 11 , & 1 , 34
Section 10. 6 Qualification of Trustee. 4 0 w a 6 0 0 0 0 8 0 6 0 a . . . . . . . 0 , 4 . . . 0 a 0 0 0 a a 6 0 a 0 0 0 0 , 34
Section 10. 7 Resignation or Removal of Trustee and Appointment of Successor. . . . . . . . 35
Section 10. 8 Concerning the Successor Trustee. 36
Section 10. 9 Monthly Statements,
ARTICLE XI SUPPLEMENTAL INDENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 . . . . . . . . . . . . . . . 37
Section 11 . 1 Supplemental Indentures Not Requiring Consent of Bondholders. . . . . . . . . . . 37
Section 11 .2 Supplemental Indentures Requiring Consent of Bondholders, a I I I w I I If 9 1 1 1 1 1 1 1 38
Section 11 .3 Supplemental Indenture to Modify this Indenture. 39
Section 11 .4 Trustee May Rely Upon Opinion of Counsel Re: Supplemental
Indenture. 39
I
Section 11 . 5 Notation. , . . . . . . . . . . 39
Section 11 . 6 Opinion of Bond Counsel. 6010 39
I
ARTICLE XII DEFEASANCE
Section 12. 1 Defeasance. * Ito . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ii
4812-8086-2739.6
I
I
i
ARTICLE XIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . * Vale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9604 . . . . 41
Section13 . 1 Severability.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 13 .2 Notices, 0 . . . . . . . a 0 0 . . . . . 41
Section 13 . 3 Holidays, * 6066460144 0 @so " , wee . . . . . . . . . * Seaga @ease * * @ 0 6000 ' a all . . . 4 6 " 140 00 " I ' ll 044 42
Section 13 . 4 Execution of Counterparts.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Al
Section 13 . 5 Applicable Law.
Section 13 . 6 Immunity of Officers, Employees, Elected Officials of the City. 42
EXHIBITS
Exhibit A Legal Description of Special Service Area j
Exhibit B Form of Bond
Exhibit C Form of Satisfaction of Tax Lien
Exhibit D Form of Disbursement Request
Exhibit E Form of Continuing Disclosure Agreement
i
i
i
i
i
i
i
I
i
i
4812-8086-2739.6
TRUST INDENTURE
THIS TRUST INDENTURE (the "Indenture") is made and entered into as of May 1 ,
2013 , by and between the United City of Yorkville, Illinois, a municipal corporation organized
and existing under and by virtue of the Constitution and laws of the State of Illinois (the "CQ "),
and The Bank of New York Mellon Trust Company, N.A. , a national banking association, as
Trustee (the "Trustee") ,
WITNESSETH ,
WHEREAS, by Ordinance No. 2003 -54 adopted on August 12, 2003 (the "Bstablishin�
Ordinance") the City has established the "United City of Yorkville Special Service Area Number
2003 - 100" as further described in Exhibit A to this Indenture (the "Special Service Area") ; and
WHEREAS , pursuant to Ordinance No . 2003 -55 adopted on August 12, 2003 (the "Prior
Bond Ordinance") and pursuant to the Special Service Area Tax Law, 35 ILCS 200/27-5 et seq.
(the "Special Service Area Act") the City determined it to be in the best interests of the City to
issue and the City subsequently did issue, $7, 150,000 aggregate principal amount of the United
City of Yorkville Special Service Area Number 2003 - 100 Special Tax Bonds, Series 2003
(Raintree Village Project) (the "Prior Bonds") for the purpose of providing a portion of the funds
needed for costs of the Special Services (defined below); and
I
WHEREAS, it was determined to be in the best interests of the City to refund the Prior
Bonds; and
WHEREAS, pursuant to Ordinance No. 2003 - adopted on April _, 2013 (the
"Bond Ordinance") and pursuant to the Special Service Area Act, it was determined in the best
interests of the City to issue a principal amount not to exceed $7,300,000 of the United City of
Yorkville Service Area Number 2003- 100 Special Tax Refunding Bonds, Series 2013 (Raintree
Village Project) (the "Bonds") for the purpose of providing the funds needed for refunding the
Prior Bonds, to fund certain reserves and to pay costs of issuance of the Series 2013 Bonds and
the refunding of the Prior Bonds; and
WHEREAS, the Bond Ordinance authorized the Mayor and City Clerk to establish
certain specific terms of the Bonds by executing and delivering a Bond Purchase Agreement with
the Purchaser (defined below); and
I
WHEREAS, pursuant to the terms so established the City will issue $
principal amount of Bonds upon the terms specified in this Indenture; and
WHEREAS, it is in the public interest and for the benefit of the City, the Special Service
Area and the owners of the Bonds that the City enter into this Indenture to provide for the
issuance of the Bonds, the disbursement of proceeds of the Bonds, the deposit of the special
taxes levied pursuant to the Bond Ordinance securing the Bonds, and the administration and
payment of the Bonds; and
i
4812-8086-2739.6
I
i
WHEREAS, all things necessary to cause the Bonds, when executed by the City and
issued as provided in the Special Service Area Act, the Local Government Debt Reform Act (as
defined below), the Bond Ordinance and this Indenture, to be legal, valid and binding and special
obligations of the City in accordance with their terms, and all things necessary to cause the
creation, authorization, execution and delivery of this Indenture and the creation, authorization,
execution and issuance of the Bonds, subject to the terms of this Indenture, have in all respects
been duly authorized;
NOW, THEREFORE, THIS TRUST INDENTURE WITNESSETH .
GRANTING CLAUSES
That the City in consideration of the premises, the acceptance by the Trustee of the trusts
created hereby and the purchase and acceptance of the Bonds by the owners thereof, and of the
sum of one dollar, lawful money of the United States of America, to it duly paid by the Trustee j
at or before the execution and delivery of these presents, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged; in order to secure
the payment of the principal of, premium, if any, and interest on the Bonds according to their
tenor and effect, and to secure the performance and observance by the City of all the covenants
expressed or implied herein and in the Bonds, does hereby pledge and assign, and grant a
security interest in, the following (the "Trust Estate") to The Bank of New York Mellon Trust
Company, N.A. , as Trustee, and its successors in trust and assigns forever, for the securing of the
performance of the obligations of the City hereinafter set forth;
GRANTING CLAUSE FIRST
All right, title and interest of the City in and to the Special Taxes and any monies held
under this Indenture by the Trustee, including the proceeds of the Bonds and the interest, profits
and other income derived from the investment thereof other than amounts held by the Trustee in
the Administrative Expense Fund, the Special Reserve Fund and the Rebate Fund;
GRANTING CLAUSE SECOND
All funds, monies, property and security and any and all other rights and interests in
property whether tangible or intangible from time to time hereafter by delivery or by writing of
any kind, conveyed, mortgaged, pledged, assigned or transferred as and for additional security
hereunder for the Bonds by the City or by anyone on its behalf or with its written consent to the
Trustee, which is hereby authorized to receive any and all such property at any and all times and
to hold and apply the same subject to the terms hereof;
TO HAVE AND TO HOLD, all and singular the Trust Estate, whether now owned or
hereafter acquired, unto the Trustee and its respective successors in said trust and assigns
forever;
IN TRUST NEVERTHELESS, upon the terms and trust herein set forth for the equal and
proportionate benefit, security and protection of all present and future owners of the Bonds from
time to time issued under and secured by this Indenture without privilege, priority or distinction
2
4812-8086-2739.6
i
i
i
as to the lien or otherwise of any of the Bonds over any of the other Bonds (except as otherwise
provided herein) ;
PROVIDED, HOWEVER, that if the City, its successors or assigns, shall 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, and shall cause the payments to be made on the Bonds as required under this
Indenture, 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 cause to be kept, performed
and observed all of its covenants and conditions pursuant to the terms of this Indenture, and shall
pay or cause to be paid all sums of money due or to become due in accordance with the terms
and provisions hereof, then upon the final payment thereof, this Indenture and the rights hereby
granted shall cease, determine and be void; otherwise this Indenture is to be and remain in full
force and effect.
THIS INDENTURE OF TRUST FURTHER WITNESSETH, and it is expressly
declared, that all Bonds issued and secured hereunder are to be issued, authenticated and
delivered and all said property, rights and interests, and amounts hereby assigned and pledged
are to be dealt with and disposed of under, upon and subject to the terms, conditions, stipulations,
covenants, agreements, trusts, uses and purposes as herein expressed, and the City has agreed j
and covenanted, and does hereby agree and covenant with the Trustee and with the respective j
owners of the Bonds as follows:
ARTICLE I
STATUTORY AUTHORITY AND DEFINITIONS
I
i
Section 1 . 1 Authority for this Indenture. This Indenture is entered into pursuant to the
powers of the City pursuant to Part 6 of Section 7 of Article VII of the 1970 Constitution of the
State of Illinois and pursuant to the respective provisions of the Special Service Area Act, the
Local Government Debt Reform Act and the Bond Ordinance.
Section 1 .2 Agreement for Benefit of Owners of Bonds. The provisions, covenants
and agreements to be performed by or on behalf of the City under this Indenture shall be for the
equal benefit, protection and security of the Bondholders except as otherwise expressly provided
herein. All of the Bonds, without regard to the time or times of their issuance or maturity, shall
be of equal rank without preference, priority or distinction of any of the Bonds over any other of
the Bonds, except as expressly provided in or permitted by this Indenture. The Trustee may
become the owner of any of the Bonds in its own or any other capacity with the same rights it
would have if it were not the Trustee.
Section 1 . 3 Definitions . Unless the context otherwise requires, the terms defined in
this Section 1 . 3 shall, for all purposes of the Indenture, of any Supplemental Indenture, and of
any certificate, opinion or other document mentioned in this Indenture, have the meanings
specified below. All references in this Indenture to "Articles," "Sections" and other subdivisions
are to the corresponding Articles, Sections or subdivisions of this Indenture, and the words
3
4812-8086-2739.6
i
"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 of this Indenture.
"Administrative Expenses" means the following actual or reasonably estimated costs
permitted in accordance with the Special Service Area Act and related to the administration of
the Special Service Area and the Bonds as determined by the City or the Consultant on its behalf:
the costs of computing the Special Taxes and of preparing the annual Special Taxes collection
schedules; the costs of collecting the Special Taxes (whether by the City, the County or
otherwise), the costs of remitting the Special Taxes 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 Rebate Consultant; the
costs of the City or its designee in complying with disclosure requirements of applicable federal
and state securities laws and of the Special Service Area Act, including, but not limited to, public
inquiries regarding the Special Taxes; the costs associated with the release of funds from any
escrow account; the costs of obtaining ratings of the Bonds; and amounts advanced by the City
for any other administrative purposes of the Special Service Area, including the costs of
prepayment of Special Taxes, recordings related, to the prepayment, discharge or satisfaction of
Special Taxes; the costs of commencing foreclosure and pursuing collection of delinquent
Special Taxes and the reasonable fees of legal counsel of the City incurred in connection with
any of the foregoing.
"Administrative Expense Fund" means the fund by that name established pursuant to
Section 7.4 of this Indenture.
"Administrative Services Agreement" means the Agreement For Administration Services
dated , 2013 between the City and the Consultant.
"Authorized Denomination" means denominations of $ 100,000 and integral multiples of
$ 1 ,000 in excess thereof.
I
"Authorized Officer" means the Mayor, the City Administrator, the City Treasurer, the
Finance Director or any other officer designated as such pursuant to a certificate of the Mayor
delivered to the Trustee.
"Authorized Newspaper ' means a financial newspaper of general circulation as selected
by the Trustee and the City.
I
"Beneficial Owner" means, when the Bonds are in a book-entry system, any person who
acquires a beneficial ownership interest in a Bond held by DTC.
"Bond and Interest Fund" means the fund by that name established pursuant to Section
7_1 of this Indenture.
"Bond Re ig' strar" means The Bank of New York Mellon Trust Company, N.A. , and its
successors or assigns.
"Bondholder" means the person in whose name such Bond is registered in the bond
register maintained by the Bond Registrar.
4
4812-8086-2739.6
"Bonds" means the City' s Special Service Area Number 2003 - 100 Special Tax
Refunding Bonds, Series 2013 (Raintree Village Project) in the aggregate principal amount of
"Business Day" means a day on which banks in Chicago, Illinois, and New York, New
York are open to transact business.
"Ciff' means the United City of Yorkville, Kendall County, Illinois.
"Closing Date" means , 2013 , the date of issuance and delivery of the Bonds .
"Code" means the Internal Revenue Code of 1986, as amended. .
"Consultant" means David Taussig & Associates, Inc. and its successors and assigns or
any other firm selected by the City to assist it in administering the Special Service Area and the
extension and collection of Special Taxes pursuant to the Special Tax Roll and Report.
i
"Continuing Disclosure Agreement" means the Continuing Disclosure Agreement c
between the Village and the Dissemination Agent named therein as set forth in Exhibit D .
"Corporate Authorities" means the City Council of the City.
"Costs of Issuance Fund" means the fund by that name established pursuant to Section
7. 3 of this Indenture.
"Coun ' means Kendall County, Illinois.
"Defeasance Securities" means any bond or other obligations which, as to both principal
and interest, constitute direct obligations of, or the timely payment of which are unconditionally
guaranteed by, the United States of America, and any certificates or any other evidences of an
ownership interest in obligations or in specified portions thereof (which may consist of specified
portions of the interest thereon) of the character described in this definition.
"Deposito Participant" shall have the meaning gi
ry ven that term in Section 2 . 10 of this
Indenture.
"Designated Corporate Trust Office" means, when used with respect to the Trustee, the
office specified in Section 13 .2, or any successor corporate trust office which has been
designated by the Trustee in a written notice delivered to the City, the Consultant and the
registered owners of the Bonds.
"DTC" means The Depository Trust Company, New York, New York.
"Establishing Ordinance" means Ordinance Number 2003 -54 adopted on August 12,
2003 by the Corporate Authorities.
"Event of Default" shall have the meaning given that term in Section 9 . 1 of this
Indenture.
5
4812-8086-2739.6
I
"Foreclosure Proceeds" means the proceeds of any redemption or sale of property in the
Special Service Area sold as the result of a foreclosure action of the lien of the Special Taxes.
"Government Securities" means bonds, notes, certificates of indebtedness, treasury bills
or other securities constituting direct obligations of the United States of America and all
securities and obligations, the prompt payment of principal of and interest on which is
guaranteed by a pledge of the full faith and credit of the United States of America.
"Indenture" means this Trust Indenture dated as of May 1 , 2013 between the City and the
Trustee, as amended and supplemented from time to time.
"Indirect Participant" shall have - the meaning- given that term in Section 2. 10 of this
Indenture.
"Interest Payment Date" means, with respect to the Bonds, March 1 and September 1 of
each year, commencing on September 1 , 2013 .
"Letter of Representations" means the Blanket Issuer Letter of Representations dated
August 29, 2002 from the City to DTC, as amended from time to time.
"Local Government Debt Reform Act" means the Local Government Debt Reform Act,
30 ILCS §350/1 et seq. , as amended.
"Maximum Parcel Special Tax" shall have the meaning given that term in the Special
Tax Roll and Report.
"Mood' s," means Moody's Investors Service, Inc., a corporation organized and existing
i
under the laws of the State of Delaware, its successors and assigns, and if such corporation shall
be dissolved or consolidated or shall no longer perform the functions of a securities rating
agency "Moody' s" shall refer to such other nationally recognized securities rating agency
designated by the City to the Trustee.
"Parcel" shall have the meaning given that term in the Special Tax Roll and Report.
"Penalty ' shall have the meaning given that term in Section 8 . 1 (c) of this Indenture.
"Principal Prepayment Amount" means an amount equal to the "Special Tax Bond
Prepayment" as defined in the Special Tax Roll and Report.
"Prior Bond Ordinance" has the meaning set forth in the recitals.
"Prior Bonds" has the meaning set forth in the Recitals.
I
"Prior Indenture" means the Trust Indenture dated as of August 1 , 2003 between the City
and The Bank of New York Mellon Trust Company, N.A. (as successor to BNY Midwest Trust
Company), as trustee, relating to the Prior Bonds.
i
6
4812-8086-2739.6
i
I
"Purchase Contract" means the Bond Purchase Agreement dated 2013
between the Purchaser and the City.
i
"Purchaser" means William Blair & Company, L.L. C .
"Qualified Investments" 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 City 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,
interest bearing time deposits, or other investments constituting direct obligations of any bank as
defined by the Illinois Banking Act which are insured by the Federal Deposit Insurance
Corporation;
(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 City, 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 the
definition of "Qualified Investments") meeting the following requirements:
(i) the securities, unless registered or inscribed in the name of the
City, 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
i
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 City in connection with
repurchase agreements involving the investment of funds by the City. The State
Treasurer may act as custodial bank for the City;
7
4812-8086-2739.6
i
I
(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 City on the records of the custodial bank and the transaction must be
i
confirmed in writing to the City 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 City 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;
I
(ix) the custodial bank must take delivery of and maintain the securities
in its custody for the account of the City and confirm the transaction in writing to
the City. The custodial undertaking shall provide that the custodian takes
possession of the securities exclusively for the City; that the securities are free of
any claims against the trading partner; and any claims by the custodian are
subordinate to the City' s claims to rights to those securities;
(x) the obligations purchased by the City 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 City or Authorized
Officer; and
i
(xi) the custodial bank shall be liable to the City for any monetary loss
suffered by the City due to the failure of the custodial bank to take and maintain
possession of such securities;
(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 City' s funds are j
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 affiliate
8
4812-8086-2739.6
I
I
I
performs services for a fee, but only with the prior written consent of the City to such
investment, whether as a custodian, transfer agent, investment advisor or otherwise.
i
together with such other investments as shall from time to time be lawful for the investment of
City funds and shall be approved by the holders of fifty-one percent (51 %) of aggregate principal
amount of Bonds outstanding; provided that "Qualified Investments" 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 .
"Rebate Consultant" means an entity selected by the City expert in the calculation of
rebate amounts pursuant to Section 148 of the Internal Revenue Code of 1986, as amended. If at j
any time the Rebate Consultant resigns or is removed, and the City shall not have appointed a
successor within 30 days, the Rebate Consultant shall be an entity selected by the Trustee.
"Rebate Fund" means the fund by that name established pursuant to Section 7. 5 of this
Indenture.
"Rebate Requirement" shall have the meaning given that term in Section 8 . 1 (b) of this
Indenture.
"Record Date" means the fifteenth day of the month preceding an Interest Payment Date.
"Reserve Fund" means the fund by that name created pursuant to Section 7.2 of this
Indenture.
"Reserve Fund Credit" shall have the meaning given that term in Section A of Exhibit B
to the Special Tax Roll and Report.
"Reserve Requirement" means an amount equal to $ as adjusted for
prepayments as set forth in Section 7. 1 of this Indenture. The Trustee may rely on a certificate
from the City or the Consultant which states the Reserve Requirement as of the date of such
certificate.
"Responsible Officer" means, when used with respect to the Trustee, any vice president,
assistant vice president, senior associate, associate or other officer of the Trustee within the
Designated Corporate Trust Office customarily performing functions similar to those performed
by the persons who at the time shall be such officers, respectively, or to whom any corporate
trust matter is referred at the Designated Corporate Trust Office because of such person's
knowledge of and familiarity with the particular subject and having direct responsibility for the
administration of this Indenture.
"S&P" means Standard & Poor's Ratings Services, a division of the McGraw Hill
Companies, Inc. , a corporation organized and existing under the laws of the State of New York,
its successors and assigns, and if such corporation shall be dissolved or liquidated or shall no
longer perform the functions of a securities rating agency, "S &P" shall be deemed to refer to any
other nationally-recognized securities rating agency designated by the City to the Trustee.
9
4812-8086-2739.6
i
"Special Redemption Account" means the account by that name established pursuant to
Section 7 . 1 of this Indenture.
i
"Special Reserve Fund" means the fund by that name created pursuant to Section 7. 3 (a)
of this Indenture.
i
"Special Reserve Fund Credit" means, with respect to each Parcel, the difference between
(A) the amount of the prepayment of the Special Taxes for such Parcel made in accordance with
the Special Tax Roll and Report and (B) the amount of prepayment of the Special Taxes for such
Parcel made in accordance with the Special Tax Roll and Report if the Prior Bonds remained
outstanding and the Bonds were not issued, as determined by the Consultant.
"Special Reserve Fund Requirement" means an amount equal to $40,000 to fund Special
Reserve Fund Credits for possible prepayments.
i
"Special Service Area" means United City of Yorkville Special Service Area Number
2003 - 100, described more fully in Exhibit A to this Indenture.
"Special Service Area Act" means the Special Service Area Tax Law, 35 ILCS §200/27-5
et seq. , as amended.
I
"Special Services" means the improvements benefiting the Special Service Area
consisting of engineering, soil testing and appurtenant work, mass grading and demolition, storm
water management facilities, storm drainage systems and storm sewers, site clearing and tree
removal, public water facilities, sanitary sewer facilities, erosion control measures, roads, streets,
curbs, gutters, street lighting, traffic controls, sidewalks, equestrian paths and related street
improvements, and equipment and materials necessary for the maintenance thereof, landscaping,
wetland mitigation and tree installation, costs for land and easement acquisitions relating to any
of the foregoing improvements, required tap-on and related fees for water or sanitary sewer
services and other eligible costs to serve the Special Service Area. Special Services are referred
to as the Public Improvements in the Public Infrastructure Agreement dated August 1 , 2003
delivered in connection with the Prior Bonds , Special Services shall not include any annexation
fees associated with the Special Service Area.
"Special Tax Requirement" means the "Special Tax Requirement" as defined in the
Special Tax Roll and Report but including any required deposits to the Special Reserve Fund,
provided that credit may be given for any amounts on deposit in the Funds and Accounts created
by this Indenture and available to pay the Special Tax Requirement.
"Special Tax Roll" means the special tax roll for the payment of the Bonds established
and amended from time to time pursuant to the Special Tax Roll and Report.
"Special Tax Roll and Report" means the United City of Yorkville Special Service Area
Number 2003 - 100 Special Tax Roll and Report prepared by the Consultant.
"Special Taxes" means the taxes levied by the City on all taxable real property within the
Special Service Area pursuant to the Special Tax Roll and this Indenture.
10
4812-8086-2739.6
"Supplemental Indenture" means an indenture adopted by the Corporate Authorities of
the City as provided in Article XI hereof which amends or supplements this Indenture.
"Tax Agreement" or "Tax Agreements" means the Tax Compliance Certificate and
Agreement of the City dated the date of issuance and delivery of the Bonds, as amended from
time to time.
"Trustee" means The Bank of New York Mellon Trust Company, N.A. , Chicago, Illinois
and its successors and assigns.
ARTICLE II
BOND DETAILS
Section 2. 1 Purpose of Issuance; Amount of Bonds . The sum of $ shall
be borrowed by the City pursuant to the Special Service Area Act and the Local Government
Debt Reform Act for the purpose of refunding the Prior Bonds, the proceeds of which were used
to pay a portion of the costs of the Special Services, including the costs of the City in connection
with the issuance of the Bonds and refunding the Prior Bonds, and deposits to the Reserve Fund.
In evidence of such borrowing, Bonds in the aggregate principal amount of $ shall
be issued as provided in this Indenture. The total principal amount of bonds that may be issued
pursuant to this Indenture is expressly limited to $
Section 2.2 Form; Denominations; Numbers. The Bonds shall be issued only in fully
registered form without coupons initially in the denominations of $ 100,000 and integral
multiples of $ 1 ,000 in excess of that sum. The Bonds shall be designated "Special Service Area
Number 2003 - 100 Special Tax Refunding Bonds, Series 2013 (Raintree Village Project)" and
shall be numbered consecutively from R- 1 upward but need not be authenticated or delivered in
consecutive order.
i
i
Section 2 .3 Date of Bonds; CUSIP Identification Numbers. The Bonds shall be dated
as of the date of delivery of the Bonds to the Purchaser upon original issuance. CUSIP
identification numbers shall be imprinted on the Bonds, provided that any failure on the part of
the City or the Trustee to use such CUSIP numbers in any notice to any Bondholders shall not
constitute an Event of Default or any violation of the City' s contract with such Bondholders and
shall not impair the effectiveness of such notice.
Section 2.4 Maturities, Interest Rates. The Bonds shall mature and become payable
on March 1 in the years and in the amounts and shall bear interest at the rates set forth below:
Year Amount Interest Rate
$
Section 2 . 5 Interest. The Bonds shall bear interest at the rate set forth in Section 2 .4
payable on the Interest Payment Dates in each year with the first Interest Payment Date being
September 1 , 2013 . Interest on the Bonds shall be calculated on the basis of a 360 day year
11
4812-8086-2739.6
composed of twelve 30-day months. Each Bond shall bear interest from the Interest Payment
Date next preceding the date of authentication of such Bond unless (i) it is authenticated on an
Interest Payment Date, in which event it shall bear interest from such date of authentication, or
(ii) it is authenticated prior to an Interest Payment Date and after the close of business on the
Record Date preceding such Interest Payment Date, in which event it shall bear interest from
such Interest Payment Date, or (iii) it is authenticated prior to the Record Date preceding the first
Interest Payment Date, in which event it shall bear interest from its dated date; provided,
however, that if at the time of authentication of a Bond, interest is in default on such Bond, such
Bond shall bear interest from the Interest Payment Date to which interest had previously been
paid or made available for payment on such Bond.
Section 2 .6 Form of Bonds; Execution; Authentication. The Bonds shall be in
substantially the form set forth in Exhibit B to this 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.
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 Exhibit B to this Indenture shall
have been duly executed by the Trustee appointed by this Indenture as authenticating agent of
the City. Execution of that certificate upon any Bond shall be conclusive evidence that the Bond
has been authenticated and delivered under this Indenture.
Section 2 .7 Payment of Bonds. The Bonds shall be payable in lawful money of the
United States at the Designated Corporate Trust Office of the Trustee. The principal of each !
Bond shall be payable at maturity upon presentment of the Bond at the principal corporate trust
office of the Trustee. Interest on each Bond shall be payable on each Interest Payment Date by
check or draft of the Trustee mailed to the person in whose name that Bond is registered on the
books of the Bond Registrar at the close of business on the Record Date. During such time as the
Bonds are registered so as to participate in a securities depository system with DTC, principal of
and interest and redemption premium on each Bond shall be payable by wire transfer pursuant to
instructions from DTC.
Section 2. 8 Appointment of Trustee. The Bank of New York Mellon Trust Company,
N.A. is appointed Trustee and Bond Registrar for the Bonds.
Section 2 . 9 Registration of Bonds; Persons Treated as Owners. The Bonds shall be
negotiable, subject to the following provisions for registration and registration of transfer. The
City shall maintain books for the registration of the Bonds at the Syracuse, New York office of
i
12
4812-8086-2739.6
the Bond Registrar. Each Bond shall be fully registered on those books in the name of its owner,
as to both principal and interest. Transfer of each Bond shall be registered only on those books
upon surrender of that Bond to the Bond Registrar by the registered owner or his or her attorney
duly authorized in writing together with a written instrument of transfer satisfactory to the Bond
Registrar duly executed by the registered owner or his or her duly authorized attorney. Upon
surrender of a Bond for registration of transfer, the City shall execute, the Trustee shall
authenticate, and the Bond Registrar shall deliver, in the name of the transferee, one or more new
Bonds of the same aggregate principal amount and of the same maturity as the Bond surrendered.
Bonds may be exchanged, at the option of the registered owner, for an equal aggregate
principal amount of Bonds of the same maturity of any other Authorized Denominations, upon
surrender of those Bonds at the office of the Bond Registrar with a written instrument of transfer
satisfactory to the Bond Registrar duly executed by the registered owner or his or her duly
authorized attorney.
In all cases in which the privilege of exchanging or transferring Bonds is exercised, the
City shall execute, the Trustee shall authenticate, and the Bond Registrar shall deliver, Bonds in
accordance with the provisions of this Indenture. All Bonds surrendered in any exchange or
transfer shall be canceled immediately by the Bond Registrar.
For every exchange or registration of transfer of Bonds, the City or the Bond Registrar
may make a charge sufficient to reimburse it for any tax, fee or other governmental charge, other
than one imposed by the City, required to be paid with respect to that exchange or registration of
transfer, and payment of that charge by the person requesting exchange or registration of transfer
shall be a condition precedent to that exchange or registration of transfer. No other charge may
be made by the City or the Bond Registrar as a condition precedent to exchange or registration of
transfer of any Bond.
I
The Bond Registrar shall not be required to exchange or register the transfer of any Bond
following the close of business on the 15th day of the month preceding any Interest Payment
Date on such Bond, nor to transfer or exchange any Bond after notice calling such Bond for
redemption has been mailed, nor during a period of 15 days next preceding mailing of a notice of
redemption of any Bonds.
The City, the Trustee and the Bond Registrar may treat the registered owner of any Bond
as its absolute owner, whether or not that Bond is overdue, for the purpose of receiving payment
of the principal of or interest on that Bond and for all other purposes, and neither the City, the
Bond Registrar nor the Trustee shall be affected by any notice to the contrary. Payment of the
principal of and interest on each Bond shall be made only to its registered owner, and all such
payments shall be valid and effective to satisfy the obligation of the City on that Bond to the
extent of the amount paid.
Section 2. 10 Global Form; Securities Depository. It is intended that the Bonds be
registered so as to participate in a securities depository system with DTC, as set forth herein.
The Bonds shall be initially issued in the form of a single fully registered Bond for each of the
maturities as established in Section 2 .4 of this Indenture. Upon initial issuance, the ownership of
the Bonds shall be registered in the name of Cede & Co. , or any successor thereto, as nominee
13
4812-8086-2739.6 j
for DTC. The City and the Trustee are authorized to execute and deliver such letters to or
agreements with DTC as shall be necessary to effectuate the securities depository system of
DTC, including the Letter of Representations. With respect to Bonds registered in the name of
Cede & Co. , as nominee of DTC, the City, the Bond Registrar and the Trustee shall have no
responsibility or obligation to any broker-dealer, bank or other financial institution for which
DTC holds Bonds from time to time as securities depository (each such broker-dealer, bank or
other financial institution being referred to herein as a "Depository Participant") or to any person
on behalf of whom such a Depository Participant holds an interest in the Bonds (each such
person being herein referred to as an "Indirect Participant") . Without limiting the immediately
preceding sentence, the City, the Bond Registrar and the Trustee shall have no responsibility or j
obligation with respect to (a) the accuracy of the records of DTC, Cede & Co. , or any Depository
Participant with respect to the ownership interest in the Bonds, (b) the delivery to any Depository
Participant or any Indirect Participant or any other person, other than a registered owner of a
Bond, of any notice with respect to the Bonds, including any notice of redemption or (c) the
payment to any Depository Participant or Indirect Participant or any other person, other than a
registered owner of a Bond, of any amount with respect to principal of, premium, if any, or
interest on, the Bonds. While in the securities depository system of DTC, no person other than
Cede & Co. , or any successor thereto, as nominee for DTC, shall receive a Bond certificate with j
respect to any Bond. Upon delivery by DTC to the Trustee of written notice to the effect that
DTC has determined to substitute a new nominee in place of Cede & Co. , and subject to the
provisions of this Indenture with respect to the payment of interest by the mailing of checks or
drafts to the registered owners of Bonds at the close of business on the record date applicable to
any Interest Payment Date, the name "Cede & Co. " in this Indenture shall refer to such new
nominee of DTC.
i
In the event that (a) the Trustee determines that DTC is incapable of discharging its
responsibilities described herein and in the Letter of Representations, (b) the Letter of
Representations shall be terminated for any reason or (c) the City determines that it is in the best
interests of the Beneficial Owners of the Bonds that they be able to obtain certificated Bonds, the
City shall notify DTC of the availability through DTC of Bond certificates and the Bonds shall
no longer be restricted to being registered in the name of Cede & Co. , as nominee of DTC. At
that time, the City may determine that the Bonds shall be registered in the name of and deposited j
with a successor depository operating a securities depository system, as may be acceptable to the
City or such depository' s agent or designee, and if the City does not select such alternate
securities depository system then the Bonds may be registered in whatever name or names
registered owners of Bonds transferring or exchanging Bonds shall designate, in accordance with
the provisions hereof.
Notwithstanding any other provisions of this Indenture to the contrary, so long as any j
Bond is registered in the name of Cede & Co. , as nominee of DTC, all payments with respect to
principal of, premium, if any, and interest on the Bonds and all notices with respect to the Series
shall be made and given, respectively, in the manner provided in the Letter of Representations.
Section 2 . 11 Mutilated, Lost, Stolen or Destroyed Bonds. If any Bond is mutilated,
lost, stolen or destroyed, the Trustee will authenticate a new Bond of the same denomination if
any mutilated Bond shall first be surrendered to the Trustee, and if, in the case of any lost, stolen
or destroyed Bond, there shall first be furnished to the Trustee, and the City evidence of such
14
4812-8086-2739.6
loss, theft or destruction, together with an indemnity satisfactory to each of them to save each of
them harmless from all risks related thereto, however remote. If the Bond has matured, instead
of issuing a duplicate Bond, the Trustee may pay the Bond without requiring surrender of the
Bond and make such requirements as the Trustee deems fit for its protection, including a lost
instrument bond. The City and the Trustee may charge their reasonable fees and expenses in this
connection.
Section 2. 12 Cancellation of Bonds. Whenever a Bond is delivered to the Trustee for
cancellation (upon payment, redemption or otherwise), or for transfer, exchange or replacement
pursuant to Section 2 . 9, the Trustee will promptly cancel the Bond and deliver the canceled Bond
or a certificate of cancellation as appropriate to the City at its request. The Trustee shall
periodically destroy such cancelled Bonds in accordance with applicable record retention
requirements and policies. -
i
ARTICLE III
NO ADDITIONAL BONDS
4
Only the Bonds will be issued under this Indenture. No additional bonds will be issued
that are secured by a pledge of the Special Taxes other than bonds or other obligations issued for
the purpose of refunding all or a portion of the Bonds.
ARTICLE IV
I
i
REDEMPTION OF BONDS
Section 4. 1 Mandatory Sinking Fund Redemption. The Bonds are subject to
mandatory sinking fund redemption and final payment at a price of par plus accrued interest,
n
without premium, on March 1 , of the years and in the amounts as follows:
Year Amount
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
15
4812-8086-2739.6
Year Amount
2028
2029
2030
2031
2032
2033
The foregoing mandatory sinking fund requirements are subject to adjustment as
described in Sections 4.2 , 4. 3 and 4.4 hereof.
The City covenants that it will redeem the Bonds pursuant to the mandatory sinking fund
redemption requirements for the Bonds to the extent amounts are on deposit in the Bond and
Interest Fund. Proper provision for mandatory redemption having been made, the City covenants
that the Bonds so selected for redemption shall be payable upon redemption and taxes have been
levied and will be collected as provided herein and in the Bond Ordinance for such purposes.
Section 4.2 Optional Redemption. The Bonds 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 March 1 , 2023 , at
a redemption price of 100% of the principal amount of the Bonds to be redeemed plus accrued
and unpaid interest to the date of redemption.
Any optional redemption of Bonds in part shall be applied, to the extent possible, to reduce pro
rata the amount of Bonds maturing in each year and required to be redeemed by mandatory
sinking fund redemption pursuant to Section 4. 1 of this Indenture so as to maintain the
proportion of principal maturing or subject to mandatory sinking fund redemption in each year to
the total original principal amount of Bonds as of the date of issuance.
i
Section 4. 3 Mandatory Redemption Upon Condemnation; Amounts Transferred from
the Special Reserve Fund.
(a) The Bonds are subject to mandatory redemption on any Interest Payment
Date, in part, at a redemption price equal to 100% of the principal amount to be redeemed,
together with accrued interest to the date fixed for redemption, without premium, from amounts
in the Bond and Interest Fund consisting of the proceeds received by the City in connection with
a condemnation of any of the Special Services or any other property dedicated to, or owned by,
the City within the Special Service Area and allocable to the Bonds as determined by the
Consultant and which proceeds are not used by the City to rebuild the Special Services.
i
(b) The Bonds are also subject to mandatory redemption, in part, on March 1 , j
2023 from amounts transferred from the Special Reserve Fund to the Special Redemption
Account on such date in accordance with Section 7 . 3 (a) at a redemption price of 100% of the
principal amount to be redeemed plus accrued and unpaid interest to the date of redemption.
(c) Any mandatory redemption of the Bonds pursuant to this Section 4. 3 shall !
be applied, to the extent possible, to reduce pro rata the amount of Bonds maturing in each year
16
4812-8086-2739.6
i
i
II
f
and required to be redeemed by mandatory sinking fund redemption pursuant to Section 4. 1 of
this Indenture so as to maintain the proportion of principal maturing and subject to mandatory
sinking fund redemption in each year to the total original principal amount of the Bonds as of the
date of issuance.
Section 4.4 Special Mandatory Redemption from Optional PreveMent of Special
Taxes . The Bonds are also subject to mandatory redemption on any March 1 , June 1 , September
1 or December 1 , in part, from amounts available for disbursement from the Special Redemption
Account of the Bond and Interest Fund pursuant to Section 7. 1 (e) and from amounts transferred
from the Special Reserve Fund and the Reserve Fund to the Special Redemption Account
pursuant to Section 7. 1 (e), at a redemption price expressed as a percentage of the principal
amount of the Bonds to be redeemed, as set forth below, together with accrued interest on such
Bonds to the date fixed for redemption:
Redemption Dates Redemption Prices
On or prior to
February 28 , 2022 102%
i
March 1 , 2022 through
February 28 , 2023 101 % j
March 1 , 2023 and thereafter 100%
Any special mandatory redemption of the Bonds pursuant to this Section 4.4 shall be
applied, to the extent possible, to reduce pro rata the amount of Bonds maturing in ,each year and
required to be redeemed by mandatory sinking fund redemption pursuant to Section 4. 1 of this
Indenture so as to maintain the proportion of principal maturing in each year or subject to
mandatory sinking fund redemption to the total original principal amount of Bonds as of the date
of issuance.
I
I
Section 4. 5 Redemption Provisions; Notice of Redemption. If less than all the Bonds
of any maturity are to be redeemed on any redemption date, the Bond Registrar appointed in this
Indenture shall assign to each Bond of the maturity to be redeemed a distinctive number for each
$ 1 ,000 of principal amount of that Bond. The Bond Registrar shall then select by lot from the
numbers so assigned, using such method as it shall deem proper in its discretion, as many
numbers as, at $ 1 ,000 per number, shall equal the principal amount of Bonds of that maturity to
be redeemed; provided that following any redemption, no Bond shall be outstanding in an
amount less than the minimum Authorized Denomination except 0 as necessary to effect the
mandatory sinking fund redemption of Bonds as provided in Section 4. 1 hereof.
Notice of the redemption of any Bonds, which by their terms shall have become subject
to redemption, shall be given to the registered owner of each Bond or portion of a Bond called
for redemption not less than 15 or more than 60 days before any date established for redemption
of Bonds, by the Bond Registrar, on behalf of the City, by first class mail sent to the registered
owner' s last address, if any, appearing on the registration books kept by the Bond Registrar. All
notices of redemption shall include at least the designation, date and maturities of Bonds called
I
17
4812-8086-2739.6
for redemption, CUSIP Numbers, if available, and the date of redemption. In the case of a Bond
to be redeemed in part only, the notice shall also specify the portion of the principal amount of
the Bond to be redeemed. The mailing of the notice specified above to the registered owner of
any Bond shall be a condition precedent to the redemption of that Bond, provided that any notice
which is mailed in accordance with this Indenture shall be conclusively presumed to have been
duly given whether or not the owner received the notice. The failure to mail notice to the owner
of any Bond, or any defect in that notice, shall not affect the validity of the redemption of any
other Bond for which notice was properly given.
Any notice of optional redemption may also state that the redemption is conditioned on
receipt of moneys for such redemption by the Trustee on or prior to the redemption date and the
satisfaction of any other condition specified in such notice ("Conditional Redemption") ; and
such notice and optional redemption shall be of no force, or effect and the redemption of the
Bonds for which notice was given shall be rescinded if by no later than the scheduled redemption
date (i) sufficient moneys are not so received or available for payment or (ii) any other condition
specified in the redemption notice has not been satisfied. Notice of a rescission of a Conditional
Redemption shall be given by the Trustee in the same manner as is provided in this Section 4. 5
for the giving of notice of redemption or by electronic means confirmed in writing. Any Bonds
subject to Conditional Redemption where redemption has been rescinded shall remain
Outstanding, .and neither the recession nor the failure of funds being made available in part or in
whole on or before the redemption date shall constitute an Event of Default.
Section 4.6 Purchase in Lieu of Redemption. In lieu of redemption as provided in this
Article IV, moneys in the Bond and Interest Fund may be used and withdrawn by the City for the
purchase of outstanding Bonds, at public or private sale as and when, and at such prices
(including brokerage and other charges) as the City may provide, but in no event may Bonds be
purchased at a price in excess of the principal amount of such Bonds, plus interest accrued to the
date of purchase and any premium which would otherwise be due if such Bonds were to be
redeemed in accordance with this Indenture.
ARTICLE V
APPLICATION OF PROCEEDS
Section 5 . 1 Application of Proceeds. The proceeds of the sale of the Bonds in the
amount of $ , which is net of underwriter' s discount in the amount of $ ,
shall be applied as follows immediately upon receipt of the purchase price:
(a) $ shall be deposited into the Bond and Interest Fund
created pursuant to the Prior Indenture and applied to the redemption of the Prior Bonds
on , 2013 .
(b) The amount of $ shall be deposited in the Reserve
Fund.
(c) The amount of $ shall be deposited , in the
Administrative Expense Fund.
18
4812-8086-2739.6
i
i
(d) The amount of $ shall be deposited in the Costs of
Issuance Fund.
All amounts received upon the sale of the Bonds, together with all interest and other
investment earnings on those amounts, are appropriated and set aside for the purposes for which
the Bonds are being issued as set forth in this Indenture. In addition, of the $ of j
amounts on deposit with the trustee for the Prior Bonds $ are being transferred or
retained by the Prior Trustee for deposit in the Bond and Interest Fund for the Prior Bonds,
$ will be transferred to the Administrative Expense Fund for the Prior Bonds, and
the remainder ($ ) shall be transferred to the Bond and Interest Fund for the Bonds.
Pursuant to the Bond Ordinance, amounts collected from the 2013 levy of Special Taxes
pursuant to the Prior Bond Ordinance shall be deposited, when collected into the Bond and
Interest Fund for application in accordance with Section 7. 1 hereof.
ARTICLE VI
SECURITY FOR THE BONDS
i
Section 6 . 1 Limited Obligations. The Bonds shall constitute limited obligations of the
City, payable from the Special Taxes and other moneys deposited in the Funds and Accounts
established pursuant to Article VII other than the Administrative Expense Fund and the Rebate
Fund. The Bonds shall not constitute general 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.
Section 6.2 Levy of Special Taxes.
(a) Pursuant to the Bond Ordinance there have been levied . Special Taxes
upon all taxable real property within the Special Service Area subject to the Special Taxes
sufficient to pay and discharge the principal of the Bonds at maturity or mandatory sinking fund
redemption dates and to pay interest on the Bonds for each year at the interest rates set forth in
Section 2 .4 of this Indenture, to pay the estimated Administrative Expenses of the City for each
year and to fund and replenish the Reserve Fund to an amount equal to the Reserve Requirement
and the Special Reserve Fund to an amount equal to the Special Reserve Fund Requirement.
i
(b) The City Clerk has been directed to file a certified copy of the Bond
Ordinance, and an accurate map of the Special Service Area, with the County Clerk of the
County of Kendall. Pursuant to the Special Tax Roll, the Special Taxes shall be computed,
extended and collected in accordance with the Special Tax Roll and Report and the Special Tax
Roll, and divided among all taxable real property within the Special Service Area in accordance
with the terms of the Establishing Ordinance and the Special Tax Roll and Report. It shall be the
duty of the City and the City hereby covenants, annually on or before the last Tuesday of
December for each of the years 2013 through 2031 to calculate or cause the Consultant to
calculate the Special Tax Requirement; to amend the Special Tax Roll pursuant to Section VI.E
of the Special Tax Roll and Report and provide the County tax collector with the amended
Special Tax Roll; to adopt an ordinance approving the amount of the current calendar year' s
Special Tax Requirement and abating the Special Taxes levied pursuant to the Bond Ordinance
19
4812-8086-2739.6
I
to the extent the taxes levied pursuant to the Bond Ordinance exceed the Special Tax
Requirement as calculated by the City pursuant to the Establishing Ordinance and the Special
Tax Roll and Report. On or before the last Tuesday of January for each of the years 2014
through 2032 the City shall notify the Trustee of the amount of the Special Tax Requirement and
the amount of the Special Taxes to be abated. The City shall take all actions which shall be
necessary to provide for the levy, extension, collection and application of the taxes levied by the
Bond Ordinance, including enforcement of such taxes by providing the County with such
information as is deemed necessary to enable the County to include any property subject to
delinquent Special Taxes in the County Collector' s annual tax sale [and in the event the tax lien
is forfeited at such tax sale, by institution of foreclosure procedures as provided by law;
provided, however, that the obligation to institute any foreclosure action against any taxpayer
shall only arise in the event the City makes the determination that the proceeds from the
foreclosure action have a commercially reasonable expectation of exceeding the costs thereof.
(c) Upon receipt by the Trustee of any prepayment of Special Taxes in an
amount calculated by the Consultant as being required pursuant to the Special Tax Roll and
Report to satisfy the lien on a Parcel within the Special Service Area, the City and the Trustee
shall execute a Satisfaction of Tax Lien substantially in the form of Exhibit C hereto,
appropriately completed and the Trustee shall deliver the Satisfaction of Tax Lien to the City for
filing with the Recorder of Deeds of Kendall County, Illinois. The City shall deliver a copy of
each such Satisfaction of Tax Lien to the property owner of record and a copy of the recorded
Satisfaction of Tax Lien to the Trustee.
ARTICLE VII
FUNDS AND ACCOUNTS
Section 7. 1 Bond and Interest Fund.
(a) There is hereby created and established with the Trustee a separate and
special fund of the City established exclusively for paying principal of, interest on and
redemption premium on the Bonds and which shall be designated as "The Special Service Area
Number 2003 - 100 Special Tax Refunding Bonds, Bond and Interest Fund" (the "Bond and
Interest Fund"). When collected, the Special Taxes, including amounts transferred to the Trustee
from the Bond and Interest Fund created for the Prior Bonds, and the Foreclosure Proceeds,
including any interest and penalties collected in connection with such Special Taxes or
Foreclosure Proceeds, shall be placed in the Bond and Interest Fund. The City may provide for
the County to transmit directly to the Trustee for deposit to the Bond and Interest Fund any
Special Taxes collected by the County. In addition, proceeds received by the City in connection j
with a condemnation of any of the Special Services or any other property owned by or dedicated
to the City within the Special Service Area and allocable to the Bonds as determined by the
Consultant which is not used to rebuild the Special Services shall be deposited in the Bond and
Interest Fund. Moneys deposited in the Bond and Interest Fund and investments of the Bond and
Interest Fund shall never be commingled with or loaned to any other funds of the City. All
interest and other investment earnings on the Bond and Interest Fund shall become, when
received, a part of the Bond and Interest Fund. When the amount of condemnation proceeds
deposited to the Bond and Interest Fund equals $5,000 or more, such amount shall be used to
20 j
4812-8086-2739.6
I
I
it
redeem Bonds pursuant to Section 4. 3 (a) of this Indenture on the next Interest Payment Date.
Any amounts representing condemnation proceeds which remain on deposit in the Bond and
Interest Fund for a continuous period of thirty (30) months and which will not be used to redeem
the Bonds on the next Interest Payment Date in accordance with Section 4. 3 and this section
shall be used to pay debt service on the Bonds on the next Interest Payment Date.
(b) Amounts deposited in the Bond and Interest Fund are appropriated for and
irrevocably pledged to, and shall be used solely for. the purpose of, paying the principal of and
interest and redemption premium on the Bonds, or for transfers to the Special Reserve Fund, the
Reserve Fund or the Administrative Expense Fund as permitted by paragraph (c) of this Section
7_1 and by Section 7.2.
(c) At any time after September 1 but in no event later than December 1 of
each year, the Trustee shall determine the amount needed to pay principal of and interest and
redemption premium on the Bonds on the next succeeding Interest Payment Date. After the
Trustee has determined that sufficient amounts are on deposit in the Bond and Interest Fund to
pay principal of, interest on and redemption premium due on the Bonds on the next succeeding
Interest Payment Date, the Trustee shall notify the City and the Consultant of any excess
amounts on deposit in the Bond and Interest Fund, and, at the written direction of the City, shall
transfer an amount from the Bond and Interest Fund to the Administrative Expense Fund which
the City has determined will be adequate, together with other amounts in the Administrative
Expense Fund or reasonably expected to be transferred to or deposited in such Fund, to pay all
Administrative Expenses during the succeeding calendar year. After making such transfer to the
Administrative Expense Fund any excess amounts on deposit in the Bond and Interest Fund shall
be transferred to the Reserve Fund to the extent necessary to replenish the Reserve Fund to the
Reserve Requirement. After (i) making such transfer to the Administrative Expense Fund, and
(ii) the Reserve Fund has amounts on deposit equal to the Reserve Requirement, any excess
amounts on deposit in the Bond and Interest Fund shall be transferred to the Special Reserve
Fund to the extent necessary to fund the Special Reserve Fund until the amount on deposit in j
such Fund equals the Special Reserve Fund Requirement. Once the amount on deposit in the
Special Reserve Fund equals the Special Reserve Fund Requirement, no further deposits shall be
made to such Fund and no replenishment of such Fund for any withdrawals shall be required. If
any excess amounts exist in the Bond and Interest Fund, after making the deposit to the Special
Reserve Fund, such excess shall be considered by the City when determining the amount of
Special Taxes to be collected pursuant to Section 6.2(a).
(d) [Reserved. ]
(e) There is hereby created within the Bond and Interest Fund established
with the Trustee a separate account designated the "Special Redemption Account." All
prepayments of the Special Taxes made in accordance with the Special Tax Roll and Report shall
be deposited in the Special Redemption Account. Moneys in the Special Redemption Account
shall be used exclusively to redeem Bonds pursuant to Section 4.4, or to pay debt service on the
Bonds pursuant to this Section 7. 1 . In the event of any optional prepayment of the Special
Taxes, prior to giving notice of the redemption of Bonds in accordance with Section 4. 5 of this
Indenture, the Trustee shall transfer from (A) the Special Reserve Fund to the Special
Redemption Account an amount (if possible) equal to the Special Reserve Fund Credit, as
21
4812-8086-2739.6
i
I
determined by and upon the direction of the Consultant, and (B) the Reserve Fund to the Special
Redemption Account an amount equal to the Reserve Fund Credit as determined by and upon the
direction of the Consultant. When the amount on deposit in the Special Redemption Account
equals or exceeds $ 1 ,000, such amount shall be used to redeem Bonds on the next March 1 ,
June 1 , September 1 or December 1 in accordance with Section 4.4. On each such payment date,
the Trustee shall withdraw from the Special Redemption Account and pay to the owners of the
Bonds the amounts to redeem the Bonds pursuant to Section 4.4. Notwithstanding the foregoing,
any amounts contained in the Special Redemption Account for a continuous period of thirty (30)
months and which will not be used to redeem Bonds on the next March 1 , June 1 , September 1 or
December 1 in accordance with the immediately preceding sentence and Section 4.4, shall be
used to pay debt service on the Bonds on the next Interest Payment Date. Any amounts
contained in the Special Redemption Account on the final maturity date of the Bonds shall be
used to pay outstanding debt service on the Bonds.
Section 7.2 Reserve Fund. There is hereby created and established with the Trustee a
separate and special fund of the City which shall be designated as "The Special Service Area
Number 2003 - 100 Special Tax Refunding Bonds, Reserve Fund" (the "Reserve Fund"), which
must be maintained in an amount equal to the Reserve Requirement. The Reserve Requirement
shall be an amount equal to $ as reduced by the amount of any Reserve Fund Credit
transferred pursuant to Section 7. 1 (e). Amounts deposited in the Reserve Fund shall be used
solely for the purpose of (i) making transfers to the Bond and Interest Fund to pay the principal
of, including mandatory sinking fund payments, and interest and any premium on, all Bonds
when due, in the event that moneys in the Bond and Interest Fund are insufficient therefor, (ii)
making any transfers to the Bond and Interest Fund if the balance in the Reserve Fund and the
Special Reserve Fund exceeds the amount required to redeem all Bonds then outstanding, (iii)
making transfers to the Special Redemption Account pursuant to Section 7. 1 (e), or (iv) if the
amount then on deposit in the Reserve Fund is at least equal to the Reserve Requirement, for
transfer in accordance with the next paragraph.
On the Business Day prior to each Interest Payment Date, moneys in the Reserve Fund in
excess of the Reserve Requirement shall be transferred by the Trustee from the Reserve Fund to
the Bond and Interest Fund to be used for the payment of interest on Bonds on the next following
Interest Payment Date.
I
C
Section 7 . 3 Special Reserve Fund and Cost of Issuance Fund.
(a) There is hereby created and established with the Trustee a separate and
special fund of the City which shall be designated as the "Special Service Area Number 2003 -
100 Special Tax Refunding Bonds, Special Reserve Fund" (the "Special Reserve Fund") .
Special Taxes shall be deposited in the Special Reserve Fund in accordance with Section 7 . 1 (c)
until the amounts on deposit in the Special Reserve Fund equal the Special Reserve Fund
Requirement.
I
Amounts deposited in the Special Reserve Fund shall be used solely for the purpose of
(i) making any transfers to the Bond and Interest Fund if the aggregate balance in the Special
Reserve Fund and the Reserve Fund exceeds the amount required to redeem all Bonds then
outstanding, (ii) for transfer to the Special Redemption Account in an amount equal to the
22
4812-8086-2739.6
I
I
Special Reserve Fund Credit in accordance with the Section 7. 1 (e), (iii) on March 1 , 2023 for
transfer to the Special Redemption Account as described below, (iv) at the direction of an
Authorized Officer for transfer to the Bond and Interest Fund or any other fund established
hereunder, or (v) at the direction of an Authorized Officer for any use permitted by the Special j
Service Area Act, provided an opinion of bond counsel is delivered to the Trustee to the effect
that such use will not violate the Special Service Area Act or adversely affect the tax-exempt
status of interest on the Bonds.
On March 1 , 2023 (on which date the Special Reserve Fund Credit shall be zero), the
Trustee shall without further direction, transfer any remaining amounts on deposit in the Special
Reserve Fund to the Special Redemption Account to be applied to the redemption of Bonds in
accordance with Section 4. 3 (b) hereof. On or prior to February 10, 2023 , the Trustee shall send
notice of the redemption of the Bonds from amounts transferred from the Special Reserve Fund
in accordance with the provisions of Section 4. 5 hereof.
Any amounts in the Special Reserve Fund that are used to pay principal of, or interest or
premium on, the Bonds shall be treated as Special Taxes paid by the owners of the affected
Parcels for purposes of the Special Tax Roll and Report.
Amounts on deposit in the Special Reserve Fund are not pledged to the payment of
principal of or interest on the Bonds.
i
(b) There is hereby created and established with the Trustee a separate and
special fund of the City which shall be designated as the "Special Service Area Number 2003- j
100 Special Tax Refunding Bonds, Costs of Issuance Fund" (the "Costs of Issuance Fund ').
Amounts deposited in the Costs of Issuance Fund shall be used solely for the purpose of paying
costs incurred in connection with the issuance of the Bonds and the refunding of the Prior Bonds.
Disbursements from the Costs of Issuance Fund shall be made by the Trustee upon receipt of a
request of the City which shall (i) set forth the amount required to be disbursed, the purpose for
which the disbursement is to be made, that the disbursement is a proper expenditure from the
Costs of Issuance Fund, and payment instructions to the Trustee for the amount to be paid; and
(ii) certify that no portion of the amount then being requested to be disbursed was set forth in any
previous request for disbursement. On the date which is six (6) months after the date of issuance
of the Bonds, the Trustee shall transfer all amounts remaining in the Costs of Issuance Fund to
the Bond and Interest Fund,
Section 7 .4 Administrative Expense Fund. There is hereby created and established
with the Trustee a separate and special fund of the City which shall be designated as "The
Special Service Area Number 2003 - 100 Special Tax Refunding Bonds, Administrative Expense
Fund" (the "Administrative Expense Fund '). Amounts in the Administrative Expense Fund shall
be withdrawn by the Trustee and paid to the City or upon its order upon receipt by the Trustee of
a written request from an Authorized Officer stating the amount to be withdrawn, that such
amount is to be used to pay an Administrative Expense, and the nature of such Administrative
Expense.
Section 7 . 5 Rebate Fund. There is hereby created and established with the Trustee a
separate and special fund of the City which shall be designated as "The Special Service Area
23
4812-8086-2739.6
I
I
I
Number 2003 - 100 Special Refunding Tax Bonds, Rebate Fund" (the "Rebate Fund") into which
there shall be deposited as necessary investment earnings in the Bond and Interest Fund, the
Reserve Fund and the Special Reserve Fund or other moneys provided by the City to the extent
required so as to maintain the tax exempt status of interest on the Bonds. All rebates, special
impositions or taxes for such purpose payable to the United States of America (Internal Revenue
Service) shall be payable from the Rebate Fund.
I
Section 7.6 Investment of Funds. Moneys on deposit in Funds and Accounts
established hereunder may be invested from time to time in Qualified Investments pursuant to
written directions from an Authorized Officer of the City to the Trustee provided that moneys on
deposit in the Special Redemption Account shall be invested in Qualified Investments having a
maturity of 90 days or less. The Trustee may conclusively rely upon the City' s written
instructions as to both the suitability and legality of the directed investments. Ratings of
Qualified Investments shall be determined at the time of purchase of such Qualified Investments
and without regard to ratings subcategories. The Trustee shall not be liable for losses on
investments made in compliance with the provisions of this Indenture. Except as otherwise
expressly provided herein, earnings or losses on such investments shall be attributed to the Fund
or Account for which the investment was made. In the event that the Trustee does not receive
written directions from the City to invest funds held hereunder, the Trustee shall invest such
funds in or a successor or similar fund which invests
in (i) short-term securities issued or guaranteed by the United States Government, its agencies or
instrumentalities and/or (ii) repurchase agreements relating to such securities which are Qualified
Investments. The Trustee is hereby authorized to execute purchases and sales of Qualified
Investments through the facilities of its own trading or capital markets operations or those of any
affiliated entity. The Trustee shall send statements to the City on a monthly basis reflecting
activity in the account for the preceding month. Although the City recognizes that it may obtain
a broker confirmation or written statement containing comparable information at no additional
cost, the City hereby agrees that confirmations of Qualified Investments are not required to be
issued by the Trustee for each month in which a monthly statement is rendered. The Trustee,
when authorized by the City, may trade with itself in the purchase and sale of securities for such
investments. The Trustee shall not be liable or responsible for the performance or tax
consequences of such investments.
Notwithstanding anything herein to the contrary, the City shall direct investment of
amounts on deposit in the ( 1 ) Special Redemption Account of the Bond and Interest Fund and
(2) the Special Reserve Fund such that the yield on the investment does not exceed the yield on
the Bonds . Investments on deposit in all funds and accounts established hereunder shall be
valued at market value at least quarterly.
ARTICLE VIII
COVENANTS AND AGREEMENTS OF THE CITY
Section 8 . 1 Tax Covenants.
(a) 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
24
4812-8086-2739.6
i
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 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 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 in the Bond and Interest Fund 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,
City Clerk and City Treasurer are authorized and directed to take such action as is 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 moneys in the Funds and Accounts established hereunder in order to establish that
the Bonds shall not constitute arbitrage bonds as so defined.
(b) The City further covenants as follows with respect to the requirements of
Section 148 (f) of the Code, relating to the rebate of "excess arbitrage profits" (the "Rebate
Requirement") to the United States:
(i) Unless an applicable exception to the Rebate Requirement is
available to the City, the City will meet the Rebate Requirement.
(ii) Relating to applicable exceptions, the City shall make such
elections under the Code as it shall deem reasonable and in the best interests of
the City. If such election may result in a "penalty in lieu of rebate" as provided in
the Code, and such penalty is incurred (the "Penal '), then the City shall pay
such Penalty.
(iii) The City shall cause to be established, at such time and in such
manner as it shall deem necessary or appropriate hereunder, the Rebate Fund for
the Bonds, and the City shall further, not less frequently than annually, cause to
be transferred to the Rebate Fund the amount determined to be the accrued
liability under the Rebate Requirement or Penalty. The City shall cause to be paid
to the United States, without further order or direction from the Corporate
Authorities, from time to time as required, amounts sufficient to meet the Rebate
Requirement or to pay the Penalty.
(iv) Interest earnings in the Bond and Interest Fund, the Special
Reserve Fund and the Reserve Fund are hereby authorized to be transferred,
without further order or direction from the Corporate Authorities, from time to
time as required, to the Rebate Fund for the purposes herein provided; and
proceeds of the Bonds, investment earnings or amounts on deposit in any of the
other funds and accounts created hereunder and any other funds of the City are
also hereby authorized to be used to meet the Rebate Requirement or to pay the j
25
4812-8086-2739.6
1.
Penalty, but only if necessary after application of investment earnings as aforesaid
and only as appropriated by the Corporate Authorities.
Section 8 .2 Levy and Collection of Taxes. The City 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 levy, extension, collection and application of the taxes levied by
this Indenture and the Bond Ordinance including enforcement of the Special Taxes as
described in clause (c) below ;
(b) it will not take any action which would adversely affect the levy,
extension, collection and application of the taxes levied by this Indenture and the Bond
Ordinance, except to abate those taxes to the extent permitted by this Indenture and the
Special Tax Roll and Report; and
(c) it will comply with all requirements of the Special Service Area
Act, the Bond Ordinance and other applicable present and future laws concerning the
levy, extension and collection of the taxes levied by this Indenture and the Bond
Ordinance; 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
Special Taxes, including without limitation, the enforcement of any delinquent Special
Taxes by providing the County of Kendall with such information as is deemed necessary
to enable the County to include any property subject to delinquent Special Taxes in the
County Collector ' s annual tax sale and in the event the tax lien is forfeited at such tax
sale, by the commencement and maintenance of an action to foreclose the, lien of any
delinquent Special Taxes all in the manner provided by law; provided, however, that the
obligation to institute any foreclosure action against any taxpayer other than a taxpayer
owning at least five percent (5 %) of the property in the Special Service Area shall only
arise in the event the City makes the determination that the proceeds from the foreclosure
action have a commercially reasonable expectation for exceeding the costs thereof.
i
Section 8 .3 Proper Books and Records. The City will keep, or cause the Trustee to
keep, proper books of record and accounts, separate from all other records and accounts of the
City, in which complete and correct entries shall be made of all transactions relating to the
deposits to and expenditure of amounts disbursed from the Funds and Accounts created
hereunder and the Special Taxes. Such books of record and accounts shall at all times during
business hours be subject to the inspection of the holders of not less than ten percent ( 10%) of
the principal amount of the Bonds then outstanding, or their representatives authorized in
writing. The City, or the Trustee on behalf of the City, upon written request will mail to the
Purchaser any information relating to the Bonds, the Special Service Area or the Special
Services, including, but not limited to, the annual audits of the Funds and Accounts established
under this Indenture for each and every year.
Section 8 .4 Against Encumbrances. The City will not encumber, pledge or place any
charge or lien upon any of the Special Taxes or other amounts pledged to the Bonds superior to,
I
26
4812-8086-2739.6
I
on a parity with, or junior to, the pledge and lien created in this Indenture for the benefit of the
Bonds, except as permitted .by, or specifically set forth in, this Indenture.
Section 8 . 5 Continuing Disclosure Agreement. The City agrees to execute and deliver
the Continuing Disclosure Agreement. In addition, the City agrees to provide to the Trustee (i) a
copy of any reports regarding collection of taxes, delinquencies, tax sales, foreclosures and such
other information as is provided by the Consultant to the City pursuant to the Administrative
Services Agreement and (ii) a copy of the City' s annual audited financial statements. The
Trustee shall have no duty to review, analyze or verify such financial statements and shall hold
such financial statements solely as a repository for the benefit of the Bondholders. The Trustee
shall not be deemed to have notice of any information contained therein or event of default
which may be disclosed therein in any manner.
ARTICLE IX
DEFAULTS AND REMEDIES
Section 9. 1 Events of Default. "Events of Default" under this Indenture are as
follows :
(a) Default shall be made by the City in the payment of the principal
i
of or premium, if any, on any Bond when and as the same shall become due and payable,
either at maturity or by proceedings for redemption or otherwise.
(b) Default shall be made by the City in the payment of any
installment of interest on any Bond when and as such installment of interest shall become j
due and payable.
(c) The City shall ( 1 ) commence a voluntary case under the Federal
bankruptcy laws, as now or hereafter constituted, or any other applicable Federal or state
bankruptcy, insolvency or other similar law, (2) make an assignment for the benefit of its
creditors, (3) consent to the appointment of a receiver of itself or of the whole or any
substantial part of its property, or (4) be adjudicated a bankrupt or have entered against it
any order for relief in respect of any involuntary case under the Federal bankruptcy laws,
as now or hereafter constituted, or any other applicable Federal or state bankruptcy,
insolvency or other similar law and such order shall continue in effect for a period of 60
days without stay or vacation.
(d) A court of competent jurisdiction shall enter an order, judgment or
decree appointing a receiver of the City, or of the whole or any substantial part of its
property, or approving a petition seeking reorganization of the City under the Federal
bankruptcy laws or any other applicable Federal or state law or statute and such order,
judgment or decree shall not be vacated or set aside or stayed within 60 days from the
date of the entry thereof.
(e) Under the provisions of any other law for the relief or aid of
debtors, any court of competent jurisdiction shall assume custody or control of the City or
27
4812-8086-2739.6
I
I
I
of the whole or any substantial part of its property, and such custody or control shall not
be terminated or stayed within 60 days from the date of assumption of such custody or
control.
i
(f) The City shall default in the due and punctual performance of any
other of the covenants, conditions, agreements and provisions contained in the Bonds, the
Bond Ordinance or in this Indenture on the part of the City to be performed, and such
default shall continue for 30 days after written notice specifying such default and
requiring the same to be remedied shall have been given to the City by the Trustee (which
may give such notice whenever it reasonably determines that such a default exists and
shall give such notice at the written request of the holders of not less than 25 % in
principal amount of the Bonds then outstanding).
Section 9 .2 Remedies. Upon the occurrence of an Event of Default the Trustee may,
and upon the written request of the holders of 25 % in principal amount of the outstanding Bonds
affected by the Event of Default and upon being indemnified as provided in Section 10 .2(1)
hereof shall, proceed to protect and enforce its rights and the rights of the holders of the Bonds
and to prevent impairment of the amounts pledged pursuant to the Indenture 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 City or from any other source shall be applied by the Trustee in
accordance with the terms of Section 9. 10 hereof.
Any judgment against the City 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 City.
i
THE BONDS SHALL NOT BE SUBJECT TO ACCELERATION UPON THE
OCCURRENCE OF AN EVENT OF DEFAULT.
Section 9.3 Notice of Default. The Trustee shall, within 10 days after a Responsible
Officer of the Trustee receives notice or obtains knowledge of the occurrence of an Event of
Default, mail to the City and the Bondholders at the address shown on the registration books of
the City maintained by the Bond Registrar, notice of all Events of Default known to the Trustee
unless such Events of Default shall have been cured before the giving of such notice.
i
Section 9.4 Termination of Proceedings by Trustee. In case any proceedings taken by j
the Trustee on account of any Event of Default shall have been discontinued or abandoned for j
any reason, or shall have been determined adversely to the Trustee, then and in every such case
the City, the Trustee and the Bondholders shall be restored to their former positions and rights
hereunder, respectively, and all rights, remedies and powers of the Trustee shall continue as
though no such proceeding had been taken.
i
I
28
4812-8086-2739.6
Section 9 . 5 Right of Bondholders to Control Proceedings. Anything in this Indenture
to the contrary notwithstanding, the holders of a majority in principal amount of the Bonds then
outstanding shall have the right, by an instrument in writing executed and delivered to the
Trustee, to direct the method and place of conducting all remedial proceedings to be taken by the
Trustee hereunder in respect of the Bonds; provided that such direction shall not be otherwise
than in accordance with law and the Trustee shall be indemnified to its satisfaction against the
costs, expenses and liabilities to be incurred therein or thereby.
i
Section 9.6 Right of Bondholders to Institute Suit. No holder of any of the Bonds
shall have any right to institute any suit, action or proceeding in equity or at law for the
execution of any trust hereunder, or for any other remedy hereunder or on the Bonds unless such
holder previously shall have given to the Trustee written notice of an Event of Default as
hereinabove provided, and unless also the holder, or holders, of 25 % in principal amount of the
outstanding Bonds affected by the Event of Default shall have made written request of the
Trustee after the right to exercise such powers, or right of action, as the case may be, shall have
accrued, and shall have afforded the Trustee a reasonable opportunity either to proceed to
exercise the powers hereinbefore granted, or to institute such action, suit, or proceeding in its
name; and unless, also, there shall have been offered to the Trustee security and indemnity
satisfactory to it against the costs, expenses and liabilities to be incurred therein or thereby, and
the Trustee shall have refused or neglected to comply with such request within a reasonable time;
and such notification, request and offer of indemnity are hereby declared in every such case, at
the option of the Trustee, to be conditions precedent to the execution of the powers and trusts of
this Indenture or for any other remedy hereunder; it being understood and intended that no one or
more holders of the Bonds shall have any right in any manner whatever by his or their action to
affect, disturb or prejudice the security of this Indenture, or to enforce any right hereunder,
except in the manner herein provided, and that all proceedings at law or in equity shall be
instituted, had and maintained in the manner herein provided and for the equal benefit of all
holders of the outstanding Bonds.
Nothing in this Section 9 . 6 contained shall, however, affect or impair the right of any
Bondholder, which is absolute and unconditional, to enforce the payment of the principal of and
interest on the Bondholder' s Bonds out of the Bond and Interest Fund, or the obligation of the
City to pay the same, out of the Bond and Interest Fund, at the time and place in the Bonds
expressed.
i
Section 9 .7 Suits by Trustee. All rights of action under this Indenture, or under any of
the Bonds, enforceable by the Trustee, may be enforced by it without the possession of any of
the Bonds or the production thereof at the trial or other proceeding relative thereto, and any such
suit, or proceeding, instituted by the Trustee shall be brought in its name for the ratable benefit of
the holders of the Bonds affected by such suit or proceeding, subject to the provisions of this
Indenture.
Section 9. 8 Remedies Cumulative. No remedy herein conferred upon or reserved to
the Trustee or to the Bondholders is intended to be exclusive of any other remedy or remedies,
and each and every remedy shall be cumulative, and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by statute.
29
4812-8086-2739.6
Section 9. 9 Waiver of Default. No delay or omission of the Trustee or of any
Bondholder to exercise any right or power shall be construed to be a waiver of any such default,
or an acquiescence therein; and every power and remedy given by this Article IX to the Trustee
and the Bondholders, respectively, may be exercised from time to time, and as often as may be
deemed expedient.
Section 9. 10 Application of Moneys After Default. The City covenants that if an Event
of Default shall happen and shall not have been remedied, the Trustee shall apply moneys,
securities and funds on deposit in the Funds and Accounts established pursuant to Article VII or
received by the Trustee pursuant to any right given or action taken under the provisions of this
Section as follows and in the following order:
(a) To the payment of the reasonable and proper charges, expenses j
and liabilities of the Trustee, the Bond Registrar and any paying agent, including the fees
and expenses of outside counsel for the Trustee, the Bond Registrar and any paying agent
and the payment of Administrative Expenses owed to the City or the Consultant.
(b) To the payment of the principal and interest then due on the Bonds C
as follows:
i
(i) first, to the payment to the persons entitled thereto of all interest
then due or payable on the Bonds in the order of the maturity of such installments;
and
I
(ii) second, to the payment to the persons entitled thereto of the unpaid
installments of principal of any of the Bonds which have become due in the order j
of the maturity of such installments.
Whenever moneys are to be applied by the Trustee pursuant to the provisions of this
paragraph, such moneys shall be applied by the Trustee at such times, and from time to time, as
the Trustee in its sole discretion shall determine, having due regard for the amount of such
moneys available for application and the likelihood of additional moneys becoming available for !
such application in the future. The deposit of such moneys with the paying agent, or otherwise j
setting aside such moneys, in trust for the proper purpose, shall constitute proper application by
the Trustee; and the Trustee shall incur no liability whatsoever to the City, to any Bondholder or
to any other person for any delay in applying any such funds, so long as the Trustee acts with
reasonable diligence, having due regard to the circumstances, and ultimately applies the same in
accordance with such provisions of this Indenture as may be applicable at the time of application
by the Trustee. Whenever the Trustee shall exercise such discretion in applying such funds, it
shall fix the date (which shall be an Interest Payment Date unless the Trustee shall deem another
date more suitable) upon which such application is to be made and upon such date interest on the
amounts of principal paid on such date shall cease to accrue. The Trustee shall give such notice
as it may deem appropriate of the fixing of any such date and of the endorsement to be entered
on each Bond on which payment shall be made, and shall not be required to make payment to the
holder of any unpaid Bond until such Bond shall be presented to the Trustee for appropriate
endorsement, or some other procedure deemed satisfactory by the Trustee.
30
4812-8086-2739.6
i
ARTICLE X
TRUSTEE
Section 10. 1 Appointment of the Trustee. The Trustee hereunder is hereby constituted
and appointed as the trustee of an express trust hereby created for the Bondholders. The further
rights and duties of the Trustee are set forth in this Article X.
Section 10.2 Performance of Duties. 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. If any
Event of Default under this Indenture shall have occurred and be continuing, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture and shall use the same
degree of care as a prudent person would exercise or use in the circumstances in the conduct of
such prudent person's own affairs.
i
No provision of this Indenture shall be construed to relieve the Trustee from liability for
its own negligent action, its own negligent failure to act or its own willful misconduct, except
that:
(a) The duties and obligations of the Trustee shall be determined
solely by the express provisions of this Indenture, and the Trustee shall not be liable
except for the performance of such duties and obligations as are specifically set forth in
this Indenture, and no implied covenants or obligations shall be read into this Indenture
against the Trustee.
(b) In the absence of bad faith on the part of the Trustee, the Trustee
may conclusively rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon any certificate or opinion furnished to the Trustee conforming to
the requirements of this Indenture; but in the case of any such certificate or opinion
which by any provision hereof is specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or not it
conforms to the requirements of this Indenture.
i
(c) The Trustee shall not be liable for any error of judgment made in j
good faith by a responsible officer or officers of the Trustee unless it shall be proved that
the Trustee was negligent in ascertaining the pertinent facts.
(d) The Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the holders of
not less than a majority (or such larger or smaller percentage as is otherwise specifically
required by the terms hereof) in aggregate principal amount of all the Bonds at the time
outstanding.
(e) 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 exercise of any of its rights or powers.
31
4812-8086-2739.6
(f) At any and all reasonable times, upon first providing 48 hours '
notice to the City, 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 books, papers and records of the City pertaining to the Special Services and the
Bonds, and to take such memoranda from and in regard thereto as may be desired.
(g) The Trustee shall not be required to give any bond or surety in
respect of the execution of the trusts and powers granted by this Indenture or otherwise in
respect of the premises.
(h) Notwithstanding anything elsewhere in this Indenture contained,
the Trustee shall have the right, but shall not be required, to demand, in respect of the
withdrawal of any cash 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, reasonably necessary to establish the right of the City to the
withdrawal of any cash or the taking of any other action by the Trustee.
(i) Before taking any action under Section 9.2, the Trustee may
require that a satisfactory indemnity bond or other security satisfactory to it be furnished
by the party requesting that the Trustee take such action 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 the negligence or willful default of the Trustee
in connection with any action so taken.
(j) All moneys received by the Trustee or any paying agent shall, until
used or applied or invested as herein provided, be held in trust for the purposes for which
they were received.
(k) 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 and
shall not be answerable for the conduct of the same if appointed with due care hereunder.
i
(1) Notwithstanding the effective date of this Indenture or anything to
the contrary in this Indenture, the Trustee shall have no liability or responsibility for any
act or event relating to this Indenture which occurs prior to the date the Trustee formally
executes this Indenture and commences acting as Trustee hereunder.
(m) The Trustee shall have no responsibility with respect to any
information, statement or recital in any official statement, offering memorandum or any
other disclosure material prepared or distributed with respect to the Bonds, except for any
information provided by the Trustee, and shall have no responsibility for compliance with
any state or federal securities laws in connection with the Bonds.
(n) The Trustee 's right to receive compensation and reimbursement of
expenses under this Indenture shall be secured by a lien on the Trust Estate, which lien
shall be subordinate to the lien in favor of the Bondholders for payment of the principal
of, premium, if any, and interest on the Bonds, except that, upon an Event of Default, the
32
4812-8086-2739.6
i
Trustee shall have a prior lien upon the Trust Estate (excluding that portion of the Trust
Estate consisting of proceeds of funds held pursuant to the defeasance provisions of
Article XII of this Indenture, and excluding that portion of the Trust Estate consisting of
funds already due and owing Bondholders and held for the benefit of the Bondholders
pursuant to any other provisions of this Indenture, as to which such lien shall be
subordinate to the lien created hereby for the benefit of the Bond Owners) for its
reasonable extraordinary fees, charges and expenses incurred in enforcing the provisions
of this Indenture or any other agreement referred to herein.
Section 10.3 Instruments Upon Which Trustee May Rely. Except as otherwise
provided in paragraph (b) hereof.
(a) The Trustee may rely and shall be protected in acting upon any
resolution certificate statement instrument o inion report, notice request, consent
order, bond or other paper or document reasonably believed by it to be genuine and to
have been signed or presented by the proper party or parties.
(b) Any notice, request, direction, election, order or demand of the
City mentioned herein shall be sufficiently evidenced by an instrument signed in the
name of the City by its Mayor or its City Clerk (unless other evidence in respect thereof
be herein specifically prescribed); and any resolution of the Corporate Authorities may be
evidenced to the Trustee by a copy thereof certified by the City Clerk under the City seal.
I
(c) The Trustee may consult with reputable counsel (who may but
need not be counsel for the City) and the opinion of such counsel shall be full and
complete authorization and protection in respect of any action taken or suffered by it
hereunder in good faith and in accordance with the opinion of such counsel. j
(d) Whenever in the administration of the trusts under this Indenture,
the Trustee shall deem it necessary or desirable that a matter be proved or established
prior to taking or suffering any action hereunder, such matter (unless other evidence in
respect thereof be herein specifically prescribed) may, in the absence of negligence or
bad faith on the part of the Trustee, be deemed to be conclusively proved and established
by a certificate of the City; and such certificate of the City shall, in the absence of
negligence or bad faith on the part of the Trustee, be full warranty to the Trustee for any
action taken or suffered by it under the provisions of this Indenture upon the faith thereof.
i
(e) The Trustee shall not be required to take notice or be deemed to
have notice of any default hereunder (except failure by the City to cause to be made any
of the payments to the Trustee required to be made by Article VII) unless a Responsible
Officer of the Trustee shall be specifically notified in writing of such default by the City
or by the holders of at least 25% in aggregate principal amount of all 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 Designated Corporate
Trust Office of the Trustee, and in the absence of such notice so delivered the Trustee
may conclusively assume there is no default except as aforesaid.
33 j
4812-8086-2739.6
;
(f) The Trustee shall have the right 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 the City shall
provide to the Trustee an incumbency certificate listing designated persons with the
authority to provide such instructions and containing specimen signatures of ' such
designated persons, which incumbency certificate shall be amended whenever a person is
to be added or deleted from the listing. If the City elects to give the Trustee e-mail or j
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, j
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 City agrees: (i) 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; (ii) that it is fully
informed of the protections and risks associated with the various methods of transmitting
instructions to the Trustee and that there may be more secure methods of transmitting
instructions than the method(s) selected by the City; and (iii) that the security procedures
(if any) to be followed in connection with its transmission of instructions provide to it a
commercially reasonable degree of protection in light of its particular needs and .
circumstances.
Section 10.4 Trustee not Responsible for Recitals and Other Matters. The Trustee shall
not be responsible in any manner whatsoever for the correctness of the recitals herein or in the
Bonds (except the Trustee ' s certificate of authentication thereon), all of which are made by the
City solely; and the Trustee shall not be responsible or accountable in any manner whatsoever
for or with respect to the validity or execution or sufficiency of this Indenture, or of any
indenture supplemental hereto, or of the Bond Ordinance or the Bonds, or the sufficiency of the
taxes levied to pay the principal of and interest on the Bonds, or for the security afforded hereby
or for the validity of any securities at any time held hereunder, and the Trustee makes no
representation with respect thereto. The Trustee shall not be accountable for the use or
application by the City of the proceeds of any Bonds authenticated and delivered hereunder, or
for the use or application of any moneys paid over by the Trustee in accordance with any
provision of this Indenture.
Section 10. 5 Trustee May Acquire Bonds , The Trustee and its officers and directors
may acquire and hold, or become the pledgee of, Bonds and may otherwise deal with the City in j
the manner and to the same extent and with like effect as though it were not Trustee hereunder.
j
Section 10. 6 Qualification of Trustee. There shall at all times be a Trustee hereunder
which shall be a corporation organized and doing business under the laws of the United States or
any state thereof, authorized under such laws to exercise corporate trust powers, having or
affiliated with an entity having a combined capital, surplus and undivided profits of at least
$50,000,000, and subject to supervision or examination by federal or state authority. If such
corporation publishes reports of condition at least annually, pursuant to law or to the
requirements of any supervising or examining authority above referred to, then for the purposes
34
4812-8086-2739.6
i
I
of this paragraph the combined capital, surplus and undivided profits of such corporation shall be
deemed to be its combined capital, surplus and undivided profits as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this paragraph, the Trustee shall resign immediately in the
manner and with the effect specified in Section 10.7.
i
Section 10. 7 Resignation or Removal of Trustee and Appointment of Successor.
(a) The Trustee may at any time resign by giving written notice to the City
I
and the Bondholders by first class mail to the names and addresses shown on the list maintained
by the Bond Registrar. Upon receiving such notice of resignation, the City shall promptly
appoint a successor Trustee by an instrument in writing executed by order of the City. If no
successor Trustee shall have been so appointed and have accepted appointment within 30 days
after the giving of such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee, or any Bondholder who has
been a bona fide holder of a Bond or Bonds for at least six months may, on behalf of himself and
all others similarly situated, petition any such court for the appointment of a successor Trustee.
Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint
a successor Trustee.
(b) In case at any time any of the following shall occur:
(i) The Trustee shall cease to be eligible in accordance with the
provisions of Section 10. 6 and shall fail to resign after written request therefor by
the City or by any Bondholder who has been a bona fide holder of a Bond or
Bonds for at least six months, or
(ii) The Trustee shall become incapable of acting, or shall be adjudged
a bankrupt or insolvent, or a receiver of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or liquidation,
then, in any such case, the City may remove the Trustee and appoint a successor Trustee
by an instrument in writing executed by order of the City or any Bondholder may, on
behalf of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
Such court may thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor Trustee.
(c) The holders of a majority in aggregate principal amount of all the Bonds at
the time outstanding may at any time remove the Trustee and appoint a successor Trustee by an
instrument or concurrent instruments in writing signed by such Bondholders. Such successor
Trustee shall be a corporation authorized under applicable laws to exercise corporate trust
powers, may be incorporated under the laws of the United States or of any State within the
United States. Such successor Trustee shall satisfy the minimum combined capital, surplus and
undivided profits requirement set forth in Section 10. 6.
I
i
35
4812-8086-2739.6
I
I
i
(d) The City, subject to the approval of the holders of a majority in aggregate
principal amount of all the Bonds at the time outstanding, may at any time remove the Trustee
and appoint a successor Trustee by an instrument in writing signed by the City and accompanied
by an instrument or concurrent instruments in writing signed by such Bondholders approving
such removal and appointment.
(e) Any resignation or removal of the Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section 10. 7 shall become effective upon
acceptance of appointment by the successor Trustee as provided in Section 10. 8 .
i
Section 10 . 8 Concerning the Successor Trustee. Any successor Trustee appointed as
provided in Section 10.7 shall execute, acknowledge and deliver to the City and to its
predecessor Trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with all the rights,
powers, trusts, duties and obligations of its predecessor in the trusts hereunder, with like effect as
if originally named as Trustee herein; but nevertheless on the written request of the City or the
request of the successor Trustee, the Trustee ceasing to act shall execute and deliver an
instrument transferring to such successor Trustee, upon the trusts herein expressed, all the rights,
powers and trusts of the Trustee so ceasing to act. Upon request of any such successor Trustee,
the City shall execute any and all instruments in writing more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and duties . Any Trustee ceasing to
act shall nevertheless be entitled to receive the amounts due it as compensation, reimbursement,
expenses and indemnity afforded to it by this Article X.
No successor Trustee shall accept appointment as provided in this Section 10 . 8 unless at
the time of such acceptance such successor Trustee shall be eligible under the provisions of
Section 10 . 6.
Upon the acceptance of appointment by a successor Trustee as provided in this Section
10. 8, the City shall mail a copy of such notice to each person whose name appears as an owner
of Bonds on the list maintained by the Bond Registrar. If the City fails to mail such notice
within 10 days after acceptance of appointment by the successor Trustee, the successor Trustee
shall cause such notice to be mailed at the expense of the City.
i
Any banking association or corporation into which the Trustee may be merged, converted
or with which the Trustee may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a parry, or any banking association or
corporation to which all or substantially all of the corporate trust business of the Trustee shall be
transferred, shall succeed to all the Trustee ' s rights, obligations and immunities hereunder
without the execution or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding.
j
Section 10. 9 Monthly Statements, The Trustee shall provide the Purchaser, the
Consultant, and the City, or their designees, a monthly statement, commencing on
1 , 2013 , itemizing all moneys received by it and all payments made by it under this Indenture
during the preceding monthly period and annual reports relating to the Funds and Accounts
I
36
4812-8086-2739.6
created under this Indenture and such other information relating to the Bonds and the Funds and
Accounts maintained by the Trustee under this Indenture as the Purchaser, the Consultant and the
City shall reasonably request.
The Trustee shall also provide to each Beneficial Owner owning at least $ 1 ,000,000 in
aggregate principal amount of the Bonds upon written request the following:
(a) Copies of all notices given by the Trustee to, or requests for
consent requested by the Trustee from, the Bondholders;
(b) Notices or reports given by the City to the Trustee pursuant to this
Indenture, including items to be delivered pursuant to Section 8 . 5 of this Indenture;
(c) Any notice required to be given to the Beneficial Owners under
this Indenture;
(d) Copies of all amendments and supplements to this Indenture; and
(e) The name and telephone number of the officer of the Trustee who
will provide information required to be delivered pursuant to this Section 10. 9, if
different than the name and telephone number set forth in Section 13 .2 hereof.
i
ARTICLE XI
i
SUPPLEMENTAL INDENTURES
Section 11 . 1 Supplemental Indentures Not Requiring Consent of Bondholders. The
City by the . Corporate Authorities, and the Trustee from time to time and at any time, subject to
the conditions and restrictions in this Indenture contained, may pass and accept an indenture or
indentures supplemental hereto, which indenture or indentures thereafter shall form a part hereof,
for any one or more of the following purposes:
(a) To add to the covenants and agreements of the City in this
Indenture contained, other covenants and agreements thereafter to be observed or to
surrender, restrict or limit any right or power herein reserved to or conferred upon the
City;
(b) To grant to or confer upon the Trustee for the benefit of the owners
of the Bonds any additional rights, remedies, powers, authority or security that may
lawfully be granted to or conferred upon the owners or the Trustee;
(c) To modify, amend or supplement this Indenture in such manner as
to permit, if presented, the qualification of this Indenture under the Trust Indenture Act of
1939 or any similar federal statute then in effect or under any state blue sky law; and
(d) To surrender any right, power or privilege reserved to or conferred
upon the City by the terms of this Indenture, provided that the surrender of such right,
37
4812-8086-2739.6
power or privilege is not contrary to or inconsistent with the covenants and agreements of
the City contained in this Indenture.
Any supplemental indenture authorized by the provisions of this Section 11 . 1 may be
executed by the City, by the Corporate Authorities, and by the Trustee without the consent of the
registered owners of any of the Bonds at the time outstanding, but only upon receipt of an
opinion of bond counsel if requested pursuant to the provisions of Section 11 . 6, notwithstanding
any of the provisions of Section 11 .2, but the Trustee shall not be obligated to accept any
provision of such supplemental indenture to the extent that it affects the Trustee' s own rights,
duties or immunities under this Indenture or otherwise.
Section 11 . 2 Supplemental Indentures Requiring Consent of Bondholders. With the
consent (evidenced as provided herein) of the registered owners of not less than a majority in
aggregate principal amount of the Bonds, respectively, at the time outstanding, but only upon
receipt of an opinion of bond counsel if requested pursuant to the provisions of Section 11 . 6, the
City, by the Corporate Authorities may pass, and the Trustee may accept from time to time and
at any time an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of this indenture or
of any supplemental indenture; provided that no such modification or amendment shall extend
the maturity or reduce the principal of or the interest rate on or otherwise alter or impair the
obligation of the City to pay the principal, interest or redemption premium, if any, at the time and
place and at the rate and in the currency provided therein of any Bond without the express
consent of the registered owner of such Bond or permit the creation of a preference or priority of
any Bond or Bonds over any other Bond or Bonds, or reduce the percentage of Bonds,
respectively, required for the affirmative vote or written consent to an amendment or
modification, or deprive the registered owners of the Bonds (except as aforesaid) of the right to
payment of the Bonds, from the Special Taxes and the Foreclosure Proceeds without the consent
of the registered owners of all the Bonds (as the case may be) then outstanding. Upon receipt by
the Trustee of a certified copy of such Indenture and upon the filing with the Trustee of evidence
of the consent of Bondholders as aforesaid, the Trustee shall accept such supplemental indenture,
but the Trustee shall not be obligated to accept any provision of such supplemental indenture to
the extent that it affects the Trustee ' s own rights, duties or immunities under this Indenture or
otherwise. j
It shall not be necessary for the consent of the Bondholders under this paragraph to
approve the particular form of any proposed supplemental indenture, but it shall be sufficient if
such consent shall approve the substance thereof.
Promptly after the passage by the City and the acceptance by the Trustee of any
supplemental indenture pertaining to the Bonds pursuant to the provisions of this paragraph, the
City shall mail a notice by first class mail to the Bondholders, setting forth in general terms the
substance of such supplemental indenture, and that the supplemental indenture has been
consented to by the requisite percentage of the Bondholders. Any failure of the City to give such
notice, or any defect therein, shall not, however,. in any way impair or affect the validity of any
such supplemental indenture.
i
i
38
4812-8086-2739.6
I
Section 11 . 3 Supplemental Indenture to Modify this Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions of this Article XI, and upon receipt of the
opinion of bond counsel if required by the provisions of Section 11 . 6, this Indenture shall be
modified and amended in accordance therewith and the respective rights, duties and obligations
under this Indenture of the City, the Trustee and all registered owners of Bonds, outstanding
thereunder shall thereafter be determined, exercised and enforced hereunder subject in' all
respects to such modification and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.
Section 1 l .4 Trustee May Rely Upon Opinion of Counsel Re: Supplemental Indenture.
The Trustee may receive an opinion of counsel as conclusive evidence that any supplemental j
indenture executed pursuant to the provisions of this Article XI complies with the requirements
of this Article XI. j
Section 11 . 5 Notation. Bonds authenticated and delivered after the execution of any
supplemental indenture pursuant to the provisions of this Article XI may bear a notation, in form
approved by the Trustee, as to any matter provided for in such supplemental indenture, and if
such supplemental indenture shall so provide, new Bonds, so modified as to conform, in the
opinion of the Trustee and the Corporate Authorities, to any modification of this Indenture
contained in any such supplemental indenture, may be prepared by the City, authenticated by the
Trustee and delivered without cost to the registered owners of the Bonds then outstanding, upon
surrender for cancellation of such Bonds in equal aggregate principal amounts.
Section 11 . 6 Opinion of Bond Counsel. Prior to the adoption of a supplemental
indenture executed pursuant to the provisions of this Article XI the Trustee shall give written
notice by mail to the registered owners of all Bonds Outstanding . at the addresses as set forth in
the ' Register of the Bonds held by the Bond Registrar of the substance of the proposed
supplemental indenture. If within 10 days of the Trustee ' s mailing such notice any registered
owner of the Bonds requests that an opinion of bond counsel be delivered to the effect that such
supplemental indenture will not adversely affect the exclusion from gross income of interest on
the Bonds for federal income tax purposes, such supplemental indenture shall not become
effective until such opinion has been delivered to the Trustee. j
ARTICLE XII
DEFEASANCE
Section 12 . 1 Defeasance.
(a) If the City shall pay or cause to be paid, or there shall otherwise be paid, to
the Bondholders of all Bonds the principal or redemption price, if applicable, and interest due or
to become due thereon, at the times and in the manner stipulated therein and in this Indenture,
then the pledge of the Trust Estate, and all covenants, agreements and other obligations of the
City to the Bondholders, shall thereupon cease, terminate and become void and be discharged
and satisfied. In such event, the Trustee shall cause an accounting for such period or periods as
shall be requested by the City to be prepared and filed with the City and, upon the request of the
39
4812-8086-2739.6
City, shall execute and deliver to the City all such instruments as may be desirable to evidence
such discharge and satisfaction, and the Trustee shall pay over or deliver to the City all moneys
or securities held pursuant to this Indenture which are not required for the payment of principal
or redemption price, if applicable, of and interest on the Bonds. If the City shall pay or cause to
be paid, or there shall otherwise be paid, to the Bondholders of any outstanding Bonds the
principal or redemption price and interest due or to become due thereon, at the times and in the
manner stipulated therein and in this Indenture, such Bonds shall cease to be entitled to any lien,
benefit or security under this Indenture, and all covenants, agreements and obligations of the City
to the Bondholders of such Bonds shall thereupon cease, terminate and become void and be
discharged and satisfied.
(b) Bonds or interest installments for the payment or redemption of which
moneys shall have been set aside and shall be held in trust by the Trustee (through deposit by the
City of funds for such payment or redemption or otherwise) at the maturity or redemption date
thereof shall be deemed to have been paid within the meaning and with the effect expressed in
subsection (a) of this Section 12 . 1 . In addition, any Outstanding Bonds shall, prior to the
maturity or redemption date thereof, be deemed to have been paid within the meaning and with
the effect expressed in subsection (a) of this Section 12. 1 upon compliance with the provisions of
subsection (c) of this Section 12. 1 .
(c) Subject to the provisions of subsection (d) of this Section 12 . 1 , any
Outstanding Bonds shall, prior to the maturity or redemption date thereof, be deemed to have
been paid within the meaning and with the effect expressed in subsection (a) of this Section 12 . 1
if
(i) in case any of said Bonds are to be redeemed on any date prior to
their maturity, the City shall have given to the Trustee irrevocable instructions
accepted in writing by the Trustee to give as provided in Section 4. 5 notice of
redemption of such Bonds on said date;
(ii) there shall have been deposited with the Trustee either moneys in
an amount which shall be sufficient or Defeasance Securities, the principal of and
the interest on which when due will provide moneys which, together with the
moneys, if any, deposited with the Trustee at the same time, shall be sufficient,
without reinvestment, to pay when due the principal or redemption price, if
applicable, and interest due and to become due on said Bonds on or prior to the
redemption date or maturity date thereof, as the case may be;
(iii) there shall have been delivered to the Trustee and the City a
verification report of an independent certified accountant or a verifier satisfactory
to the Trustee and the City as to the sufficiency of the funds and/or securities
deposited with the Trustee for the payment, when due, of the principal or
redemption price, if applicable, and interest due and to become due on said Bonds
on or prior to the redemption date or maturity date thereof, as the case may be; ;
and
40
4812-8086-2739.6
(iv) in the event said Bonds do not mature, are not by their terms
subject to redemption or, under the plan of refunding applicable thereto, are not to
be redeemed, in each case, within the next succeeding ninety (90) days, the City
shall have given the Trustee in form satisfactory to it irrevocable instructions to
give, as soon as practicable, by first-class mail, postage prepaid, to the owners of
such Bonds at their last addresses appearing on the books of the City kept at the
office of the Bond Registrar a notice that the deposit required by (ii) above has
been made with the Trustee and that said Bonds are deemed to have been paid in
accordance with this Section 12. 1 and stating such maturity or redemption date
upon which moneys are to be available for the payment of the principal or
redemption price, if applicable, on said Bonds.
(d) Anything in this Indenture to the contrary notwithstanding, any moneys
I
held in trust for the payment and discharge of any of the Bonds which remain unclaimed for one
year after the date when such Bonds have become due and payable, either at their stated maturity
dates or by call for earlier redemption shall be repaid to the City, as its absolute property and free
from trust, and the Trustee shall thereupon be released and discharged, with respect thereto and
the Bondholders shall look only to the City for the payment of such Bonds; provided, however,
that before being required to make any such payment to the City, the Trustee shall, at the
expense of the City, (i) give to the owners of such Bonds as to which any moneys remain
unclaimed, by first class mail, postage prepaid, at the last address of such owners appearing on
the books of the City kept at the office of the Bond Registrar and (ii) cause to be published one
time in an Authorized Newspaper, a notice that said moneys remain unclaimed and that, after a
date named in said notice, which date shall be not less than thirty (30) days after the date of the
publication of such notice, the balance of such moneys then unclaimed will be returned to the
City.
(e) Upon the payment or defeasance of all outstanding Bonds as provided in
this Article XII, and provided no refunding Bonds are outstanding which are secured by the
Special Taxes, the Trustee and the City shall execute a Satisfaction of Tax Lien substantially in
the form of Exhibit C hereto for all Parcels for which a satisfaction of tax lien has not previously
been delivered and the City shall file or cause to be filed such Satisfaction of Tax Lien with the
Recorder of Deeds of Kendall County, Illinois.
ARTICLE XIII
MISCELLANEOUS
Section 13 . 1 Severability. If any provision of this Indenture shall be held or deemed to
be illegal, inoperative or unenforceable under applicable law or interpreted in such manner as to
be prohibited by or be held invalid under such law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of such provision or
the remaining provisions of this Indenture.
i
Section 13 .2 Notices. Except as otherwise provided in this Indenture, all notices,
certificates or other communications hereunder shall be sufficiently given and shall be deemed
41
4812-8086-2739.6
i
given when personally delivered or mailed by certified mail, postage prepaid, or when sent by
telecopy (receipt confirmed by telephone) or telegram, addressed as follows:
If to the City:
United City of Yorkville
800 Game Farm Road
Yorkville, Illinois 60560
Attention: Mayor
Telephone: 630-553 -4350
Telecopier: 630-553-7570
If to the Trustee:
The Bank of New York Mellon Trust Company, N.A.
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Attention: Corporate Trust Department
Telephone: 312-827-8528
Telecopier: 312-827-8522
If to the Purchaser: j
William Blair & Company, L.L. C.
222 West Adams Street
Chicago, Illinois 60606
Attention: Peter J. Raphael
Telephone: 312-364-8386
Telecopier: 312-236-0174
Section 13 . 3 Holidays. If any date for the payment of an amount hereunder or the
taking of any other action required or permitted to be taken hereunder, is not a Business Day,
then such payment shall be due, or such action shall or may be taken, as the case may be, on the
first Business Day thereafter with the same force and effect as if done on the nominal date
provided in this Indenture.
Section 13 .4 Execution of Counterparts. This Indenture may be executed in several
i
counterparts, each of which shall be an original and all of which shall constitute but one and the
same instrument.
Section 13 . 5 Applicable Law. This Indenture shall be governed by and construed in
accordance with the internal laws of the State of Illinois.
Section 13 . 6 Immunity of Officers, Employees, Elected Officials of the City. No
recourse shall be had for the payment of the principal of or premium, if any, or interest on any of
the Bonds or for any claim based thereon or upon any obligation, covenant or agreement
contained in this Indenture or any agreement supplemental hereto, against any past, present or
42
4812-8086-2739.6
i
future mayor or other officer, director, member, employee, attorney or agent of the City, or any
incorporator, officer, director, member, employee or agent of any successor corporation or body
politic, as such, either directly or through the City or any successor corporation or body politic,
under any rule of law or equity, statute or constitution or by the enforcement of any assessment
or penalty or otherwise, and all such liability of any such incorporators, officers, directors,
members, employees or agents, as such, is hereby expressly waived and released as a condition
of and consideration for the execution of this Indenture and the issuance of any of the Bonds .
i
i
i
I
I
i
i
I
I
i
i
i
i
i
i
I
43
4812-8086-2739.6
IN WITNESS WHEREOF, the United City of Yorkville, Illinois has caused these
presents to be signed in its name and on its behalf by its Mayor and attested by its City Clerk and
to evidence its acceptance of the trusts hereby created The Bank of New York Mellon Trust j
Company, N.A. has caused these presents to be signed in its name and on its behalf by its
Authorized Officer and the same to be attested by its Authorized Officer, all as of the day and
year first above written.
UNITED CITY OF YORKVILLE, ILLINOIS
i
By:
Mayor
Attest:
I
By:
City Clerk
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A. , as Trustee
I
i
By:
Authorized Officer
i
i
Attest:
i
By:
Authorized Officer
I
i
[Signature page to Trust Indenture]
i
EXHIBIT A
UNITED CITY OF YORKVILLE
SPECIAL SERVICE AREA NUMBER 2003- 100
i
I
i
i
i
i
i
I
i
i
I
4812-8086-2739.6
I
EXHIBIT B
UNITED STATES OF AMERICA
STATE OF ILLINOIS COUNTY OF KENDALL
UNITED CITY OF YORKVILLE
KENDALL COUNTY, ILLINOIS
SPECIAL SERVICE AREA NUMBER 2003 - 100
SPECIAL TAX REFUNDING BOND
SERIES 2013
(RAINTREE VILLAGE PROJECT)
I
Bond No. Principal Amount: $
Date of Bond: , 2013 Interest Rate:
CUSIP: Date of Maturity:
Registered Owner: Cede & Co.
The United City of Yorkville, Kendall . County, Illinois (the "Ci for value received,
promises to pay to the Registered Owner specified above or registered assigns, upon presentation
and surrender of this bond at the office of The Bank of New York Mellon Trust Company,
Chicago, Illinois, as Trustee (the "Trustee") the Principal Amount of this bond specified above
on the Date of Maturity specified above and to pay the Registered Owner of this bond interest on
that sum at the Interest Rate per year specified above from the Date of Bond specified above to
the Date of Maturity specified above, payable semiannually on March 1 and September 1 , with
the first Interest Payment Date being September 1 , 2013 . Interest shall be computed on the basis
of a 360-day year of twelve 30-days months. Interest on this bond shall be payable on each j
Interest Payment Date by check or draft of the Trustee mailed to the person in whose name this
bond is registered at the close of business on the 15th day of the month preceding such Interest
Payment Date. During such time as this bond is registered so as to participate in a securities
depository system with The Depository Trust Company ("DTC"), principal of and interest on
this Bond shall be payable by wire transfer pursuant to instructions from DTC . The principal of,
interest on and redemption premium on this bond are payable in lawful money of the United
States of America. No interest shall accrue on this bond after its Date of Maturity unless this
bond shall have been presented for payment at maturity and shall not then have been paid.
This bond is one of an authorized issue of bonds in the aggregate principal amount of
$ . This bond and the issue of which it is a part (together, the "Bonds") are issued
pursuant to the provisions of the "Special Service Area Tax Law," 35 ILCS §200/27-5 et seq. , as
amended, and the provisions of the Local Government Debt Reform Act, 30 ILCS § 350/ 1 et seq.,
as amended, and the principal of and interest on the Bonds are payable from special taxes (the
"Special Taxes") levied on all taxable real property within the United City of Yorkville Special
Service Area Number 2003 - 100 (the "Special Service Area") pursuant to a special tax roll.
I
i
4812-8086-2739.6
I
The Bonds are being issued for the purpose of refunding the City' s Special Service Area
Number 2003 - 100, Special Tax Bonds, Series 2003 (Raintree Village Project) (the "Prior
Bonds") funding a deposit to a Reserve Fund and paying costs of issuance of the Bonds and the
refunding of the Prior Bonds, all as more fully described in an ordinance adopted by the City
Council of the City on , 2013 (the "Bond Ordinance") and a Trust Indenture dated as
of , 2013 between the City and the Trustee (the "Indenture"), to all the provisions of
which the holder by the acceptance of this bond assents. Terms not otherwise defined herein
shall have the meanings ascribed to such terms in the Indenture. The Bonds, together with the
interest thereon, are limited obligations of the City, payable solely from the collection of the
Special Taxes and other moneys deposited in certain Funds and Accounts established pursuant to
the Indenture. For the prompt payment of the principal of and interest on this bond the Special
Taxes are hereby irrevocably pledged. THE BONDS DO NOT CONSTITUTE GENERAL
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
THE PAYMENT OF THE BONDS .
The Bonds are subject to mandatory sinking fund redemption and final payment at a price
of par plus accrued interest, without premium, on March 1 of the years and in the amounts as
follows:
Year Amount
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027 j
2028
2029
2030
2031
2032
2033
i
I
The City covenants that it will redeem the Bonds pursuant to the mandatory sinking fund
redemption requirements for the Bonds to the extent amounts are on deposit in the Bond and
Interest Fund.
i
B-2
4812-8086-2739.6
i
'
The Bonds are also subject to optional redemption prior to maturity at the option of the
City, in whole or in part, on any date on or after March 1 , 2023 , at a redemption price of 100% of j
the principal amount of the Bonds to be redeemed, plus accrued and unpaid interest to the date of
redemption.
Any optional redemption of Bonds shall be applied, to the extent possible, to reduce pro
rata the amount required to be redeemed by mandatory sinking fund redemption pursuant to the
Indenture, so as to maintain the proportion of principal maturing and subject to mandatory
sinking fund redemption each year to the total original principal amount of Bonds as of the date j
of issuance.
Pursuant to Section 4. 3 of the Indenture, the Bonds are subject to mandatory redemption
on any Interest Payment Date, in part, at a redemption price equal to the principal amount to be
redeemed, together with accrued interest to the date fixed for redemption, without premium,
from amounts in the Bond and Interest Fund consisting of the proceeds received by the City in
connection with a condemnation of any of the special services or any other property owned by or
dedicated to the City within the Special Service Area and allocable to the Bonds as determined
by the Consultant and which proceeds are not used by the City to rebuild the Special Services.
Pursuant to Section 4. 3 of the Indenture, the Bonds are also subject to mandatory
redemption, in part, on March 1 , 2023 from amounts transferred from the Special Reserve Fund
to the Special Redemption Account on such date in accordance with Section 7. 3 (a) at a
redemption price of 100% of the principal amount to be redeemed plus accrued and unpaid
interest to the date of redemption.
i
Pursuant to Section 4.4 of the Indenture, the Bonds are also subject to mandatory
redemption on any March 1 , June 1 , September 1 or December 1 , in part, from amounts available
for disbursement from the Special Redemption Account and from amounts transferred from the
Special Reserve Fund and the Reserve Fund to the Special Redemption Account in connection
with prepayments of the Special Taxes, at a redemption price expressed as a percentage of the
principal amount of the Bonds to be redeemed, as set forth below, together with accrued interest
on such Bonds to the date fixed for redemption:
I
Redemption Dates Redemption Prices I
On or prior to
February 28, 2022 102%
March 1 , 2022 through
February 28 , 2023 101 %
March 1 , 2023 and thereafter 100%
Any mandatory redemption of the Bonds in part pursuant to Section 4. 3 or 4.4 of the
Indenture shall be applied to reduce pro rata the amount of Bonds maturing and required to be
redeemed by mandatory sinking fund redemption pursuant to the Indenture, so as to maintain the
B-3
4812-8086-2739.6
I
I
proportion of principal maturing or subject to mandatory sinking fund redemption in each year to
the total original principal amount of Bonds.
If less than all the Bonds of any maturity are to be redeemed on any redemption date, the
Bond Registrar named below will assign to each Bond of the maturity to be redeemed a
distinctive number for each $ 1 ,000 of principal amount of that-Bond. The Bond Registrar will
then select by lot from the numbers so assigned, using such method as it shall deem proper in its
discretion, as many numbers as, at $ 1 ,000 per number, shall equal the principal amount of Bonds
of that maturity to be redeemed; provided that following any redemption, no Bonds shall be
outstanding in an amount less than the minimum Authorized Denomination except as necessary
to effect the mandatory sinking fund redemption of Bonds as provided in the Indenture.
I
Notice of the redemption of any Bonds, which by their terms shall have become subject
to redemption, will be given to the registered owner called for redemption in whole or in part not
less than 15 or more than 60 days before any date established for redemption of Bonds, by the j
Bond Registrar, on behalf of the City, by registered or certified mail sent to the registered
owner' s last address, if any, appearing on the registration books kept by the Bond Registrar. All
notices of redemption shall include at least the designation, date and maturities of Bonds called
for redemption, CUSIP Numbers, if available, and the date of redemption. In the case of a Bond
to be redeemed in part only, the notice will also specify the portion of the principal amount of the
Bond to be redeemed. The mailing of the notice specified above to the registered owner of any
Bond will be a condition precedent to the redemption of that Bond, provided that any notice
which is mailed in accordance with the Indenture will be conclusively presumed to have been
duly given whether or not the owner received that notice. The failure to mail notice to the owner
of any Bond, or any defect in that notice, shall not affect the validity of the redemption of any
other Bonds. Conditional notice of redemption may be given as provided in the Indenture.
i
This bond is negotiable, subject to the following provisions for registration and
registration of transfer. The City maintains books for the registration and registration of transfer
of Bonds at the office of the Trustee, as Bond Registrar. This bond is fully registered on those
books in the name of its owner, as to both principal and interest, and transfer of this bond may be
registered on those books upon surrender of this bond to the Bond Registrar by the registered
owner or his or her attorney duly authorized in writing together with a written instrument of
transfer satisfactory to the Bond Registrar duly executed by the registered owner or his or her
duly authorized attorney. Upon surrender of this bond for registration of transfer, a new bond or
bonds in the same aggregate principal amount and of the same maturity will be issued to the
transferee as provided in the Indenture.
This bond may be exchanged, at the option of the Registered Owner, for an equal
aggregate principal amount of bonds of the same maturity of any other Authorized
Denominations, upon surrender of this bond at the office of the Bond Registrar with a written
instrument of transfer satisfactory to the Bond Registrar duly executed by the Registered Owner
or his or her duly authorized attorney.
i
i
For every exchange or registration of transfer of this bond, the City or the Bond Registrar
may make a charge sufficient to reimburse it for any tax, fee or other governmental charge, other
than one imposed by the City, required to be paid with respect to that exchange or registration of
B-4
4812-8086-2739.6
I
transfer, and payment of that charge by the person requesting exchange or registration of transfer
shall be a condition precedent to that exchange or registration of transfer. No other charge may
be made by the City or the Bond Registrar as a condition precedent to exchange or registration of
transfer of this bond.
The Bond Registrar shall not be required to exchange or register the transfer of any Bond
following the close of business on the 15th day of the month preceding any Interest Payment
Date on such Bond, nor to transfer or exchange any Bond after notice calling such Bond for
redemption has been mailed, nor during a period of 15 days next preceding mailing of a notice of
redemption of any Bonds.
The City, the Trustee and the Bond Registrar may deem and treat the registered owner of
this bond as its absolute owner, whether or not this bond is overdue, for the purpose of receiving
payment of the principal of or interest on this bond and for all other purposes, and neither the
City, the Bond Registrar nor the Trustee shall be affected by any notice to the contrary. Payment
of the principal of and interest on this bond shall be made only to its registered owner, and all
such payments shall be valid and effective to satisfy the obligation of the City on this bond to the
extent of the amount paid.
I
All conditions which by law must have existed or must have been fulfilled in the issuance
of this bond existed and were fulfilled in compliance with law. Provision has been made for the
levy, collection and segregation of the Special Taxes sufficient to pay and discharge the principal
of this bond at maturity and to pay interest on this bond as it falls due. The issuance of the
Bonds by the City will not cause the City to exceed or violate any applicable limitation or
condition respecting the issuance of bonds imposed by the law of the State of Illinois or by any
indenture, ordinance or resolution of the City. The Bonds are issued for purposes for which the
City is authorized by law to issue bonds including but not limited to the payment of a portion of
the costs of the special services to be provided to the Special Service Area, making deposits to a
reserve fund, administrative expense fund and a capitalized interest account, and paying costs of
the City in connection with the issuance of the Bonds.
This bond shall not be valid for any purpose unless and until the certificate of
authentication on this bond shall have been duly executed by the Trustee.
I
I
l
B-5
4812-8086-2739.6
I
IN WITNESS WHEREOF, the United City of Yorkville, Kendall County, Illinois, by its
Mayor and City Council, has caused this bond to be executed by the manual or facsimile
signature of its Mayor and attested by the manual or facsimile signature of its City Clerk and has
caused its corporate seal to be affixed to this bond (or a facsimile of its seal to be printed on this
bond), all as of the Date of Bond specified above.
UNITED CITY OF YORKVILLE, ILLINOIS
By:
Mayor
(SEAL)
ATTEST:
i
i
City Clerk
I
Date of Authentication:
i
This bond is one of the bonds described in the Indenture authorizing the issuance of
$ United City of Yorkville, Kendall County, Illinois Special Service Area Number
2003 - 100 Special Tax Refunding Bonds, Series 2013 (Raintree Village Project) .
THE BANK OF NEW YORK MELLON
TRUST COMPANY, as trustee
By:
Authorized Signatory
For Value Received, the undersigned sells, assigns and transfers to
this bond and all rights and title under this bond, and irrevocably constitutes and appoints
attorney to transfer this bond on the books kept for registration of
this bond.
i
Dated:
i
B-6
4812-8086-2739.6
EXHIBIT C
This Document was (The Above Space For Recorder' s Use Only)
prepared by and after
recording return to:
i
The Bank of New York Mellon Trust
Company
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Attention: Corporate Trust Department
SATISFACTION OF TAX LIEN
The undersigned duly elected and acting Mayor of the United City of Yorkville, Kendall
County, Illinois (the "C�iff'), in consideration of the receipt of the sum of $ , hereby
acknowledges and certifies that special taxes levied and to be extended in accordance with the j
Special Tax Roll approved by the City Council of the City pursuant to Ordinance No. 2003-54,
adopted on August 12, 2003 (the "Establishing Ordinance") recorded on August 12, 2003 as
Document Number 200300032746, are paid and the lien of such taxes satisfied with respect to
the following lots in the City' s Special Service Area Number 2003 - 100 (the "SSA") legally
described on Exhibit A attached hereto:
Lot PIN Address Subdivision
i
The undersigned further certifies that pursuant to Section VIX of the Special Tax Roll
and Report attached to and incorporated in the Establishing Ordinance as Exhibit E (the "Special
Tax Roll and Report"), upon payment of the prepayment amount as calculated pursuant to the
Special Tax Roll and Report, the Special Taxes which were prepaid shall not be levied on the
Parcel for which the prepayment was made. Pursuant to Section VI.E of the Special Tax Roll
and Report, the City shall amend the Special Tax Roll each calendar year to reflect the I
Maximum Parcel Special Tax.
Dated:
UNITED CITY OF YORKVILLE
i
By:
Title:
i
i
i
i
4812-8086-2739.6
i
Approved by:
DAVID TAUSSIG & ASSOCIATES , INC.
j
By:
Title:
I.
The Trustee hereby acknowledges receipt of the sum of $
THE BANK OF NEW YORK MELLON
TRUST COMPANY, as trustee j
j
i
By: j
Title:
j
i
i
i
I
i
i
i
i
I
j
i
I
i
i
I
i
I
I
C-2
4812-8086-2739.6
STATE OF ILLINOIS )
SS .
COUNTY OF )
I, , a Notary Public in and for such County and State
I
aforesaid, do hereby certify that , personally known to me
I
to be the Mayor of the United City of Yorkville, Illinois, whose name is subscribed to the
i
foregoing Satisfaction, appeared before me this day in person and acknowledged that as such
officer he signed and delivered the foregoing Satisfaction as such officer of the United City of
Yorkville, Illinois, as his free and voluntary act, and as the free and voluntary act and deed of
such City, for the uses and purposes therein set forth.
Given under my hand and notarial seal, this day of
I
I
I
i
Notary Public
Commission expires :
i
I
I
i
I
i
I
C-3
4812-8086-2739.6
i
I
I
EXHIBIT D
CONTINUING DISCLOSURE AGREEMENT
i
i
$
UNITED CITY OF YORKVILLE
KENDALL COUNTY, ILLINOIS
SPECIAL SERVICE AREA NUMBER 2003 - 100
SPECIAL TAX REFUNDING BONDS, SERIES 2013
(RAINTREE VILLAGE PROJECT)
i
This Continuing Disclosure Agreement (the "Agreement") is executed and delivered by
the United City of Yorkville, Kendall County, Illinois (the " ly") aAd [David Taussig & j
Associates, Inc. ] with its principal office at as Dissemination Agent (the
"Dissemination Ag_ent") in connection with the issuance by the City of $ aggregate
principal amount of Special Service Area Number 2003 - 100 Special Tax Refunding Bonds,
Series 2013 (Raintree Village Project) (the "Bonds"). The Bonds are being issued pursuant to a
Trust Indenture dated as of May 1 , 2013 between the City and The Bank of New York Mellon
Trust Company, N.A. , as trustee (the "Indenture") . The City and the Dissemination Agent
covenant and agree as follows:
Section 1 . Purpose of the Agreement. This Agreement is being executed and
delivered by the City and the Dissemination Agent . for the benefit of the holders and Beneficial j
Owners of the Bonds. Although the Bonds are exempt from the requirements of S .E.C. Rule
15c2- 12(b)(5), the Participating Underwriter has requested that the City enter into this
Agreement to provide certain information with respect to the Bonds for the benefit of the holders
and Beneficial Owners of the Bonds.
Section 2 . Definitions. In addition to the definitions set forth in the Indenture, which
apply to any capitalized term used in this Agreement unless otherwise defined in this Section, the
following capitalized terms shall have the following meanings:
i
"Annual Report" shall mean any Annual Report provided by an Obligated Person
pursuant to, and as described in, Sections 3 and 4 of this Agreement.
"Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly,
to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons
holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the
owner of any Bonds for federal income tax purposes.
"Disclosure Representative" shall mean the City Administrator or his or her designee, or
such other officer or employee as the City shall designate in writing to the Dissemination Agent
from time to time.
"Dissemination Agent" shall mean initially [David Taussig & Associates, Inc.] or any
successor Dissemination Agent appointed by the City pursuant to Section 7 of this Agreement to
I
i
4812-8086-2739.6
li
• I
I
�I
serve as Dissemination Agent and which has filed with the City a written acceptance of such
designation.
"EMMA" shall mean the Electronic Municipal Market Access system of the MSRB. As
of the date of this Agreement, the EMMA Internet Web site address is
http://www. emma.msrb. org,
"Listed Events" shall mean any of the events listed in Section 5 of this Agreement.
"MSRB" shall mean the Municipal Securities Rulemaking Board established in
accordance with the provisions of Section 15B(b)(1 ) of the 1934 Act. As of the date of this
Agreement, the address and telephone and telecopy numbers of the MSRB are as follows:
Municipal Securities Rulemaking Board
1900 Duke Street, Suite 600
Alexandria, Virginia 22314
Tel: (703 ) 797-6600
Fax: (703) 797-6700
" 1934 Act" shall mean the Securities Exchange Act of 1934, as amended.
"Obligated Person'' shall mean the City.
"Participating Underwriter" shall mean any of the original underwriters of the Bonds.
"Rule" shall mean Rule 15c2- 12(b)(5) adopted by the Securities and Exchange
Commission under the 1934 Act, as the same may be amended from time to time.
Section 3 . Provision of Annual Reports.
(a) Within 210 days after the end of each fiscal year of the City (which
currently ends ), commencing with the first fiscal year after the Rule
becomes applicable to the Bonds, the City shall, or shall cause the Dissemination Agent
to, provide to the MSRB, an Annual Report which is consistent with the requirements of
Section 4 of this Agreement. The Annual Report may be submitted as a single document
or as separate documents comprising a package, and may cross-reference other
information as provided in Section 4 of this Agreement, provided that the audited
financial statements of the City may be submitted separately from the balance of the
Annual Report and later than the date required above for the filing of the Annual Report
if they are not available by that date. If the City' s fiscal year changes, it shall give notice
of such change in the same manner as for a Listed Event under Section 5 of this
Agreement.
(b) Not later than ten ( 10) business days prior to the date required in
subsection (a), the City shall provide the Annual Report to the Dissemination Agent. If
the City is unable to provide to the MSRB an Annual Report by the date required in
subsection (a), the Dissemination Agent shall send a notice to the MSRB in substantially
the form attached as Exhibit B.
D-2
4812-8086-2739.6
i
(c) The Dissemination Agent shall:
(i) determine each year, prior to the date for providing the Annual
Report the name and address of the MSRB, and
i
(ii) file a report with the City certifying that the Annual Report has
been provided pursuant to this Agreement, stating the date it was
provided to the MSRB as described in Section 13 .
Section 4. Content of Annual Reports, The City' s Annual Report shall contain or
incorporate by reference the following items:
I
(a) The City' s audited financial statements for the prior fiscal year, prepared
in accordance with generally accepted auditing standards and the standards for financial
audits contained in Government Auditing Standards ( 1988 Revision), issued by the
Comptroller General of the United States. The City may from time to time, in order to
comply with federal or State legal requirements, modify the basis upon which its
financial statements are prepared. Notice of any such modification shall be provided to
the MSRB and shall include a reference to the specific federal or State law or regulation
describing such accounting basis. If the City' s audited financial statements are not
available by the time the Annual Report is required to be filed pursuant to Section 3 . (a),
the Annual Report shall contain unaudited financial statements and the audited financial
statements shall be filed in the same manner as the Annual Report when they become
available.
i
If a change is made to the basis on which financial statements are prepared, the
annual financial information for the year in which the change is made shall present a
comparison between the financial statements or information prepared on the basis of the
new accounting principles and those prepared on the basis of the former accounting
principles. Such comparison shall include a qualitative and, to the extent reasonably
feasible, quantitative discussion of the differences in the accounting principles and the
impact of the change in the accounting principles on the presentation of the financial
information.
(b) The Annual Report shall include a copy of the annual report prepared by
the Consultant pursuant to Task 3 of Exhibit A to the Administrative Services Agreement
showing the Special Taxes received, all disbursements from the Funds and Accounts
administered by the Indenture, including the balances in all Funds and Accounts relating
to the Bonds and the Special Services as of the end of such fiscal year, the collection of
taxes, delinquencies, tax sales and foreclosures. j
i
Any or all of the items listed above may be incorporated by specific reference to other
documents, including official statements of debt issues of the City or related public entities,
which have been submitted to the MSRB or the Securities and Exchange Commission. If the
document incorporated by reference is a final official statement, it must be available from the
MSRB. The City shall clearly identify each such other document so incorporated by reference.
D-3
4812-8086-2739.6
I
Section 5 . Reporting of Significant Events.
(a) Pursuant to the provision of this Section 5, the Obligated Person shall
give, or cause to be given by the Dissemination Agent, notice of the occurrence of any of
the following events with respect to the Bonds, in a timely manner not in excess of ten
( 10) business days after the occurrence of the event and in accordance with the Rule:
i
( 1 ) Principal and interest payment delinquencies;
i
(2) Non-payment related defaults, if material;
(3) Unscheduled draws on debt service reserves reflecting
financial difficulties;
(4) Unscheduled draws on credit enhancement reflecting
financial difficulties;
i
(5) Substitution of credit or liquidity providers, or their failure !
to perform;
(6) Adverse tax opinions, the issuance by the Internal Revenue
Service of proposed or final determination of taxability, Notices of
Proposed Issue (IRS Form 5701 -TEB) or other material notices or
determinations with respect to the tax status of the security or other
materials events affecting the tax status of the security;
(7) Modification to rights of security holders, if material;
(8) Bond calls, if material;
(9) Defeasances;
( 10) Release, substitution, or sale of property securing
repayment of the securities, if material;
( 11 ) Rating changes;
( 12) Tender offers;
i
( 13) Bankruptcy, insolvency, receivership or similar event of the
Obligated Person;
( 14) The consummation of a merger, consolidation, or
acquisition involving an obligated person or the sale of all or substantially
all of the assets of the obligated person, other than in the ordinary course
of business, the entry into a definitive agreement to undertake such an
action or the termination of a definitive agreement relating to any such
actions, other than pursuant to its terms, if material; and
i
D-4
4812-8086-2739.6
i
I
I
I
i
( 15) Appointment of a successor or additional trustee or the
change of name of a trustee, if material.
(a) The parties hereto agree a release of the lien of the Special Tax upon a
prepayment of the Special Tax that complies with the terms of the Indenture need not be
reported separately pursuant to clause ( 10) above but may be reported as part of the
redemption notice provided pursuant to clause (8) above.
(b) Whenever the City obtains knowledge of the occurrence of a Listed Event
described in subsection (a)(2), (7), (8), ( 10), ( 14) or ( 15), the City shall as soon as
possible determine if such event would be material under applicable federal securities j
laws. The City covenants that its determination of materiality will be made in j
conformance with federal securities laws.
(c) If the City determines that (i) a Listed Event described in subsection
(a)( 1 ), (3 ), (4), (5), (6), (9), ( 11 ), ( 12) or ( 13) has occurred or (ii) the occurrence of a
Listed Event described in subsection (a)(2), (7), (8), ( 10), ( 14) or ( 15) would be material
r
under applicable federal securities law, the City shall notify the Dissemination Agent and
cause a notice of such occurrence to be filed with the MSRB within ten ( 10) business
days of the occurrence of the Listed Event. In connection with providing a notice of the
occurrence of a Listed Event described in subsection (a)(9), the City shall include in the
notice explicit disclosure as to whether the Bonds have been escrowed to maturity or
escrowed to call, as well as appropriate disclosure of the timing of maturity or call.
(d) In connection with providing a notice of the occurrence of a Listed Event,
the Dissemination Agent, solely in its capacity as such, is not obligated or responsible
under this Agreement to determine the sufficiency of the content of the notice for j
purposes of the Rule or any other state or federal securities law, rule, regulation or
administrative order.
(e) If the Dissemination Agent has been instructed by the City to report the
occurrence of a Listed Event, the Dissemination Agent shall file a notice of such
occurrence with the MSRB.
Section 6. Termination of Reporting Obligation. The Obligated Person' s obligations
under this Agreement shall terminate upon the legal defeasance, prior redemption or payment in j
full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the
Obligated Person shall give notice of such termination in the same manner as for a Listed Event
under Section 5 .
Section 7 . Dissemination Agent. The Obligated Person may, from time to time,
appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this
Agreement and may discharge any such Dissemination Agent, with or without appointing a
successor Dissemination Agent. The Dissemination Agent shall not be responsible in any
manner for the content of any notice or report prepared by an Obligated Person pursuant to this
Agreement.
D-5
4812-8086-2739.6
Section 8 . Amendment: Waiver. Notwithstanding any other provision of this
Agreement, the Obligated Person and the Dissemination Agent may amend this Agreement (and
the Dissemination Agent shall agree to any amendment so requested by the Obligated Person),
and any provision of this Agreement may be waived, provided that the following conditions are
satisfied:
(a) If the amendment or waiver relates to the provisions of Sections 3 (a), 4, or
5(a), it may only be made in connection with a change in circumstances that arises from a
change in legal requirements, change in law, or change in the identity, nature or status of
an Obligated Person with respect to the Bonds;
(b) The undertaking, as amended or taking into account such waiver, would
not in the opinion of nationally recognized bond counsel or counsel expert in federal
securities law in and of itself cause the undertakings therein to violate the Rule, taking
into account any subsequent change in or official interpretation of the Rule.
I
In the event of any amendment or waiver of a provision of this Agreement, the Obligated
Person shall describe such amendment in the next Annual Report, and shall include, as
applicable, a narrative explanation of the reason for the amendment or waiver and its impact on
the type (or in the case of a change of accounting principles, on the presentation) of financial
information or operating data being presented by the Obligated Person.
i
Section 9. Additional Information. Nothing in this Agreement shall be deemed to
prevent the Obligated Person from disseminating any other information, using the means of
dissemination set forth in this Agreement or any other means of communication, or including
any other information in any Annual Report or notice of occurrence of a Listed Event, in
addition to that which is required by this Agreement. If the Obligated Person chooses to include
any information in any Annual Report or notice of occurrence of a Listed Event in addition to
that which is specifically required by this Agreement, the Obligated Person shall have no
obligation under this Agreement to update such information or include it in any future Annual j
Report or notice of occurrence of a Listed Event.
Section 10. Default. If the Obligated Person or the Dissemination Agent fails to
comply with any provision of this Agreement, the Dissemination Agent or any holder or
Beneficial Owner of Bonds may take such actions as may be necessary and appropriate,
including seeking mandate or specific performance by court order, to cause the Obligated Person
or the Dissemination Agent to comply with its obligations under this Agreement. A default
under this Agreement shall not be deemed a default under the Indenture or the Bonds and the
sole remedy .under this Agreement in the event of any failure of the Obligated Person or the
Dissemination Agent to comply with this Agreement shall be an action to compel performance.
I
Section 11 . Duties, Immunities and Liabilities of Dissemination Agent. The j
Dissemination Agent shall have only such duties as are specifically set forth in this Agreement
and the Obligated Person, to the extent permitted by law, agrees to indemnify and save the
Dissemination Agent, its officers, directors, employees and agents, harmless against any loss,
expense and liabilities which it may occur arising out of or in the exercise or performance of its
powers and duties hereunder, including the costs and expenses (including attorneys fees) of
D-6
4812-8086-2739.6
defending against any claim of liability, but excluding liabilities due to the Dissemination
Agent' s negligence or willful misconduct. The obligations of the Obligated Person under this
Section shall survive resignation or removal of the Dissemination Agent and payment of the
Bonds.
Section 12 . Beneficiaries. This Agreement shall inure solely to the benefit of the
Obligated Person, the Dissemination Agent, the Participating Underwriter and the holders and
Beneficial Owners of the Bonds, and shall create no rights in any other person or entity.
Section 13 . Mandatory Electronic Filing with EMMA. All filings with the MSRB
under this Agreement shall be made by electronically transmitting such filings through the
EMMA Dataport at http://www. emrna,msrb.org as provided by the amendments to the Rule
adopted by the SEC in Securities Exchange Act Release No. 59062 on December 5 , 20080
Section 14. Governing Law. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Illinois, and any suits and actions arising out of this
Disclosure Agreement shall be instituted in a court of competent jurisdiction in the State of
Illinois. Notwithstanding the foregoing, to the extent this Agreement addresses matters of
federal securities laws, including the Rule, this Agreement shall be construed and interpreted in
accordance with such federal securities law and official interpretations thereof.
Section 15 . Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original, but such
counterparts shall together constitute but one and the same instrument.
[The rest of this page is intentionally left blank.]
I
i
i
i
I
i
I
i
i
D-7
4812-8086-2739.6
i
I
Date: May ., 2013 .
UNITED CITY OF YORKVILLE
By:
Title:
[DAVID TAUSSIG & ASSOCIATES, INC.] , as
Dissemination Agent
i
By:
Title:
i
I
i
i
i
i
i
I
D-8
4812-8086-2739.6
Exhibit C
Form of Bond Purchase Agreement
I
i
i
I
i
i
i
i
i
I
i
i
i
4842-4466-2803 .6
I
ICI
Exhibit C Draft 4 04/ 17/ 13
I
United City of Yorkville
Kendall County, Illinois
Special Service Area Number 2003 400
Special Tax Refunding Bonds, Series 2013
(Raintree Village Project)
BOND PURCHASE AGREEMENT
April _, 2013
I
United City of Yorkville, Illinois
800 Game Farm Road
Yorkville, Illinois 60560
I
Ladies and Gentlemen:
The undersigned, William Blair & Company LLC (the "Purchaser"), offers to enter into
the following agreement (this "Contract") with the United City of Yorkville, Illinois (the "City"),
which upon acceptance by the City will be binding upon each of the City and the Purchaser.
Capitalized terms used herein and not otherwise defined herein shall have the meanings set forth
in the Indenture (as hereinafter defined) and the Limited Offering Memorandum (as hereinafter
defined).
This offer is made subject to acceptance by the City on or before 1 : 00 P.M. , Chicago
time, on the date hereof, and, if not so accepted, will be subject to withdrawal by the Purchaser
upon notice delivered to the City at the address set forth above at any time prior to the
acceptance hereof by the City. 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 Special Service Area Tax Law of the State of Illinois, 35
ILCS 200/27-5 et seq. , as amended.
(B) "Ancillary Documents" means the Bond Ordinance, the Indenture, the Tax
Compliance Certificate and Agreement, the Limited Offering Memorandum, the Continuing
Disclosure Agreement, the Administrative Services Agreement and all other agreements and
certificates executed and delivered in connection with the issuance and sale of the Bonds.
I
(C) "Area" means the United City of Yorkville Special Service Area Number
2003 - 100 created pursuant to the Establishing Ordinance.
(D) "Bond Ordinance" means Ordinance No. 2013-_ adopted by the
corporate authorities of the City on April 2013 relating to the Bonds.
'I
(E) "Bonds" means the interest-bearing, tax exempt obligations issued by the
City pursuant to the Bond Ordinance and called the United City of Yorkville, Kendall County,
Illinois, Special Service Area Number 2003 - 100 Special Tax Refunding Bonds, Series 2013
(Raintree Village Project) in the aggregate principal amount of $
(F) "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.
(G) "City" means the United City of Yorkville, Kendall County, Illinois.
(H) "Closing" means the Closing as defined in Section 2(B) herein held on the
Closing Date. j
(1) "Closing Date" means _, 2013 or such earlier or later date
as the City and the Purchaser shall mutually agree upon, and refers to the date on which the
transaction by which the City causes the Trustee to deliver the Bonds to the Purchaser and the
Bonds are paid for by the Purchaser pursuant to this Contract.
(J) "Code" means the Internal Revenue Code of 1986, as amended.
(K) "Continuing Disclosure Agreement" means the Continuing Disclosure
Agreement by and between the City and David Taussig & Associates, as Dissemination Agent,
dated the date of the Closing Date.
i
(L) "Contract" means this Bond Purchase Agreement. j
(M) "Establishing Ordinance" means Ordinance No. 54 adopted by the
corporate authorities of the City on August 12, 2003 , establishing the United City of Yorkville,
Illinois Special Service Area Number 2003 - 100. j
(N) "Governmental Body" means any federal, state, municipal, or other
governmental department, commission, board, bureau, agency or instrumentality, domestic or
foreign.
(0) "Indenture" means the Trust Indenture dated as of 1 , 2013
between the City and the Trustee and any amendments and supplements thereto, pursuant to
which the Bonds will be issued.
(P) "Limited Offering Memorandum" means the Limited Offering
Memorandum of the City (including each Appendix thereto) relating to the Bonds dated
April _, 20130
i
i
(Q) "Pledged Funds" means the Special Taxes and the moneys and funds
pledged to the payment of the Bonds pursuant to the Bond Ordinance and Indenture. j
i
2
I
I
(R) "Preliminary Limited Offering Memorandum" means the Preliminary
Limited Offering Memorandum of the City (including each Appendix thereto) relating to the
Bonds dated April _, 2013 .
(S) "Purchaser" means William Blair & Company LLC .
i
(T) "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 Bonds.
(U) "Trustee" means The Bank of New York Mellon Trust Company, N.A. , as
Trustee under the Bond Ordinance.
i
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 Purchaser hereby agrees to purchase from
the City for a limited offering, and the City hereby agrees to sell to the Purchaser for such
purpose, all, but not less than all, of the $ aggregate principal amount of
Bonds, at a purchase price equal to $ , which reflects an Underwriter' s
discount of $ The Bonds shall be due on March 1 , 2033 , and shall bear
interest at the rate of % . The Bonds shall be issued pursuant to the Bond Ordinance.
The Bonds shall be dated, shall mature and be subject to mandatory and optional redemption 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
Limited Offering Memorandum and the Bond Ordinance and the Indenture.
(B) Closing. The purchase and sale of the Bonds shall take place on the
Closing Date at the offices of Foley & Lardner LLP, Chicago, Illinois. At the Closing, as
defined below, the Purchaser will accept the delivery of the 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 Bonds and delivery of the Bonds, as herein described, is herein
called the "Closing."
I
3 . City' s Pre-Closing Deliveries.
(A) Prior to the Closing. Date, the City shall have delivered or caused to be
delivered to the Purchaser an executed copy of the Limited Offering Memorandum, executed on
behalf of the City by its City Mayor.
i
(B) Prior to the Closing Date, the City shall have delivered or caused to be
delivered to the Purchaser a certified copy of the Establishing Ordinance, the Bond Ordinance,
and such other ordinances of the City which shall include the authorization of the execution,
delivery and performance of this Contract, the Bonds and the other Ancillary Documents to
3
i
which the City is a party, among other things, together with such reasonable number of copies of
each of the foregoing as the 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 Documents, the information contained in
the 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
Bonds. The City hereby ratifies, approves, and consents to the use and distribution by the
Purchaser, prior to the date hereof, of the Preliminary Limited Offering Memorandum and, after
the date hereof, of the Limited Offering Memorandum in connection with the offering of the
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 Purchaser as the Purchaser may
deem reasonably necessary in order to qualify the 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 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
E
connection with any such qualification in any jurisdiction.
i
4. Representations and Warranties of the City.
The City represents and warrants to and agrees with the Purchaser that:
(A) Cam. The City is a non-home rule unit, municipal corporation duly
organized and validly existing and is 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, the Bond Ordinance, the Limited Offering
Memorandum, and the Ancillary Documents to which the City is or is to be a party. The
adoption of each of the Bond Ordinance and the Establishing Ordinance and the execution, j
delivery and performance by the City of this Contract, the Ancillary Documents to which the
City is or is to be a party and the issuance of the 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 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 j
constitute, and the Ancillary Documents 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 j
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 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
4
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
Purchaser at the Closing in accordance with the provisions of this Contract, the Bonds will
conform in all material respects to the description thereof contained in the 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 Bonds being applied other
than as provided in the Bond Ordinance and as described in the Limited Offering Memorandum.
Such proceeds will not be used by the City in a manner that would cause the 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 Bonds, the
Bond Ordinance, the Establishing Ordinance, this Contract, or the Ancillary Documents 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.
(D) Limited Offering Memorandum. The descriptions and information j
contained in the Limited Offering Memorandum under the captions "INTRODUCTORY
STATEMENT," "THE BONDS" (other than information under the sub-caption "— Book-Entry
Only System"), "PLAN OF FINANCE," "SECURITY AND SOURCE OF PAYMENT FOR
THE BONDS" (other than information under the sub-caption ". Value to Lien Ratio" and
information in the fourth and fifth paragraphs under the subcaption "— Tax Assessment,
Collection and Representative Property Taxes"), " THE CITY," "THE SPECIAL _ SERVICE
AREA AND THE SPECIAL TAXES," "LEGAL OPINIONS," "CONTINUING
INFORMATION," "NO LITIGATION," "NO RATING" and "AUTHORIZATION" and in
Appendix A thereto (collectively, the "City Information") 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
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 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
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 Bonds. Other than as specifically
disclosed in the Limited Offering Memorandum, the City has not entered into any contract or
arrangements 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 Bonds. The City is lawfully entitled
5
i
I
i
l
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 Bonds.
(F) No Litigation. Except as described in the 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 Bonds or the delivery by the City of any of the Ancillary Documents to which the
City is a party, or the collection of Pledged Funds, or in any way contesting or affecting the
validity of the Bonds, or any of the Ancillary Documents to which the City is a party, or in any
way questioning or affecting (w) the proceedings under which the Bonds are to be issued, (x) the
validity or enforceability of any provision of the Bonds, the Bond Ordinance, the Establishing
Ordinance or this Contract, (y) the authority of the City to collect the Pledged Funds, or to
perform its obligations hereunder or with respect to the Bonds, or to consummate any of the
transactions set forth in the Ancillary Documents to which it is or is to be a party as
contemplated hereby or by the Bond Ordinance, or the Limited Offering Memorandum, (z) the
legal existence of the City, or the title of its Mayor, Aldermen 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 Funds, assets or the financial
condition of the City.
(G) Certificates. Any certificate signed by an authorized officer of the City
I
and delivered to the Purchaser and/or the Trustee shall be deemed a representation and covenant
by the City to the Purchaser and/or the Trustee as to the statements made therein.
(H) The Ordinances. Each of the Bond Ordinance and the Establishing j
Ordinance is in full force and effect, and has not been amended, modified, revoked or repealed. j
5 . Reserved.
6, Representations, Warranties and Agreements of the Purchaser.
(A) Limited Offering. The Purchaser agrees to make a limited offering of the
Bonds to a limited number of institutional investors at a price not in excess of the offering price
set forth on the cover page of the Limited Offering Memorandum; such limited offering shall j
meet requirements for exemption from registration under applicable federal and state securities
laws. In connection with the foregoing the City acknowledges and agrees that:
(i) The City has received and reviewed the disclosure letter dated
March 8, 2013 that is required by the Municipal Securities Rulemaking Board ("MSRB")
Rule G- 17 as set forth in MSRB Notice 2012-25 (May 7, 2012); and
i
(ii) (a) the purchase and sale of the Bonds pursuant to this Contract is
an arm's length commercial transaction between the City and the Purchaser; (b) in
connection with the purchase and sale of the Bonds and with the discussions,
6
undertakings and procedures leading up to the consummation of such transaction, the
Purchaser is and has been acting solely as a principal and is not acting as an agent,
advisor or fiduciary of the City; and (c) the City has consulted its own legal, financial and
other advisors to the extent it has deemed appropriate.
(B) Limited Offering Memorandum. The descriptions and information
contained in the Limited Offering Memorandum under the caption "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 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 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 Purchaser shall have the right to cancel Purchaser' s obligations to purchase the
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 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 Limited Offering Memorandum, or, in the
reasonable opinion of the Purchaser, such action or event pertaining to the federal income tax
consequences referenced above materially adversely affects the market for the Bonds or the sale,
at the contemplated offering price, by the Purchaser of the 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 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 Bonds, as contemplated herein and
in the 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 Purchaser either (A) makes untrue,
7
i
incorrect or misleading in any material respect any statement or information contained in the
Limited Offering Memorandum or (B) is not reflected in the 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 refuses to permit the
Limited Offering Memorandum to be supplemented to correct or supply such statement or
information, or the effect of the Limited Offering Memorandum as so corrected or supplemented
is such as, in the reasonable judgment of the Purchaser, would materially adversely affect the
market for the Bonds or the sale, at the contemplated offering price, by the Purchaser of the
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
Purchaser, would materially adversely affect the market for or the marketability of the Bonds or
obligations of the general character of the 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 Limited Offering
Memorandum; (x) the Limited Offering Memorandum is not executed, approved and delivered
in accordance with Section 3 above; (xi) in the reasonable judgment of the Purchaser, the market
price of the Bonds, or the market price generally of obligations of the general character of the
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 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 Purchaser, materially adversely affects the market for the Bonds or of
obligations of the general character of the Bonds; (xiii) any litigation shall be instituted, pending
or threatened to restrain or enjoin the issuance, sale or delivery of the Bonds or in any way
protesting or affecting any authority for or the validity of the Bonds, the Bond Ordinance, the
existence or powers of the City, or any event described or contemplated by the 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 Purchaser, would materially adversely affect the ability of the
Purchaser to market the Bonds.
I
86 Conditions of Closing.
The Purchaser' s obligation to purchase the Bonds under this Contract is subject to the
performance by the City of its obligations hereunder at and prior to the Closing Date, to the
accuracy, in the reasonable discretion of the Purchaser, of the representations and warranties of
the City contained herein as of the Closing Date, and, in the reasonable discretion of the
Purchaser, to the following conditions, including the delivery of such documents as are
8
enumerated herein in form and substance satisfactory to the Purchaser and its counsel as of the
Closing Date:
(A) Ordinances in Effect and City in Compliance Therewith. At the time of
the Closing (i) each of the Bond Ordinance and the Establishing 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 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 the Bonds or the Bond Ordinance to be
performed at, simultaneously with or prior to the Closing.
(B) Opinions of Bond Counsel. The Purchaser shall have received an
unqualified approving legal opinion substantially in the form of Appendix C to the Limited
Offering Memorandum and a supplemental legal opinion substantially in the form of Exhibit A
hereto, each dated the Closing Date, addressed to the Purchaser and the Trustee, from Foley &
Lardner LLP, Bond Counsel, satisfactory to the Purchaser in its reasonable discretion.
(C) Opinion of Purchaser' s Counsel. The Purchaser shall have received an
opinion dated the Closing Date, addressed to the Purchaser, from Burke Burns & Pinelli, Ltd. ,
satisfactory to the Purchaser in its reasonable discretion.
(D) Opinion of Counsel to the City. The Purchaser shall have received a
favorable opinion dated the Closing Date, addressed to the Purchaser, Bond Counsel and the
Trustee, from Kathleen Field Orr & Associates, counsel to the City, satisfactory to the Purchaser
in its reasonable discretion, substantially in the form of Exhibit B hereto.
(E) Performance: No Default, The City shall have performed and complied
with all agreements and conditions herein required to be performed or complied with by the City
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 Documents or the Bonds.
(F) Ancillary Documents. At the Closing Date, (i) all of the Ancillary
Documents shall be in full force and effect, shall have been duly executed and copies delivered
to the 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 Purchaser and there shall be no defaults or events of default thereunder and (ii) the
proceeds of the sale of the Bonds shall be applied or deposited with the Trustee for application as
described in the Bond Ordinance and the Limited Offering Memorandum.
(G) Closing Certificate of City M"o r. The City shall have delivered to the
Purchaser a certificate dated the Closing Date, addressed to the Purchaser and the Trustee signed
by the City Mayor in form and substance reasonably satisfactory to the Purchaser.
(H) The Bonds. The 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.
9
(I) Trustee ' s Certificate. The Purchaser shall have received a certificate dated
the Closing Date of an authorized officer of the Trustee, addressed to the Purchaser reasonably
acceptable in form and substance to the Purchaser.
(J) Form 8038-G. The Purchaser shall have received a copy of the completed
Form 8038-G of the Internal Revenue Service executed by the City.
(K) Officers ' Certificates . The Purchaser shall have received any and all
certificates required to be furnished by the provisions of any Ancillary Document to be obtained
or furnished by the City at or prior to Closing.
(L) Specimen Bonds. The Purchaser shall have received specimen Bonds.
(M) Certified Copies of Ordinances. The Purchaser shall have received
certified copies of the Bond Ordinance and the Establishing Ordinance. The Bond Ordinance
shall include authorization for execution and delivery of this Contract.
(N) Special Tax Roll and Report. The Purchaser shall have received a copy of
the Special Tax Roll and Report substantially in the form attached to the Limited Offering
Memorandum (the "Special Tax Report ') .
(0) Special Tax Report Consent. The Purchaser shall have received from the
preparers of the Special Tax Report a letter dated the Closing Date, addressed to the Purchaser
regarding such preparer' s qualifications and the preparer' s consent to the inclusion of the Special
Tax Report in the Limited Offering Memorandum.
(P) Additional Opinions, Certificates, etc. The Purchaser shall have received
such additional legal opinions, certificates, proceedings, instruments and other documents as the
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 in
the reasonable judgment of the Purchaser, they are satisfactory in form and substance.
If there shall be a failure to satisfy the conditions of the Purchaser' s obligations contained
in this Contract or if the Purchaser' s obligations to purchase the Bonds shall be terminated for
any reason permitted by this Contract, this Contract shall terminate, and the Purchaser and the
City shall not have any further obligations hereunder, except for the obligations set forth in
Section 10 hereof which shall remain in full force and effect.
9. Changes Affecting the Limited Offering Memorandum.
At any time prior to the Closing, the City agrees to supplement or amend the Limited
Offering Memorandum whenever requested by the Purchaser when, in the reasonable judgment
of the Purchaser and the City, such supplement or amendment is required. No amendment or
supplement to the Limited Offering Memorandum shall be made without the approval of the j
Purchaser. After the Closing and so long as the Purchaser shall be offering any of the Bonds, but
not later than 90 days after the date of this Contract, if any event shall occur as a result of which
10
it is necessary to amend or supplement the 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 Purchaser. In any such case, the City shall cooperate in the preparation,
execution and delivery of either amendments to the Limited Offering Memorandum or
supplemental information so that the statements in the 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 which costs may be reimbursed from amounts made available under the Bond
Ordinance as Administrative Costs.
100 Payment of Expenses.
All fees, costs and expenses associated with the issuance of the Bonds, including without
limitation, the reasonable fees and disbursements of the preparer of the Special Tax Report, the
Purchaser' s legal counsel, Burke Burns & Pinelli, Ltd. , Bond Counsel, Foley & Lardner LLP,
and the City' s counsel, Kathleen Field Orr & Associates, shall be disbursed and paid by the
Trustee from the proceeds of the 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.
i
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 and the Purchaser, including the j
successors and assigns of the Purchaser, and no other person, partnership, association or
corporation shall acquire or have any rights hereunder or by virtue hereof.
i
11
II
i
I
i
16. Reserved.
17. Reserved.
i
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.
190 Survival of Representations Warranties Agreements and Obligations.
I
Each respective representation, warranty and agreement of the City and the Purchaser
shall remain operative and in full force and effect, regardless of any investigations made by or on
behalf of the Purchaser and the City and shall survive the Closing. This Section 19, the
obligations of the City under Sections 9, 10, 16 and 17 hereof, and the obligations of the
Purchaser under Section 16 hereof, hereof shall survive any termination of this Contract pursuant
to its terms.
20. Severability.
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.
[ SIGNATURE PAGE FOLLOWS]
I
i
i
i
i
I
l
12
[Signature Page to Bond Purchase Agreement]
Very truly yours,
WILLIAM BLAIR & COMPANY, LLC
By:
Its:
Accepted and agreed to by the under-signed
as of the date first above written: -
UNITED CITY OF YORKVILLE, an Illinois
municipal corporation
By:
Gary J. Golinski, Mayor
i
i
I
i
i
i
I
i
I
i
i
EXHIBIT A
2013
United City of Yorkville William Blair & Company, L.L.C.
800 Game Farm Road 222 West Adams Street
Yorkville, Illinois 60560 Chicago, Illinois 60606
The Bank of New York Mellon Trust
Company, N.A.
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Re: $
United City of Yorkville, Kendall County, Illinois
Special Service Area Number 2003 - 100
Special Tax Refunding Bonds
Series 2013 (Raintree Village Project)
Ladies and Gentlemen:
We have served as Bond Counsel to the United City of Yorkville, Kendall County,
Illinois (the "City") with respect to the issuance today of the $ United City of
Yorkville, Kendall County, Illinois, Special Service Area Number 2003- 100 Special Tax
Refunding Bonds, Series 2013 (the "Bonds"). The Bonds are issued pursuant to an ordinance
adopted by the City on April _, 2013 (the "Bond Ordinance"), a Determination of the City
executed pursuant thereto and a Trust Indenture dated as of 17 2013 (the " Trust
Indenture") between the City and The Bank of New York Mellon Trust Company, N.A. , as
trustee.
We have delivered to you an executed copy of our approving opinion, dated today,
addressed to you with respect to the Bonds. Based upon our examination as described in that
opinion, we are further of the opinion that the Bonds are not subject to the registration
requirements of the Securities Act of 1933 , as amended, and the Trust Indenture is exempt from
qualification pursuant to the Trust Indenture Act of 1939, as amended.
We are further of the opinion that statements contained in the Limited Offering
Memorandum dated , _, 2013 relating to the Bonds under the sections entitled
"THE BONDS" (other than information under the subcaption ". Book-Entry-Only System" as to
which no view is expressed); "SECURITY AND SOURCE OF PAYMENT FOR THE
BONDS ;" (other than information under the subcaptions "Value to Lien Ratio' and
United City of Yorkville
William Blair & Company, L.L.C.
The Bank of New York Mellon Trust Company, N.A. , as Trustee
, 2013
Page 2
"Representative Property Taxes" as to which no view is expressed); "THE SPECIAL SERVICE
AREA AND SPECIAL TAXES" (other than information under the subcaptions "Levy
Abatement and Collection of Special Taxes" and " Special Service Area Special Tax Roll and
Report ' as to which no view is expressed) ; "TAX MATTERS", and in Appendix C — Form of
Bond Counsel Opinion thereto insofar as the statements contained under such sections or in such
Appendix purport to describe or summarize certain provisions of the Bonds, the Bond Ordinance
and the Trust Indenture, or summarize such opinion, present an accurate description or summary
- of such provisions and opinion.
Very truly yours,
FOLEY & LARDNER LLP
SJG/lr
i
i
I
i
i
I
I
i
i
I
I
EXHIBIT B
, 2013
i
i
United City of Yorkville Foley & Lardner LLP
800 Game Farm Road 321 North Clark Street, Suite 2800
Yorkville, Illinois 60560 Chicago, Illinois 60610
William Blair & Company, L.L.C. The Bank of New York Mellon Trust
222 West Adams Street Company, N.A., as Trustee
Chicago, Illinois 60606 2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
i
i
Re: $ United City of Yorkville, Kendall County, Illinois Special
Service Area Number 2003 - 100 Special Tax Refunding Bonds, Series 2013
(Raintree Village Project)
Ladies and Gentlemen:
i
We have served as counsel for the United City of Yorkville, Illinois (the "City") in
connection with the execution and delivery of the Bond Purchase Agreement dated
2013 (the "Purchase Agreement") by and between the City and William Blair &
Company, L.L.C. (the "Purchaser") providing for the purchase by the Purchaser of the United
City of Yorkville, Kendall County, Illinois, Special Service Area Number 2003 - 100 Special Tax
Refunding Bonds, Series 2013 (the "Bonds") issued pursuant to a Trust Indenture dated as of
1 , 2013 (the "Trust Indenture") between the City and The Bank of New York Mellon
Trust Company, N.A. , as trustee. Terms used but not defined herein shall have the meanings
ascribed thereto in the Purchase Agreement. This opinion is being delivered to you at the
express direction of the City and pursuant to the Purchase Agreement.
In such capacity, we have examined the following:
a. the Purchase Agreement;
i
b. the Preliminary Limited Offering Memorandum of the City dated 2013
(the "Preliminary Limited Offering Memorandum") and the Limited Offering
Memorandum of the City dated 2013 relating to the Bonds (the "Final
Limited Offering Memorandum", and together with the Preliminary Limited
Offering Memorandum, the "Limited Offering Memorandum");
C, the Trust Indenture;
i
i
William Blair & Company, L. L. C.
United City of Yorkville
Foley & Lardner LLP
2003
Page 2
d. the Continuing Disclosure Agreement dated _, 2013 (the
I
"Continuing Disclosure Agreement") executed and delivered by the City and
the Dissemination Agent;
e. the Tax Compliance Certificate and Agreement dated _, 2013 (the "Tax
Compliance Certificate"); and
f. City Ordinance No. 2013 -_ adopted April _, 2013 (the "Bond Ordinance") and
City Ordinance 2003 - 54 adopted on August 12, 2003 (the `Establishing
Ordinance") ;
and such other documents as we have deemed necessary to render this Opinion.
As counsel to the City, we advised the City as to applicable requirements and performed
other legal services necessary in order to enable us to render the opinions set forth below.
Additionally, we participated in reviews and discussions with representatives of the Underwriter,
Bond Counsel, and the Trustee relating to the Limited Offering Memorandum.
i
For the purposes of this opinion, we have assumed that:
a. The execution and delivery of all documents reviewed by us, and the entry into
and performance of the transactions contemplated by the Purchase Agreement and
the Indenture by all parties other than the City have been duly authorized by all
necessary actions and that said agreements constitute the valid and binding
obligations of all parties other than the City.
b. All natural persons who are signatories to the Purchase Agreement, the
Continuing Disclosure Agreement and the Indenture on behalf of parties other
than the City were legally competent at the time of execution.
C, All signatures on behalf of parties other than the City on said agreements and j
other documents reviewed by us are genuine.
d. The copies of all documents submitted to us are accurate and complete and
conform to originals.
Based upon our familiarity with the City, and the proceedings, showings and related
matters of law with respect to the foregoing, but subject to the assumptions set forth herein, we
are of the opinion that:
i
1 . The City is a municipal corporation duly organized and validly existing under the
laws of the State of Illinois, and has full legal right, power and authority to adopt
the Bond Ordinance and the Establishing Ordinance, and to enter into, execute
and deliver the Purchase Agreement, the Final Limited Offering Memorandum,
the Continuing Disclosure Agreement, the Indenture and the Tax Compliance
I'I
William Blair & Company, L. L. C .
United City of Yorkville
Foley & Lardner LLP
, 2003
Page 3
Certificate (the foregoing documents are hereafter collectively referred to as the
"City Agreements"), to consummate all transactions contemplated thereby, and to
issue and sell the Bonds for the purposes described in the Limited Offering
Memorandum.
26 Each of the members or officers of the City executing the City Agreements and
other closing documents executed in connection with the delivery of the Bonds
has been authorized to do so.
3 . The Establishing Ordinance and the Bond Ordinance were each duly authorized
and adopted by the City at a meeting of the Corporate Authorities of the City,
which was called and held pursuant to law and with the public notice required by
law and at which a quorum was present and acting throughout and each such
Ordinance is in full force and effect, and has not been amended, modified,
revoked, repealed or supplemented since the respective dates thereof.
4. Each of the City Agreements has been duly authorized by all necessary action on
the part of the City, has been duly executed and delivered by authorized officers
of the City and constitute legal, valid and binding obligations of the City
enforceable against the City in accordance with their respective terms, subject to
the qualification that the enforcement thereof may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws affecting creditors '
rights and by the availability of equitable remedies.
5 . The Final Limited Offering Memorandum has been duly executed and delivered
by the City. The use by the Underwriter of the Limited Offering Memorandum in
connection with the offer and sale of the Bonds has been authorized and ratified
by the City.
6. The Bonds have been duly authorized by all necessary action on the part of the
City, have been duly executed by the authorized officers of the City and have
been validly issued by the City and constitute the legal, valid and binding
obligations of the City enforceable against the City in accordance with their
terms, subject to the qualification that the enforcement thereof may be limited by
laws relating to bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors ' rights and by the availability of equitable
remedies.
7. Other than as set forth in the Limited Offering Memorandum, there is no action,
suit, proceeding, inquiry or investigation, at law or in equity, or by any court,
public board or body pending or, to our knowledge, threatened against or
affecting the City, or, to our knowledge, is there any basis for any such action,
suit, proceeding or investigation in any way (i) contesting or affecting the
proceedings under which the Bonds are to be issued and delivered; (ii) contesting
i
i
William Blair & Company, L.L. C.
United City of Yorkville j
Foley & Lardner LLP
52003
Page 4
or affecting the collection, application or validity of the Special Taxes or the
special tax levy; (iii) contesting or affecting the creation, organization, existence
or powers of the City or the Area, or the titles of the Mayor, Aldermen and
officers to their respective offices; (iv) which seeks to enjoin or restrain the
issuance, sale and delivery of the Bonds; (v) questioning or affecting any of the
rights, powers, duties or obligations of the City with respect to the Special Tax or
the monies and assets pledged or to be pledged to pay the principal of, premium,
if any, or interest on the Bonds; (vi) questioning or affecting any authority for the
issuance of the Bonds, or the validity or enforceability of the Bonds; or (vii)
questioning or affecting the City Agreements, the Bond Ordinance, the
Establishing Ordinance or the transactions contemplated by the City Agreements,
the Bond Ordinance or the Establishing Ordinance.
8 . The authorization, execution and delivery by the City of the City Agreements do
not, and the compliance with the provisions thereof by the City, under the
circumstances contemplated therein, will not, in any material respect, conflict
with or constitute on the part of the City a breach of or default under any
agreement to which the City is a party under any law, regulation, order, ordinance
or consent decree of any court or governmental tribunal to which the City is
subject.
i
90 The adoption of the Bond Ordinance and the Establishing Ordinance, the
execution and delivery by the City of the Bonds and compliance by the City with
the provisions thereof, under the circumstances contemplated thereby, do not and
will not violate any applicable judgment, order or regulation of any court or of
any public or governmental agency or authority of the State of Illinois and will
not conflict with, or result in a breach of, any of the terms and provisions of, or
constitute a default under, any existing law, court or administrative regulation,
decree, order or any agreement, indenture, mortgage, lease or other instrument to
which the City is subject or by which it is or may be bound.
10. Based upon our familiarity with the City to the extent of our capacity as special
counsel to the City, our involvement in the negotiation of the City Agreements
and the issuance of the Bonds by the City, nothing has come to our attention and
we have no reason to believe that the information contained in the Limited
Offering Memorandum in or under the captions "INTRODUCTORY
STATEMENT"; "THE BONDS" (other than information under the sub-caption
"— Book-Entry Only System") ; "PLAN OF FINANCE"; "SECURITY AND
SOURCE OF PAYMENT FOR THE BONDS" (other than information under the
sub-caption "— Value to Lien Ratio"); "THE CITY"; "THE SPECIAL SERVICE
AREA AND THE SPECIAL TAXES"; "RISK FACTORS — Limited Source of
Funds" and "— Loss of Tax Exemption"; "LEGAL OPINIONS"; "CONTINUING
I
INFORMATION"; "NO LITIGATION"; "NO RATING" and
"AUTHORIZATION" and in Appendix A thereto (except with respect to
I
i
II�
William Blair & Company, L.L. C .
United City of Yorkville
Foley & Lardner LLP
2003
Page 5
financial information and statistical data contained therein, as to which we express
no opinion), contains any untrue statement of a material fact or omits any material
fact that is necessary to be stated therein in order to make the statements therein,
in light of the circumstances in which they were made, not misleading.
This opinion is limited to the matters set forth herein. No opinion may be inferred or
implied beyond the matters expressly contained herein. This opinion is rendered solely for the
benefit of the persons or entities to whom it is addressed and no other person or entity shall be
entitled to rely on any matters set forth herein without the express written consent of the
undersigned.
Very truly yours,
i
i
i
i
i
i
Exhibit D
Form of Preliminary Limited Offering Memorandum
i
I
I
I
i
i
i
i
i
I
4842-4466-2803 .6
I
Exhibit D
Pi2ELI11TN :\t2.1' Llltl`fGD OFFERING \iE: tiIOR ,aNC)1.1m DATED APRIL , 20 ( 3 DRAFT > 0 �! 17i 13
NEW ISSUE—BOOK ENTRY ONLY NOT RATED
z r, 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 Bonds is excluded from gross income for
federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended. In the opinion of Bond Counsel, interest
f on the Bonds is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes, although such
¢ interest is included in adjusted current earnings when calculating corporate alternative minimum taxable income. Interest on the Bonds is
c
Z :: ;, not exempt from present State of Illinois income taxes. Bond Counsel expresses no opinion regarding any other tax consequences related to
the ownership or disposition of, or the accrual or receipt of interest on, the Bonds. See "TAX MATTERS. "
_ $61650,000*
° b UNITED CITY OF YORKVILLE
KENDALL COUNTY, ILLINOIS
SPECIAL SERVICE AREA NUMBER 2003400
SPECIAL TAX REFUNDING BONDS, SERIES 2013
7, (RAINTREE VILLAGE PROJECT)
CUSIPt :
Dated: Date of Delivery % Price: 100% Due: March 1, 2033_
This Limited Offering Memorandum is being furnished solely for consideration by prospective. sophisticated purchasers of the
United City of Yorkville, Kendall County, Illinois Special Service Area Number 2003- 100 Special Tax Refunding Bonds, Series 2013
4 0 (Raintree Village Project) (the "Bonds") with substantial financial resources and the experience and financial expertise to understand and
evaluate the high degree of risk inherent in this investment. Purchase of the Bonds will constitute an investment secured solely by a pledge
o of Special Taxes (as defined herein) and certain other amounts held in funds established pursuant to the Trust Indenture between United City
of Yorkville, Illinois and The Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of May 1 , 2013 (the "Indenture"). The
a purchase of the Bonds is an investment subject to a high degree of risk, including the risk of non-payment of principal and interest. See
r o "RISK FACTORS" herein.
L w
The Bonds are issuable only as fully registered bonds without coupons and, when issued, will be registered in the name of Cede &
Co., as nominee of The Depository Trust Company, New York, New York ("DTC"). Individual purchases will be made in book-entry form
2 only, in principal amounts of $ 100,000 or integral multiples of $ 1 ,000 in excess thereof. Beneficial Owners of the Bonds will not receive
o physical certificates representing their interest in the Bonds purchased. Principal of, premium, if any, and interest (payable on March 1 and
z September 1 of each year, commencing September 1 , 2013) on the Bonds are payable by The Bank of New York Mellon Trust Company,
N.A., as Trustee, 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 Bonds, as described herein.
The Bonds are subject to optional, mandatory and special mandatory redemption prior to maturity as set forth herein.
�! L
{
THE BONDS ARE BEING ISSUED PURSUANT TO THE SPECIAL SERVICE AREA TAX LAW OF THE STATE OF
ILLINOIS, AS AMENDED, AND, IN THE OPINION OF FOLEY & LARDNER LLP, CHICAGO, ILLINOIS, BOND COUNSEL, WILL
CONSTITUTE VALID AND LEGALLY BINDING LIMITED OBLIGATIONS OF THE UNITED CITY OF YORKVILLE, ILLINOIS
r (THE "CITY") PAYABLE SOLELY AND ONLY FROM THE SPECIAL TAXES AND AMOUNTS ON DEPOSIT IN CERTAIN OF
THE FUNDS ESTABLISHED AND MAINTAINED PURSUANT TO THE INDENTURE, AS SET FORTH HEREIN, THE BONDS ARE
. NOT GENERAL OBLIGATIONS OF THE CITY AND NEITHER THE FULL FAITH AND CREDIT NOR THE GENERAL TAXING
•< . POWER OF THE CITY, THE COUNTY OF KENDALL, THE STATE OF ILLINOIS, OR ANY POLITICAL SUBDIVISION THEREOF
r : 2 IS PLEDGED TO THE PAYMENT OF THE BONDS, NO HOLDER OF ANY BOND SHALL HAVE THE RIGHT TO COMPEL THE
EXERCISE OF ANY TAXING POWER OF THE CITY (OTHER THAN THE LEVY OF THE SPECIAL TAXES AS DESCRIBED
HEREIN) FOR PAYMENT OF THE PRINCIPAL AMOUNT OF, PREMIUM, IF ANY, OR INTEREST ON THE BONDS.
? The Bonds are offered when, as and if issued, subject to prior sale, withdrawal or modification of the offer without notice, the
r n
approving legal opinion of Foley & Lardner LLP, Chicago, Illinois, Bond Counsel, and certain other conditions. See "TAX MATTERS"
herein and Appendix C hereto. Certain legal matters will be passed upon for the Underwriter by Burke Burns & Pinelli, Ltd., Chicago,
[ Illinois, and for the City by Kathleen Field Orr & Associates, Chicago, Illinois. It is expected that the Bonds will be available for delivery to
Z DTC in New York, New York on or about May 2013.
N a
[Underwriter Logo]
>> Dated: April 2013
ti
r N
J
z * Preliminary; subject to change.
— w
1 The CUSIP number has been assigned by an organization not affiliated with the City and is included for the convenience of the owners of
oil
N 7
x the Bonds. The City is not responsible for the selection or uses of the CUSIP number nor is any representation made as to its correctness
}' rA on the Bonds. A CUSIP number may be changed after the issuance date. CUSIPS is a registered trademark of the American Bankers
Association, j
i
I
III
I
i
LIMITED 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 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 Bonds by any person, in any jurisdiction in which it is unlawful for j
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 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 placement described herein, and, if given or made, such information or representation must not
be relied upon as having been authorized. Certain information contained herein has been obtained from
the City and other sources which are believed by the Underwriter to be reliable. 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 Underwriter has 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 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 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 Bonds in accordance with j
the applicable provisions of securities laws of the states in which the Bonds have been registered or j
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
Bonds or the accuracy or completeness of this Limited Offering Memorandum. Any representation to the
contrary may be a criminal offense.
THE BONDS HAVE RISK CHARACTERISTICS WHICH REQUIRE CAREFUL ANALYSIS
AND CONSIDERATION BEFORE A DECISION TO PURCHASE IS MADE. THE BONDS SHOULD
BE PURCHASED BY INVESTORS WHO HAVE ADEQUATE EXPERIENCE TO EVALUATE THE
MERITS AND RISKS OF THE BONDS , PROSPECTIVE INVESTORS ARE NOT TO CONSTRUE
THE CONTENTS OF THIS LIMITED OFFERING MEMORANDUM OR ANY PRIOR OR
SUBSEQUENT COMMUNICATION FROM THE UNDERWRITER, ITS 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.
i
There can be no guarantee that there will be a secondary market for the Bonds or, if a secondary
market exists, that it would continue to exist or that the Bonds could in any event be sold for any
particular price.
i
i
i
UNITED CITY OF YORKVILLE, ILLINOIS
MAYOR
Gary J. Golinski
I
CITY ALDERMEN
Ken Koch Marty Munns
Carlo Colosimo Chris Funkhouser
Larry Kot Diane Teeling
Jacquelyn Milschewski Rose Spears
i
TREASURER
r
i
CITY ADMINISTRATOR
i
Bart Olson
FINANCE DIRECTOR
I
Rob Fredrickson
i
CITY CLERK
Beth Warren
PROFESSIONAL SERVICES
BOND COUNSEL SPECIAL SERVICE AREA
ADMINISTRATOR AND
SPECIAL TAX CONSULTANT
Foley & Lardner LLP David Taussig & Associates, Inc.
Chicago, Illinois Newport Beach, California
I
TRUSTEE
The Bank of New York Mellon Trust Company, N.A.
Chicago, Illinois
CITY' S COUNSEL
Kathleen Field Orr & Associates
Chicago, Illinois j
i
i
I
I
TABLE OF CONTENTS
UNITED CITY OF YORKVILLE
KENDALL COUNTY, ILLINOIS
SPECIAL SERVICE AREA NUMBER 2003 400
SPECIAL TAX REFUNDING BONDS, SERIES 2013 (RAINTREE VILLAGE PROJECT)
Page
INTRODUCTORYSTATEMENT . . . . . .. . . .. . . . . .. . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . .. . . . . . 1
i
THEBONDS . . . .. . . .. . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . 3
General Description of the Bonds . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 3
i
Redemption , . 0 1 1 1 1 1 1 1 a 4 0 0 1 1 0 0 0 1 0 1 1 1 4 1 1 1 1 1 . . . . . 0 V 0 . . . 0 0 0 a a a a 0 0 1 a 0 0 0 a 4 0 .. . . . . . . . . a .. . . . . * I@ * * ' $ . . . . . . . . . . . . . .. . 3 j
Optional Prepayment of Special Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . .. . 6
Book-Entry-Only System.. . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . . .. . . .. . 6
PLAN OF FINANCE" . . , . . . 10 , 0100
General .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . .. . .. . . 8
TheSpecial Services . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . .. . 9
ESTIMATED SOURCES AND USES OF FUNDS . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .. . . . . . . . . 9
DEBT SERVICE REQUIREMENTS . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECURITY AND SOURCE OF PAYMENT FOR THE BONDS . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
t
General 12
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .. . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . .. . . . . . . .
Special Taxes . . . . . . . . . . . .. . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . .. 13
. .. . . . . . . . . . . . . .. . . . . . . . . . . . . . .. .. . . .. . . . . . . . . . . . .
Fundsand Accounts . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 14
Covenantsof the City. . . . . . . . . . . . . . .. . . . . . . . . .. . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Enforcement of Payment of Special Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Valueto Lien Ratio . . . . . . . . .. . . . . . . . . . . . . . . . . . .. . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 20
Tax Assessment, Collection and Representative Property Taxes . . . . . . . . . .. . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . 21
THECITY . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . .. . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 22
General . . . . . . . . . . . . . . . . . . . . .. 22
City Government and Services . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . 23
Transportation . . a 0 . 0 0 0 1 1 1 1 1 1 1 1 1 1 6 0 $ 1 1 1 1 1 0 1 1 0 0 1 9 1 0 0 1 1 1 1 1 1 1 1 1 1 1 1 4 1 1 1 1 9 1 9 1 1 1 1 s 1 0 a a 4 4 see 0 0 6 0 0 0 0 . . . V . . . . . . . . . 0 . . . . . . . . . . q 0 0 9 0 9 9 0 0 1 s 5 0 . . . * . . . 23
Commerceand Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
i
CommunityLife. . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
i
Education .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SocioeconomicInformation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . .24
Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . .. . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . 28
i
i
i
TABLE OF CONTENTS
(continued)
Page
RetailActivity . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . .. . . . .. . . . . . . 30
THE SPECIAL SERVICE AREA AND SPECIAL TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
The Special Service Area Act . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Establishmentof the Area . . . . . . . .. . . . . . . . . . . . . . . .. . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . 32
Levy, Abatement and Collection of Special Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Special Service Area Special Tax Roll and Report. . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . .. . . . . . . . . . . . 33
DelinquencyRates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . .. . . . . . . . . . . . . . . 34
AdministrativeServices . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . 35
RISKFACTORS . ... . . . . : . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . .. . . . . . . . . . . . . . . . .. . . . . . . .. 35
LimitedSource of Funds . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .. . . . . . . . ... . 35
InformationNot Verified . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Local, State and Federal Land Use Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . .. . . . 36
Overlapping Indebtedness . . 1 0 1 0 0 1 1 1 1 1 9 1 1 1 1 4 1 1 0 4 1 . 0 too . . . . . . . . . . . .
TaxDelinquencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . .. . . .. . . .. . . . . . . . . . . . . . . . . . . . .. . . . . 36
Potential Delay and Limitations in Foreclosure Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Bankruptcy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 , 38
Maximum Parcel Special Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
. . . . . . . .. . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaymentof Special Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . 38
Disclosure to Future Purchasers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . .. . . . 38
LimitedSecondary Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 38
Secondary Market and Prices. . 1 0 1 11 1 4 0 1 1 1 1 1 1 1
Lossof Tax Exemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Risk of Legislative and Judicial Changes . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . 39
UNDERWRITING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
LEGALOPINIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . .. . .. 39
TAXMATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
CONTINUINGDISCLOSURE . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 41
LIMITEDOFFERING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 41
NOLITIGATION . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
NOR ATING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 42
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
i
I
ii
TABLE OF CONTENTS
(continued)
Page
AUTHORIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . .. . . .. . . . .. . .. . . .. . . . . . . . . . . . .. . . . . . . . . . . . . . . .. . . . . .. . . . 42
APPENDICES
APPENDIX A — Special Service Area Special Tax Roll and Report
APPENDIX B — Form of Indenture
APPENDIX C — Form of Bond Counsel Opinion
APPENDIX D — Form of Continuing Disclosure Undertaking
I
I
i
I
I
i
i
i
i
i
I
I
i
i
$696509000*
United City of Yorkville
Kendall County, Illinois
Special Service Area Number 2003 400
Special Tax Refunding Bonds, Series 2013 (Raintree Village Project)
INTRODUCTORY STATEMENT
This Limited Offering Memorandum, which includes the cover page and all 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 $6,650,000* aggregate principal amount Special
Service Area Number 2003- 100 Special Tax Refunding Bonds, Series 2013 (Raintree Village Project) due
March 1 , 2033 (said Bonds are collectively referred to hereinafter as the "Bonds") . The Bonds, if and
when issued, will be issued by the City pursuant to (i) the Illinois Constitution of 1970; (ii) the Special
Service Area Tax Law of the State of Illinois (the "Special Service Area Act"); (iii) the Illinois Local
Government Debt Reform Act of the State of Illinois; (iv) Ordinance No . 2013 -_ of the City adopted on
April 2013 (the "Bond Ordinance") providing for the issuance of the Bonds; and (v) the Trust
Indenture between the City and Trustee dated as of May 1 , 2013 (the "Indenture"). The 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 $ 1 ,000 in excess thereof. Capitalized terms used but not defined herein shall
have the meaning given such terms in the Indenture. See APPENDIX B — "Form of Indenture."
The Bonds will be secured primarily by the proceeds of the Special Taxes (as defined in the
Special Service Area Special Tax Roll and Report attached hereto as Appendix A and hereafter referred to
as the "Special Tax Roll and Report") levied on certain property within the United City of Yorkville
Special Service Area Number 2003 - 100 (the "Area") . In addition, the Bonds will be payable from and
secured by certain funds established pursuant to the Indenture. See "SECURITY AND SOURCE OF
PAYMENT FOR THE BONDS."
i
The City previously established the Area pursuant to Ordinance Number 2003 -54 adopted on
August 12, 2003 , the provisions of the Special Service Area Act, and the provisions of Section 7 of
Article VII of the 1970 Constitution of the State of Illinois, and in compliance with all other conditions
precedent required by the Special Service Area Act. The Area consists of approximately 163 acres of
land located on the southeast side of Illinois Route 71 , the southwest side of Illinois Route 126 and east of
State Route 47 in the City. The Area is commonly known as the Raintree Village subdivision and was
originally developed by Lennar Corporation (the "Developer") .
The Developer has developed the Area with finished lots for 200 detached single family detached
homes ("Single Family Homes") and 86 single family attached dwellings ("Duplexes"). The development
of such Single Family Homes and Duplexes within the Area is hereinafter referred to as the "Project. " A
finished lot for a Single Family Home shall be sometimes referred to herein as a "Single Family Home j
Parcel" and a finished lot for a Duplex shall sometimes be referred to herein as a "Duplex Parcel." The
Single Family Home Parcels and Duplex Parcels are sometimes collectively referred to as the "Parcels."
As of April 1 , 2013 , 189 Single Family Home Parcels have been improved with single family homes and
77 Duplex Parcels have been improved with duplex homes and all such Parcels have been sold to third
party purchasers. As of such date, the Developer continues to hold 11 Single Family Home Parcels and 9
Duplex Parcels. See "PLAN OF FINANCE — The Special Services."
i
* Preliminary; subject to change.
i
i
The City previously deemed it necessary and in the best interests of the City to provide special
services benefiting the Area consisting of engineering, soil testing and appurtenant work, mass grading
and demolition, storm water management facilities, storm drainage systems and storm sewers, site
clearing and tree removal, public water facilities, sewer lines, erosion control measures, roads, streets,
curbs, gutters, street lighting, traffic controls, sidewalks, equestrian paths and related street improvements,
and equipment and materials necessary for the maintenance thereof, landscaping, wetland mitigation,
utility relocation and tree installation, costs for land and easement acquisitions relating to any of the
foregoing improvements, required tap-on and related fees for water or sanitary sewer services, and other
eligible costs of improvements to serve the Area (collectively, the "Special Services") in connection with
the development of the Project. In order to finance the cost of design, construction, installation and
performing of such Special Services, it was determined necessary and in the best interests of the City to
issue its Special Service Area Number 2003- 100, Special Tax Bonds, Series 2003 (Raintree Village
Project) (the "Prior Bonds"), currently outstanding in the principal amount of $6,278 ,000.
The Bonds, together with certain moneys on deposit in the funds and accounts created pursuant to
the Prior Indenture, are being issued to (i) refund all of the outstanding Prior Bonds on the earliest
i
practicable date on which the Prior Bonds may be redeemed (which could be as early as thirty days after
the Bonds are issued), (ii) pay certain expenses incurred in connection with the issuance of the Bonds and
the refunding of the Prior Bonds and (iii) fund certain reserves. The proceeds of the Bonds will be
deposited to: (i) the Reserve Fund for the Bonds in the amount of the initial Reserve Requirement equal to
maximum annual debt service; (ii) an Administrative Expense Fund to fund a portion of the
administrative expenses to be incurred in connection with administration of the Area and the Bonds; (iii)
the Costs of Issuance Fund and (iv) the Bond and Interest Fund created pursuant to the Prior Indenture to
be applied, together with funds available for such purpose under the indenture for the Prior Bonds, to the
refunding of the Prior Bonds. See "PLAN OF FINANCE" and "ESTIMATED SOURCES AND USES
OF FUNDS," herein.
IN THE OPINION OF BOND COUNSEL, THE BONDS WILL CONSTITUTE VALID AND
LEGALLY BINDING LIMITED OBLIGATIONS OF THE CITY, PAYABLE SOLELY AND ONLY
FROM THE SPECIAL TAXES (AS PROVIDED IN THE BOND ORDINANCE, THE SPECIAL TAX
ROLL AND REPORT AND THE INDENTURE) AND AMOUNTS ON DEPOSIT IN CERTAIN OF
THE FUNDS AND ACCOUNTS ESTABLISHED AND MAINTAINED UNDER THE INDENTURE,
AS SET FORTH HEREIN, THE BONDS ARE NOT GENERAL OBLIGATIONS OF THE CITY AND
NEITHER THE FULL FAITH AND CREDIT NOR THE GENERAL TAXING POWER OF THE
CITY, THE COUNTY OF KENDALL, THE STATE OF ILLINOIS, OR ANY POLITICAL
SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. NO HOLDER OF
ANY BOND SHALL HAVE THE RIGHT TO COMPEL THE EXERCISE OF ANY TAXING POWER
OF THE CITY (OTHER THAN THE LEVY OF THE SPECIAL TAXES) FOR PAYMENT OF THE
PRINCIPAL AMOUNT OF, PREMIUM, IF ANY, OR INTEREST ON THE BONDS.
A copy of any document or agreement referred to herein may be obtained upon request from
William Blair & Company, L.L.C. (the " Underwriter").
i
i
i
i
2
THE BONDS
General Description of the Bonds
The Bonds will be issued in the aggregate principal amount of $6,650,000*, will be dated the date
of their delivery, will bear interest at the rate set forth on the cover page of this Limited Offering
Memorandum and will mature on the date set forth on the cover page of this Limited Offering
Memorandum. The Bonds will be issued only in fully registered form without coupons in the
denominations of $ 100,000 and integral multiples of $ 1 ,000 in excess of that sum. The Bonds will be
subject to optional or mandatory redemption as described herein.
The Depository Trust Company, New York, New York ("DTC"), will act as securities depository
for the Bonds. Principal of, premium, if any, and interest on the 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 Bonds. See
"THE BONDS — Book-Entry-Only System."
Interest on the Bonds will be paid in lawful money of the United States of America semiannually
on March 1 and September 1 of each year (each, an "Interest Payment Date"), commencing
September 1 , 2013 . Interest on the Bonds shall be calculated on the basis of a 360-day year composed of
twelve 30-day months.
Redemption
Mandatory Sinking Fund Redemption. The Bonds are subject to mandatory sinking fund
redemption and final payment at a price of par plus accrued interest, without premium, on March 1 , of the
years and in the principal amounts as follows:
Year Amount
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024 j
2025
2026
2027
2028
I
2029
2030
2031
2032
2033
Total
I
i
* Preliminary; subject to change.
3
i
I
The City covenants that it will redeem the Bonds pursuant to the mandatory sinking fund
redemption requirements for the Bonds to the extent amounts are on deposit in the Bond and Interest
Fund. Proper provision for mandatory redemption having been made, the City covenants that the Bonds
so selected for redemption shall be payable upon redemption and taxes have been levied and will be
collected as provided in the Indenture and in the Bond Ordinance for such purposes.
j
Optional Redemption. The Bonds are also subject to optional redemption prior to maturity at the
option of the City, in whole or in part, and if in part on any date on or after March 1 , 2023 at a redemption j
price of 100% of the principal amount of Bonds to be redeemed plus accrued and unpaid interest to the
date of redemption:
Any optional redemption of the Bonds in part will be applied, to the extent possible, to reduce pro
rata the amount of Bonds required to be redeemed by mandatory sinking fund redemption, so as to
maintain the proportion of principal maturing or subject to mandatory sinking fund redemption in each j
year to the total original principal amount of Bonds.
Mandatory Redemption Upon Condemnation; Amounts Transferred from the Special Reserve
Fund. The Bonds are subject to mandatory redemption on any Interest Payment Date, in part, at a
redemption price equal to the principal amount to be redeemed, together with accrued interest to the date j
fixed for redemption, without premium, from amounts in the Bond and Interest Fund consisting of the
proceeds received by the City in connection with a condemnation of any of the Special Services or any
other property dedicated to, or owned by, the City within the Special Service Area and allocable to the
Bonds as determined by the Special Tax Consultant retained by the City in connection with the Special
Service Area (the "Special Tax Consultant") and which proceeds are not used by the City to rebuild the
Special Services.
The Bonds are also subject to mandatory redemption, in part, at a redemption price equal to the
principal amount to be redeemed, together with accrued interest to the date fixed for redemption, without
premium, on March 1 , 2023 (so long as on such date the Special Reserve Fund Credit is zero) from
amounts transferred from the Special Reserve Fund to the Special Redemption Account on such date. On
or prior to February 10, 2023 , the Trustee will send notice of the redemption of the Bonds from amounts
transferred from the Special Reserve Fund as described below under "— Redemption Provisions; Notice of
Redemption ."
Any mandatory redemption of the Bonds as described in the preceding two paragraphs will be
applied, to the extent possible, to reduce pro rata the amount of Bonds required to be redeemed by
mandatory sinking fund redemption so as to maintain the proportion of principal maturing or subject to
mandatory sinking fund redemption in each year to the total original principal amount of the Bonds.
Special Mandatory Redemption from Optional Prepayment of Special Taxes. Pro p Y owners
may prepay the Special Taxes at any time. See "THE BONDS — Optional Prepayment of Special Taxes."
The proceeds received from any such prepayments will be used to redeem the Bonds in part.
Consequently, the Bonds are also subject to mandatory redemption on any March 1 , June 1 , September 1
or December 1 , in part, from amounts available for disbursement from the Special Redemption Account
(which includes optional prepayments of the Special Taxes and amounts transferred from the Reserve
Fund and the Special Reserve Fund to the Special Redemption Account) pursuant to the Indenture, at a
redemption price (expressed as a percentage of the principal amount of the Bonds to be redeemed), as set
forth below, together with accrued interest on such Bonds to the date fixed for redemption:
i
4
i
i
I
Redemption Dates Redemption Prices
On or prior to February 28, 2022. . . .. . . . .. . . .... . . . . .. . ..... ... .. . .... . . . 102%
March 1 , 2022 through February 28, 2023 . . . . . .... . . .. .. . . . . .. . . . . . 101
March 1 , 2023 and thereafter.. . . . .. .. . .... . . . .. . . . . . . . .. . . . .. . .. . . .. . .. ... . 100
Any special mandatory redemption of the Bonds pursuant to the previous paragraph will be
applied, to the extent possible, to reduce pro rata the amount of the Bonds required to be redeemed by
mandatory sinking fund redemption so as to maintain the proportion of principal maturing or subject to
mandatory sinking fund redemption in each year to the total original principal amount of Bonds. j
Redemption Provisions; Notice of Redemption. If less than all the Bonds of any maturity are to
be redeemed on any redemption date, the Bond Registrar appointed in the Indenture shall assign to each j
Bond of the maturity to be redeemed a distinctive number for each $ 1,000 of principal amount of that
Bond. The Bond Registrar shall then select by lot from the numbers so assigned, using such method as it
shall deem proper in its discretion, as many numbers as, at $ 1 ,000 per number, shall equal the principal
amount of Bonds of that maturity to be redeemed; provided that following any redemption, no Bond shall
be outstanding in an amount less than the minimum Authorized Denomination, except as necessary to
effect the mandatory sinking fund redemption of Bonds as set forth above.
Notice of the redemption of any Bonds, which by their terms shall have become subject to
redemption, shall be given to the Notice Beneficial Owners (as defined in the Indenture) and the
registered owner of each Bond or portion of a Bond called for redemption not less than 15 or more than
60 days before any date established for redemption of Bonds, by the Bond Registrar, on behalf of the
City, by first-class mail sent to the registered owner's last address, if any, appearing on the registration
books kept by the Bond Registrar. All notices of redemption shall include at least the designation, date
and maturities of Bonds called for redemption, CUSIP Numbers, if available, and the date of redemption.
In the case of a Bond to be redeemed in part only, the notice shall also specify the portion of the principal
amount of the Bond to be redeemed. The mailing of the notice specified above to the Notice Beneficial
Owners and the registered owner of any Bond shall be a condition precedent to the redemption of that
Bond, provided that any notice which is mailed in accordance with the Indenture shall be conclusively
presumed to have been duly given whether or not the owner received the notice. The failure to mail
notice to the owner of any Bond, or any defect in that notice, shall not affect the validity of the
redemption of any other Bond.
Any notice of optional redemption may also state that the redemption is conditioned on receipt of
moneys for such redemption by the Trustee on or prior to the redemption date and the satisfaction of any
other condition specified in such notice ("Conditional Redemption"). The redemption of the Bonds for
which notice of such Conditional Redemption was given shall be rescinded if by no later than the
scheduled redemption date (i) sufficient moneys are not so received or available for payment or (ii) any
other condition specified in the redemption notice has not been satisfied. Notice of a rescission of a
Conditional Redemption shall be given by the Trustee in the same manner as is provided in the Indenture
for the giving of notice of redemption or by electronic means confirmed in writing. Any Bonds subject to
Conditional Redemption where redemption has been rescinded will remain Outstanding, and neither the
rescission nor the failure of funds being made available in part or in whole on or before the redemption
date will constitute an event of default under the Indenture.
Purchase in Lieu of Redemption. In lieu of redemption as provided in the Indenture, moneys in
the Bond and Interest Fund may be used and withdrawn by the City for the purchase of outstanding
Bonds, at public or private sale as and when, and at such prices (including brokerage and other charges)
as the City may provide, but in no event may Bonds be purchased at a price in excess of the principal
I
5
I
amount of such Bonds, plus interest accrued to the date of purchase and any premium which would
otherwise be due if such Bonds were to be redeemed in accordance with the Indenture.
Optional Prepayment of Special Taxes
The manner in which Special Taxes may be prepaid is described in the Special Tax Roll and
Report. Generally, the Special Taxes may be prepaid with respect to any Parcel of property (as defined in
the Special Tax Roll and Report) at any time and the obligation to pay the Special Taxes permanently
satisfied by the payment of (i) an amount equal to all delinquent Special Taxes on such Parcel, including
any applicable penalties and related costs as required by law, and Special Taxes due on such Parcel but
not yet paid for the Calendar Year in which such prepayment is made, plus (ii) an amount equal to the
amount of prepayment determined in accordance with the formula set forth in the Special Tax Roll and
Report. See Appendix A hereto for a more complete discussion of the calculation of the amount of
prepayment of Special Taxes .
Book-Entry-Only System
THE INFORMATION PROVIDED IMMEDIATELY BELOW CONCERNING DTC AND
THE BOOK-ENTRY-ONLY SYSTEM, AS IT CURRENTLY EXISTS, IS BASED SOLELY ON
INFORMATION PROVIDED BY DTC AND IS NOT GUARANTEED AS TO ACCURACY OR j
COMPLETENESS BY, AND IS NOT TO BE CONSTRUED AS A REPRESENTATION BY, THE
UNDERWRITER, THE CITY, OR THE TRUSTEE,
The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the
Bonds. The 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 or more fully-registered bond certificates will be issued for the Bonds of each series and
maturity, in the aggregate principal amount thereof, and will be deposited with DTC.
DTC, the world' s largest securities depository, is a limited-purpose trust company organized j
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
3 . 5 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 is the holding company for
DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are
registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. 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 a Standard & Poor' s
rating of AA+. 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 and www.dtc.org.
i
i
I
I
i
6
Purchases of Bonds under the DTC system must be made by or through Direct Participants,
which will receive a credit for the 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
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 Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.
To facilitate subsequent transfers, all 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 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 Bonds; DTC' s records reflect only the
identity of the Direct Participants to whose accounts such 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 Bonds may wish to take certain
steps to augment the transmission to them of notices of significant events with respect to the Bonds, such
as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example,
Beneficial Owners of Bonds may wish to ascertain that the nominee holding the 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 Bonds 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.
i
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to
Bonds unless authorized by a Direct Participant in accordance with DTC ' s MMI Procedures. Under its
usual procedures, DTC mails an Omnibus Proxy to the 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 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).
i
Payment of principal of and interest on the Bonds, redemption proceeds, distributions, and
dividend payments on the 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 detail information from the City or the 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, the Trustee, or the City, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of principal of and interest on the
Bonds, redemption proceeds, distributions, and dividend payments to Cede & Co . (or such other nominee
7
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 the Beneficial Owners will be the responsibility of Direct and Indirect
Participants.
DTC may discontinue providing its services as depository with respect to the Bonds at any time
by giving reasonable notice to the City. Under such circumstances, in the event that a successor
depository is not obtained, Bonds 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, Bonds will be printed and delivered as described in the
Indenture.
NEITHER THE CITY, THE UNDERWRITER NOR THE TRUSTEE WILL HAVE ANY
RESPONSIBILITY OR OBLIGATION TO ANY DIRECT PARTICIPANTS OR INDIRECT
PARTICIPANTS OR THE PERSONS FOR WHOM THEY ACT WITH RESPECT TO ( 1) THE
ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY SUCH DIRECT PARTICIPANT
OR INDIRECT PARTICIPANT; (2) THE PAYMENT BY ANY PARTICIPANT OF ANY AMOUNT
DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL OF OR INTEREST OR
PREMIUM ON THE BONDS; (3) THE DELIVERY BY ANY SUCH DIRECT PARTICIPANT OR
INDIRECT PARTICIPANT OF ANY NOTICE TO ANY BENEFICIAL OWNER THAT IS
REQUIRED OR PERMITTED UNDER THE TERMS OF THE INDENTURE TO BE GIVEN TO
BONDHOLDERS; (4) THE SELECTION OF THE BENEFICIAL OWNERS TO RECEIVE PAYMENT
IN THE EVENT OF ANY PARTIAL REDEMPTION OF THE BONDS; OR (5) ANY CONSENT
GIVEN OR OTHER ACTION TAKEN BY DTC AS BONDHOLDER.
i
PLAN OF FINANCE
General
The City will use the proceeds of the Bonds, together with certain moneys on deposit in the funds
and accounts created under the Prior Indenture, to: (i) refund all of the outstanding Prior Bonds on the
earliest practicable date on which the Prior Bonds may be redeemed; (ii) pay certain expenses incurred in
connection with the issuance of the Bonds and the refunding of the Prior Bonds; (iii) fund the Reserve
Fund in an amount equal to the Reserve Requirement; and (iv) make an initial deposit to the
Administrative Expense Fund. See "ESTIMATED SOURCES AND USES OF FUNDS."
The City expects to deposit $ from the proceeds of the Bonds and
$ of amounts on deposit in certain trustee held funds for the Prior Bonds into the Bond and
Interest Fund created under the Prior Indenture for the purpose of refunding all of the outstanding Prior
Bonds. The City has determined to refund the Prior Bonds to realize debt service savings. The table
below sets forth the maturity date, interest rate, principal amount (including premium) payable to refund
the Prior Bonds and the redemption date for the Prior Bonds.
Redemption of Prior Bonds
Special Service Area and Interest Amount Payable to Redemption
Series Maturi Rate Refund the Prior Bonds Date
SSA 2003 - 100, Series 2003 3/1/2033 6.875% $ / 1/2013
8
The taxes levied in calendar year 2013 and thereafter pursuant to the Prior Bond Ordinance will
be abated upon defeasance of the Prior Bonds.
The Special Services
Proceeds of the Prior Bonds were used to construct, acquire and install the Special Services
within the Area. All Parcels within the Area have been developed and currently benefit from the Special
Services. The following table shows, as of April 1 , 2013 , the ownership of the Parcels, the number of
Parcels for which Special Taxes have been prepaid and the number of Parcels on which Special Taxes
remain to be collected.
Parcels Owned Prepaid Special Taxes
Developed by Parcels Owned by Special Taxes Remaining Due
Parcel Type Parcels Third Parties Developer Parcels (Parcels)
Single Family 200 189 11 15 185
Homes
Duplexes 86 77 9 6 80
Total 286 266 20 21 265
i
i
ESTIMATED SOURCES AND USES OF FUNDS1
Estimated Sources and Uses of Funds
Sources:
Par Amount of Bonds $6,6502000
Funds Held Under Prior Indenture 663 ,355
Total $743134355
i
i
Uses :
Deposit Under Prior Indenture to Redeem Prior
Bonds $694759495
Reserve Fund ca) 6315500
Administrative Expense Fund 13,235
Costs of Issuance ro) 193, 125
Total $743134355
i
(a) The Debt Service Reserve Fund is equal to maximum annual debt service. j
(b) Includes underwriter's discount. See "UNDERWRITING."
1 Preliminary; subject to change.
9
I
DEBT SERVICE REQUIREMENTS
The following table sets forth the debt service schedule for the 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:
Bond Year
Ending Annual Debt
(March 1) Principal* Interest* Service*
2014 190,000 290,938 480,938
2015 150,000 339, 150 4893150
2016 165,000 331 ,275 4969275
2017 180,000 322,613 5023613 -
2018 1955000 3137163 508, 163
2019 215,000 302,925 517,925
2020 230,000 291 ,638 521 ,638
2021 25500 2795563 5347563
2022 2752000 2665175 541 , 175
2023 295,000 251 ,738 5469738
r
2024 320,000 2365250 556,250
2025 345,000 219,450 5642450
2026 370,000 201 ,338 571 ,338
2027 4009000 181 ,913 581 ,913
2028 430,000 160,913 590,913
2029 455,000 138,338 593,338
2030 495,000 114,450 609,450
2031 525,000 88,463 6137463
2032 560,000 60,900 6207900
2033 600,000 31 ,500 6319500
Total 6,650,000 41422,688 11 ,072,688
I
I
I
I
* Preliminary; subject to change.
i
10
I
I
The following table sets forth expected Special Taxes and Debt Service Coverage:
Expected Special Taxes and Debt Service Coverage* !
Bond Year Trustee and Debt Service Modified
Ending Administrative Reserve Adjusted Special Debt Service
(March 1) Debt Service Feest EarningsZ Debt Service Taxes3 Coverage
2014 $480,938 $20,000 ($ 19579) $499,359 $583 , 160 1 . 17
2015 4897150 20,300 ( 13579) 507,871 591 ,955 1 . 17
2016 4965275 20,605 (15579) 515,301 6005750 1 . 17
2017 5027613 20,914 ( 1 ,579) 5219947 609,730 1 . 17
2018 508, 163 21 ,227 (1 ,579) 527,811 618,975 1 . 17
2019 517,925 21 ,546 (15579) 537,892 628,220 1 . 17
2020 521 ,638 21 ,869 ( 1 ,579) 541 ,928 637,730 1 . 18
2021 534,563 22, 197 (15579) 5557181 647,240 1 . 17
2022 5419175 22,530 ( 12579) 5629126 657,015 1 . 17
2023 546,738 22,868 ( 15579) 568,027 666,790 1 . 17
2024 556,250 237211 (13579) 577,882 676, 830 1 . 17
2025 564,450 23,559 (1 ,579) 5867430 687,055 1 . 17
2026 5713338 23,912 ( 12579) 593,671 697,360 1 . 17
2027 581 ,913 243271 ( 11579) 604,605 707, 850 1617
2028 590,913 24,635 ( 1 ,579) 6135969 718,420 1 . 17
2029 593,338 25,005 (12579) 6162763 729, 175 1 . 18
2030 609,450 252380 ( 1 ,579) 633,251 7401195 1 . 17
2031 6131463 25,760 (13579) 637,644 7511215 1 . 18
2032 620,900 26, 147 ( 1 ,579) 645,468 7625500 1 . 18
2033 631 ,500 26,539 (11579) 656,460 7739970 1 . 18
Total 11 ,0722688 462,473 (31 ,575) 1135033586 137486, 135 j
Assumes Administrative and Trustee Fees increase at 1 .5% per year.
2 Assumes an investment rate of 0.25% on the Reserve Fund.
3 Based on 185 Single Family Homes and 80 Duplexes. See "INTRODUCTORY STATEMENT' and "PLAN OF FINANCE - The
Special Services."
i
i
i
i
* Preliminary; subject to change.
11
The following table sets forth expected Special Taxes and Debt Service Coverage assuming 11
Single Family Home Parcels and 9 Duplex Parcels (representing Parcels currently owned by the
Developer) do not pay the Special Taxes in any year:
Expected Special Taxes and Debt Service Coverage*
Bond Year Trustee and Debt Service Modified Debt
Ending Debt Administrative Reserve Adjusted Special Service
(March 1) Service Feest EarningS2 Debt Service Taxes Coverage
2014 $480,938 $205000 ($ 15579) $499,359 540,398 1 . 12
2015 489, 150 20,300 ( 13579) 507,871 5483547 1 . 12
2016 496,275 20,605 (1 ,579) 515,301 556,696 1 . 12
2017 5027613 203914 (19579) 521 ,947 565,019 1 . 12
2018 508, 163 217227 (1 ,579) 527,811 5737587 1 . 13
2019 517,925 211546 (1 ,579) 537,892 5829155 1 . 12
2020 521 ,638 21 ,869 (1 ,579) 541 ,928 590,968 1 . 13
2021 534,563 227197 (11579) 555, 181 599,781 1 . 12
2022 5412175 225530 (11579) 562, 126 608,839 1 . 13
2023 546,738 22,868 (1 ,579)_ 5689027 6175897 1 . 13
2024 5562250 235211 (1 ,579) 5777882 6272200 1 . 13
2025 564,450 23,559 (1 )579) 586,430 6363677 1 . 13
2026 5713338. 23,912 ( 11579) 593,671 646,225 1 . 13
2027 581 ,913 24,271 (11579) 604,605 655,947 1 . 13
2028 590,913 24,635 (11579) 613,969 665,740 1 . 13
2029 5932338 25,005 (1 ,579) 616,763 675,707 1 . 14
2030 6095450 25,380 ( 11579) 633,251 6857919 1 . 13
2031 6135463 252760 (11579) 6377644 696, 131 1 . 13
2032 6205900 26, 147 (1 ,579) 645,468 7065588 1 . 14
2033 6315500 269539 (1 )579) 656,460 717,219 1 . 14
Total 1 ,0729688 462,473 (315575) 111503,586 1214975240
Assumes Administrative and Trustee Fees increase at 1 .5% per year.
Assumes an investment rate of 0.25% on the Reserve Fund.
3 Based on 176 Single Family Homes and 77 Duplexes (shouldn't this be174 and 71 accounting omentj. See r
"INTRODUCTORY STATEMENT " and "PLAN OF FINANCE - The Special Services."
SECURITY AND SOURCE OF PAYMENT FOR THE BONDS
General
The Bonds and the interest thereon are limited obligations of the City secured and payable solely
from (i) the Special Taxes to be levied, extended and collected on all the taxable real property within the
Area subject to the Special Taxes, including, without limitation, the Parcels, including interest on such
Special Taxes and the proceeds of the redemption or sale of property sold as a result of any actions to
foreclose the lien of Special Taxes and any interest accrued thereon, brought following a delinquency in
the payment of the Special Taxes (the "Special Taxes") (ii) any amounts transferred by the City to the
Bond and Interest Fund including the allocable portion of condemnation proceeds received by the City
not used to rebuild the Special Services, and (iii) amounts deposited in the Bond and Interest Fund, the
Reserve Fund and the Costs of Issuance Fund (all as defined below) . The Bonds and the interest thereon
* Preliminary; subject to change.
12
I
I
are not secured by amounts on deposit in the Administrative Expense Fund, the Special Reserve Fund
and the Rebate Fund (all as defined below) .
When collected, the Special Taxes and any Foreclosure Proceeds shall be placed in the Bond and
Interest Fund. In addition, proceeds received by the City from a condemnation of any of the Special
Services or any other property owned by or dedicated to the City within the Special Service Area and
allocable to the Bonds, provided such proceeds are not used to rebuild the Special Services, shall be
deposited in the Bond and Interest Fund as security for the Bonds.
The amount of Special Taxes that the City may levy in the Area in any year is strictly limited by
the maximum rates approved by the Corporate Authorities at the time of formation of the Area. The City
is legally authorized under the Special Service Area Act, and has covenanted in the Indenture, to extend
and collect the Special Taxes in an amount determined according to the Special Tax Roll and Report.
Pursuant to the Bond Ordinance the City has levied the Special Taxes in the amounts set forth in the
Maximum Parcel Special Tax column in the Table set forth below in "THE SPECIAL SERVICE AREA
AND SPECIAL TAXES — Special Service Area Special Tax Roll and Report," and will abate such tax
each year to the extent it is not required to pay Administrative Expenses and principal of, redemption
premium on, or interest on the Bonds. See "SECURITY AND SOURCE OF PAYMENT FOR THE
BONDS — Special Taxes" below. The Special Tax Roll and Report apportions the total amount of
Special Taxes to be collected among the Parcels in the Area as more particularly described herein. Any
Mandatory Prepayment of the Special Taxes shall be levied against the Parcels that result in application of
the prepayment provisions. The Maximum Parcel Special Tax will remain unchanged for the Parcels that
did not result in the application of the prepayment provisions. See "THE SPECIAL SERVICE AREA
AND SPECIAL TAXES — Special Service Area Special Tax Roll and Report" and APPENDIX A —
"Special Service Area Special Tax Roll and Report."
Special Taxes
The levying of the Special Taxes was authorized by the Corporate Authorities of the City in the
Bond Ordinance. Pursuant to the Bond Ordinance, the City caused (i) the Establishing Ordinance to be
recorded on or before the date of delivery of the Bonds with the Recorder of Deeds of Kendall County,
Illinois. j
The Bonds are secured by, among other things, a pledge of Special Taxes including all scheduled
payments of Special Taxes received by the City, interest thereon, and proceeds of the redemption or sale
of property sold as a result of foreclosure of the lien of Special Taxes. Pursuant to the Bond Ordinance
the City has levied the Special Taxes in the amounts set forth in the Maximum Parcel Special Tax column
in the Table set forth below in "THE SPECIAL SERVICE AREA AND SPECIAL TAXES — Special j
Service Area Special Tax Roll and Report", and will abate such tax each year to the extent it exceeds the
Special Tax Requirement as calculated by the Special Tax Consultant on its behalf. The City has
covenanted in the Bond Ordinance and the Indenture annually on or before the last Tuesday of
December for each of the years 2013 through 2031 to calculate or cause the Special Tax Consultant to
calculate the Special Tax Requirement; to amend the Special Tax Roll and provide the county tax
collector with the amended Special Tax Roll; to adopt an ordinance approving the amount of the current
calendar year's Special Tax Requirement; and abating the Special Taxes levied pursuant to the Bond j
Ordinance to the extent the taxes levied pursuant to the Bond Ordinance exceed the Special Tax
Requirement as calculated by the City pursuant to the Establishing Ordinance and the Special Tax Roll j
and Report. On or before the last Tuesday of January for each of the years 2014 through 2032 the City
shall notify the Trustee of the amount of the Special Tax Requirement and the amount of the Special
Taxes to be abated. The City shall take all actions which shall be necessary to provide for the levy,
extension, collection and application of the taxes levied by the Bond Ordinance, including enforcement of
i
i
13
i
such taxes by providing the County Collector with such information as is deemed necessary to enable the
County Collector to include any property subject to delinquent Special Taxes in the County Collector's
annual tax sale and in the event the tax lien is forfeited at such tax sale, by institution of foreclosure
procedures as provided by law; provided, however, that the obligation to institute any foreclosure action
against any taxpayer shall only arise in the event the City makes the determination that the proceeds from
the foreclosure action have a commercially reasonable expectation of exceeding the costs thereof. See
"THE SPECIAL SERVICE AREA AND SPECIAL TAXES — Special Service Area Special Tax Roll and
Report."
The levy of the Special Taxes is subject to certain limitations. The levy of the Special Taxes on
each Parcel within the Area is constrained by the Maximum Parcel Special Tax amount applicable to such
Parcel. If there is an event that reduces the total of the Maximum Parcel Special Tax, ' the City would
levy a Mandatory Prepayment thereby reducing the Maximum Parcel Special Tax levied upon the Area as
a whole and the Maximum Parcel Special Tax (i.e., the maximum per-parcel Special Taxes) would not
increase. See "THE SPECIAL SERVICE AREA AND SPECIAL TAXES — Special Service Area
Special Tax Roll and Report" and "RISK FACTORS — Maximum Parcel Special Tax" herein. The full
amount of the Maximum Parcel Special Tax as set forth in the subcaption under the caption "Special Tax
Roll and Report" has been levied pursuant to the Bond Ordinance. Pursuant to the Indenture, the City
covenants that, to the extent necessary to enforce a prepayment, it will adopt a supplemental levy
ordinance within the Area in the event of a mandatory prepayment of the Special Taxes pursuant to the
Special Tax Roll and Report caused by a change in the expected number of Single Family Homes or
Duplexes as set forth in the final plat of subdivision approved by the City, to the extent the mandatory
prepayment amount calculated pursuant to the terms of the Special Tax Roll and Report exceeds the
Special Taxes levied for the year in which the prepayment is due pursuant to the Bond Ordinance.
Although the Special Taxes, when levied, will constitute a lien on Parcels within the Area, it does j
not constitute a personal indebtedness of the owners of such Parcels within the Area. There is no
assurance that the owners of such Parcels in the Area will be financially able to pay the annual Special
Taxes or that they will pay such tax even if financially able to do so. See "RISK FACTORS" herein.
Funds and Accounts
i
Bond and Interest Fund. The Indenture creates and establishes with the Trustee a separate and
special fund of the City established exclusively for paying principal of, interest on and redemption
premium on the Bonds and which is designated as "The Special Service Area Number 2003400 Special
Tax Refunding Bonds, Bond and Interest Fund (the "Bond and Interest Fund"). When collected, the
Special Taxes and the Foreclosure Proceeds, including any interest and penalties collected in connection
with such Special Taxes or Foreclosure Proceeds shall be placed in the Bond and Interest Fund. The City
may provide for the County to transmit directly to the Trustee for deposit to the Bond and Interest Fund
any Special Taxes collected by the County. In addition, proceeds received by the City in connection with
a condemnation of any of the Special Services or any other property dedicated to or owned by the City
within the Special Service Area and allocable to the Bonds as determined by the Special Tax Consultant
which is not used to rebuild the Special Services shall be deposited in the Bond and Interest Fund.
Moneys deposited in the Bond and Interest Fund and investments of the Bond and Interest Fund shall
never be commingled with or loaned to any other funds of the City. All interest and other investment
earnings on the Bond and Interest Fund shall become, when received, a part of the Bond and Interest
i
Such as a prepayment of Special Taxes. See "PLAN OF FINANCE — The Special Services" and the description of
prepayments made to date; resulting in a decrease in the number of Parcels for which Special Taxes are still due to 185 Single
Family Homes and 80 Duplexes. See also "RISK FACTORS — Prepayment of Special Taxes."
14
Fund. When the amount of condemnation proceeds deposited to the Bond and Interest Fund equals
$5 ,000 or more, such amount shall be used to redeem Bonds on the next Interest Payment Date. Any
amounts representing condemnation proceeds which remain on deposit in the Bond and Interest Fund for
a continuous period of thirty (30) months and which will not be used to redeem the Bonds on the next
Interest Payment Date will be used to pay debt service on the Bonds on the next Interest Payment Date.
i
Amounts deposited in the Bond and Interest Fund are appropriated for and irrevocably pledged
to, and shall be used solely for the purpose of, paying the principal of and interest and redemption
premium on the Bonds, or for transfers to the Reserve Fund, the Special Reserve Fund or the
Administrative Expense Fund as permitted in the Indenture.
At any time after September 1 but in no event later than December 1 of each year, the Trustee
will determine the amount needed to pay principal of and interest and redemption premium on the Bonds
on the next succeeding Interest Payment Date. After the Trustee determines that sufficient amounts are
on deposit in the Bond and Interest Fund to pay principal of, interest on and redemption premium due on
the Bonds on the next succeeding Interest Payment Date, the Trustee shall notify the City and the Special
Tax Consultant of any excess amounts on deposit in the Bond and Interest Fund, and, at the written j
direction of the City, shall transfer an amount from the Bond and Interest Fund to the Administrative
Expense Fund which the City has determined will be adequate, together with other amounts in the
Administrative Expense Fund or reasonably expected to be transferred to or deposited in such Fund, to
pay all Administrative Expenses during the succeeding calendar year. After making such transfer to the
Administrative Expense Fund any excess amounts on deposit in the Bond and Interest Fund will be
transferred to the Reserve Fund to the extent necessary to replenish the Reserve Fund to the Reserve
Requirement (as defined below under the subcaption "Reserve Fund"). After making such transfer to the
Administrative Expense Fund, and the Reserve Fund has amounts on deposit equal to the Reserve
Requirement, any excess amounts on deposit in the Bond and Interest Fund shall be transferred to the
Special Reserve Fund to the extent necessary to fund and replenish the Special Reserve Fund to the
Special Reserve Fund Requirement.
Special Redemption Account. A separate account designated the "Special Redemption Account"
exists within the Bond and Interest Fund established with the Trustee. All prepayments of Special Taxes
made in accordance with the Special Tax Roll and Report shall be deposited in the Special Redemption
Account. Amounts deposited in the Special Redemption Account representing optional prepayments of
Special Taxes in accordance with the Special Tax Roll and Report shall be applied to the redemption of
Bonds pursuant to the Indenture and as described under the caption "THE BONDS — Redemption —
Special Mandatory Redemption from Optional Prepayment of Special Taxes." Amounts deposited in the
Special Redemption Account representing mandatory prepayments of Special Taxes upon condemnation
of property within the Area in accordance with the Special Tax Roll and Report shall be applied to the
redemption of Bonds in accordance with the Indenture and as described under the caption "THE BONDS
— Redemption — Mandatory Redemption Upon Condemnation."
Moneys in the Special Redemption Account shall be used exclusively to redeem Bonds pursuant
to the Indenture or to pay debt service on the Bonds pursuant to the Indenture. In the event of any
prepayment of Special Taxes, prior to giving notice of the redemption of the Bonds in accordance with
the Indenture, the Trustee will transfer (i) from the Reserve Fund to the Special Redemption Account an
amount equal to the Reserve Fund Credit (as defined in the Special Tax Roll and Report), and (ii) from
the Special Reserve Fund to the Special Redemption Account an amount equal to the Special Reserve
Fund Credit upon the direction of the Special Tax Consultant. When the amount on deposit in the Special
Redemption Account equals or exceeds $ 1 ,000, such amount shall be used to redeem the Bonds on the
next March 1 , June 1 , September 1 or December 1 in accordance with the Indenture. On each such
payment date, the Trustee shall withdraw from the Special Redemption Account and pay to the owners of
15
the Bonds to be redeemed the amounts required to redeem such Bonds. Notwithstanding the foregoing,
any amounts contained in the Special Redemption Account for a continuous period of thirty (30) months
and which will not be used to redeem the Bonds on the next March 1 , June 1 , September 1 or December 1
in accordance with the immediately preceding sentence and the Indenture shall be used to pay debt
service on the Bonds on the next Interest Payment Date. Any amounts contained in the Special
Redemption Account on the final maturity date of the Bonds shall be used to pay outstanding debt service
on the Bonds.
Reserve Fund. A separate and special fund of the City exists with the Trustee which is designated
as "The Special Service Area Number 2003- 100 Special Tax Refunding Bonds, Reserve Fund" (the
"Reserve Fund"), and which must be maintained in an amount equal to the Reserve Requirement. The
Reserve Requirement is an amount equal to $ , as adjusted for prepayments pursuant to
the Indenture and as described in the preceding paragraph hereof. Amounts deposited in the Reserve
Fund shall be used solely for the purpose of (i) making transfers to the Bond and Interest Fund to pay the
principal of, including mandatory sinking fund payments, and interest and any premium on, all Bonds
when due, in the event that moneys in the Bond and Interest Fund are insufficient therefor, (ii) making
any transfers to the Bond and Interest Fund if the balance in the Reserve Fund and the Special Reserve
Fund exceeds the amount required to redeem all Bonds then outstanding, (iii) making transfers to the
Special Redemption Account pursuant to the Indenture, or (iv) if the amount then on deposit in the
Reserve Fund is at least equal to the Reserve Requirement, for transfer in accordance with the next
paragraph.
i
On the Business Day prior to each Interest Payment Date, moneys in the Reserve Fund in excess
of the Reserve Requirement shall be transferred by the Trustee from the Reserve Fund to the Bond and
Interest Fund to be used for the payment of interest on Bonds on the next following Interest Payment
Date.
i
Special Reserve Fund. A separate and special fund of the City which is designated as "Special
Service Area Number 2003- 100 Special Tax Refunding Bonds, Special Reserve Fund" (the "Special
Reserve Fund") exists with the Trustee. Special Taxes will be deposited in the Special Reserve Fund in
accordance with the Indenture until the amounts on deposit in the Special Reserve Fund equal the Special
Reserve Fund Requirement. Once the amount on deposit in the Special Reserve Fund equals the Special
Reserve Fund Requirement, no further deposits will be made to such Fund and no replenishment of such
Fund for any withdrawals is required. The "Special Reserve Fund Requirement" is an amount, not to
exceed $40,000 and shall be used to fund any Special Reserve Fund Credits for possible prepayments. A
"Special Reserve Fund Credit" means, with respect to each Parcel, the difference between (i) the amount
of the prepayment of the Special Taxes for such Parcel made in accordance with the Special Tax Roll and
Report and (ii) the amount of prepayment of the Special Taxes for such Parcel made in accordance with j
the Special Tax Roll and Report if the Prior Bonds had remained outstanding and the Bonds were not
issued, as determined by the Special Tax Consultant.
I
Amounts deposited in the Special Reserve Fund will be used solely for the purpose of (i) making
any transfers to the Bond and Interest Fund if the aggregate balance in the Special Reserve Fund and the
Reserve Fund exceeds the amount required to redeem all Bonds then outstanding, (ii) for transfer to the
Special Redemption Account in an amount equal to the Special Reserve Fund Credits in accordance with
the Indenture, (iii) on March 1 , 2023 for transfer to the Special Redemption Account as described in the
following sentence, (iv) for transfer to the Bond and Interest Fund or any other fund established under the
Indenture at the direction of the City, or (v) at the direction of the City for any use permitted by the
Special Service Area Act, provided an opinion of bond counsel is delivered to the Trustee to the effect
that such use will not violate the Special Service Area Act or adversely affect the tax-exempt status of j
interest on the Bonds. On March 1 , 2023 (on which date the Special Reserve Fund Credit shall be zero),
16
I
I
I
the Trustee will without further direction, transfer any remaining amounts on deposit in the Special
Reserve Fund to the Special Redemption Account to be applied to the redemption of Bonds in accordance
with the Indenture. Any amounts in the Special Reserve Fund that are used to pay principal of, or interest
or premium on, the Bonds shall be treated as Special Taxes paid by the owners of the affected Parcels for
purposes of the Special Tax Roll and Report.
Amounts on deposit in the Special Reserve Fund are not pledged to the payment of
principal of or interest on the Bonds.
Costs oflssuance Account. A separate account designated the "Costs of Issuance Account" exists
within the Improvement Fund established with the Trustee. Amounts deposited in the Costs of Issuance
Account shall be used solely for the purpose of paying costs incurred by the City in connection with the
issuance of the Bonds and the refunding of the Prior Bonds and shall be administered according to the
Indenture. On the date which is six months after the date of issuance of the Bonds, the Trustee will
transfer all amounts remaining in the Costs of Issuance Account to the Bond and Interest Fund.
i
Amounts on deposit in the Costs of Issuance Account are not pledged to the payment of
principal of or interest on the Bonds.
Administrative Expense Fund. A separate and special fund of the City which is designated as
"The Special Service Area Number 2003 400 Special Tax Refunding Bonds, Administrative Expense
Fund" (the "Administrative Expense Fund") exists with the Trustee. Amounts in the Administrative
Expense Fund shall be withdrawn by the Trustee and paid to the City or upon its order upon receipt by the
Trustee of a written request of an Authorized Officer stating the amount to be withdrawn, that such
amount is to be used to pay an Administrative Expense,. and the nature of such Administrative Expense.
Amounts on deposit in the Administrative Expense Fund are not pledged to the payment of
principal of or interest on the Bonds.
Rebate Fund. A separate and special fund of the City exists with the Trustee which is designated
as "The Special Service Area Number 2003- 100 Special Tax Refunding Bonds, Rebate Fund" (the
"Rebate Fund"), into which there shall be deposited as necessary investment earnings in the Bond and
Interest Fund, the Reserve Fund and the Special Reserve Fund or other moneys provided by the City to
the extent required so as to maintain the tax exempt status of interest on the Bonds. All rebates, special
impositions or taxes for such purpose payable to the United States of America (Internal Revenue Service)
shall be payable from the Rebate Fund.
Amounts on deposit in the Rebate Fund are not pledged to the payment of principal of or
interest on the Bonds.
Investments of Funds. Moneys on deposit in Funds and Accounts established under the Indenture
may be invested from time to time in Qualified Investments pursuant to written directions from an
Authorized Officer the City to the Trustee provided that moneys on deposit in the Special Redemption
Account shall be invested in Qualified Investments having a maturity of 90 days or less. See APPENDIX
B — "Form of Indenture" for the definition of "Qualified Investments." Subject to the requirements of the
Indenture, earnings or losses on such investments shall be attributed to the Fund or Account for which the
investment was made. In the event the Trustee does not receive written directions from the City to invest
funds held under the Indenture, the Trustee shall invest such funds in the or a
successor or similar fund which invests in short-term securities issued or guaranteed by the United States
Government or instrumentalities and/or repurchase agreements relating to such securities.
17
Covenants of the City
Pursuant to the Indenture, the City has covenanted for the benefit of the owners of the Bonds (the
"Bondowners") that, among other things, the City will:
(a) take all actions, if any, which shall be necessary, in order further to provide for
the levy, extension, collection and application of the Special Taxes including enforcement of the
Special Taxes as described in (c) below;
(b) not take any action which would adversely affect the levy, extension, collection
and application of the Special Taxes levied pursuant to the Bond Ordinance and Indenture, except
to abate Special Taxes to the extent permitted by the Indenture and the Special Tax Roll and
Report;
(c) comply with all requirements of the Special Service Area Act, the Bond
Ordinance and other applicable present and future laws concerning the levy, extension and
collection of the Special Taxes levied pursuant to the Bond Ordinance and Indenture, 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 Special Taxes, including without limitation, the enforcement
of any delinquent Special Taxes by providing the County of Kendall with such information as is
deemed necessary to enable the County to include any property subject to a delinquent Special
Taxes in the County Collector's annual tax sale and, in the event that a tax lien is forfeited at such
sale, the commencement and maintenance of an action to foreclose the lien of any delinquent
Special Taxes, all in the manner provided by law; provided, however, that the obligation to
institute any foreclosure action against any taxpayer other than a taxpayer owning at least five
percent of the property in the Special Service Area shall only arise in the event the City makes the
determination that the proceeds from the foreclosure action have a commercially reasonable
expectation for exceeding the costs thereof;
(d) not encumber, pledge or place any charge or lien upon any of the Special Taxes
or other amounts pledged to the Bonds superior to, or on a parity with, or junior to, the pledge and
lien created in the Indenture for the benefit of the Bonds, except as permitted by, or specifically
set forth in, the Indenture;
(e) take all actions which are reasonably and 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; and
(f) keep, or cause the Trustee to keep, proper books of record and accounts, separate
from all other records and accounts of the City, in which complete and correct entries will be
made of all transactions relating to the deposits to and expenditure of amounts disbursed from the
Funds and Accounts created under the Indenture and the Special Taxes.
Enforcement of Payment of Special Taxes
The Kendall County Clerk has stated that it intends to incorporate the Special Taxes bill into the
regular ad valorem property tax bill. In Illinois, general ad valorem property taxes are levied in one year
and become payable during the following year. At the end of each collection year, the Kendall County
Treasurer applies to the Circuit Court of Kendall County for a judgment for all unpaid general ad valorem
property taxes. The Circuit Court of Kendall County order resulting from that application for judgment
provides for a sale of all property with unpaid general ad valorem property taxes . A public sale is held, at
18
which time successful bidders pay the unpaid general ad valorem property taxes plus penalties (i.e.,
interest penalties and certain other costs). The annual tax sale is usually held during November of any
given year in Kendall County. Unpaid general ad valorem property taxes accrue penalties at the rate of 1 -
1/2% per month from their due date until the date of sale. Taxpayers can redeem their property by paying
the purchaser of the delinquent taxes on the property at the general tax sale the amount paid at the sale,
plus a penalty. If redemption does not occur within two and one half years and certain procedural
requirements are met, the purchaser of the property at the tax sale may petition for, and receive a deed to
the property which has been sold for delinquent taxes. Any delinquent Special Taxes for any given year
would be included in this general tax sale. In addition to using the annual tax sale as an enforcement
mechanism, as discussed below, a municipality may seek enforcement of unpaid Special Taxes through
commencement of foreclosure proceedings pursuant to the Special Service Area Act.
If a delinquency in the payment of the Special Taxes occurs, the City is authorized by the Special
Service Area Act to order institution of an action pursuant to Article 9 of the Illinois Municipal Code (65
ILCS 5/9- 1 - 1 , et seq.) to foreclose any lien therefor securing the Special Taxes. In such an action a court
having jurisdiction would enter a foreclosure decree authorizing the sale of the property subject to the lien
of the Special Taxes, and the real property subject to the lien of the Special Taxes would be sold at a
judicial foreclosure sale. The ability of the City to foreclose the lien of delinquent unpaid Special Taxes
may be limited in certain instances and may require prior consent of the property owner in the event that
the property is owned by any receivership of the Federal Deposit Insurance Corporation (the "FDIC").
See "RISK FACTORS — Bankruptcy" and "RISK FACTORS — Tax Delinquencies."
Such judicial foreclosure proceedings are not mandatory under the Special Service Area Act.
However, in the Indenture, the City has covenanted with the holders of the Bonds to take all actions, if
any, which shall be necessary to provide for the levy and extension, collection and application of the
Special Taxes, and to assure the timely collection of Special Taxes, including without limitation, the
enforcement of any delinquent Special Taxes by the commencement and maintenance of an action to
foreclose the lien of any delinquent Special Taxes, provided, however, that the obligation to institute any
foreclosure action shall only arise in the event the City makes the determination that the proceeds from
the foreclosure action have a commercially reasonable expectation of exceeding the costs thereof. For a
description of this covenant, as well as other events of default and remedies under the Indenture, see
APPENDIX B — "Form of Indenture."
No assurances can be given that a judicial foreclosure action, once commenced, will be
completed or that it will be completed in a timely manner. See "RISK FACTORS — Potential Delay and
Limitation in Foreclosure Proceedings" below. Article 9 of the Illinois Municipal Code provides that the
municipality or its assignee may file a complaint to foreclose a special service area tax lien in the same
manner that foreclosures are permitted by law in case of delinquent general taxes. The "law in case of
delinquent general taxes" to which the Illinois Municipal Code refers is the Illinois Revenue Code. Under
such foreclosure proceedings, the court adjudicates the existence of a default in the payment obligation
and authorizes a foreclosure sale; the sale is conducted and the proceeds distributed according to the
respective priorities; the successful bidder is given a certificate of sale; and, if the redemption period
expires without a redemption of the special service area taxes, the certificate of sale may be converted to a
deed. Although the municipality holds the lien for the local improvement and is therefore the proper
party to commence foreclosure procedures, bondholders with bonds secured by special service area taxes
may compel the municipality to perform its duty and use all lawful means, including foreclosure, to
collect the taxes out of which the bondholders are to be paid. Special service area taxes create a lien that
is superior to other liens and encumbrances, and when general property taxes and Special Taxes are both
delinquent, the proceeds of any foreclosure action, if insufficient to pay each in full, are divided between
them on a pro rata basis. If special service area taxes are not paid in full at a foreclosure sale, and the lien
amounts are bid in at such foreclosure sale, then unless the special service area taxes are then redeemed
19
i
i
i
i
through payment of the amount of the special service area taxes plus interest, the certificate of sale can be
converted into a deed to the property only after expiration of the applicable redemption period. The
Illinois Constitution prescribes certain minimum redemption periods for unpaid taxes on property
including special service area taxes, but the Illinois General Assembly may create longer redemption
periods. For residential property with less than seven dwelling units, the Illinois Constitution provides for
a minimum two-year redemption period. The corresponding statute, however, permits the delinquent
owner of such property to redeem it for two and a half years (35 ILCS 200/21 -350). Additionally, in
certain circumstances the redemption period may be extended for a period which will expire no later than
3 years from the date of the sale (35 ILCS 200/21 -385). If the property can also be considered "vacant
non-farm real estate," the Constitution authorizes a reduction of the redemption period to one year, but the
statute applicable to special service area taxes contains no such exception.
No assurances can be given that the real property subject to sale or foreclosure and sale will be
sold or, if sold, that the proceeds of sale will be sufficient to pay any delinquent installment of special
service area taxes. Neither the Special Service Area Act nor Article 9 of the Illinois Municipal Code
requires the City to purchase or otherwise acquire any lot or parcel of property offered for sale or subject
to foreclosure if there is no other purchaser at such sale. Article 9 of the Illinois Municipal Code does
specify that the special service area taxes will have the same lien priority in the case of delinquency as the
priority of the lien of ad valorem property taxes.
If the Reserve Fund is depleted and delinquencies in the payment of Special Taxes exist,
there could be a default or delay in payments to the Bondowners pending the annual tax sale and/or
prosecution of foreclosure proceedings and receipt by the Village of the sale and/or foreclosure sale
proceeds, if any. However, subject to the Maximum Parcel Special Tax as set forth in the Special
Tax Roll and Report and the Special Service Area Act, the Village may adjust the Special Taxes
levied on all property within the Area in future calendar years to provide an amount, taking into
account such delinquencies, required to pay debt service on the Bonds and to replenish the Reserve
Fund. The amounts of the Maximum Parcel Special Tax are sufficient to pay the amounts required
by the Indenture to be paid on the Bonds (except with respect to a Mandatory Prepayment);
however, there are no assurances that the taxes levied will always be collected in their entirety.
i
Value to Lien Ratio
The following table sets forth the assessed value-to-lien ratio with respect to the Project, based on
$6,650,000 aggregate principal amount of the Bonds as compared to Appraised Value:
Value of Parcels improved with On-Site Special Appraised Value
Services (based on 185 Single Family Homes and 80 Duplexes) ' . . . .. . ... $49,666,491
Bonds Outstanding ' .. . . . . . .. . . . . . . . . . .. . . . .. . . . . . . .. ... . . . .. . . .. .. .. .. . . .. . . . .. . .. . ..... . . ... . ... .. .. ... $62650,000
Value-to-Lien Ratio . . . ..... . . .. . . .. .. . . .. . . . . . .. . . .. .. .. . . . . . . .. .. . . . . . . . .... . . ... . .. . .... .. . . .. ... . .. .. 7.9 : 1
1 Three times the equalized assessed value. Based on 185 Single Family Homes and 80 Duplexes. See "INTRODUCTORY
STATEMENT" and "PLAN OF FINANCE — The Special Services."
2 As of March 1 , 2013
Source: Kendall County and David Taussig & Associates, Inc.
!
i
This value-to-lien ratio is based on the Equalized Assessed Valuation of the Parcels. No
assurance can be given that the foregoing ratio can . or will be maintained during the period of time the
Bonds are outstanding both because property values could drop and because other public entities, over
which the Area has no control, could issue additional indebtedness secured by a lien on a parity with the
lien securing payment of the Special Taxes or payable through the levy or imposition of a tax on a parity
with the Special Taxes.
i
20
i
Tax Assessment, Collection and Representative Property Taxes
i
Under state law, local assessment officers are responsible for determining the assessed valuation
of taxable real property including railroad property not used for transportation purposes. Certain other
types of taxable property including railroad property used for transportation purposes and pollution
control equipment, are assessed by the Illinois Department of Revenue (the "Department") . Valuations
determined by local assessment officers are subject to appeal and review at the county level and then, in
general, to equalization by the Department. Such equalization is achieved by applying to each county' s
assessments a multiplier determined by the Department. The purpose of equalization is to provide a
common basis of assessments among counties by adjusting assessments toward the statutory standard of
33 - 1/3 % of fair market value. Farmland is assessed according to a statutory formula which takes into
account factors such as productivity and crop mix. Taxes are extended against the assessed values after
equalization. Certain statutory exemptions provide for reductions in assessed valuation or for limitations
upon increases in assessed valuation to qualifying taxpayers.
Property tax levies of each taxing body, such as the City, are filed in the office of the county clerk
of each county in which territory of the taxing body is located. The county clerk computes the rates and
amounts of taxes applicable to taxable property subject to the tax levies of each taxing body and
determines the dollar amount of taxes attributable to the respective parcels of taxable property. The
county clerk then supplies to the appropriate collecting officials within the county the information needed j
to bill the taxes in respect to the various parcels therein.
After the taxes have been collected, the collecting officials distribute to the various taxing bodies
their respective shares of the taxes collected. Taxes levied in one calendar year are due and payable in j
two installments during the next calendar year. Taxes not paid when due are subject to a penalty of 1 '/%
per month until paid. Unpaid property taxes constitute a lien against the property subject to the tax.
i
The following table sets forth a statement of general ad valorem taxes, based on current rates, that
would be expected to be assessed against Parcels improved with detached Single Family Homes and
Duplexes in the Area based on the assessed values for such property set forth below and the most recent
tax bill received by the Developer as owner of property in the Area.
Ad Valorem Taxes
United City of Yorkville
i
Single Family Home Duplex
I
Market Value .. . . . . . .. . . ... . . .... .. . . . . . .. .. . .. . . . . . .. . .. . . . . . .. . . . . . . . . . . . . .. . . . . . . . . . . . . . . . $ 228;813 $ 1567396
Assessed Value . .. .., ., ... .. . . . .. . .... . .. . .. . .. . . . . . .. ..... . . . .... . .. . . ...go 769271 521132
Multiplier . . . . . .. . . . .... .. ... .. . . . . . .. . . ... . . . . . . . ... . . . . . .. . . . .. . .. .. . . .. . . . . . ... .. .. .... . . . . . . 1 1
Average Homeowner's Exemption. , .. . . (35500) (3,500)
Taxable Valuation, . , . . . . , ', , * , ,'. , . ... .. . .. . . .. . . $ 72,771 $ 48,632
i
21
I
Single Family Home Duplex
Taxing Agency Tax Rate (%)j Tax Rate (%)
Countyof Kendall .. .. . . . . . . . . .. .. . ... ... . . ... . .. . .. . . . . . .. . . .. .. . . ... . . .. . . . . . .. . . .. .... .
Mental Health ..
CountyHealth . .. . ... . . . . .. . . . . . . . . . . . ..... . . .... . . . . .. . . . . . . . ... . .. . . . ... ... .. . .. . . . .. . . .. ..
Kendall County Forest Preserve .. . . . .. .. . . .. . . . . . . . .. .. .. .. ... . . .. .... . .. . . . . .... .
KendallTownship. .. . ... . .. . . . .. . . . .. . . .. . . . . . . . . .. . . . .. . . . .. . . . . .. .. . . ... .. .. ... . . . .. . . . .
Bristol — Kendall Fire District .. . . . . . . . . . . . . .. . .. .. . .. .. . .. . . .... . .. ... . . ..... . . .. . .
Yorkville — Bristol Sanitary Districts .. , .
Unit School District Number 115 . . . .... . . . .. ... . . ..... .. .. ... . . ... ... . ... .... . . . .
Community College Dist. Number 516 . . . ... . .. .. . . .. .. ... . . . . . . . . . ... . . . . . . . .
City of Yorkville... . . .... . .. . . .. . .. . .. .... .. .. . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . .. .. . . . . .. . . . . .
YorkvilleLibrary ... . . . . . . .... . . .. . . . . . . . . . . .... . . ... . . .. .. . . . .. .. . . . . . . . .. . . . . . . . . . . . . . . ..
TotalTax Rate .. ... . .. . .. . ..... . .. . . . ... . . . .. . . . . .. .... . .... . . . .. .. . . . . . . .. . . . ... . . . . . . .. . ..
Representative Ad Valorem Tax .. . . . . ... .. . . . .. . . . ... . .. .. . ... .. . . ... ... . . . . .. . . . $6,717 $49489 -
Maximum Parcel Special Tax Levy Year 2012 . .. . . ... . . .. .. . . . . . .. .. .. . . . 2.328 1 .906
TotalTaxes' . .. ... .. .. . . . . . . . . . .. . .. . . . .. ... . . . .... . . . .. . ... .. .... . ...... .... . .. . . . . . .. . . ...: . $9,045 $6,385
i
Tax rates are for 2012 and assume a Parcel improved with a Single Family Home or Duplex in the United City of
Yorkville, Kendall Township, Kendall County, Illinois.
'` The amounts shown represent the Maximum Parcel Special Tax per Parcel, which was determined by David Taussig &
Associates, Inc., Special Tax Consultant, after estimating Administration Expenses and additional taxes for
delinquencies. ,
The City has no control over the amount of additional debt payable from taxes or assessments on
all or a portion of the property within the Area, that may be issued in the future by other governmental
entities or districts. Nothing prevents the owners of land within the Area from consenting to the issuance
of additional debt by other public agencies which would be secured by taxes or assessments on the same
property subject to the Special Taxes. To the extent such indebtedness is payable from assessments, and
other special taxes levied pursuant to the Special Service Area Act or other taxes, such assessments,
special taxes and other taxes may have a lien on the property within the Area in addition to and on a
parity with the lien of the Special Taxes. Accordingly, the liens on the property within the Area could
increase without any corresponding increase in the value of the property within the Area and thereby
reduce the ratio that exists at the time the Bonds are issued between the value of the property and the debt
secured by the taxes and assessments thereon. The imposition of such additional indebtedness could also
reduce the willingness and ability of the property owners within the Area to pay the Special Taxes when
due. See "RISK FACTORS — Overlapping Indebtedness."
THE CITY
General
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 has
a population of 6, 189. A special census in December of 2003 resulted in a population total of more than
8 ,500; a special census completed in May of 2006 showed an increase in that total of 31 . 8% when the
population increased to 11 ,204. The special census in 2008 recorded a population of 16,838 which !
increased to 16,921 at the 2010 census.
22
I
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 Aldermen (two Aldermen elected from each of the City' s four wards).
The City is served by the Bristo/Kendall Fire Protection District which carries a Protection Class
6 and maintains a 24 hour paramedic unit. The Police Department has employs 23 full-time officers and 4
part-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 (1-80); 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.
Commerce and Industry j
i
Businesses and retailers are attracted to the City because of its location near several major
thoroughfares and the Fox River. The City features several shopping centers including Kendall
Marketplace and the historic downtown area as well as the retail establishments found on both the north
and south ends of the City. It is also the site of the Fox Industrial park which is one of three tax increment
districts; the other two are Countryside Center and the downtown area. Major private employers are found j
in a variety of fields including entertainment, retail, services and light industry. Some of the larger
employers are the Raging Waves Water Park (450 employees), Wrigley Manufacturing Company LLC
(335) employees), Super Target ( 180 employees), Menard Mega Store ( 140 employees), and Jewel/Osco
and Newlyweds Foods (both with 130 employees).
Community Life
I
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/Western 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.
Raging Waves, the largest outdoor water park in Illinois, opened in 2009. Among its attractions
are the Kangaroo Falls play structure with ladders and water spouts, the Cyclone Bowl and Boomerang
Tornado rides as well as the Great Barrier Reef wave that imitates the action of the ocean.
Yorkville Public Library (the "Library") serves the residents of the City and is a member of the
Heritage Trail Library System. In addition to its extensive collection of book, 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 serves,
interlibrary loan, kit for brothers and sisters of new babies, kits for sick kids, loft meeting area,
23
I
i
I
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. The Library recently completed a
$ 8 .75 million expansion program. j
Medical services are available at Rush/Copley Medical Center in the City and also at the
Rush/Copley Medicine 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 550 teachers and administrators and
approximately 5,000 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.
Socioeconomic Information
Following are lists of large employers located in the City and in the surrounding area.
I
I
I
i
j
I
I
I
i
24
Major City Employers(i)
Approximate
Name Product/Service Employment
Community Unit School District
Number 115 Education 550
Raging Waves Water Park Water Park 450
Kendall County County Government 345
Wrigley Manufacturing Co., LLC Sugar Confections, Bubble Gum, and Candy 335
Super Target Retail Store 180
United City of Yorkville City Government 155
Menards Mega Store Home Improvement Store 140
Jewel/Osco Grocery Store 130
Newlyweds Foods Food Seasonings, Cures and Binders 130
Kohl's Retail Store 115
United States Postal Service Postal Service 100
Hillside Health Care Center Healthcare 90
Home Depot Home Improvement Store 85
Wheatland Title Guaranty Co Title Insurance 65
Marshalls Retail Store 50
SEC Group, Inc., An HR Green
Company Civil Engineering Service 50
Brenart Eye Clinic Eyeglasses 45
Rush-Copley Medical Center Medical Center 45
Maciano's Pizza & Pastaria Restaurant 40
Panera Bread Restaurant and Bakery 40
Note: ( 1 ) Source: 2013 Illinois Manufacturers Directory, 2013 Illinois Services Directory, Yorkville Economic Development
Corporation and a selective telephone survey.
i
I
I
I
i
i
25
Major Area Employers(l)
Approximate
Name Location Business or Product Employment
Greater Fox
Rush-Copley Medical Center (2) Valley Area Medical Center 21000
Waubonsee Community College #516 Sugar Grove Education 11460
Exelon Nuclear, Dresden Generation Station Morris Electric Service 900
Eby-Brown Co Montgomery Wholesale Tobacco and Confectionery 400
Lyons Workspace Products, LLC Montgomery Steel Storage Equipment 400
LyondellBassell Industries Morris Plastic Materials 400
V V F Illinois Services Montgomery Soap and Detergents 350
Fox River Foods Inc. Montgomery Wholesale Food 300
Northfield Block Co Montgomery Architectural Concrete Blocks 300
CB&I, Inc. Plainfield Storage Tank Insulation Equipment 300
Diageo North American, Inc. Plainfield Gin and Vodka Distilling 300
Aurora Bearing Co. Montgomery Ball and Roller Bearings 250
Coldwell Banker Primus Realty Oswego Residential Real Estate 225
Hormann Gadco LLC Montgomery Doors, Sash and Trim Metal 200
Plainfield Precision Plainfield Custom Metal and Plastic Components 200
Midwest Mfg., Inc. Plano Millwork 200
Walsh Landscape Plainfield Landscape Construction and Maintenance 185
Aurora Metals Div., L.L.C. Montgomery Copper foundries 150
International Paper Montgomery Corrugated Cartons 150
Radiac Abrasives, Inc. Oswego Diamond Grinding Wheels 150
Fox Valley Molding, Inc. Plano Compression Transfer and Injection Molding 150
Note: (1 ) Source: 2003 Illinois Manufacturers Directory, 2013 Illinois Services Directory and a selective telephone survey.
(2) Includes the City.
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 U. S. Census Bureau 2007-
2011 American Community Survey 5-year estimated values.
Employment By Industry(')
The City Kendall County State of Illinois
Classification Number Percent Number Percent Number Percent
Agriculture, Forestry, Fishing, Hunting, and Mining..... ... . 20 0.2% 333 0.6% 63 ,960 1 . 1 %
Construction. ............ ... 626 7.6% 3,912 7.0% 343,232 5.7%
Manufacturing . ..... .... ... ...... 1 ,260 15.3 % 71522 13 .5% 775,663 12.8%
Wholesale Trade . .... ... .... . ........ ... .... .... ............ .... .. . .... .... ..... 274 33% 1 ,805 3 .2% 196,738 33%
Retail Trade .. .... .... ........ ..... ....... . ........ ............ ....... ......... ... . 996 12. 1 % 6,633 11 .9% 6593708 10.9%
Transportation and Warehousing, and Utilities", ,,. ... . 408 5.0% 32555 6.4% 3559486 5.9%
Information ........... ..... ..................... .... ........... .... ....... ..... .... 312 3 .8% 1 ,405 2.5% 135,688 2.2%
Finance, Insurance, Real Estate, and Rental and Leasing . . 508 6.2% 45890 8.8% 466,468 7.7%
Professional, Scientific, Management, Administrative,
and Waste Management Services . .... IV.".,....... ...... ..... .... 641 7.8% 5,874 10.5% 6629987 11 .0%
Educational, Health and Social Services.., ,... .... ... 1 ,910 23 .2% 119398 20.4% 1 ,337,455 22. 1 %
Entertainment and Recreation Services,
Accommodation and Food Services ..... ,.,.,,, "lot of. 0 502 6, 1 % 39878 7.0% 5249925 83%
Other Services (except Public Administration).. .... ... ... .. .... 316 3 . 8% 29126 3 .8% 2889538 4.8%
Public Administration ............... . ...I .,......... .. .. ... ........ .... ... ... 447 5.4% 2.467 4.4% 232.923 3 .9%
Total ... . . . ... . . . . . .. . ... . . . . . . . . . . . . . . . . . .. 8,220 100.0% 55,798 100.0% 610439771 100.0%
Note: ( 1 ) Source: U. S. Bureau of the Census, American Community Survey 5-year estimates 2007 to 2011 .
26
Employment By Occupation(')
The City Kendall County State of Illinois
Classification Number Percent Number Percent Number Percent
Management Business, Science and Art .. .. . . . ... . . .. .. . 3,393 41 .3% 21 ,718 38 .9% 221679571 35.9%
Service .... .. .. . . .. .. . ... . . .. . . ... . .. . . .. .. . . . . .. . . .. .. .... . . .. .... . . . .. . . . 11274 15.5% 7,319 13 . 1 % 11007,434 163%
Sales and Office . ... . .... . ... . . . . . . .. .. . . .. . . . . . . ... . . . .... . . . .. . .. . .. 1 ,947 233% 145863 26.6% 1 ,550,202 25.6%
Natural Resources, Construction, and
Maintenance . .... . .. .. . .... . . . . . .. .. . . .. .. . . . .. .... . ... . 0 ... . . .. .. . 740 9.0% 51159 9.2% 4745566 7.9%
Production, Transportation, and Material Moving . 866 10.5% 6339 12. 1 % 843.998 14.0%
Total .... . . .. . . . . . ... . . ...:.. .. . . . . . . .. . . .... ... .. . ..... . . .. . . . . .. . .. . . . 8,220 100.0% 553798 100.0% 62043 ,771 100.0%
Note: ( 1 ) Source: U.S. Bureau of the Census, American Community Survey 5-year estimates 2007 to 2011 .
Annual Average Unemployment Rates(i)
Calendar
Year The City Kendall County State of Illinois
2003 3 .6% 6.0% 63%
2004011111. 1. 111111004 a 3 .4% 5.0% 62%
2005 .. .. ... .. . . . . . .. .. . 3.2% 5.2% 5.7%
2006 , 11, 111 ,111 ,14 l000d 2.6% 4. 0% 4.5%
20070, 111 ,111 ,10 ,111100 3 . 1 % 4. 5% 4.6%
2008 .*1111111 3.8% 5. 8% 64%
2009 .. . . . .... ... .. . .. . . 6.6% 9.9% 1000%
2010 ,011 . 1 .. . .
6.4% 9.8% 10.3 %
2011 '.. , .. . 0 .11 , 11 ,111, 5 .9% 8.7% 9.8%
2012 ".. 0 .. 1.1111111111 N/A 7. 8% 8.9%
2013(2) . . . . . ... . . . . ... . N/A 9.0% 10. 1 %
Notes: (1 ) Illinois Department of Employment Security.
(2) Preliminary rates for the month of January 2013.
Housing
The U. S. Census Bureau 5 -year estimated values reported that the median value of the City' s
owner-occupied homes was $248,200. This compares to $239,300 for the County and $ 198 ,500 for the
State of Illinois. The following table represents the five year average market value of specified owner-
occupied united for the City, the County and the State of Illinois at the time of the 2007-2011 American
Community Survey.
i
i
I
27
I
Specified Owner-Occupied Units(1)
The City Kendall County State of Illinois
Value Number Percent Number Percent Number Percent
Less than $50,000 . . . ... .. . . 68 1 .5% 302 1 .0% 218,208 6.7%
$50,000 to $99,9991111 . . . . 141 3 .2% 789 2.5% 4511967 13.8%
$ 100,000 to $ 149,9991111 396 8 .8% 2,652 8.3% 464, 158 14.2%
$ 1501000 to $ 199,999 .. . . 654 14.6% 6,873 21 .6% 5187957 15.8%
$200,000 to $299,999 . . .. 1 ,909 42.6% 12, 198 38.4% 7257004 22. 1 %
$300,000 to $499,999 . . . . 1 ,099 24.6% 75465 2345% 6137486 183%
$500,000 to $999,999 . . . . 209 4.7% 1 ,287 4. 1 % 234,600 7.2%
$ 1 ,000,000 or more . . ., . .. , 0 0.0% 204 0.6% 53 , 191 1 .6%
Total:.: .... . . .... . . . . .... . .: . . . 42476 100.0% 31 ,770 100.0% 3,2795571 100.0%
Note: ( 1 ) Source: U.S. Bureau of the Census, American Community Survey 5-year estimates 2007 to 20111
Mortgage Status(l)
The City Kendall County State of Illinois
Number Percent Number Percent Number Percent
Housing Units with a
Mortgage 39802 84.9% 27,085 853% 22272,745 693%
Housing Unites without
a Mortgage 674 15 . 1 % 4,685 14.7% 11006,826 303%
Total . . . . . . . . . . . . . . . . . . . . . . . 4,476 100.0% 31 ,770 100.0% 3,279,571 100.0% j
i
Income
The following table shows the Illinois counties with the highest per capita personal
income for the year 2010. Kendall County ranked fourth among all counties in the state.
Per Capita Personal income
for the Ten Highest Income Counties in the State(])
Rank 2007-2011
1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... ............ . ..I Lake County. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... $ 38,512
2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ......... ........... DuPage County. . . . . . . . . . . . . . . . . . . . . . . . . . . .. 38,405
3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......... .....0.... McHenry County, . . . . . . . . . . . . . . . . . . . . . . . ... 329318
4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......... ....... ... Monroe County. . . . . . . . . . . . . . . . . . . . . . . . . . . .. 31 ,570
5 . . 11111 . . . . . . . . . . . . . . . ... . .. .. Kendall County. . . . . . . . . . . . . . . . . . . . . . . . . . . .. 31 ,325
6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......6.6..6. 0. . ... Will County. . . . . . . . I . . . . . . . . . . . . . . . . . 1 . 1 . .. . 30, 199
7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...... ........... ... Cook County. . . . . . . . . . . . . . . . . . . . . 1 . 11 . . 1 . . .. 29,920
8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......1. ..... ..I .I. Woodford County. . . . . . . . . . . . . . . . . . . . . . . . .. 29,886
9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ......... .... ... ... Kane County. . . . . . . . . . . . . . . . . . . . . . . . . . . . . , ., 29,864
10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... .... . .. ..... .... Sangamon County. . . . . . . . . . . . . . . . . . . . . . . . . 29,167
i
Note: (1 ) Source: U.S. Bureau of the Census. 2007-2011
American Community 5-Year Estimates.
The following shows a ranking of median family income for the Chicago metropolitan area from
the 2007-2011 American Community Survey.
i
I
28
i
Ranking of Median Family Income(1)
Ill. Family Ill.
County Income Rank
DuPa a County. . . . . . . . . . $ 94,049 1
Lake County. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . " 935260 2
Kendall Coun ... 90,696 3
McHenry County. . , . . . . . . . 87,133 4
Will County. . . . . . . . . . . " . . . . . . . . . . . . . . . . . . .. 86,372 5
Kane County. . 111 . . . 1 . . . . . . . . . . .. . . . . . . . . . .. . 79,686 7
Cook County. . . . . . . . . . . . . . . . . . . . . . . . . . . 0 . . . . 652842 20
Note: (1 ) Source: U.S. Bureau of the Census.
2007-2011 American Community 5-Year
Estimates.
i
The U. S. Census Bureau 5 -year estimated values reported that the City had a median family
income of $90,657. This compares to $90,696 for the County and $69,658 for the State of Illinois. The
following table represents the distribution of family income for the City, the County and the State of
Illinois at the time of the 2007-2011 American Community Survey.
Median Family Income(1)
The City The County State of Illinois
Value Number Percent Number Percent Number Percent
Under $ 10,000 8 0.2% 361 1 .2% 1311841 4.2%
$ 10,000 to $ 14,999 30 03% 175 0.6% 86,610 2.7%
$ 15,000 to $24,999 265 6.3 % 926 3.2% 224,421 7. 1 %
$25,000 to $34,999 198 4.7% 1 ,379 43% 260,262 83%
$35,000 to $49,999 415 9. 8% 2,617 9.0% 3895862 1264%
$50,000 to $74,999 735 17.4% 5,659 19.4% 606,737 19.2%
$757000 to $90,999 762 18.0% 5,386 18.5% 4861151 15.4% j
$ 100,000 to $ 149,999 15175 27.8% 8,409 28.9% 547,784 17.4% j
$ 150,000 to $ 199,999 342 8. 1 % 2,581 8.9% 212,016 6.7%
$200,000 or more 298 7.0% 1 ,609 5.5% 207,841 6.6%
Total.. .. . . . .. . . . . . . . .... . . . . .. . 4,228 100.0% 292102 100.0% 3,2791571 100.0%
Note: (1 ) Source: U.S. Bureau of the Census. American Community Survey 5-year estimates 2007 to 2011 .
I
The U. S . Census Bureau 5-year estimated values reported that the City had a median household
income of $ 82,917. This compares to $ 82,649 for the County and $56,576 for the State of Illinois. The
following table represents the distribution of household incomes for the City, the County and the State of
Illinois at the time of the 2007-2011 American Community Survey,
i
i
I
I
i
29
Household Income(l)
( )
The City The County State of Illinois
Value Number Percent Number Percent Number Percent
Under $ 10,000 47 0.8% 689 1 .9% 324,506 6.8%
$ 10,000 to $ 14,999 75 13% 481 13% 225,927 43%
$ 15,000 to $24,999 442 73% 11697 4.6% 480,204 10. 1 %
$25,000 to $34,999 286 5.0% 11965 5.3% 462, 115 9.7%
$35,000 to $49,999 774 135% 3,940 103% 6289998 13.2%
$50,000 to $74,999 949 16.6% 79596 20.6% 884,623 185%
$75,000 to $99,999 971 17.0% 6,558 17.8% 627,813 13.2%
$ 100,000 to $ 149,999 1 ,485 26.0% 9,348 25.4% 6565199 133%
$ 150,000 to $ 199,999 387 6.8% 2,870 7. 8% 243,765 5. 1 %
$200,000 or more 305 53% 1 ,712 4.6% 2384852 5.0%
Total. ...... .. . . . .. . . .. ... ... . . . 5,721 100.0% 367856 100.0% 4,773,002 100.0%
i
Note: (1 ) Source: U. S. Bureau of the Census. American Community Survey 5-year estimate 2007-20111
I
Retail Activity
Following is a summary of the City' s sales tax receipts as collected and disbursed by the State.
i
Retailers' Occupation, Service Occupation and Use Tax(1)
State Fiscal Year State Sales Tax Annual Percent
Ending June 30 Distributions (2) Change + (-)
20031 , . . . . . . 1111111 . . 4 . 16 . $ 11558,831 29.55 0/o(3)
2004, 1 . 11 1 . 0 11 1 1 . 1 1 . . 11982,218 27. 16%
2005 , . . . . . . . 1 . 11 . 11 . . . . . . . 25320,546 17.07%
20061 . . 1 . 2,649,888 14. 19%
2007 . 11 . . . . 2,631 ,521 (0.69%)
2008 , 11 , 111 , . . . 2,5061434 (4.75%)
2009. . . . . . . . . . . . . . . . . . . . . . 275005285 (0.25%)
201011 . 1111 . 1 . . . . 2,4461099 (2. 17%)
2011 , . . . . 1 . 111 , 11 , . . . . . . 25569,233 5.03%
2012. 11 , 1111 . 11 . . . 25552,483 (0.65%)
Growth from 2003 to 2012. . 63 .74
i
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 2003 percentage is based on a 2002 sales tax of $ 1 ,203,279
I
I
I
i
30
The following tables show the representative property tax rates for the City from 2007 through
2011 and the amount of tax extensions and collection for the levy year 2007 through 2011 .
Representative Tax Rates(i)
(Per $100 EAR
Levy Year
The City 2007 2008 2009 2010 Nall, 2011
Corporate .. . . . ... . ... . . .
IMRF . . .. . . ... .. .. ... . .. . . . .. ... . .. . . . . . . . .... . . . . .. . . ... . . ... . ... . . .
Police Protection . .. . .. . .. .... . . ... . . . ... . . .. . . .. . . . . .. .. . .. . .. .
PolicePension . . . .... ..... . .. . . . . . . . . . . .. . . . . .. . . . . . . . ... . ... .. .
Garbage.. . . .. . . . . .. .. . .. . . . . .. . . . . . .. .. . . . .. .. . . . . ... . . . . .... . .. . .. .
Audit . . 0 1 1 1 1 1 oat oat a a 0 '40*4 a . .. .
Liability Insurance , I I I I I I I 1 0 a 0 @,to we a 9 0*00 1 1 1 1 1 1 1 1 1 4 0 1 1 1
Social Security .. .. .. . .. . . . . . .. ..... . . . . .. . . . . . . .. .. .. ..... . . ... .
School Cross Guard . . ... . . . . . .. . . . . .. . . . . . . . .. . . . . ..... .. . ...
Unemployment Insurance .. . . . .... . . .. . . . .. .. .. . ... . .. ... .
Library . .. . .. . .. . . . . ..... .. .. .. . . . .. .. .. . . . .. . . . . .. .. .. . . .. .... .... . .
IMRF — Library .. .. . . . . . ... ... .. .. . . . ... . . . . . . .... I ..... . .. ... .
SS — Library. ,., .,. . .. . . . ... . . . .. .
Total City Rates(`) . .. ... . . . ... . . . .. . .. .. . . .. . ... ... . . ... .. . j
Kendall Count
Kendall County Forest Preserve . . . . . .. . . . . . .. .. . . .. . . .
Kendall Township, . I I I I I I.I I I I I 1 0 0 . W .0 0
Bristol — Kendall Fire District .. . . . . .... .. . . . . . . . . . . . . . .
Yorkville — Bristol Sanitary District . . . ..... .. . . .. . . .
Unit School District Number 115 .. .. .. . .. .. .. . . .. . .. .
Community College District Number 516 . . .. . ..,
Total Tax Rates(3) . .. . . . . . . . .. . . . .. . . . . . . .. . . . .. . . ... . .. ...
( 1 ) Source: Kendall County Clerk
(2) Statutory tax rate limits forjtlio City are as followsr Corporate ($0 3300); ' Police Protection ($0.0750),. Garbage
($.Q.2000); School: CrossGuard ($OA200) and; Ltbrary.($0 1500)':1 .
(3) Representative tax rates for other government units are from Kendall Township tax code 003 .
Tax Extensions and Collections(l)
(Excludes Road and Bridge Levy)
Taxes Collected(3)
Taxes
Levy Year Coll. Year Extended(�) Amount Percent
2007 1998
2008 1999
2009 2000
2010 2001
2011 2002
2002 2003 In Collection
( 1 ) Source: Kendall County Treasurer j
(2) Tax extensions have been adjusted for abatements. j
(3) Total collections include back taxes, taxpayer refunds, interest, etc.
i
31
THE SPECIAL SERVICE AREA AND SPECIAL TAXES
The Special Service Area Act
Section 7(6) of Article VII of the Illinois Constitution of 1970 permits a non-home rule unit to
levy or impose additional taxes upon areas within its boundaries to provide special services to those areas
and to pay debt incurred in order to provide those special services in the manner provided by law. Such
areas are established pursuant to the provisions of the Special Service Area Act. Under the Special
Service Area Act, the Corporate Authorities of the municipality within which the special service area lies
constitute the governing body of such special service area.
i
The Special Service Area Act provides that bonds may be issued to provide for the special
services. Such bonds do not constitute indebtedness of the municipality in which the special service area
is situated for the purpose of any limitation imposed by any law. Such bonds shall be retired by a tax
which may be either an ad valorem property tax, a special tax, or a combination of an ad valorem
property and a special tax. A special tax may be levied or imposed on any basis that provides a rational
relationship between the amount of special tax levied or imposed against each lot or parcel within the
special service area and the special service benefit conferred. The Special Service Area Act further
provides that the lien and foreclosure remedies provided in Article 9 of the Illinois Municipal Code shall j
apply on non-payment of any special tax.
The Special Service Area Act contains a provision that allows residents of a special service area
to petition the circuit court having jurisdiction to disconnect territory from the special service area if,
among other things, such territory was not, is not, and is not intended by the corporate authorities which
created the special service area to be benefited or served by services then existing or authorized, and that
such territory constitutes less than 1 1/2% of the special service area's total equalized assessed valuation.
The City has represented that no parcel within the Area meets this test.
Establishment of the Area
Pursuant to the Special Service Area Act, the Corporate Authorities of the City adopted
Ordinance No. 2003 -27 on April 22, 2003 , proposing to establish the Area. Pursuant to notice given by
publication at least once not less than 15 days prior to the hearing, and pursuant to notice by mail to each
person in whose name general taxes for the last proceeding year were paid on each parcel of land within
the Area, a public hearing was held on July 8 , 2003 to further consider establishment of the Area. On
August 12, 2003 the City Board adopted Ordinance No. 2003-54 (the "Establishing Ordinance"), which
established the Area to provide certain special services, and authorized the City to levy and collect
Special Taxes in the manner set forth in the Special Tax Roll and Report, to pay principal of and interest
on the bonds secured by the Special Taxes in an aggregate principal amount not to exceed $ 15,000,000 to
be retired over a period not to exceed 30 years at an interest rate not to exceed 9% per annum or 125% of j
the rate for the most recent date shown in the 20 G.O. Bonds Index of average municipal bond yields as
published in the most recent edition of the Bond Buyer at the time the contract is made for sale of the
Bonds and the Bonds shall mature within not more than thirty (30) year from their issue date; the
proceeds of the sale of the Bonds would be used to (a) construct such Special Services; and (b) to pay
administrative expenses. Pursuant to the Special Service Area Act, if a petition signed by at least 51 % of
the electors residing within the Area and by at least 51 % of the owners of record of land included within
the boundaries of the Area is filed with the municipal clerk . within 60 days following the final
adjournment of the public hearing objecting to the creation of the Area, the issuance of the Bonds or the
provision of the Special Services, then the Area may not be created. No such petition was filed objecting
to the creation of the Area. The sole owner of the property has waived its right to file an objection
petition pursuant to the Special Service Area Act. The City has caused the Declaration of Consent and the
Establishing Ordinance to be recorded in the Office of the Recorder of Deeds of Kendall County.
32
Levy, Abatement and Collection of Special Taxes
In Illinois, property taxes levied in one year become payable during the following year as
provided in said levy. See "SECURITY AND SOURCE OF PAYMENT FOR THE BONDS — Tax
Assessment, Collection and Representative Property Taxes." Pursuant to the Bond Ordinance the City
has levied the Maximum Parcel Special Tax for all parcels within the Area. Pursuant to the Indenture and
the Special Tax Roll and Report, the City has covenanted that prior to the last Tuesday of December of
each year the Mayor and City Council of the City shall determine the Special Tax Requirement due as
provided in the Special Tax Roll and Report, taking into account other amounts that may be available to
pay principal of and interest on the Bonds and administrative expenses, to amend the Special Tax Roll
pursuant to the Special Tax Roll and Report and shall, by ordinance, approve the amount of the Special
Tax Requirement and direct the County Clerk of Kendall County to extend the Special Taxes for
collection on the tax books in the amounts so determined pursuant to the Special Tax Roll and Report
against all parcels of taxable property in the Area. The Kendall County Clerk must receive the Special
Tax Roll by the last Tuesday in December. The Kendall County Clerk intends, to the extent possible, to
incorporate the Special Tax bill into the regular ad valorem property tax bill which will be payable in two
equal installments. The first installment is payable in June and the second installment is payable in
September. The Special Taxes levied by the Bond Ordinance shall be abated each year to the extent the
taxes levied pursuant to such Bond Ordinance exceed the Special Tax Requirement as calculated by the
Special Tax Consultant on behalf of the City.
At the end of each collection year, the Kendall County Treasurer applies to the Circuit Court of
Kendall County, for a judgment for all unpaid taxes. The Circuit Court of Kendall County order resulting
from that application for judgment provides for a sale of all property with unpaid taxes. A public sale is
held, at which time successful bidders pay the unpaid taxes plus penalties. The annual tax sale is usually
held during October in Kendall County. Unpaid taxes accrue penalties at the rate of 1 1/2% per month
from their due date until the date of sale. Taxpayers can redeem their property by paying the purchaser of
the property at the tax sale the amount paid at the sale, plus a penalty. If redemption does not occur
within two and one half years and certain procedural requirements are met, the purchaser of the property
at the tax sale can receive a deed to the property which has been sold for delinquent taxes. In addition, a
municipality may seek enforcement of unpaid Special Taxes through foreclosure proceedings by seeking
in a court an adjudication of the existence of a lien and a finding of a failure to pay Special Taxes when
due. Upon making such a finding, a court having jurisdiction would enter a foreclosure decree
authorizing the sale of the property subject to the lien of the Special Taxes. See "SECURITY AND
SOURCE OF PAYMENT FOR THE BONDS — Enforcement of Payment of Special Taxes" herein.
Special Service Area, Special Tax Roll and Report
The following description of the Special Service Area Special Tax Roll and Report prepared by
David Taussig & Associates, Inc. , Newport Beach, California, Special Tax Consultant, is qualified in its
entirety by reference to the complete form of the Special Tax Roll and Report set forth in Appendix A
hereto. Capitalized terms used in this section but not defined shall have the meaning given to such terms
in the Special Tax Roll and Report.
The Special Service Area Special Tax Roll and Report was prepared on the basis of 200 Single
Family Homes and 86 Duplexes. See "INTRODUCTORY STATEMENT" and "PLAN OF FINANCE —
The Special Services." The Special Tax Roll and Report sets forth the provisions for apportioning and j
levying the Special Taxes in the Area. The Special Taxes have been levied in the Area each Calendar
Year from 2013 to 2031 and will be collected each Calendar Year from 2014 to 2032. The amount of
Special Taxes to be levied pursuant to the Special Tax Roll and Report has been calculated to provide an
amount equal to at least 110% of the annual debt service on the Bonds taking into account estimated
33
I�
interest earnings and after deduction of estimated Administrative Expenses and taking into account
prepayment of Special Taxes.
The Maximum Parcel Special Tax levied by the City within the Area in 2013 shall be $591 ,955
and each year thereafter shall be increased by 1 . 50% per year; provided, however, that in no event shall
the Maximum Annual Special Tax levied exceed $773 ,970 in 2031 , the final year the Maximum Annual
Special Tax shall be levied. Subject, however, to the mandatory prepayment provisions set forth in the
Special Tax Roll and Report, the Special Tax Bond Prepayment amount shall not exceed the principal
amount of the Bonds plus any Premium, Defeasance and Fees as such terms are defined in the Special
Tax Roll and Report, less the Reserve Fund Credit, plus any delinquent Special Taxes on the Parcel for
which the prepayment is being made, including any applicable penalties and related costs. See "THE
BONDS — Optional Prepayment of Special Taxes" and "— Mandatory Prepayment of Special Taxes."
The following table sets forth certain information concerning the Special Taxes, including the
aggregate Maximum Parcel Special Tax to be collected in 2014 through 2032 and the Maximum Parcel
Special Tax which has been levied pursuant to the Bond Ordinance:
Maximum Parcel Special Tax for Levy Years 20134031
Maximum Parcel
Special Tax per Single Maximum Parcel Maximum Parcel Special
Levy Year(1) Family Home Special Tax per Duplex Tax (2)
2013 2536100 1 ,935.00 5917955
2014 21398 .00 11964.00 600,750
2015 27434.00 11993.00 6095730
2016 2,471 .00 21023 .00 6189975
2017 2,508.00 2,053.00 628,220
2018 23546.00 2,084.00 637,730
2019 29584.00 23115.00 647,240
2020 2,623 .00 2, 147.00 657,01. 5
2021 202.00 2, 179.00 6669790
2022 2,702.00 21212.00 676,830
2023 21743 .00 2,245.00 6875055
2024 2,784.00 25279.00 6975360
2025 21826900 21313 .00 707,850
2026 21868.00 2,348.00 7185420
2027 21911 .00 2138100 729, 175
2028 2,955.00 21419.00 7402195
2029 21999.00 2,455.00 7515215
2030 35044.00 2,49100 7625500
2031 31090.00 2,529.00 7737970
i
Taxes to be collected in year after levy year.
(2) Based on 185 Single Family Homes and 80 Duplexes. See "PLAN OF FINANCE — The Special Services."
Delinquency Rates
Set forth in the table below is the percentage of Special Taxes levied within the Area for the
payment of the Prior Bonds that were delinquent in payment in the years set forth therein. In addition, the
table indicates the delinquent Parcels that were offered and sold at the County's annual tax sale in the
same years. The Special Tax Consultant typically reviews delinquencies twice a year, in October of the
collection year and again in November or December to determine the abatement amount and Special
Taxes Requirement for the following year.
34
i
Delinquent Special Taxes in Area
i
Amount of Amount Amount of
Special Number of Special Special
Special Special Taxes of Parcels Taxes Taxes
Levy Taxes Taxes Delinquency Offered at Offered at Sold at Unsold at
Year Assessed Collected Rate Tax Sale Tax Sale Tax Sale Tax Sale
2011 $508 ,509.40 $456326436 1027% $52,244. 64 20 $ 0000 $52,244.64
2010 5059235 . 12 5013248 .84 0.79 39986628 2 3 ,986.28 0000
2009 4849292.96 472,914.32 2 .35 11 ,378 .64 7 11 ,378 . 64 0800
2008 482,087.96 475 ,628 . 67 1 .34 6,459.29 5 6,45929 0400
2007 470,366.50 4559578 . 50 3 . 14 14,788 .00 8 12,939. 50 11848 .50
i
i
I
Administrative Services
David Taussig & Associates, Inc. (the "Administrator") will provide administrative services for
the Special Service Area for the City pursuant to an Administrative Services Agreement. The
Administrator prepared the Special Tax Roll and Report. Under the Administrative Services Agreement,
the Administrator will (i) maintain a Parcel database necessary to extend, bill and collect the Special
Taxes, (ii) calculate the amount of Special Taxes to be abated for the Area, (iii) prepare an annual report j
for the Area, (iv) facilitate billing of the Special Taxes, (v) monitor tax receipts and collections, (vi) track
Special Taxes prepayment amounts and Special Reserve Fund Credits, (vii) field taxpayer inquiries, (viii)
monitor sales practices and disclosure materials, and (ix) calculate any rebate on the Bonds.
RISK FACTORS
i
Investment in the 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 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 or willingness
of property owners in the Area to pay their Special Taxes when due. Such failures to pay Special Taxes
could result in the inability of the Area to make full and punctual payments of debt service on the Bonds.
In addition, the occurrence of one or more of the events discussed herein could adversely affect the value
of the property in the Area. j
i
Limited Source of Funds j
The Bonds, together with the interest thereon, are limited obligations of the City, payable solely
from the Special Taxes and the amounts on deposit in the various funds and accounts established and
maintained under the Indenture, all as more fully set forth therein. The 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 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
levy of the Special Taxes as provided in the Bond Ordinance and the Indenture). See "SECURITY AND
SOURCE OF PAYMENT FOR THE BONDS — General" herein.
i
35
Information Not Verified
Information concerning the Area 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 sales and ability of homeowners and other property owners to pay their share of
the Special Taxes; such information is, by its nature, not subject to verification.
Local, State and Federal Land Use Regulations
There can be no assurance that land development operations within the Area will not be adversely
affected by future government policies, including, but not limited to, governmental policies which directly
or indirectly restrict or control development. 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. Bondowners should assume that any event that significantly
impairs the ability to develop land in the Area could cause the land values within the Area to decrease
substantially and could affect the willingness and ability of the owners of land to pay the Special Taxes
when due or to proceed with development of land in the Area.
i
Overlapping Indebtedness
The Special Taxes and any penalties assessed for failure to pay such taxes will constitute a lien
against the parcels of land on which they will be levied until such taxes are paid. Such lien will be on a
parity with all special taxes and special assessments which may be levied by other agencies and is co-
equal to and independent of the lien for general ad valorem real property taxes regardless of when they
are imposed upon the same property. The City, however, has no control over the ability of other entities
and districts to issue indebtedness secured by special taxes or assessments payable from all or a portion of
the property within the Area.
The ability of an owner of land within the Area to pay the Special Taxes could be adversely
affected if additional debt is issued or additional taxes or assessments are levied which are payable by the
owners of land within the Area. The imposition of additional liens, whether public or private, may reduce
the ability or willingness of the landowners to pay the Special Taxes and increases the possibility that
foreclosure proceeds will not be adequate to pay delinquent Special Taxes.
Tax Delinquencies
In order to pay debt service on the Bonds, it is necessary that the Special Taxes within the Area
be paid in a timely manner. The Special Taxes, from which funds necessary for the payment of principal �
of, and interest on, the Bonds are derived, will be billed to the property owners within the Area on the
regular general ad valorem property tax bills sent to owners of such properties or on a special tax bill
delivered at the same time as the regular ad valorem property tax bills. Such Special Tax installments are
due and payable, and bear the same penalties and interest for non-payment, as do general ad valorem
property tax installments. The unwillingness or inability of a property owner to pay ad valorem property
tax bills as evidenced by general ad valorem tax delinquencies may also indicate an unwillingness or
inability to make general ad valorem tax payments and Special Tax installment payments in the future. If
owners fail to pay the Special Taxes when due there could be significant special tax delinquencies.
Also, the Kendall County Collector may not be willing to bill the property owners in the Area the
Special Taxes on their regular ad valorem property tax bills, or, if the Kendall County Collector is willing
i
36
to bill the property owners in the Area the Special Taxes on their regular ad valorem property bills today,
the Kendall County Collector may not be willing to do so in the future. In that event, the responsibility to
bill and collect Special Taxes would become the City' s responsibility under the Special Tax Roll and
Report.
See "SECURITY AND SOURCE OF PAYMENT FOR THE BONDS — Enforcement of
Payment of Special Taxes" for a discussion of the provisions which apply, and procedures which the City
is obligated to follow under the Indenture, in the event of delinquencies in the payment of Special Taxes.
See "RISK FACTORS — Potential Delay and Limitation in Foreclosure Proceedings" and "— Bankruptcy"
below, for a discussion of limitations on the City' s ability to foreclose the lien of delinquent unpaid
Special Taxes in certain circumstances.
Potential Delay and Limitations in Foreclosure Proceedings
The payment of Special Taxes and the ability of the City to foreclose the lien of a delinquent
unpaid Special Taxes may be limited by bankruptcy, insolvency and other laws generally affecting
creditors ' rights or by the laws of the State of Illinois relating to judicial foreclosure. See "RISK
FACTORS — Bankruptcy." In addition, the prosecution of a foreclosure could be delayed due to many
reasons, including crowded local court calendars or lengthy procedural delays.
i
The ability of the City to foreclose the lien of a delinquent unpaid Special Tax payment may be
limited with regard to properties in which the Federal Deposit Insurance Corporation ("FDIC ') or any
successor to the FDIC may acquire an interest. The FDIC currently does not have an interest in the land
within the Area. However, if a lender takes a security interest in property in the Area and becomes
insolvent, such a lender could fall under the jurisdiction of the FDIC. The FDIC could assert federal
preemptive power to challenge any prior taxes, special taxes and assessments where it is in their interest
to do so, including the requirement that local agencies obtain the consent of the FDIC in order to
foreclose the lien of delinquent unpaid special taxes.
If the City is required to obtain the consent of the FDIC to foreclose on property located in the
Area, such consent could be denied and the City might be unable to pursue foreclosure proceedings.
Additionally, obtaining such consent could delay the foreclosure proceedings. Any delay in foreclosure
proceedings or the inability of the City to foreclose on property in the Area in which the FDIC has an j
interest could result in a delay or default in payment of the Bonds.
i
In addition, potential investors should be aware that judicial foreclosure proceedings are not
summary remedies and can be subject to significant procedural and other delays caused by crowded court
calendars and other factors beyond the control of the Area or the City. In addition, the Illinois
Constitution prescribes certain minimum redemption periods, which may be as long as three years, in the
event of foreclosure. See "SECURITY AND SOURCE OF PAYMENT FOR THE BONDS -
Enforcement of Payment of Special Taxes." It should be assumed that, under current conditions, it is
estimated that a judicial foreclosure of the lien of the Special Taxes could take several years from
initiation of litigation to the lien foreclosure sale.
Delays and uncertainties in the Special Tax lien foreclosure process create significant risks for
Bondowners. High rates of Special Tax payment delinquencies which continue during the pendency of
protracted Special Tax lien foreclosure proceedings, could result in the rapid, total depletion of the
Reserve Fund prior to replenishment from the resale of Parcels in the Area upon foreclosure. In that
event, there could be a default in payments of the principal of, and interest on, the Bonds. Moreover, in
the event of a delinquency in the payment of Special Taxes, no assurance can be given that the proceeds
of any foreclosure sale or any County tax sale would be sufficient to pay the delinquent Special Taxes and
any other delinquent special taxes, assessments or taxes.
37
Bankruptcy
The various legal opinions to be delivered concurrently with the delivery of the 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 or other similar laws affecting the
rights of creditors generally.
Although a bankruptcy proceeding would not cause the Special Taxes to become extinguished,
the amount and priority of any Special Tax lien could be modified if the value of the property falls below
the value of the lien. If the value of the property is less than the lien, such excess amount could be treated
as an unsecured claim by a bankruptcy court having jurisdiction. In addition, bankruptcy of a property
owner could result in a delay in commencement and completion of tax sale or foreclosure proceedings.
Such delay would increase the likelihood of a delay or default in payment of the principal of, and interest
on, the Bonds and the possibility of delinquent tax Special Tax installments not being paid in full.
Maximum Parcel Special Taxes
Pursuant to the Bond Ordinance, the City has levied the Special Taxes in the maximum amounts
permitted by the Special Tax Roll and Report. However, there is no assurance that the maximum
amounts will at all times be sufficient to pay the amounts required to be paid by the Indenture. See
"SECURITY AND SOURCE OF PAYMENT FOR THE BONDS — Special Taxes" and "THE SPECIAL
SERVICE AREA AND SPECIAL TAXES — Special Service Area Special Tax Roll and Report."
Prepayment of Special Taxes
The prepayment amount applicable to each dwelling unit was established based upon the
principal amount of the Prior Bonds and the corresponding interest rate. After the refunding, the amount
of principal outstanding will exceed the principal amount of the refunded Prior Bonds. However, annual
debt service on the Bonds will be lower than the annual debt service on the refunded Prior Bonds.
However, if a significant number of property owners elect to prepay their Special Tax sooner than
projected (there have been 21 prepayments in the Area to date), there would be a negative impact on debt
service coverage. The Underwriter, on behalf of the City has run scenarios to calculate the possible
impact. To mitigate the shortfall, the Special Reserve Fund has been created. See "SECURITY AND
SOURCE OF PAYMENT FOR THE BONDS — Funds and Accounts — Special Reserve Fund."
Disclosure to Future Purchasers
The City has recorded the Establishing Ordinance for the property included in the Area in the
Office of the Recorder of Deeds of Kendall County. While title companies normally refer to such notices
in title reports, there can be no guarantee that such reference will be made or, if made, that a prospective
purchaser or lender will consider such Special Tax obligation in the purchase of Parcels or the lending of
money thereon. A purchaser's failure to be aware of or consider the Special Tax obligation may
negatively affect such purchaser' s willingness and ability to pay the Special Taxes when due.
Limited Secondary Market
There can be no guarantee that there will be a secondary market for the Bonds or, if a secondary
market exists, that such Bonds can be sold for any particular price. Except as described below under the
caption "CONTINUING DISCLOSURE," neither the City nor the Developer has committed to provide
any financial or operating information on a going forward basis . See Appendix B — "Form of Indenture."
Occasionally, because of general market conditions, lack of current information, the absence of a credit j
rating for the Bonds or because of adverse history or economic prospects connected with a particular
38
I
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.
Secondary Market and Prices
i
The Underwriter presently does not intend to engage in secondary market trading of the Bonds.
The Underwriter is not obligated to engage in secondary trading or to repurchase any of the Bonds at the
request of the Owners thereof. No assurance can be given that a secondary market for any of the Bonds
will be available and no assurance can be given that the initial offering prices for the Bonds will continue
for any period of time.
Loss of Tax Exemption
i
Interest on the Bonds could become includible in gross income for federal income tax purposes
retroactive to the date of issuance of the 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 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 Indenture.
Risk of Legislative and Judicial Changes
i
Future legislation, regulations, governmental or judicial interpretation of regulations or legislation j
or practices and procedures related to property tax assessment, levy, collections or distribution could have
a material effect on the calculation or availability of the Special Taxes. There is no assurance that
legislation will not be considered or enacted in the future, and unless provision is made in such legislation
for special service areas generally in Illinois, the generation of the Special Taxes could be materially
adversely affected.
UNDERWRITING
The Underwriter, William Blair & Company, L.L.C. , has agreed to purchase the Bonds from the
City for reoffering, subject to certain conditions, at an aggregate purchase price of $ , which
reflects an underwriting discount of $ Under the bond purchase agreement among the
City and the Underwriter (the "Bond Purchase Agreement'), the Underwriter is obligated to purchase all
of the Bonds if any are purchased. The obligation of the Underwriter to make such purchase is subject to
certain conditions set forth in the Bond Purchase Agreement. The Underwriter may change the prices and
other terms with respect to the offer and sale of the Bonds from time to time after the Bonds are released
for sale, and the Bonds may be offered and sold at prices other than the initial offering price set forth on
the cover page of this Limited Offering Memorandum, including sales to dealers.
I
I
LEGAL OPINIONS
I
Legal matters incident to the authorization, issuance and sale of the 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 C. Certain legal matters will be passed upon
for the Underwriter by its counsel, Burke Bums & Pinelli, Ltd. , Chicago, Illinois;. and for the City, by its
counsel, Kathleen Field Orr & Associates, Chicago, Illinois.
39
' I
TAX MATTERS
[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 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 Bonds
is included in adjusted current earnings in calculating federal corporate alternative minimum taxable
income. Interest on the Bonds is not exempt from State of Illinois income taxes.
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 j
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.
i
To the extent the issue price of any maturity of the Bonds is less than the amount to be paid at
maturity of such Bonds (excluding amounts stated to be interest and payable at least annually over the
term of such 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 Bonds which is excluded from
gross income for federal income tax purposes. For this purpose, the issue price of a particular maturity of
the Bonds is the first price at which a substantial amount of such maturity of the Bonds is sold to the
public (excluding bond houses, brokers, or persons or organizations acting in the capacity of underwriters, j
placement agents or wholesalers). The original issue discount with respect to any maturity of the Bonds
accrues daily over the term to maturity of such 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 Bond to determine taxable gain or loss upon disposition
(including sale, redemption, or payment on maturity) of Bonds. Beneficial Owners of the Bonds should
consult their own tax advisors with respect to the tax consequence of ownership of Bonds with original
issue discount, including the treatment of purchasers who do not purchase such Bonds in the original
offering to the public at the first price at which a substantial amount of such Bond was sold to the public.
i
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 Bonds.
The City has covenanted to comply with certain restrictions designed to insure that interest on the 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 Bonds being included in gross income for federal
income tax purposes, possibly from the original issue date of the 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 Bonds may adversely affect the value of or the tax-exempt status of
interest on the Bonds . 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 Bonds. Beneficial Owners are encouraged to consult their own tax
advisors with respect to proposals to restructure the federal income tax.
i
40
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 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 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 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 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 express 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 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 Bonds for audit examination, or
the course or result of any examination of the Bonds, or other bonds which present similar tax issues, will
not affect the market price for the Bonds.]
CONTINUING DISCLOSURE
Although the Bonds are exempt from the requirements of Section (b)(5) of Rule 15c2- 12 (the
"Rule") adopted by the Securities and Exchange Commission (the " Commission") under the Securities
Exchange Act of 1934, the Indenture provides that City will enter into a Continuing Disclosure
Undertaking (the " Undertaking") for the benefit of the beneficial owners of the Bonds to send the Special
Tax Roll and Report annually and to provide notice of certain events described in the Undertaking to the
Municipal Securities Rulemaking Board (the "MSRB") through its Electronic Municipal Market Access
System or through such other electronic format or system prescribed by the MSRB or the Commission for
purposes of the Rule. A copy of the form of the Undertaking is attached as Appendix D.
A failure by the City to comply with an Undertaking will not constitute a default under the Bond
Ordinance or the Indenture and beneficial owners of the Bonds are limited to the remedies described in
the Undertaking. (See Appendix D) . The City is in compliance with every undertaking previously entered
into by it pursuant to the Rule.
LIMITED 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.
41
NO LITIGATION
At the time of delivery of and payment for the 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 Area or the titles of its officers to their respective offices or
seeking to restrain or to enjoin the sale or delivery of the Bonds, the application of the proceeds thereof in
accordance with the Bond Ordinance and/or the Indenture, or the collection or application of the Special
Taxes, or in any way contesting or affecting the validity or enforceability of the Bonds, the Bond
Ordinance, the Indenture, or any action of the City contemplated by any of the said documents, or the
collection or application of the Special Taxes, or in any way contesting the completeness or accuracy of
the Bond Ordinance, the 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.
i
NO RATING
i
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 j
statutes, and reference is made to all such documents and statutes for full and complete statements of their
terms and provisions .
I
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, the Special Tax Consultant, or the Underwriter as to
completeness or accuracy.
I
i
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 Area since the date
hereof.
AUTHORIZATION
The City has authorized the execution and distribution of this Limited Offering Memorandum.
I
42
i
UNITED CITY OF YORKVILLE,
an Illinois municipal corporation
By:
Gary J. Golinski, Mayor
i
i
I
i
i
i
43
i
APPENDIX A
Special Service Area Special Tax Roll and Report
i
i
I
i
I
i
i
I
i
i
I
APPENDIX B
Form of Indenture
i
I
I
i
I
i
I
I
I
i
I
i
i
i
APPENDIX C
Form of Bond Counsel Opinion
I
i
I
i
I
i
i
I
i
I
i
i
I
I
I
i
I
i
i
I
i
APPENDIX D
Form of Continuing Disclosure Undertaking
I
i
I
I
I
i
i
I
I
i
i
Exhibit E
Form of Administrative Services Agreement
i
i
i
4842-4466-2803.6
i
Exhibit E
I
AGREEMENT FOR ADMINISTRATIVE SERVICES
i
i
THIS AGREEMENT is made and entered into this day of , 2013 by and
between the United City of Yorkville at 800 Game Farm Road, Yorkville, Illinois 60560,
hereinafter called "Yorkville " or " Client, " and David Taussig & Associates, Inc ., at 5000 Birch
Street, Suite 6000, Newport Beach, CA 92660, hereinafter called "Consultant. " The Client and
the Consultant in consideration of the mutual promises and conditions herein contained agree as
follows .
ARTICLE I
TERM OF CONTRACT
i
Section 1 . 1 This agreement shall become effective on the date stated above and will
continue in effect until terminated as provided in Article 6 below.
ARTICLE II
SERVICES TO BE PERFORMED BY CONSULTANT
Section 2.1 Consultant agrees to perform the professional services for the Client in
accordance with the applicable professional standard of care and to deliver the work products to
the Client as described in the Scope of Work statement attached as Exhibit "A" hereto. Such
professional services and work products, as from time to time modified in accordance with
Section 2 . 3 hereof, are collectively referred to as the "Administrative Services . "
Section 2.2 Consultant will determine the method, details and means of performing
the Administrative Services. Consultant may, at Consultant's own expense, employ such
assistance as it deems necessary to perform the Administrative Services required by Client under
this Agreement. Consultant shall conduct research and arrive at conclusions with respect to its
rendition of information, advice, recommendation or counsel independent of the control and
direction of the Client, other than normal contract monitoring.
Section 2.3 All computer software (including without limitation financial models,
compilations of formulas and spreadsheet models), inventions, designs, programs,
improvements, processes and methods (collectively, the "Proprietary Models ") used or
developed by Consultant in performing its work is proprietary and shall remain property owned
solely by, or licensed by a third party to Consultant. Client acknowledges and agrees that the
consideration paid by Client herein only entitles Client to a license to use the hard copy or
electronically transmitted reports generated pursuant to the Administrative Services; provided
that Client has paid Consultant for the same, and that any Proprietary Model that Consultant uses
to generate such reports is owned by, or is duly licensed from a third party to Consultant and is
not being provided to Client hereunder. The reports and models used to generate such reports are
for use in connection with the special tax administration of Special Service Area No. 2003400
(hereinafter referred to as the "Project") only. The Client shall not reuse or make any
modification to the hard copy or electronically transmitted reports generated pursuant to the
Consulting Services without the prior written authorization of the Consultant. Any such reuse or
modification shall be at Client' s sole risk and without liability to Consultant. Client
acknowledges and agrees that Consultant has the right to use the reports and analyses that it j
authors pursuant to this Agreement as base works or templates for reports and analyses that
Consultant authors for Consultant's other clients, provided, however, that Consultant shall not
use any confidential information provided by Client in such future reports and analyses . Client
acknowledges and agrees that Consultant has spent substantial time and effort in collection and
compiling data and information (the "Data Compilations") in connection with the Administrative j
Services and that such Data Compilations may be used by Consultant for its own purposes,
including, without limitation, sale or distribution to third parties ; provided, however, that
Consultant will not sell or distribute any of Client's confidential information that may be
contained in such Data Compilations, unless such confidential information is used only on an
aggregated and anonymous basis .
Section 2.4 Any proposed changes in the Administrative Services hereunder shall be
submitted to the other party hereto, and any such changes agreed to by the parties shall be
reflected in an amendment to Exhibit "A" in accordance with Section 7 .2 hereto.
Section 2.5 Nothing in this Agreement shall give the Consultant possession of
authority with respect to any Client decision beyond the rendition of information, advice, j
recommendation or counsel.
ARTICLE III
COMPENSATION
Section 3.1 Client agrees to pay Consultant for its Administrative Services a
professional fee computed according to the Fee Schedule attached as Exhibit "B " hereto. (if
applicable) Client acknowledges and agrees that portions of Consultant's professional fees and
expenses may have been incurred by Consultant prior to the execution of this Agreement (the
"Pre-Agreement Fees") and Client agrees to pay such Pre-Agreement Fees in accordance with
this Agreement.
Section 3.2 In addition to fees for services, Client shall reimburse Consultant for
Consultant's out-of-pocket expenses as set forth in Exhibit "B " hereto . Expenses shall include all
actual expenditures made by Consultant in the performance of any Consulting Services
undertaken pursuant to this Agreement.
Section 3 .3 On or about the first two weeks of each quarter, in accordance with the Fee
Schedule, Consultant shall present to Client an invoice . Such invoices shall be paid by Client
within thirty (30) days of the date of each invoice. A 1 .2% charge may be imposed against
accounts which are not paid within 30 days of the date of each invoice . If Client objects to any
portion of an invoice, Client shall notify Consultant within fourteen ( 14) calendar days of receipt
of the invoice, otherwise the invoice shall be deemed accepted. If Client objects to any portion
of an invoice, Client shall so timely notify Consultant in writing identifying the specific cause of
the disagreement and the amount in dispute and shall pay that portion of the invoice not in
dispute in accordance with the other payment terms of this Agreement.
Section 3.4 The maximum total fee amount set forth in Exhibit "B " may be increased
as a result of any expansion of the Administrative Services to be rendered hereunder pursuant to
Section 2.3 or as provided in Exhibit "A" hereto.
David Taussig & Associates, Inc Page 2
United City of Yorkville SSA No. 2003-100 April 17, 2013
i
Section 3.5 Records of the Consultant's costs relating to (i) the Administrative
Services performed under this Agreement and (ii) reimbursable expenses shall be kept and be
available to the Client or to Client's authorized representative at reasonable intervals during
normal business hours.
ARTICLE IV
OTHER OBLIGATIONS OF CONSULTANT
Section 4.1 Consultant agrees to perform the Administrative Services in accordance
with Exhibit "A. " Should any errors caused by Consultant's negligence be found in such services
or products, Consultant will correct them at no additional charge- by revising the work products
called for in Exhibit "A" to eliminate the errors . Consultant's contribution toward all obligations,
losses, liabilities, damages, claims, attachments, executions, demands, actions and/or
proceedings and all costs and expenses in connection therewith, including reasonable attorneys'
fees, arising out of or connected with the performance of Consultant's Administrative Services
under this Agreement, however alleged or arising, except as may arise from Consultant's willful
misconduct or gross negligence, shall in no event exceed the amounts received by Consultant C
under this Agreement. .
Section 4.2 Consultant will supply all tools and instrumentalities required to perform
the Administrative Services under the Agreement.
Section 4.3 Neither this Agreement nor any duties or obligations under this Agreement
may be assigned by Consultant without the prior written consent of Client. However, Consultant
may subcontract portions of the work to be performed hereunder to other persons or concerns
provided Consultant notifies Client of the name and address of said proposed subcontractor and
Client either consents or fails to respond to notification with respect to the use of any particular
proposed subcontractor.
Section 4.4 In the performance of its Administrative Service hereunder, Consultant is, j
and shall be deemed to be for all purposes, an independent contractor (and not an agent, officer,
employee or representative of Client) under any and all laws, whether existing or future .
Consultant is not authorized to make any representation, contract or commitment on behalf of j
Client.
ARTICLE V
OTHER OBLIGATIONS OF CLIENT
Section 5. 1 The Client shall provide full information in a timely manner regarding
requirements for and limitations on the Project. Client agrees to comply with all reasonable
requests of Consultant and provide access to all documents reasonably necessary to the
performance of Consultant's duties under this Agreement with the exception of those documents
which Exhibit "A" calls upon the Consultant to prepare. Furthermore, the Client shall designate
one or more representatives authorized to act on the Client's behalf with respect to the Project.
The Client or such designated representative shall render decisions in a timely manner pertaining
to documents submitted by the Consultant in order to avoid unreasonable delay in the orderly
and sequential progress of the Consultant's services.
I
Section 5.2 Neither this Agreement nor any duties or obligations under this Agreement
David Taussig do Associates, Ina Page 3
United City of Yorkville SSA No. 2003-100 April 17, 2013
may be assigned by Client without the prior written consent of Consultant.
Section 5.3 The Client, County of Kendall and other public agencies, property owners,
consultants and other parties dealing with Client or involved in the subject special service areas
referred to in Exhibit "A" will be furnishing to Consultant various data, reports, studies,
computer printouts and other information and representations as to the facts involved in the
special service areas which Client understands Consultant will be using and relying upon in
preparing the reports, studies, computer printouts and other work products called for by Exhibit
"A. " Consultant shall not be obligated to establish or verify the accuracy of the information
furnished by or on behalf of Client, nor shall Consultant be responsible for the impact or effect
on its work products of the information furnished by or on behalf of Client, in the event that such
information is in error and therefore introduces error into Consultant's work products.
Section 5.4 The Client shall- provide - prompt - written -notice to -the Consultant if the
Client becomes aware of any fault or defect in the Project, including any errors, omissions or
inconsistencies in the Consultant's Work Product,
Section 5.4 In the event that court appearances, testimony or depositions are required
of Consultant by Client in connection with the services rendered hereunder, Client shall
compensate Consultant at a rate of $300 per hour and shall reimburse Consultant for out-of-
pocket expenses on a cost basis.
ARTICLE VI
TERMINATION OF AGREEMENT
Section 6. 1 Either party may terminate or suspend this Agreement upon thirty days
(30) written notice . Unless terminated as provided herein, this Agreement shall continue in force
until the Administrative Services set forth in Exhibit "A" have been fully and completely
performed and all proper invoices have been rendered and paid.
Section 6.2 Should either party default in the performance of this Agreement or
materially breach any of its provisions, the other party at its option may suspend or terminate this
Agreement by giving written notification to the defaulting party. Such termination shall be
effective upon receipt by the defaulting party, provided that the defaulting party shall be allowed
ten ( 10) days in which to cure any default following receipt of notice. of same .
Section 6.3 In the event of any termination that is not the fault of the Consultant, the
Client shall pay the Consultant, in addition to payment for Consulting Services rendered and
reimbursable costs incurred, for all expenses reasonably incurred by the Consultant in connection
with the orderly termination of this Agreement, including but not limited to demobilization,
reassignment of personnel, associated overhead costs and all other expenses directly resulting
from the termination, plus an amount for the Consultant' s anticipated profit on the value of the
Consulting Services not performed by the Consultant.
Section 6.4 The covenants contained in Sections 2 .2, 3 . 1 , 4. 1 , 5 . 3 , 5 .4, and all of
Article VII shall survive the termination of this Agreement.
David Taussig & Associates, Inc Page 4
United City of Yorkville SSA No. 2003-100 April 17, 2013
ARTICLE VII
GENERAL PROVISIONS
Section 7. 1 Any notices to be given hereunder by either party to the other may be
effected either by personal delivery in writing or by mail . Mailed notices shall be addressed to
the parties at the addresses appearing in the introductory paragraph of this Agreement, but each
party may change the address by written notice in accordance with the first sentence of this j
Section 7 . 1 . Notices delivered personally will be deemed communicated as of actual receipt.
Mailed notices will be deemed communicated as of two (2) days after mailing.
!
Section 7.2 This Agreement and exhibits hereto supersede any and all agreements,
either oral or written, between the parties hereto with respect to - the rendering of service by
Consultant for Client and contains all of the covenants and agreements between the parties with
respect to the rendering of such: services. Each party to this Agreement- acknowledges that no
representations, inducements, promises, or agreements, orally or otherwise, have been made by
any party, or anyone acting on behalf of any party, which are not embodied herein, and that no
other agreement, statement, or promise not contained in this Agreement shall be valid or binding.
Any modification of this Agreement (including any exhibit hereto) will be effective if it is in
writing and signed by the party against whom it is sought to be enforced.
Section 7.3 If any provision in this Agreement is held by a court of competent
jurisdiction to be invalid, void, or unenforceable, the remaining provisions will nevertheless j
continue in full force without being impaired or invalidated in any way.
Section 7.4 Any controversy between the parties hereto involving the construction or
application of any of the terms, covenants, or conditions of this Agreement will, on the written
request of one party served on the other, be submitted to binding arbitration in accordance with
the commercial rules and regulations of the American Arbitration Association. The arbitration
shall take place in Chicago, Illinois, or such other location mutually agreed to by the parties .
The arbitrator(s) shall be selected as follows : In the event that Consultant and Client
agree on one arbitrator, the arbitration shall be conducted by such arbitrator. In the event
Consultant and Client do not so agree, Consultant and Client shall each select an arbitrator and
the two arbitrators so selected shall select the third arbitrator. If there is more than one arbitrator,
the arbitrators shall act by majority vote .
The decree or judgement of an award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof. The parties may propose arbitrators from JAMS, ADR, ARC or
any independent arbitrator/neutral for dispute resolution. The parties are not required to hire a
triple A arbitrator for resolution of a dispute hereunder.
Section 7.5 The prevailing party in any arbitration or legal action brought by one party
against the other and arising out of this Agreement shall be entitled, in addition to any other
rights and remedies it may have, to reimbursement for its expenses, including court costs and
reasonable attorneys' fees. The non-prevailing party shall be liable, to the extent allowable under
law, for all fees and expenses of the arbitrator(s) and all costs of the arbitration.
Section 7.6 This Agreement will be governed by and construed in accordance with the
laws of the State of Illinois.
i
David Taussig & Associates, Ina Page S
United City of Yorkville SSA No. 2003- 100 April 17, 2013
i
I
Section 7.7 Nothing contained in this Agreement shall create a contractual relationship
with or a cause of action in favor of a third party against either the Client or the Consultant. The
Consultant's services under this Agreement are being performed solely for the Client's benefit,
and no other party or entity shall have any claim against the Consultant because of this
Agreement or the performance or nonperformance of Consulting Services hereunder.
IN WITNESS WHEREOF, this Agreement has been executed on the date and year first above
written.
CLIENT : United City of Yorkville
Date :
CONSULTANT : David Taussig & Associates, Inc.
By:
David Taussig, President
Date :
http://127.0.0. 1/resources/Proposals/ADMIN/ILLINOIS/Yorlcville/Admin Agreement SSA 2003- 100 (Revised 4. 17. 13).docx
I
I
I
I
i
i
David Taussig & Associates, Inc Page 6
United City of Yorkville SSA No. 2003400 April 171 2013
I
Exhibit A " Scope of Work
The Scope of Work statement for the administration of Special Service Area No. 2003 - 100
(hereinafter referred to as " SSA") is comprised of those services associated with the annual
calculation and billing of the special taxes, review of bond funds and accounts, responses to
taxpayer inquiries (i .e . , phone calls, prepayment requests, builder education/coordination),
determination of arbitrage/rebate liability, reporting of certain information as set forth in the
Continuing Disclosure Agreement and the Trust Indenture as follows :
I
Task 1 : Development Research and SSA Parcel Database
This task involves gathering and organizing the information required to establish and maintain a
parcel database necessary to extend, bill, and collect the special taxes, pursuant to the SSA
Special Tax Roll and Report, and includes the following:
101 Subdivision Research : Coordinate with Yorkville and any developer to obtain
copies of all final plats. Identify recording date, property use, acreage, and the lot,
block and unit numbers, as applicable, for each new parcel.
1 .2 Permanent Index Numbers : Coordinate with Kendall County (the " County") to
determine valid Permanent Index Numbers ("PIN") and obtain new cadastral
maps.
i
1.3 Classification of Property: Assign each parcel to the appropriate special tax
classification in accordance with the SSA Special Tax Roll and Report.
194 SSA Parcel Database: Establish and maintain parcel database for the SSA that
will include all relevant PINs, property data, and special tax characteristics.
Task 2 . Tax Requirement Calculation and Special Tax Abatement
This task involves calculating the amount of special tax to be abated for the SSA and includes
the following subtasks :
2. 1 Bond Funds Accountability Analysis : This task involves the review and
analysis of account statements for the funds and accounts maintained by the
trustee . Consultant will prepare a monthly report, which summarizes the activity
for each fund and account and evaluates flow of funds for consistency with the
Indenture or other controlling documents. When necessary, Consultant will
communicate our findings with Yorkville or trustee.
2.2 Determine Annual Expenses : Identify the SSA's expenses including annual debt j
service, administrative expenses, and provision for delinquencies .
2.3 Year-End Reconciliation : Prepare year-end reconciliation to determine surplus
funds, if any, in the bond funds and accounts, interest earnings, and other credits
that may be applied to toward the abatement of the special tax.
j
2.4 Extension of Special Taxes: Extend the required special taxes to each PIN
pursuant to the SSA Special Tax Roll and Report and determine the resulting
David Taussig & Associates, Ina Page A. 1
United City of Yorkville SSA No. 2003 400 April 17, 2013
i
i
I
amount to be abated, if any
Task 3 : Report Preparation
This task includes the preparation of an annual report for the SSA, which will generally contain
the following .
• Brief Development Summary
• Flow of Funds Summary
• Special Tax Collection, Delinquencies, Tax Sale, and Foreclosure Status
• Bond Fund and Account Balance Summary
• Special Tax Requirement and Abatement
i
The contents of the annual report will satisfy the reporting requirements set forth in Sections
6 .213 and 8 .5 of the Trust Indenture .
Task 4 : Billing of the Special Tax
This task involves coordination with and assistance to the County, as needed, to facilitate the
billing of the special tax. The following subtasks are included:
4. 1 Special Tax Roll: For the SSA, Consultant will prepare a special tax roll listing
each PIN and the corresponding maximum special tax, special tax amount abated,
and special tax amount to be billed.
I
41 Transmittal to County: The special tax rolls will be transmitted to the County in
hard copy and/or electronic form as specified by the County, along with a
certified copy of the abatement ordinances, to be provided to Consultant by
Yorkville, in hard copy and electronic form as specified by the County.
Task 5 : Assistance with Delinquent Special Taxes
As needed, Consultant will assist in the monitoring of special tax receipts and collection of
delinquent special taxes . The following subtasks are included:
I
I
591 Special Tax Receipts : Consultant will review the special tax distribution reports
provided by the County to monitor and record the collection of special taxes . At
Client's request, Consultant will arrange for the automatic wire transfer of special
tax receipts to the trustee, provided the County and trustee can accommodate an
electronic transfer of special taxes . Consultant will request and review the
County's unpaid list to determine the payment status of each individual PIN. As
needed, Consultant will record this data in a special tax payment database and
prepare an annual delinquent special tax report for distribution to Yorkville,
County, trustee, and other interested parties .
5.2 Demand Letters: this task entails the preparation and mailing of demand letters
I
to the property owners that remain delinquent in the payment of special taxes after
the County has conducted its tax sale (or such other date as specified in the
Indenture) . Consultant will prepare a draft demand letter for review and approval
by Yorkville staff and counsel. After the form of the demand letter is approved,
Consultant will print and mail the demand letters to property owners.
David Taussig & Associates, Ina Page A.2
United City of Yorkville SSA No. 2003-100 April 17, 2013
I,
i
I
5.3 Coordination with Property Owners : Consultant will respond to telephone calls
from property owners who have questions regarding the payment of the
delinquent special taxes .
5A Foreclosure : This task involves assistance with the foreclosure of the special
taxes that remain delinquent after the follow-up process . Consultant assumes that
at this stage in the collection process Yorkville will retain legal counsel to pursue
foreclosure. Therefore, our services will consist of the preparation of materials
detailing the delinquent special taxes, penalties, and interest.
Task 6 : Special Tax Prepayments j
This task entails the .calculation of prepayment amounts and coordination with the trustee and
associated record keeping in the event any special tax is prepaid. This task includes the following
subtasks :
691 Prepayment Calculation: Upon request, Consultant will calculate the amount
needed to prepay the special tax pursuant to the prepayment formula as set forth
in the SSA Special Tax Roll and Report. Consultant will calculate the special
reserve fund credit to be applied to the prepayment, if any. The prepayment
information provided will identify the amount due, the deadline for payment, and
direction regarding where payment is to be remitted.
I
6.2 Bond Redemption: This task involves analysis of the early redemption of bonds
resulting from the prepayment of special taxes . Consultant will coordinate with
the trustee to ensure the proper application of such funds and review the resulting
revised debt service schedule .
Task 7 : Taxpayer Inquiries
This task involves responding to inquiries regarding the SSA. This task includes brief written
responses to property owners as necessary. Consultant has a toll-free number available to
efficiently and effectively handle inquiries .
Task S : Continuing Disclosure and Dissemination
This task involves the preparation and dissemination of a continuing disclosure report in
accordance with Security and Exchange Commission Rule 15c242, which will generally contain
the following:
i
a Expected Special Taxes and Debt Service Coverage;
a Representative Property Taxes;
a Number of Residential Building Permits ; and
a Equalized Assessed Value.
The contents of the continuing disclosure report will satisfy the reporting requirements set forth
in Continuing Disclosure Agreement.
Task 9 : Arbitrage/Rebate Calculation
This task encompasses those activities associated with computing the rebate liability of the bonds
sold on behalf of the SSA.
David Taussig & Associates, Ina Page A.3
United City of Yorkville SSA No, 2003-100 April 17, 2013
Exhibit B — Fee Schedule
PROFESSIONAL FEES
Consultant's annual compensation for Tasks 1 through 8 of the Scope of Work statement is a
fixed fee of $ 15 ,000. Consultant's compensation for Task 9 is $2,750 per bond issue for the
initial annual calculation, and $2,250 per bond issue per year for subsequent years; note,
additional fees will be incurred for transferred proceeds analysis, commingled funds analysis,
final or five year report, or computation periods in excess of twelve months.
GENERAL TERMS AND CONDITIONS
The preceding annual professional fees shall be billed in four equal installments, with invoices
submitted by Consultant to Client on or about the first two weeks of each quarter. Invoices shall
be paid from bond proceeds at bond closing. A 1 .2% per month (or the maximum amount
permitted by law if less than 1 .2%) charge may be imposed against accounts which are not paid
within thirty (30) days of the date of each invoice.
At Client's request, services in addition to those identified in the Scope of Work statement may
be provided. Unless otherwise agreed to by Client and Consultant, any additional tasks assigned
by Client shall be charged at the hourly rates listed below.
TABLE 1
DAVID TAUSSIG & ASSOCIATES, INC .'S
HOURLY FEE SCHEDULE
Managing Director or Vice President $200/Hour
Manager $ 190/Hour
Senior Associate $ 175/Hour
Associate $ 155/Hour
Senior Analyst $ 135/Hour
Analyst $ 120/Hour
Research Assistant $ 90/Hour
Support Staff $ 45/Hour
Such additional tasks may include, but are not be limited to, the following:
• Manual billing of special taxes ; j
• Administration of variable rate bonds ;
• Attendance, other than via telephone, at meetings with property owners or Yorkville staff
to answer questions, review the levy, or resolve disputes regarding the calculation of the
special tax;
• Assistance with workshops, seminars, etc . concerning disclosure of the special tax; and
• Assumption of dissemination agent responsibilities for developer continuing disclosure
reports, if any.
Consultant's hourly rates in Table 1 above apply for a twelve ( 12)-month period from execution
of the Agreement and are subject to a cost-of4iving and/or other appropriate increase every
David Taussig & Associates, Ina Page B. 1
United City of Yorkville SSA No. 2003400 April 17, 2013
twelve ( 12) months thereafter. Consultant generally reviews its hourly rates annually and, if
appropriate, adjusts them to reflect increases in seniority, experience, cost-of-living, and other
relevant factors . Consultant shall notify City in advance of any such increase .
I
I
i
I
i
David Taussig & Associates, Ina Page B.2
United City of Yorkville SSA No. 2003-100 April 17, 2013
i
UNITED CITY OF YORKVILLE
KENDALL COUNTY, ILLINOIS
$6,705,000
SPECIAL SERVICE AREA NUMBER 2003400
SPECIAL TAX REFUNDING BONDS ,
SERIES 2013
(RAINTREE VILLAGE PROJECT)
i
CERTIFICATE OF PUBLICATION
i
I, Beth Warren, certify that I am the duly qualified and acting City Clerk of the
United City of Yorkville, Kendall County, Illinois (the "City") . As City Clerk I certify as j
follows : Ordinance Number 2013 - oZ6 of the City adopted on April 23 , 2013 was published in j
i
pamphlet form on April 23 , 2013 ,
Dated: May 22, 2013
i
City Clerk
United City of Yorkville
Kendall County, Illinois
I
i
I
i
i
i
I
i
4834-5966-6964. 1
I
UNITED CITY OF YORKVILLE
KENDALL COUNTY, ILLINOIS
$6,705,000
SPECIAL SERVICE AREA NUMBER 2003- 100
SPECIAL TAX REFUNDING BONDS ,
SERIES 2013
(RAINTREE VILLAGE PROJECT)
CERTIFICATE OF FILING OF BOND ORDINANCE
I, Debbie Gillette, certify that I am the duly elected, qualified and acting County
Clerk of Kendall County, Illinois, and as such official I further certify that a copy certified by the
City Clerk of the United City of Yorkville of Ordinance Number 2013 - 0? S entitled "An
Ordinance Providing for Issuance of United City of Yorkville, Kendall County, Illinois Special
Service Area Number 2003 - 100 Special Tax Refunding Bonds, Series 2013 (Raintree Village
Project)" adopted on April 23 , 2013 was filed for record in my office on MAY d ( , 2013 .
IN WITNESS WHEREOF, I have signed this certificate and affixed my seal of
office hereto thispx, day of May, 2013 ,
County Clerk
Kendall County, Illinois
(SEAL)
STATE OF ILLINOIS
COUNTY OF KENDALL
FILED
MAY 2 1 2013
COUNTY .CLERK
KENDALL COUNTY
4842-3148-4436. 1